The last earthquake in Japan proved that our society is vulnerable and the economy looks fragile as well. We question again the opportunity of nuclear energy, and the measures for the environmental protection. In other words, we wonder if we are in harmony with mother nature. At the same time, companies analyze the quake’s repercussions. They look serious, but still undetermined. The scrutiny aims at two questions: the impact on Japan’s recovery and the consequences on the global economy.
Tokyo’s role in Asia is set to diminuish in favour of China, even though the recent history shows that a catastrophe can trigger an unprecedentd development (e.g. the period after WWII). Ironically , the reconstruction may increase China’s weight further, since its exports of cement, steel, construction material will be under great stress to reconstruct the Japanese infrastructure, increased supplies of wood, coke and liquefied gas can be grabbed by other countries in SEA.
Time will give the exact answer; for the moment the disaster’s outcome triggers eco-psychological reaction . The recovery will depend on Japan’s ability to restore its logistics and its energy network. Concern is raised about the Japan’s role in the international supply chain. Only 0.7% of world Gdp is located in the hit area, but some crucial sectors are heavily damaged by the quake. Slow deliveries, due to factories’s temporary shutdown, caused a strong price increase for sophisticated electronics components, automotive parts, and precision mechanics. Export will be affected too, mainly for optical equipment, motorbikes and even sushi for the restaurants. Finally, the outbound tourism, a lucrative revenue for the visited countries, will surely register a reduction.
The MNC’s reaction will rely on alternatives supplies, speed of the recovery, ability of Asian countries (China, S.Korea, Singapore) to cater the needs. We can envisage a new scenario, with a Japanese reduced weight. On the financial side, the quake’s repercussions have been quicker, as usual, but probably not long lasting.
Tokyo’s Stock Exchange fell dramatically, but quickly recovered, at least partially. China was not untouched by the trembles. Its companies’ investment in Japanese top 10 corporations reach $ 6.5 billion. The sovereign fund China International Corporation holds the lion’s share, with asset bought in property, electronics, mechanics. The initial loss has been widespread, with Tokyo Electric Power, a big CIC’s asset, falling 40% of its market value few days after the quake. Finally, repercussions go beyond the pure economic aspect. Two Ipo’ in Hong Kong, ready to be launched, were cancelled because timing was no longer auspicious.
In the coastal cities of China, a “salt fever” invested the population. Citizens are literally hoarding salt. Speculation enjoys and price rose up to 25 times. The demand is skyrocketing for a couple of incredible reasons: fear that radiation from Japan can contaminate the Ocean (making marine salt harmful) and the common belief that a shield of salt is a strong protection against the nuclear radiation.