By Kiyonori Murakami *
Japan’s Ministry of Finance announced that trade with China in 2004, including figures for Hong Kong, totaled 22.2 trillion yen ($215.4 billion) and surpassed trade with the U.S. ($200.5 billion). This is the first time since the end of WWII that Japan’s top trade partner has not been the U.S.
Japan recognizes that over the next ten years, China will be the most important business partner for Japan and the country with the highest GDP in Asia. Because of China’s recent trend of eliminating restrictions on foreign retailers forming joint ventures, many Japanese companies are exploring ways to increase their presence in the Chinese market.
For example, the Japanese Curry chain store “Kokoichibanya”, opened the first curry restaurant in China (Shanghai) last September. The takoyaki chain company “Tsukijigindako” and the gyudon chain company “Yoshinoya” also have plans to open stores in Chinese cities. All Nippon Airways (ANA) considers China to be its main target for new business development opportunities.
The EU ranked first in total trade with China in 2004, with $177.2 billion, followed by the U.S. with $169.6 billion, and Japan with $167.8 billion. Chinese trade surplus in 2004 was $31.9 billion. Total exports from China reached $593.3 billion with total imports into China totaling $561.3 billion.
With in the unfortunate events that occurred during WWII, the relationship between Japan and other Asian countries (especially Korea and China) has been strained over the years. However, Japan considers Korea to be an important factor in its own business and political well-being. There seems to be a distinct trend towards including more Korean and Chinese goods and popular culture into daily life in Japan. This bodes well for Japan because it would like to build and maintain strong economic ties with its Asian neighbors.
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* Kiyonori Murakami is an International Extern at Kirton & McConkie. KMC has a Japan Practice Group with several specialists in Japanese trade and investment. For more information, contact Conan Grames at cgrames@kmclaw.com, Hisaka Yamamoto at hyamamoto@kmclaw.com, or Chad Grange at cgrange@kmclaw.com.