Japan, Inc. sees better opportunities beyond China’s ‘Belt and Road’

TOKYO — A vast majority of Japanese companies have no interest to participate in China’s sweeping “Belt and Road” initiative, seeing greater business opportunities in other international economic cooperation, a Reuters poll shows.

Only 5% of 220 respondents in the monthly Reuters Corporate Survey said they would participate in the Chinese project, which aims to build infrastructure and trade links between China, central Asia, Europe and beyond.

Instead, they thought a free trade agreement (FTA) between Japan and the United States, proceeding with the Trans Pacific Partnership (TPP) without the United States or economic cooperation with Russia, among others, represented better business opportunities.

“Japanese businesses basically have no clear idea about the ‘Belt and Road’ projects,” said Toru Nishihama, chief economist at Dai-ichi Life Research Institute, who reviewed the survey results.

“Will any projects pay? Can Japanese firms expect a level playing field when they compete with Chinese state-owned enterprises?” he asked. “A lot of questions remain unanswered. Under such circumstances, companies have no choice but to wait and see.”

The survey results underscore skepticism from elsewhere about the Chinese initiative, seen by some critics as an attempt to promote Chinese influence overseas.

Some Japanese and Western officials have expressed concern about transparency and access for foreign companies to the “Belt and Road” projects.

Last weekend, Chinese President Xi Jinping gathered with 29 other heads of state to promote the modern-day Silk Road and they agreed to build an open economy and ensure free and inclusive trade under the initiative.

Japan’s prime minister, Shinzo Abe, did not attend the summit. Instead, the ruling party’s No. 2 official, Toshihiro Nikai, represented Japan.

The survey, conducted monthly for Reuters by Nikkei Research, polled 527 big and mid-sized businesses between May 9 and May 19. Around 220 firms, which replied on condition of anonymity, responded. About a third of Japanese firms believed a bilateral free trade agreement with the United States would boost their business opportunities, the survey found.

A quarter picked the TPP, an 11-nation free-trade zone, despite the withdrawal of the United States. The survey showed 14% opted for Russian-Japanese economic cooperation, while just 6% saw opportunities in China-led infrastructure investment.