SunWuKong
08-19-2004, 09:05 PM
The Dragon invests in Japan
By J Sean Curtin
While China has enjoyed stupendous economic growth rates, Japan has suffered a decade-long downturn, though now it's on the upswing. These two opposing, yet complementary, forces finally are beginning to interact, altering the fundamental dynamics of the Sino-Japanese equation. Even though Japanese companies are still heavily investing in China, the traffic is no longer one-way. An increasing number of cash-rich Chinese enterprises are starting to buy up Japanese firms weakened by the prolonged business slump.
Japan is now China's largest trading partner, while China is Japan's second-largest trading partner after the United States. Most economists predict that in the space of a few years China will easily snatch the number one slot. China already has overtaken the US as the largest exporter to Japan.
Although the trend of Chinese companies buying Japanese enterprises is only in its nascent stage, it appears to be the genesis of a highly significant shift, which will probably transform the underlying nature of the two countries' increasingly interdependent economic links.
The exact number of these Chinese acquisitions and their total worth or estimated worth is not known. The Japanese government is not known to have published figures or estimates for Chinese firms investing in Japan because the numbers are still low.There is apparently no public country-by-country breakdown for foreign direct investment (FDI). Overall, Japan's ratio of FDI inflow to gross domestic product (GDP) is low.
Buoyed by phenomenal growth and a determination to enhance their global presence with brands and the latest cutting-edge technologies, a growing number of Chinese enterprises are homing in on Japan as fertile investment soil. While some sectors of the Japanese economy have recently shown signs of recovery, huge swathes remain in poor shape, weakened by the lengthy recession. These conditions make many Japanese companies ripe for foreign acquisition.
Dr Linda Yueh, a well-known expert on the Chinese economy at the London School of Economics (LSE), told Asia Times Online, "China will likely become an investor in Japan on account of the strong push of Chinese firms to establish their brands overseas, and [they are] learning from companies which have been able to do so successfully. Moreover, Chinese consumers prefer Japanese products, particularly in cosmetics, and such industries become natural acquisitions and partners."
In the past three years, a number of Chinese enterprises have acquired majority stakes in a wide variety of Japanese companies, ranging from a microwave-oven manufacturer to a high-tech printing firm. In most cases, the Chinese purchaser was able to turn around an ailing Japanese business by restructuring and relocating some production to China, where labor costs are cheaper. All indicators point to a greater volume of Chinese investment in Japan during 2004.
more... (http://www.atimes.com/atimes/China/FH17Ad05.html)
By J Sean Curtin
While China has enjoyed stupendous economic growth rates, Japan has suffered a decade-long downturn, though now it's on the upswing. These two opposing, yet complementary, forces finally are beginning to interact, altering the fundamental dynamics of the Sino-Japanese equation. Even though Japanese companies are still heavily investing in China, the traffic is no longer one-way. An increasing number of cash-rich Chinese enterprises are starting to buy up Japanese firms weakened by the prolonged business slump.
Japan is now China's largest trading partner, while China is Japan's second-largest trading partner after the United States. Most economists predict that in the space of a few years China will easily snatch the number one slot. China already has overtaken the US as the largest exporter to Japan.
Although the trend of Chinese companies buying Japanese enterprises is only in its nascent stage, it appears to be the genesis of a highly significant shift, which will probably transform the underlying nature of the two countries' increasingly interdependent economic links.
The exact number of these Chinese acquisitions and their total worth or estimated worth is not known. The Japanese government is not known to have published figures or estimates for Chinese firms investing in Japan because the numbers are still low.There is apparently no public country-by-country breakdown for foreign direct investment (FDI). Overall, Japan's ratio of FDI inflow to gross domestic product (GDP) is low.
Buoyed by phenomenal growth and a determination to enhance their global presence with brands and the latest cutting-edge technologies, a growing number of Chinese enterprises are homing in on Japan as fertile investment soil. While some sectors of the Japanese economy have recently shown signs of recovery, huge swathes remain in poor shape, weakened by the lengthy recession. These conditions make many Japanese companies ripe for foreign acquisition.
Dr Linda Yueh, a well-known expert on the Chinese economy at the London School of Economics (LSE), told Asia Times Online, "China will likely become an investor in Japan on account of the strong push of Chinese firms to establish their brands overseas, and [they are] learning from companies which have been able to do so successfully. Moreover, Chinese consumers prefer Japanese products, particularly in cosmetics, and such industries become natural acquisitions and partners."
In the past three years, a number of Chinese enterprises have acquired majority stakes in a wide variety of Japanese companies, ranging from a microwave-oven manufacturer to a high-tech printing firm. In most cases, the Chinese purchaser was able to turn around an ailing Japanese business by restructuring and relocating some production to China, where labor costs are cheaper. All indicators point to a greater volume of Chinese investment in Japan during 2004.
more... (http://www.atimes.com/atimes/China/FH17Ad05.html)