Companies come a cropper due to Dokdo dispute
One in 10 domestic enterprises engaged in business with Japan are suffering after a centuries-old dispute over the disputed Dokdo islets has flared up again between the neighboring countries, studies show.
Should the conflict become more drawn out, the losses will likely extend to 60 percent of the total, the Korean Chamber of Commerce and Industry (KCCI) said yesterday.
The KCCI recently conducted a survey on 500 domestic companies that do business with Japan.
Among them, 12 percent said they have suffered financial losses as a result of the ongoing bickering over the rocky outcroppings, known in Japan as Takeshima.
If the conflict continues for an extended period, 64.7 percent see it as posing a threat to their business.
So far, 28.6 percent of the surveyed companies that work in the tourism and travel industry said they have suffered considerable setbacks in terms of declining sales or revenue.
This compares to 25.8 percent that answered similarly and import cars from Japan, 20.6 percent in the food industry, 5.6 percent that manufacture cell phones or other consumer electronics, and 4.3 percent that are engaged in the cultural content industry.
According to the results of the survey, these figures will all shoot up should the political tension be prolonged, changing to 83.3 percent (travel and tourism), 80.6 percent (imported cars), 64.7 percent (food), 69.5 (consumer electronics) and 73.7 percent (cultural content).
The domestic travel industry appears to have been the hardest hit by the growing negative sentiment among travelers from both countries, putting a damper on two-way tourism.
According to the KCCI, one of the nation’s three major tourism companies said 300 tourists from Japan canceled their holiday reservations to Korea between National Liberation Day on Aug. 15, when the conflict occurred, and the end of last month.
The agencies also reported that outbound travelers to Japan have been falling in number consistently over the same period.
Korean companies that sell Japanese cars are reporting a 30 percent drop in customers on average, and a 50 percent drop in sales over the fortnight.
The KCCI said industry sources claim that disputes between the two sides, whether territorial, political, cultural or historical, often prompt a sales slowdown.
The food industry is also on alert as requests from Japanese food importers have been flooding in to postpone deliveries as they have reportedly seen local sales fall by around one-third.
One domestic food company that requested anonymity has even canceled a marketing event it began last year in Japan featuring famous Korean idol singers as it anticipates sales falling to below half of where they were at this time last year, the KCCI said.
“Due to the repetitive conflict between the two countries over the territorial and historical issues, both countries are incurring losses upon losses,” said Park Jong-gap, survey director at KCCI.
By Kim Jung-yoon [email@example.com]
More in Economy
Gangbuk beats Gangnam
600,000 jobs added last year, but many public or welfare
Consumer price gains pick up speed in November
Life expectancy up 7 months for Koreans born in 2019
OECD knocks tenth of a point off Korea's 2020 growth