A bird's-eye view of the skyline of Kobe in Japan File photo: IC

A mature business environment and good contract spirit make Japan an investment destination that favors more and more Chinese enterprises. At the same time, Chinese enterprises bring high-tech and business-model innovation to Japan, making up for the labor shortage in Japan's aging society and helping the country break its inherent contemplation mode to solve real problems.

Data from the Ministry of Commerce in April shows that bilateral trade between China and Japan reached $327.66 billion in 2018, up 8.1 percent year-on-year. China's direct investment in all industries in Japan was $251 million in 2018, remaining at a high level from the previous year.

Japanese Prime Minister Shinzo Abe vowed to push bilateral ties to "a new stage" on Friday during a policy speech, the Xinhua News Agency reported. Abe said that exchanges between Japan and China should be expanded to all areas, including economic and youth exchanges.

At an investment forum held by the Japan External Trade Organization (JETRO) Beijing and the China Council for the Promotion of International Trade (CCPIT) in August, government and business representatives of both China and Japan told the Global Times in a recent interview that "innovation" is a key word for bilateral trade, with advanced fields such as artificial intelligence (AI) becoming an unknown market space for investment in Japan.

Important players

"Japan is facing a serious aging problem. The population is shrinking and each region has its own problems," Takeo Donoue, director general for the Beijing Office of JETRO told the Global Times. "Young Chinese companies in particular have a lot of technologies related to AI and big data. If they can use these new technologies and ideas to help Japan solve real problems, it will be an extremely promising result."

Donoue noted that Chinese companies which can stimulate and bring new vitality to Japan are undoubtedly important players in the Japanese market.

With Japan's population set to fall below 100 million by 2053, the country desperately needs to improve productivity through advanced technologies such as AI, according to data from Tokyo Shoko Research.

"As a mature society, Japan has formed an inherent thinking mode to some extent, and it is difficult to brew new ideas. In the process of learning new technologies from China, Japan can get a lot of inspiration and solve long-standing problems easily with new technology from China," Donoue added.

In fact, some innovative Chinese enterprises have already tried to lay out the Japanese market. According to statistics, there are less than 5,000 radiologists in Japan, unable to cope with the huge population and patients in need. 

Infervision Technology Corp, a Chinese medical innovation company, has made its first stop abroad in Japan. It developed AI products based on clinical trial samples to help radiologists read X-ray photographs and identify possible lesions. The company helped liberate the hands of nearly 80 percent of radiologists, and received widespread attention from the Japanese medical industry and media.

"AI products cannot replace doctors, but they can be assistants," Zhou Xiaoyan, Infervision's president, told the Global Times. "In the future, the products will be updated and iterated constantly to better integrate into the medical process, based on the feedback from Japanese doctors."

Kobe, a port city in western Japan, is home to 354 medical-related companies, making it the largest biomedical cluster in Japan. 

"Kobe is challenging cutting-edge fields to attract foreign investment led by Chinese enterprises," Akira Umesawa, the head of the general representative office of Kobe city government in China, told the Global Times.

According to Umesawa, Kobe has a set of supporting policies for foreign enterprises such as subsidizing up to 33 million yen ($308,880) spent on rent, as well as providing financial support such as communications fees and senior talent fees. 

Highly complementary

Kobe is not the only city in Japan that offers big financial support to foreign enterprises.

Yokohama provides the most incentives in Japan. Relying on natural geographical advantages, Chinese enterprises such as Huawei, BYD, Great Wall Motor and Bank of China have already settled in Yokohama. 

But in order to attract more high-quality enterprises, the Japanese city offers subsidies of up to 5 billion yen for foreign enterprises.

"Yokohama pays particular attention to the development of high-tech industries such as AI, big data and robotics, and has launched a support policy especially for Chinese enterprises," Tomoko Kawashima, chief representative of the Yokohama Industrial Development Corporation Shanghai Office, told the Global Times.

"Subsidies of up to 5 billion yen will be provided to large enterprises and up to 100 million yen to small and medium-sized enterprises. In addition, offering incubator offices, introducing experts, business consultants and other special supports are [services] available," Kawashima added.

Japan's AI market is expected to reach about $20 billion by 2030. AI will penetrate more industries and the market size is expected to grow, according to Tokyo Shoko Research.

"Japan is in delay in terms of digitalization, and Japanese companies are eager to upgrade their technological capabilities," Kenyu Osawa of Japan's DIP Corp told the Global Times. "China, like Japan, faces an aging population. The two countries can work together to solve common problems."

China has taken a leading position in the field of AI, and its progress could complement and accelerate Japan's own AI development.

The UN's World Intellectual Property Organization (WIPO) said that China is leading the world's AI technology, together with the US. 39 percent of executives worldwide believe China will overtake the US as the global leader in AI, according to a survey conducted by the Global Business Policy Council and reported by Forbes in August.

"The companies in China are growing fast by using AI," said SoftBank Group Corp Chairman and CEO Masayoshi Son, the Japan Times reported in July. "As I love Japan, I want to invest in Japanese companies, but the reality is that there are no unicorn AI companies in the country."

WIPO reported that China had 17 of the top 20 academic organizations filing for AI-related patents.

I believe that China and Japan are highly complementary in innovation areas such as AI, Hiro Watanabe, director of the incubation and innovation department of SoftBank's subsidiary DEEPCORE Inc, told the Global Times.

"There are few business-to-consumer (B2C) cases in retail, entertainment and media, as data available in the Japanese market is scarce and of low quality due to restrictions on regulatory measures, personal information protection and other laws and regulations," said Watanabe. "China not only has a large amount of big data and a wealth of B2C application cases, but also has a lot of practical experience that Japan does not have."