ADVERSE EFFECT ON BUSINESS

Dominion, Volume 30, Issue 299, 14 September 1937, Page 12

ADVERSE EFFECT ON BUSINESS

Sino-Japanese Conflict

NEW ZEALAND IMPORTERS

CONCERNED

Already the hostilities between Japan and China are having a disturbing effect on business in New Zealand, according to the official organ of the New Zealand Federation of Drapers, Clothiers and Boot Retailers. This journal emphasises the substantial trade that has developed between Japan and New Zealand, and refers to the effect on orders and supplies as a result of the present conflict. After referring to post-war improvements in Japanese manufacturing, the article states: “With all this improvement Japan has been able to keep production costs so low that, aided by a heavily depreciated currency, she was able to scale the barriers of ad valorem tariffs, and compete with local manufacturers in the domestic markets of such highly-protected countries as the United States, Canada and Australia, while in low tariff countries like New Zealand, China, India, Africa and the East generally, she was able to flood the markets with textiles, fancy goods, footwear and an ever-widening variety of goods, at prices against which manufacturers of other countries were quite unable to quote.

“Here in New Zealand there was considerable resistance to this wholesale invasion, particularly while the quality and standard of the goods was unreliable, and our traders preferred to rely on more satisfactory sources of supply, leaving the distribution of the cheap Oriental lines to the chain stores and multiple shops. “But with the slump and the rapidly decreasing purchasing power of the public occurring at the same time as a marked improvement in the standards of these Eastern goods, our shopkeepers were forced into meeting the increased public demand for them, and our trade with Japan has been increasing by leaps and bounds.” Figures are given .showing the increase in New Zealand imports from Japan from £332,281 in 1931 to £1,505,474 for 1937, and it is remarked that “we are now spending nearly five times as much on Japanese goods as we were spending in 1931, and the United States is now the only foreign country which supplies us with more manufactured goods than Japan.” It is pointed out that the Japanese are not only large sellers of goods to New Zealand, but also substantial buyers, and since her disagreement with the Commonwealth over Australia’s restriction of Japanese imports, Japan is looking more and more to New Zealand for supplies of wool to her textile factories. In 1936 Japan, for the first time, took over £1,000,000 worth of New Zealand exports, but this year for the three months only ending on March 31, we had shipped nearly £2,000,000 worth of exports to Japan, as against about half that value of imports from there. “This outbreak of hostilities is bound to be disturbing to trade here, on account of the interference in the delivery of orders, but so long as the war is confined to the two countries the necessary adjustments will soon be made, ami trade will probably revert to former channels,” the article adds. “But the danger of other countries being drawn into the conflict, and the critical situation .which persists in Europe as a result of conditions in Spain, must continue to cause our traders considerable cogitation and anxiety, and it militates against business activities when supply markets become hazardous and uncertain.”