An unusually large delegation of approximately 200 Japanese business leaders has arrived in China, marking the first such visit in more than four years. The economic mission aims to strengthen bilateral economic relations between Japan and China despite ongoing geopolitical challenges. Japanese economic delegations had historically visited China annually since 1975, but the practice lapsed during the COVID-19 era due to border closures and pandemic-related restrictions.
The Japanese business delegates, including Masakazu Tokura, Chairman of Keidanren (Japan Business Federation), are scheduled to meet with Chinese Premier Li Qiang during their visit this week. Tensions between Japan and China have escalated on various fronts, such as disputes over Japan’s release of treated radioactive water into the ocean and the detention of Japanese citizens on suspicion of espionage. Japan’s restrictions on the export of advanced chipmaking equipment to China have also fueled accusations from China about containment efforts.
Despite these challenges, Japanese Prime Minister Fumio Kishida and Chinese President Xi Jinping emphasized the importance of pursuing mutually beneficial relations during a rare meeting in November. China’s top diplomat, Wang Yi, called for establishing a “correct mutual understanding” and highlighting cooperative partnerships rather than viewing each other as threats.
Japan is heavily dependent on China, with Japanese companies having invested significantly in building manufacturing supply chains and forming partnerships with local entities. China is both Japan’s top export market and its largest source of imports. However, a survey published last year indicated that the number of Japanese firms planning to expand in China fell below 30%, with concerns about economic uncertainty and geopolitical risks cited as reasons.
China’s arrest of a Japanese executive on suspicion of espionage has had a chilling effect on business, and some Japanese companies are facing challenges in China due to rising local competition, economic uncertainties, and negative sentiment following the Fukushima wastewater release. Procter & Gamble reported a 34% decline in sales of its SK-II beauty brand in Greater China, citing temporary headwinds for Japanese brands.
Nidec Corp, a Japanese EV parts maker, recently lowered its full-year profit forecast due to intensified price competition in China, while Japanese automakers are grappling with a market share decline in the competitive Chinese electric vehicle market.
The visit by the Japanese business delegation underscores the complex dynamics of economic relations between the two nations amid broader geopolitical issues. Despite challenges, both countries recognize the economic interdependence that exists and the potential for mutual benefit through cooperation.
Read Now:U.S. Navy Warship Transits Taiwan Strait Amid Tensions with China
