| |
Japan strives to adapt to a strong
China
By Suvendrini Kakuchi
TOKYO - China's edging out the United States as
Japan's top trading partner highlights how Beijing's
economic clout has grown in recent years, a factor that
is likely to color touchy bilateral ties and the two
countries' rivalry in Asia.
China's emerging
power is proving a serious challenge to Japan's
traditional postwar leadership in Asia, analysts say.
"China's rise can be compared to the current
'shock and awe' attack operation on Iraq," said Koichi
Ishiyama, a business writer.
The shock comes
from the fact that "China produces everything from
technological to other goods at one half the price.
Japan cannot compete," he explained. "Awe translates
into the economic advantage of China to improve its old
communist image.
"With this gone and the
popularity of its special economic zones, China has
turned into a formidable rival, becoming the second
largest economic power next to the United States," he
added.
Indeed, Akira Koijima, a professor of
business and commerce at Keio University, said, "China
appears keen to seize the diplomatic initiative not just
in Southeast Asia but in the whole East Asian region.
China's rapid economic development has resulted in the
argument for a need to 'quell China as a threat'."
China last year for the first time became the
largest exporter to Japan. That country imported US$61.7
billion worth of goods in 2002 from China, compared with
$57.5 billion from the United States.
This was a
reversal of the picture in 2001, when Japan bought more
goods from the United States than from China.
Last year, China marked a trade surplus with
Japan - exports to Japan were $70 billion compared with
Japanese imports at almost $48 billion.
Likewise, China-Japan trade increased 13.8
percent to $101.5 billion last year, posting an annual
record high for the fourth straight year, according to
figures from the Japan External Trade Organization
(JETRO).
"The new statistics imply that Japan
and China are increasingly dependent on each other as
economic powers," said Kenichi Imai, China expert at the
Institute of Developing Economies, a quasi-governmental
think- tank.
This interdependence means that
Japan must come to grips with China's ascendance and
develop a more balanced, friendly relationship with that
country.
"The two countries, historically at
odds, have to learn to walk the tightrope in bilateral
diplomacy as friction lies ahead," said Imai.
There are other signs of deepening economic
links. For instance, imports of China's low-cost
products are now mainly in machinery such as in office
machines and audio equipment, which increased by 29.4
percent in 2002 from 2001.
Marine and
agricultural products as well as cheap apparel are also
flooding the Japanese market.
This surge follows
high investment by Japanese firms that are attracted by
low labor charges in China - between 20 and 30 percent
lower than Japan - and the fast-growing consumer market
in a country whose gross domestic product reportedly
grew by 8 percent last year, compared with Japan's less
than 1 percent.
As Ishiyama said, the Japanese
cannot compete with China's low production costs, so
Japanese manufacturers are going to China to produce
goods instead.
As of 2001, Japan invested $32.3
billion in China, not counting Hong Kong and Macau,
making it the second-largest investor in mainland China
after the United States.
Toshiba Corp, a leading
Japanese electronics manufacturer, for example, has
released new plans to double investment to China to $2
billion over the next five years for projects including
the world's largest notebook-computer plant.
Drawn into joint ventures aimed at capturing the
lucrative local market, several large Japanese companies
have moved into new collaborations.
Nissan Motor
Co will start joint operations with Dong Feng Automobile
Co, one of three major Chinese auto makers, by investing
$976 million this year. Nissan hopes to boost its share
of the Chinese market for passenger cars to more than 10
percent in 2006.
But growing economic ties also
brings with it potential for friction. The first signs
of serious economic provocation came this year when
Japan voiced strong concerns over its domestic deflation
being linked to cheap Chinese goods.
In January,
Finance Minister Masajiro Shiokawa said China should
abandon the peg of its currency, the yuan, to the
dollar. Officials say cheap Chinese goods are tantamount
to exporting deflation to other countries and calling
for a re-evaluation of the "too low" value of the yuan.
The yuan has traded in a range of about a third
of a percent - about 8.28 yuan - to $1 for the past
eight years. China, however, has brushed aside the call
for an appreciation of its currency.
Japan's
Nikkei, the leading financial daily, likens Japan's
record trade deficit with China to the regular bouts of
friction between Tokyo and the United States. Japan's
large trade surplus with the United States - about $7
billion in 2002 - is a thorn in its ties with its
closest ally.
As room for friction increase with
trade ties, China and Japan have already begun to invoke
tariff safeguards on such goods as steel imports under
the standards of the World Trade Organization, which
China joined last year.
Some Japanese
politicians also are calling for cuts in Tokyo's aid to
China, which for fiscal year 2002 already fell 25
percent from the previous year. They say aid should be
reduced, citing China's economic might and rise in
military spending.
Another sore point is the
rise in bankruptcies among small and medium-sized
companies in Japan, which are being linked to the
increase in cheap Chinese imports.
The Chinese
economic onslaught is likely to shape Japan's foreign
policy and nudge Tokyo to scramble for more free-trade
agreements with the Association of Southeast Asian
Nations (ASEAN) and East Asia.
A free-trade
accord, the Japan-Singapore Economic Partnership
Agreement, took effect in November 2002.
Analysts say that East Asia and ASEAN are also
seeking a balancing factor from Tokyo against China's
looming shadow. "Japan must increase its efforts to
restructure its industry and its agricultural sector to
play the role of balancer," said Koijima.
(Inter
Press Service)
|
| |
|
|
 |
|
