Probably bad for Japan
All the lessons people learned after the Kobi earthquake cut off supplies of black IC cover plastic are back again - you can't have Japan as sole source for your supplies, however convenient.
I imagine China is making sure that it has domestic suppliers for all the vital ingredients, and will be willing to sell them to anyone that is having a problem with western suppliers. That's the nice thing about the Chinese - they aren't going to let politics get in the way of making money.
Biting the hand that feeds IT
