Why Japan Can’t Get Enough of China
China now absorbs nearly 19% of Japan’s total exports, more than what the U.S. takes in.
Once the Asian economic giant itself, Japan is now courting China for all its worth. The Japanese Ministry of Economy, Trade and Industry sees Chinese consumption increasing to $5.57 trillion by 2020, eclipsing its own forecasted $3.61 trillion.
That makes for an enviable client base. And Japanese businesses know it. They have taken to making goods in China for China, instead of for export elsewhere.
Their enthusiasm helped lift foreign-direct investment there by Japanese manufacturers by 68% over five years to 3.74 trillion yen last year.
Some merchants don’t even have to leave home. Many retailers in Tokyo’s glitzy Ginza shopping district have come to depend on Chinese tourists and their Ginren credit cards.
They can continue enjoying those benefits too. In July, Japan eased visa restrictions in the hopes of attracting 1.8 million Chinese visitors this year, up from 2009′s 1 million.
Those travelers should spend around ¥500 billion this year and with their income rising, they could spend 10 times more over the next decade, equating to 1% of Japan’s GDP!
Call it rebalancing.
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