HONG KONG (Yonhap) -- Escalating anti-Japanese protests in China could come as a boon to rivals of Japanese companies there due to worsening consumer sentiment toward Japanese products, analysts said Tuesday.
Protesting Japan's claim over disputed islands between the two countries, tens of thousands of angry Chinese vandalized a number of Japanese factories and stores in China over the weekend, forcing them to temporarily shut down.
"If Chinese consumers do end up boycotting Japanese brands, Japanese companies' market shares may decline in the short term and there may be a negative impact on shipments at Chinese enterprises along Japanese companies' supply chains," said Steven Mao, an analyst at UBS.
"On the other hand, market shares at Japanese companies' competitors may increase, which would be a positive for the corresponding supply chain enterprises in China."
Anti-Japanese sentiment has intensified throughout China, following Japan's announcement last week that it bought three of the disputed islands, known as Senkaku in Japan and Diaoyu in China, from private Japanese owners.
China on Friday sent six Chinese patrol ships briefly to waters near the disputed islands, further heightening the tensions.
Car market watchers said the recent anti-Japan protests could hurt Japanese car sales in China.
Luo Lei, the deputy secretary general of the China Automobile Dealers Association, said potential Chinese car buyers might not buy Japanese-brand cars due to concerns over safety.
Goldman Sachs held a similar view. "Other international and local brands could gain market share on Japanese brands' weakness in China," said Yang Yipeng, a Goldman Sachs analyst.
UBS also said foreign brands such as Hyundai Motor Group, Volkswagen Group and General Motors Co. as well as BMW AG and Audi Group will benefit, while China's domestic brands will likely not gain market share particularly.
However, the overall impact has yet to be assessed, as the global supply chains, many of which are based in China, could be negatively affected.
"If Japanese factories' operations in China are disrupted, we would need to confirm specifically which products were being disrupted," said Mao of UBS.
"If they are irreplaceable products, global machinery shipments would be adversely affected, thereby hitting supply chain enterprises."
Meanwhile, the People's Daily, which represents the voice of the Chinese communist party, published a commentary criticizing the outbreak of sporadic vandalism.
"Damaging the legal property of compatriots and venting on Japanese civilians living in China is extremely inappropriate," it said.
The newspaper, however, warned at the same time that Japan's provocations over the islets will cause self-destruction for itself, hinting at possible economic sanctions. "Japan's economy lacks immunity to China's economic measures," it said.