Japan's
economy has been in the dumps for a long time, but western businesses
should watch out because the slumbering giant is stirring and making
bold overtures to China.
China is Japan's second biggest trading partner, but Japan is only China's third largest trading partner after the EU and US, according to the China Daily.
Deteriorating political relations between the two Asian countries caused Sino-Japanese bilateral trade to suffer in recent years, with the EU replacing Japan as China's biggest trading partner in 2004.
Nevertheless, China is now looking to thaw frosty relations with Japan, according to the Chinese 'paper. The strong recovery signals being put out by Japan's economy 2005 have weakened somewhat in 2006. However, some economists believes that if Japan can put its economy back on a sustainable growth track, Japan could overtake both the US and the EU and once again become China's top trading parter.
In 2004, Sino-Japan bilateral trade grew a phenomenal 25% although growth dropped to below 10% last year. This year, it is currently running at around 11.8%.
At the Sino-Japanese Economic Symposium, held recently in Changxing, Zhejiang province, the two Asian giants discussed ways of boosting bilateral trade.
Interestingly, environmental protection and saving energy were seen as two fields where Japan had much to offer China.
According to a Ministry of Commerce spokesman, China believes Japan has "ample management experience and apparent technological advantages" in areas such as burning rubbish, processing sewage and the development of renewable energy.
Processing sewage might not seen the most glamorous of business opportunities but China is crying out for outside help in the environmental field and it has apparently has lots of money to invest in projects. The PRC's current five-year plan allocates 3.8 trillion yuan, or almost $500bn to this field in a bid to build a greener society.
While China's new economy offers enormous opportunities in areas as diverse as mobile phones, supermarkets and banking, I think too many businesses in the west focus on these "hot" markets and neglect the long-term growth potential of less glamorous sectors like water supply and environmental protection.
The symposium also discussed greater cooperation between China and Japan in hi-tech sectors, where Japan's strengths are well known.
Separately, Qingdao Software Park, officially launched an office in Tokyo in a bid to attract Japanese software enterprises to invest in Qingdao. So far, 13 Japanese software enterprises have visited Qingdao.
Like the rival Dalian Software Park, Qingdao is hoping geographic proximity to Japan will help it attract software-related investment from Japanese hi-tech companies, as well as provide a base for Chinese software companies to sell into the Japanese market. Neusoft, for example already, has its facility in Dalian -- see this EngagingChina story for more on Neusoft.
