Develop contingency plans, says Gartner
Anticipating unstable relations between China and Japan, Gartner has issued
a new report encouraging enterprises to develop contingency plans for reducing
dependency on products and services from northeast Asia.
The report analyses three possible scenarios with different degrees of severity:
The first is when business returns to almost as usual; the second is for continued
uncertainty and volatility; and the last when there is a continued escalation
By leveraging the insight provided by these scenarios, companies based in China,
Japan and the rest of the world can examine possible outcomes and prepare for
action in case one or more elements of a scenario become reality.
In the first scenario, Gartner believes the impact will be restricted primarily
to Chinese and Japanese companies. Chinese consumers will start to favour alternative
brands, whether home grown or from Korea and Taiwan, while nascent efforts by
Chinese technology companies to enter the Japanese consumer market will meet
even more resistance.
Gartners medium severity scenario foresees continued uncertainty and volatility
in relations between China and Japan. This will have a broad business impact
with bias against each others products becoming more widespread and pronounced.
Moreover, Japanese investment in technology manufacturing will gradually decline
because of difficulties in hiring and retaining staff. This will create an opportunity
for other overseas investors. Economic growth in both China and Japan would
If tensions between the two countries were to escalate, a global recession could
occur. This would certainly kill off initiatives to develop joint standards
in areas such as fourth generation mobile networks, RFID, Open Source software
and next-generation Internet.
Since there is a large disconnect between the business and political relations
of China and Japan, commerce and trade in both countries and in many other parts
of the world could be negatively affected. All IT-using and IT solution-providing
enterprises globally need to reassess their business models, investments, trading
partners and strategies for both Japan and China. This reassessment should be
based on an understanding of the causes, current status and potential trigger
points in the relationship.