South Korean companies in China have suffered no damage yet from the recent wave of anti-Japanese protests sweeping across China over a territorial dispute with Tokyo, industry sources said Tuesday.

The South Korean firms, however, are bracing for any possible fallout from the demonstrations, as protesters torched a factory of Japanese electronics maker Panasonic and a Toyota dealership.

The latest outbreak of anti-Japan sentiment flared over Japan’s recent decision to buy some disputed islands in the East China Sea known as the Senkaku by Japan and the Diaoyu by China from Japanese owners.

Chinese authorities have advised Japanese businesses in Beijing’s Chaoyang District not to open on Tuesday, citing possible anti-Japan demonstrations, Japan’s Kyodo News agency reported.

However, protests have not directly affected South Korean businesses in China.

South Korea’s second-largest refiner GS Caltex Co., which operates a chemical factory in the eastern Chinese city of Suzhou, has reported no damage from the demonstrations.

Hyundai Motor Co. and its affiliate Kia Motors Corp. are keeping a close watch on the developments to see if anti-Japan protests could lead to a falling demand for cars in China.

Hyundai Motor and Kia Motors have a market share of 5.5 percent and 3.1 percent in China, respectively.

The two South Korean carmakers said anti-Japan sentiment is unlikely to lead to increased auto sales, as they currently are not meeting the demand in China.

Hyundai Motor, which produced 740,000 units of vehicles last year, is preparing to increase its production to meet a growing demand in China. Kia, which has an annual capacity of 440,000 units in China, broke ground in June to build a third factory that can manufacture 300,000 vehicles annually.

Some industry officials said anti-Japan sentiment may help South Korean companies boost their sales, as Chinese could travel to South Korea instead of Japan.

Some Chinese state media urged Chinese to boycott Japanese goods and cancel travel to Japan, according to the AP.

Lotte Group, which runs department stores, duty free shops and hotels, said its sales could increase if anti-Japan sentiment in China worsens.

“If the situation prolongs, it could have a positive impact” on our business, a Lotte official said, noting Chinese opted to travel to South Korea instead of Japan in a similar case in the past.

Meanwhile, others are concerned that soured relations between China and Japan may not necessarily make Chinese travel to South Korea instead of Japan.

They said anti-Japan sentiment could lower Chinese demand for tour programs linking South Korea and Japan, which in turn could negatively affect South Korea’s move to attract Chinese tourists.

China is South Korea’s largest trading partner, with bilateral trade expected to reach $300 billion by 2015. (Yonhap News)