THE JAPAN NEWS


 

JOETSU, Niigata (Reuters) — In snow country along Japan’s northern coast, a small manufacturer of precision molds is feeling the pain of China’s economic slowdown.

Orders have slowed to a trickle at Nagumo Seisakusho Co., which supplies big auto-parts makers such as Denso Corp. and Aisin Seiki Co, and the company may keep salaries flat or even reduce them in the coming fiscal year.

Manufacturers across Japan depend heavily on customers in China, the world’s second-biggest economy, to buy their products, especially the parts and equipment that reach China’s factory floor and fuel its domestic and export growth.

Automotive chipmaker Renesas Electronics Corp. last week said it would suspend production at some plants for up to two months as it braces for China’s growth to slow further. In recent months, other big companies such as factory-robot makers Yaskawa Electric Corp. and Fanuc Corp.; Mitsubishi Electric Corp., trading house Mitsui & Co. and toilet giant Toto Ltd. have blamed China as they cut profit forecasts.

But the impact of China’s wobble is worse for manufacturers nearer the start of the supply chain, like tiny Nagumo. It employs 100 people to create precision press molds other Japanese manufacturers use to make car parts and other products for the China market.

On the nondescript 4,000-square-meter factory floor in Nagumo’s main Sanwa plant, grey-clad workers, some wearing blue surgical masks, busied themselves during a recent day designing molds by computer, then milling, stamping and assembling dies.

But the normalcy belies tough times for Nagumo, which makes all of its products on demand.

“Orders have stalled suddenly since January. Many of our clients are car-parts makers, and they have slammed on the brakes for orders recently,” at least through March, said president Hiroshi Komemasu.

“It is said that when China sneezes, Japan catches a cold,” Komemasu told Reuters recently on the factory floor. “I strongly feel that the trade war is affecting even small firms like us.”