To: gg cox who wrote (16999 ) 4/13/2007 12:29:37 PM From: elmatador Respond to of 217886 Sino-Japanese cooperation saves Japan 2 trillion yen in foreign exchange annually Despite small changes in Japan's industrial growth index over the last decade (just 1.5 percentage points) Japan's export and import trade has increased remarkably. In 2005, Japanese exports rose 27% from 2000, and overall trade by 39%. This is the major reason for the Japanese economy's recovery over the last five years. A turning point in the data is when China became the largest exporter to Japan. In 1980 the value of products exported from China to Japan accounted for just 3.1% of Japan's total import trade. The ratio rose to 5.1% in 1990 and to 14.5% in 2000. In 2005, China replaced the United States as Japan's largest exporter, occupying 21% of the Japanese market. The rapid growth of the share of Chinese products in the conservative Japanese market demonstrates the rapid improvement of China's trade competitiveness. As a result, Japan's dependence on the Chinese market has grown rapidly. In 1980, the value of products exported from Japan to China accounted for 3.9% of total exports. This situation has not changed much in the 1990s. At one stage the ratio dropped to just 2.1%. In 2000, the ratio rose to 6.3%. By 2005 it had doubled to reach 13.5%. How will growing Japanese imports of Chinese good influence bilateral relations? Who stands to benefit more? A senior research fellow from Nomura Securities believes that "by improving its trade terms with China, Japan actually facilitated the transfer of a tremendous amount of revenue from China to Japan. As a result, Japan can save as much as 1.9 trillion yen [approximately 123.5 billion yuan] of foreign exchange, equivalent to 0.4% of its GDP and 10 times the size of its direct investment in China in 2002 [statistics from the Japanese Ministry of Finance]." People in Japanese industry circles generally agree that it was the "special demand from China" that helped industries such as iron, steel and petrochemicals out of the shadow of the economic crisis. Meanwhile, given the aging population and low birth rate in Japan, people have reached a consensus that there are great benefits to be had from taking advantage of labor divisions within China and entering the Chinese market. A few years ago, there were concerns of an "industrial hollowing-out". Today very few people mention this. english.people.com.cn