Fair wind for Ja­panese firms

Im­proved busi­ness sen­ti­ment prompts com­pa­nies to scale up their China oper­a­tions

China Daily (Canada) - - TORONTO - By LI XIANG lix­i­ang@chi­nadaily.com.cn

Most of the Ja­panese com­pa­nies in China are will­ing to ex­pand their oper­a­tions, sig­nal­ing im­proved busi­ness sen­ti­ment af­ter a sharp con­trac­tion last year, a top Ja­panese trade of­fi­cial said on Wed­nes­day.

Food and trans­porta­tion equip­ment man­u­fac­tur­ers showed the strong­est de­sire to ex­pand their busi­ness in China whereas ex­port-ori­ented com­pa­nies were less mo­ti­vated, said Yoshi­hisa Ta­bata, di­rec­tor-gen­eral of the Bei­jing of­fice of the Ja­pan Ex­ter­nal Trade Or­ga­ni­za­tion, cit­ing a sur­vey con­ducted by the or­ga­ni­za­tion.

Op­ti­mism about China’s eco­nomic re­form and tran­si­tion as well as im­proved po­lit­i­cal re­la­tion­ships are cited as rea­sons for the im­proved busi­ness sen­ti­ment, the sur­vey showed.

It was con­ducted among 35 Ja­panese com­pa­nies in China be­tween June and Au­gust against the back­drop of a 40 per­cent con­trac­tion of Ja­panese in­vest­ment in China last year due to the slow­ing Chi­nese econ­omy, ris­ing la­bor costs and the de­pre­ci­a­tion of the yen.

“The de­clin­ing

in­vest­ment trend seems to have ceased and most com­pa­nies we sur­veyed ex­pect China’s eco­nomic growth to be sta­ble,” Ta­bata said, not­ing that to­tal Ja­panese in­vest­ment in China will re­main at around $4 bil­lion this year.

Chi­nese con­sumers have shown a surg­ing in­ter­est in Ja­panese prod­ucts while the num­ber of Chi­nese visi­tors to Ja­pan has soared, which of­fer more in­vest­ment in­cen­tives to Ja­panese com­pa­nies, he said.

Dur­ing the first seven months of the year, the num­ber of Chi­nese visi­tors to Ja­pan more than dou­bled to 2.76 mil­lion, ex­ceed­ing the to­tal num­ber last year, ac­cord­ing to the Ja­pan Na­tional Tourism Or­ga­ni­za­tion.

“The shop­ping spree by Chi­nese con­sumers in­di­cated that con­sump­tion and the ser­vices sec­tor will be a key driver of fu­ture growth. It­meansa lot of op­por­tu­ni­ties for us to ex­plore,” a Ja­panese trad­ing com­pany was cited by the sur­vey as say­ing.

The Chi­nese gov­ern­ment’s push for more in­vest­ment in in­fra­struc­ture projects and the grow­ing de­mand for au­to­ma­tion at Chi­nese plants will also help drive busi­ness for Ja­panese equip­ment man­u­fac­tur­ers, the sur­vey said.

Most of the Ja­panese com­pa­nies said that they have not felt any im­me­di­ate im­pact on their busi­ness from China’s stock mar­ket crash, but some ex­pressed con­cerns that it might weigh on fu­ture per­sonal con­sump­tion.

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