Japanese investment in China expected to pick up
June 26, 2017 Category Foreign investment, Weekly
Sagging Japanese investment in China is expected to pick up after several years of declines, as better relations between the two nations boost business confidence, according to a white paper by the Japanese Chamber of Commerce and Industry in China. But it also called for fair treatment, more transparent administrative procedures, and a further opening of the market. Of the 8,852 Japanese businesses surveyed late last year for the white paper, some 40.1% said they were willing to expand their business in China, while 7.1% wanted to scale down or withdraw, compared to 38.1% wanting to expand in 2015, and 10.6% keen to scale down or leave. It was the first time the proportion of Japanese businesses aiming to expand in China had grown, albeit only slightly, in recent years, and it was also the first time since 2011 that the percentage of those wanting to exit declined. “Our current conclusion is that Japanese business would act more positively towards investing in China from now on,” said Yoshihisa Tabata, Director of the Beijing office of the Japan External Trade Organization (JETRO), and lead researcher and author of the white paper. He also noted that there was a strong correlation between business sentiment data gleaned from the annual survey and the actual foreign direct investment (FDI) figure the following year. Japanese businesses signaling their willingness to invest in China reached the lowest level in the 2015 study, and the following year FDI from Japan fell 3.1% year-on-year to USD3.1 billion – the lowest investment since 2001. It was the fourth straight year FDI from Japan had declined. Last year’s FDI was also half that of the peak in 2012, when Japanese investors poured some USD7.4 billion into China, the South China Morning Post reports.
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