Year ahead provides opportunity to improve ties, trade official says
Diplomatic tensions and rising costs mean that an increasing number of Japanese companies are moving to emerging markets elsewhere in the region, a leading Japanese trade official said.
But Shintaro Mine, president of the Japan External Trade Organization in Shanghai, said that the time is right for tensions to ease.
"I think the countries should take advantage of the 35th anniversary of the signing of the Treaty of Peace and Friendship between Japan and China as a window of opportunity to improve relations."
Mine oversees his country's largest government-led foreign trade and investment office outside Japan. A poll conducted by the organization in December suggested that China's attractiveness as a top investment destination was declining.
Of the 8,000 Japanese enterprises surveyed, all with a presence in the Asia-Pacific region, 52.3 percent believed that China would still be an important investment destination in two years. This figure was down from 66.8 percent at the end of 2011.
The fall marked the steepest single drop for a country, Mine said.
"We noticed a surge in Japanese interest in emerging markets like Cambodia, Myanmar and Laos. There's already intense competition in countries such as Vietnam and Indonesia where Chinese companies have established a foothold," Mine said.
Concerns over China's rising costs have also come into play as higher wages and operating costs deter Japanese investors, he noted.
"Some Japanese firms lost the opportunity to bid for certain government procurement projects in China. These companies have a growing sense of uncertainty about carrying out business in China," he said.
Japan's automobile sector, tourism, agriculture and food exports are among the worst-hit industries since September, Mine noted. As a result, only a fraction of investment projects are being carried out as planned, while most operations have been halted or even completely stopped.
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