Survey shows growing interest in domestic market
Japanese enterprises in China expect to see a free trade agreement (FTA) between China, Japan and South Korea implemented soon, and hope that Chinese authorities can improve their transparency, according to a white paper released by a chamber on Wednesday.
Japanese companies in China would like to see simplified and speeded-up administrative processes by the Chinese government, Kazuaki Tanaka, chairman of the Japanese Chamber of Commerce and Industry (JCCI) in China, said at a press conference held in Beijing Wednesday.
"China's economy is entering into a 'new normal' phase, in which Japanese firms in the country are expected to play a bigger role," Tanaka noted.
The Japanese Business in China White Paper 2015 revealed the results of a survey of 8,874 Japanese companies operating in China, many of whom highlighted the importance of fairness and proposed either the removal or review of various regulations that impede fair competition.
Japanese companies also hope for a change in the regulation of foreign investment because investing in China has been evolving in recent years, Liu Junhong, a researcher specializing in Japanese studies at the China Institutes of Contemporary International Relations, told the Global Times Wednesday.
"Japanese investment is shifting from traditional manufacturing to various other areas, such as China's capital market," said Liu, noting that there will be a rising number of merger and acquisition (M&A) deals by Japanese firms in China in the near future.
Japan was among the top 10 countries and regions in terms of investment volume in the Chinese mainland from January to April, according to data released by the Ministry of Commerce (MOFCOM) in May. The total amount of Japanese investment in China reached $1.44 billion from January to April, the MOFCOM data also showed.
"About 60 percent of the Japanese firms that participated in the survey have seen steady profit growth in China," Tanaka said, adding that none of them intend to move out of China.
However, it has become a trend for Japanese firms to invest in Southeast Asian countries such as Vietnam because of cheaper labor costs, Huang Dahui, a professor specializing in East Asian Studies at Renmin University of China, told the Global Times Wednesday.
"But the Chinese market is still attractive to Japanese firms, as the demand in countries like Vietnam is less strong than in China," Huang said.
Japanese companies that focus on marketing and sales are willing to expand their business in China, according to the white paper, which shows that the Chinese market is still full of potential, Huang noted.
Among the 8,874 Japanese companies that participated in the JCCI survey, many are eager to see the implementation of an FTA between China, Japan and South Korea, as well as progress on the Regional Comprehensive Economic Partnership (RCEP), Tanaka noted.
A total of 16 countries including -China, Japan, South Korea and the 10 member states of the Association of Southeast Asian Nations (ASEAN) started negotiations in November 2012 on the RCEP, which covers various domains such as trade in goods and services, as well as investment among the 16 countries.
The RCEP is expected to encourage and facilitate foreign investment in the region, according to the announcement.
China and South Korea signed a bilateral FTA on June 1, which could accelerate other FTA deals in the East Asian region, Huang said, adding that the signing on Wednesday of the China-Australia FTA will also encourage Japan to focus on accelerating the RCEP talks.
