The Hindu Business Line : `India may gain from China-Japan spat'

IT research firm Gartner has advised enterprises to develop contingency plans for reducing dependency on products and services from northeast Asia in a new report according to a press release.

This is in anticipation of unstable relations between China and Japan for the foreseeable future.

"More than 95 per cent of the largest 2,000 companies in the world have extensive interests, investments and employees in China and Japan," said Mr Dion Wiggins, Vice-President and Research Director of Gartner.

Enterprises should look to take advantage of opportunities that the situation presents, the report said. "Most large global companies will have to adjust their strategies and plans if the China-Japan situation remains volatile. For many companies, it is no longer `business as usual' in northeast Asia," he added.

According to the report if tensions between the two countries were to escalate, the impact may spread to Hong Kong and Korea. In this extreme scenario, Japanese technology firms may reduce their commitment to the Chinese market with many ultimately withdrawing completely, and India would become Japan's new base for low-cost manufacturing said the report.

China surpassed the US as Japan's largest trading partner in 2004, with trade between China and Japan increasing more than 30 per cent to $213 billion.

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