Japanese investment in China requires cooperative efforts

CHANGCHUN - Declining investment in China by Japanese companies has been disappointing, but a trilateral pact between Japan, China and the Republic of Korea may buffer the falling trend, analysts say.

Latest data from China's Ministry of Commerce showed investment by Japanese companies in China in the first quarter plunged 46.8 percent year on year.

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Japan External Trade Organization (JETRO) statistics showed that last year Japanese companies invested $9.09 billion in China, down 33 percent year on year. The sum accounts for 6.8 percent of all overseas investment Japanese companies made last year.

Ding Yibing, professor with Economics School of Jilin University, said declining investment has been a trend for the past three years.

Li Tie, vice-chairman of the International Trade Association of China(ITAC), said investment was suffering because of souring Sino-Japan relations.

"Japan is turning right-wing on the whole and disputes concerning the Diaoyu Islands have made the situation worse, leading to instability in investment and trade exchanges," said Li.

Japanese investors are attracted by China's market scale and growth potential. But a shift towards Association of Southeast Asian Nations (ASEAN) countries has taken shape, said Minoru Arahata, director of the Dalian branch of JETRO.

The organization's statistics said Japanese companies invested $22.8 billion in Singapore, Thailand, Indonesia, Malaysia, the Phillipines and Vietnam last year, almost triple to that of China, Japan's biggest trading partner.

He told Xinhua that China's rising land and labor costs have led to Japanese companies exploring other Southeast Asian countries where labor is much cheaper.

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