The straining of relationships between Asia's two economic power houses - China and Japan - will be beneficial to India with Japanese firms "withdrawing from China" and intending to make India its manufacturing base, according to a report by a global IT research agency.There is a large disconnect in political and business relations between the two countries, and if tensions were to escalate, Japanese technology firms would reduce their commitment to the Chinese market, Gartner Inc said in a report released today.This would result in many Japanese firms "ultimately withdrawing completely" from the Chinese market, it said.However, as India is actively supported currently by the Japanese government, the country would become Japan's new base for low-cost manufacturing, it said.Chinese industry would suffer as its source of leading-edge technology dries up amid continuing export restrictions from US and Europe.Certain technology companies from North America, Europe and Asia would acquire Japanese assets at "attractive prices" but others would steer clear and divert sourcing away from and unstable region.Gartner expects continued uncertainty and volatility in relations between China and Japan. This would have a broad business impact with bias against each other's products becoming more widespread and pronounced.Japanese technology firms would assume a lower profile in China through intermediaries and local brand strategies, it said.
