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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 192

China Business Intelligence No. 192

Samsung Economic Research Institute Beijing Office

Apr. 7, 2011

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I. Economy

On March 11, the Tohoku Earthquake, a massive 9.0-magnitude quake and tsunami, struck Japan's northeastern region, causing radiation leaks and destroying industrial areas. The northeast region, where auto, nuclear, petrochemical and semiconductor industries are heavily concentrated, has contributed eight percent to the Japan's GDP. Since the Tohoku Earthquake, major automakers such as Toyota, Honda and Nissan have either closed their production lines or suspended their operations. Once recovery efforts become full-blown, demand for low and mid-priced steel products and construction materials will also balloon. China, which is the world's biggest supplier of construction materials, steel products, services, daily necessities and food ingredients, will play the role of major supplier in Japan's reconstruction efforts.

Ⅱ. Industry

Japan's Tohoku Earthquake has sparked fierce debates over the safety of nuclear technology with rising concerns over the radiation leaks at the Fukushima nuclear power plant. Countries across the world initiated safety checks for nuclear power and demands for the development of a new source of energy have surged. Accordingly, nuclear power plant plans have been adjusted. As a consequence of the Japanese earthquake, China's auto and electronics industries are expected to suffer from temporary supply shortages while the steel industry may enjoy export increase. Also, China is likely to replace Japan as the exporter of certain agricultural goods and export more protective gear to block and detect radioactivity as the demand has soared.

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