China's reform boosts Japanese firms


CNC  Added On August 7, 2014





Despite recent reports that Japanese investment has declined in China, analysts say China will remain an important destination for investment among Japanese businesses.


And the country's reforms will offer fresh opportunities.


Since this year, reports about the decline of Japanese investment in China have spread.


According to the Ministry of Commerce, direct investment from Japan, China's fifth-biggest investor, plunged 42.2 percent year on year during the January-May period. 


The recently issued "White Paper 2014: Chinese Economy and Japanese Enterprises" by the Japanese Chamber of Commerce and Industry of China echoed the situation.


But the president of the Chamber said the drop was partly a result of rising production costs. 


SOUNDBITE(JAPANESE):SHINJIRO SAWADA, Japanese Chamber of Commerce and Industry of China

"There is no direct analysis that concludes the investment trend issue in our white paper. But we quote a survey from the Japanese External Trade Organization showing that there is an investment withdrawal tendency from Japanese enterprises in China. The survey gave such tendency against the backdrop of productivity costs, such as the rising price of raw materials and labor. But the survey also showed that more than half of all Japanese enterprises in China are still optimistic about the Chinese market, and are hoping to expand their business in China. So generally speaking, the situation is still optimistic."


China's ongoing economic restructuring, with the country's growth slowing and production costs rising, is posing new challenges for Japanese businesses.


But along with new challenges also come fresh opportunities. 


SOUNDBITE(JAPANESE):SHINJIRO SAWADA, Japanese Chamber of Commerce and Industry of China

"There is a new trend in bilateral trade. China was used as the world's factory in the past and the country used to import raw material from Japan, then produce and process them in China, and finally export them to Japan or other countries. However, China is a potential consumer market, so we will tap into the large market in the future."


Beijing Dentsu Advertising Co., Ltd is a Japanese enterprise in China. Its general manager Nagasaki said his company hopes to expand investment in China.


SOUNDBITE (JAPANESE): NAGASAKI, Beijing Dentsu Advertising Co. 

"We expect greater development in China with a market of rapid growth. So we will expand our investment in China. We have some business opportunities in other countries in Asia, but we still see China as one of the most important markets in the world."


Experts say China's reform push to expand the market scale, open industrial scope and improve the business environment will still make it attractive for Japanese enterprises.