by Akio Isomata
Ambassador and Consul-General of Japan in Shanghai
Japan and China
The relationship between our two countries is now back on a normal track and is at a new stage of development. At the G20 Osaka summit in June, both countries’ leaders agreed to open up a “New Era of Japan and China.” Additionally, there are a great deal of high-level and other dialogues currently taking place that we fully expect to continue. This new era of relations is creating fantastic opportunities.
China: The world’s market
China’s population currently stands at nearly 1.4 billion people. The country remains a huge market for investors and businesses from Japan and the rest of the world. The Chinese market is said to include 450 million middle-income people and 150 million high-income people.
Here at the consulate in Shanghai, we cover Shanghai and four neighboring provinces. Young Chinese people are increasingly interested in Japan, and we are hosting traditional and local performances, as well as introducing to Chinese youths new aspects of Japanese culture, including popular music, anime, digital art and video games by hosting, organizing and supporting relevant events and activities. Innovation and co-creation are also playing important roles in bringing our two countries together and we play an active role in these areas.
‘ The Trinity:’ Consulate General, JETRO (Japan External Trade Organization) and the Shanghai Japanese Commerce and Industry Club
We work together to discuss policy, advocacy and share our resources to collect business-related data. Based upon the data, we compile an annual recommendation report on the improvement of the business environment in Shanghai, submit it to the local authorities and conduct follow-up discussions regularly.
Japanese in China
There are 57,000 Japanese expatriates living and working in Shanghai and the city’s four neighboring provinces. This accounts for more than 40 percent of all Japanese expats living in China. There are 41,000 Japanese expats living and working in Shanghai itself compared with just 8,000 Japanese expats living in Beijing. Eighty-six percent of Japanese direct investment to China comes to Eastern China, namely, Shanghai and its surrounding provinces.
Today, the city is at the forefront of economic and cultural exchanges between Japan and China. Shanghai is also striving to become the financial center of China, and the two countries are
holding regular capital market dialogues as the financial sector in China continues to develop. At the timing of the 2nd China International Import Expo held in early November,
the Japanese government sent two state ministers, and the number of Japanese firms reached nearly 400 — the largest among foreign firms.
Japan and China are taking on the challenges faced by the global community. Both countries can work together to address issues related to free trade, climate change, global health, innovation, medical and health services, among other areas. We can also assist the private sector to reach out and take advantage of opportunities in developing countries.
Challenges and solutions
Since China started the policy of reform and opening up in 1978, the country has attracted significant investment from Japan. The challenges the Japanese business communities face in China encompass global challenges such as the slowing down of the world economy, U.S.-China trade frictions, cost of labor and increasing property prices.
In China it is becoming more difficult to invest in labor-intensive businesses due to the high-cost of labor, environmental and safety restrictions. Moving forward, Japanese and international investors will need time to change and adapt to the shifting business conditions in China.
Tourism remains a huge opportunity. In 2014, 2.41 million Chinese visitors traveled to Japan. Last year, 8.38 million Chinese people visited Japan and here at the consulate, we issued 2.25 million visas to Chinese passport holders visiting Japan — one-third of all Japanese visas issued in the world. This year we are expecting more than 9 million Chinese travelers to visit Japan and, with the 2020 Tokyo Olympics taking place next year, we expect interest in visiting Japan to further increase. In addition, we are encouraging global tour operators to adopt the “Fly and Cruise” concept. This involves wealthy North American and European travelers flying to Shanghai and then taking an overnight cruise to Japan. This initiative has good potential as it provides these travelers a chance to experience both China and Japan and compare cultural differences between the two countries.
Japan and China’s partnership is open to other global players, and we want to cooperate and work together with other countries to address the global challenges we commonly face. When Prime Minister Shinzo Abe visited China in 2018, 52 memorandums of understanding were signed by public and private organizations for cooperation in markets of developing countries. Japan and China can work together to grasp various opportunities as we address regional and global concerns. This “win-win-win” concept between Japan, China and other countries can bring the region closer together while strengthening the long-term relationship between Japan and China.
“China and Japan have a good relationship and we are seeing efforts to strengthen the economic ties between our two countries. There are many opportunities to bring our countries closer together through increased trade and the Shanghai Japanese Commerce and Industry Club will continue to work to support the Japanese business community in China.”
Hitoshi Nakamura, Secretary General, Shanghai Japanese Chamber of Commerce and Industry Club (JCCIC)
“In 1972, Japan and China re-established diplomatic relations and today is a ‘Golden age’ for our partnership. We are seeing closer ties regarding trade relations between both countries and interaction is increasing both economically and culturally. About 15 percent of JETRO’s annual budget is spent in mainland China, indicating the importance JETRO places on the Chinese market. We have eight offices in China, including Hong Kong and actively encourage investment from China to Japan.”
Michiaki Oguri, Managing Director, Japan External Trade Organization (JETRO)
“The Japan National Tourism Organization maintains 21 offices in key cities around the world. Each overseas office is committed to promoting travel and tourism to Japan. JNTO currently has two branches in China, namely Shanghai and Beijing and will be opening a new branch in Guangzhou towards the end of 2019. Chinese tourists to Japan account for the largest number of visitors to Japan from any country. The most popular travel destinations for Chinese travelers to Japan are Tokyo, Osaka, Hokkaido, Chiba, Aichi, and Kyoto.”
Kenji Haraguchi, Chief Representative, Japan National Tourism Organization (JNTO)