Japan-China trade prospers
expected to continue its rapid expansion. There are concerns, however, that the Chinese government, as a measure against inflation, may alter its current “appropriately accommodative” monetary policy to a more “neutral” one. As China’s consumer market expands, Japan’s exports of parts, materials, machinery and high-value added products for production of finished goods in China are likely to grow despite expansion of local production of such items.
Moreover, along with China’s economic growth and technical advances, Japan has increased its total investment in China and broadened the spheres for its investment in the country.
Figures published by China’s Ministry of Commerce show that Japan’s investment in China had reached $60.7 billion by 2007. Its direct investment in the country has also undergone a shift from processing industries such as raw material and foodstuffs to manufacturing such as the mechanical and electrical industry.
The Japan-China economic relationship is driven by complementarities in economic structures and the multilateral settings in which both are deeply integrated. These factors have been more powerful drivers of trade than the ups and downs of politics.
What emerges from consideration of the China-Japan economic relationship is the power of strong multilateral institutions in overwhelming the inconsistencies of political disturbance to commerce
According to a recent report from the Japan External Trade Organization (JETRO), Japan’s total trade with China (imports and exports combined) rose 30.0% year-on-year to US$301.9 billion in 2010, exceeding US$300 billion and setting a new (year-on-year) record. Japan’s exports to China rose by 36.0% to US$149.1 billion, while its imports from China rose by 24.7 % to US$152.8 billion.
Japan’s trade with China posted positive growth (year on year basis) for 12 consecutive months in 2010 and was also up overall versus 2009. The improvement was attributed to an increase in exports to China on the back of the country’s high economic growth and a rise in Japan’s imports following its own gradual economic recovery. China remains Japan’s largest trading partner in terms of imports, exports and total trade.
This expansion was larger than the increase in Japan’s overall trade (28.6%), giving Japan-China trade a record 20.7% share of Japan’s total trade in 2010. The share of Japan’s exports to China out of overall exports reached 19.4%, also a record.
Japan’s exports to China reached its highest level ever (in value terms) in 2010. This growth was fuelled by rapid expansion of the Chinese economy, which grew 10.3% in 2010. Imports from China rose due to a surge in import of mobile phones, liquid crystal display television sets and food, on increasing demand in Japan amidst an economic recovery.
Japan’s imports from China showed a clear sign of recovery, posting positive growth (year-on-year) for 11 consecutive months between February and December 2010.
The imports mostly included electrical machinery, personal computers and nonferrous metals.
Japan’s trade with China in 2011 is likely exceed the record growth seen in 2010, with China
Japanese Vice Foreign Minister Kenichiro Sasae (L) and Chinese Vice
Foreign Minister Zhang Zhijun shake hands in Tokyo.