Impact on Japan's neighbors hardest
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Economic?aftershocks of the devastation in Japan are rolling through Asia. It is among Japan's neighbors that the reverberations of the catastrophe are being felt hardest.
Auto makers in Thailand are slowing production. South Korean electronics manufacturers face shortages of critical parts. Panic buying has driven up prices of Japanese cameras in China.
The 9.0-magnitude quake and tsunami that laid waste to Japan's industrial northeast might also undermine Japan and China as manufacturing bastions as the catastrophe gives global companies further reason to spread suppliers over more countries to avoid reliance on a handful of production powerhouses.
"There was a sense that many multinationals had become too dependent on a single source of production," said Frederic Neumann, HSBC's co-head of Asian economics research. "The broad trend to diversify production will not just affect Japan, it will affect China."
South Korea, a manufacturing force in its own right, has been among the first to shudder as Japanese suppliers grappled with damaged factories and power shortages.
Samsung Electronics Co and Hynix Semiconductor Inc buy 50 to 60 percent of the wafers they use to make computer chips from Japan's Shin-Etsu Chemical Co, which shut two factories damaged in the quake. Operations at other plants have been affected by rolling blackouts, the Japanese company said on its website.
On China's mainland, businesses have started looking for replacement markets for about US$100 billion of exports they ship to Japan annually.
Chongqing Kinglong Fine Strontium Chemical Co, based in Chongqing, sells more than 80 percent of the strontium carbonate it produces to Japan, where it is used to make LCD monitors.
Many Chinese manufacturers that use imported components are still able to run on inventory, but companies that rely on high end Japanese electronics and auto parts are bracing for shortfalls and rising prices, said Wang Shaopu, director of the Center for Pan-Pacific Studies at Shanghai's Jiaotong University.
Though disruption to supply chains and production is being felt across Asia, most economists say the impact of the Japanese disaster on regional economic growth will not be severe.
