Japanese investors increasingly attracted to Chinese market despite US trade tensions

By Huang Ge Source:Global Times Published: 2019/1/2 19:14:35

Trade spat with US doesn’t deter deals

Photo: VCG

Japanese investors' enthusiasm for the Chinese manufacturing industry continues to rise thanks to China's large growth potential and domestic consumer demand, despite trade tensions between China and the US.

China's attraction to foreign investment will not change in 2019 as the country is advancing its reform and opening-up, experts noted.

The comment came after an announcement that Japan-based sugar manufacturer Mitsui Sugar Co will buy 20 percent of COFCO Liaoning Sugar Industry Co in January, according to a filing by the Chinese firm's parent company, COFCO Tunhe Sugar Co, to the Shanghai Stock Exchange on Friday.

The transaction is worth about 2.2 billion yen ($20.1 million), media reports said. It will be the third overseas production base for Mitsui Sugar and the first time that the Japanese company will produce sugar in China.

Mitsui's investment is not an isolated case. Japanese heavy equipment manufacturer Kawasaki Heavy Industries plans to build a factory in Suzhou, East China's Jiangsu Province, in the spring of 2020 to transfer the production of hydraulic equipment components that were previously manufactured in Japan, the Nikkei reported on Saturday.

"Great growth potential and rising consumer demand in the Chinese market are factors that are attractive for Japanese capital, as the country has seen its direct investment in China's manufacturing industry increase since 2017," said Chen Zilei, director of the Research Center for Japanese Economics at the Shanghai University of International Business and Economics.

As bilateral relations between China and Japan have largely improved recently, Japanese investment in the Chinese market will not be affected by trade tensions between China and the US, Chen told the Global Times on Wednesday.

Japan's foreign direct investment (FDI) into the Chinese market was $3.66 billion in the first 11 months of 2018, ranking No.6 among overseas investment, followed by the US with $3.17 billion, according to China's Ministry of Commerce. During the same period, FDI in China rose 1.1 percent year-on-year to $121.26 billion.

China's position as one of the world's most attractive investment destinations will not change as the country is advancing its opening-up, an industry analyst surnamed Yang told the Global Times on Wednesday, adding that foreign investors are optimistic about China.

China took further steps to open its market to domestic and foreign investors on December 25 via the unveiling of a new negative list for market access.

The list, based on experience from pilot programs, has 151 items, down by 177, or 54 percent, compared with the previous version.

Chen said that firmly advancing reform and opening-up will help China hedge risks brought about by trade disputes with the US.
Newspaper headline: Japanese firms drawn to China


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