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Japan business leaders seek a more investment-friendly China

  • November 22, 2017
  • , Nikkei Asian Review , 3:28 a.m.
  • English Press

BEIJING — Though the recent thaw in Sino-Japanese relations has been good for business, government constraints on foreign companies discourage investment in China, a Japanese business delegation told Premier Li Keqiang here Tuesday.


Both sides praised the improvement in bilateral ties. “We should value the recent positive developments and strengthen the foundation of the China-Japan relationship,” Li said early in the talks, referring to his meeting this month with Japanese Prime Minister Shinzo Abe.


Japan Business Federation chief Sadayuki Sakakibara also expressed high hopes, saying that “a stable political and diplomatic relationship is needed to serve as the basis for our economic relationship.”


Li encouraged the business representatives to invest more actively in China, stressing efforts to open up its economy.

Despite the recent diplomatic progress, Japanese companies have been slow to step up Chinese investment, owing partly to surging labor costs that have made the country less attractive as a manufacturing base. Japanese investment here totaled $3.11 billion last year, down 57% from the most recent peak in 2012, Chinese government data shows.


Some in Japan’s business world have voiced concern about Chinese practices that they say deviate from international rules.


Regulators demanded in September that foreign companies selling certain expensive medical devices disclose pricing and medical data, warning that those failing to comply within about two weeks would be barred from bidding for public-hospital contracts. The government aims to use the threat of losing market access to keep prices down as well as gain valuable information, some argue.


In a dialogue with Chinese entrepreneurs, Shoji Muneoka, head of the Japan-China Economic Association, asserted that the country’s business environment “must conform to global standards.”


New investment will be difficult to justify if China continues violating World Trade Organization rules, a senior executive at a major automaker warned.


A cybersecurity law implemented in June may make it necessary to get government approval to transfer outside the country customer information collected in China. Such a barrier to the free movement of data would pose a problem for Japanese companies that use big data to develop products and services. Muneoka urged Li to avoid hindering companies’ global activities.


The cybersecurity law is spawning imitators in Southeast Asia, while China is using its Belt and Road Initiative to write regional trade rules. Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, asked Li to consider the impact of Beijing’s actions on the world economy while still putting his own country first.

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