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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4360)	2/9/2005 6:00:47 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Japanese firms depending on China exports TOKYO - The emergence of China as Japan's biggest trading partner in 2004 underscores the growing dependence of Japanese companies on China for production of their products for export. In the past, there have been concerns that an influx of cheaper Chinese products into Japan would pose a threat to domestic industries. But with Japanese companies in China seeing a sharp increase in exports to Japan and the US, Sino-Japanese trade relations appear to be shifting toward an emphasis on coexistence. The fact that China replaced the US as Japan's largest trading partner highlights how the Japanese economy is leaning heavily on the economy of China , which is growing into a major consumer nation. In 2004, Japan's trade surplus with China posted a 20% annualized increase to 1.45 trillion yen. But Japan's trade surplus with the US was mostly flat at slightly below 7 trillion yen. A growing number of Japanese companies have adopted business models that rely on assembly of products in China for export to such markets as the US In particular, many Japanese manufacturers have shifted production of goods requiring high levels of technology to China and have established R&D bases there as well. The US trade deficit with China totaled about 150 billion dollars in 2004, constituting a quarter of the US's entire trade deficit. With a portion of this said to include Japanese companies' products exported through China, "US-China trade friction issues involve us too," said a senior executive at a major electronics manufacturer. But the economic outlook in the US as the destination for final consumption of goods, remains uncertain. The key to the longevity of Japanese-company exports through China will depend largely on whether money continues to pour into the US to support consumer spending there and imports of Chinese and Japanese products remain brisk. Japan's exports to China remain solid. But in comparison, Chinese imports coming into Japan appear to be stabilizing. As a result, past concerns about a flood of cheap Chinese products contributing to deflation in Japan and job losses are not as prevalent. Japanese imports from mainland China topped 10 trillion yen in 2004, posting 10%-level growth for a second straight year. But the figure pales in comparison to Japan's pace of growth in exports to that nation. Japan's imports of Chinese textile products grew just 5.2%, but the pace of growth in such imports as coal and other resources as well as low-priced materials has shown few signs of losing steam. To this end, China's contribution to deflationary pressure in Japan has not disappeared. (Asia Pulse/Nikkei) atimes.com