Japanese firms still betting on China despite tensions, see leaving ripe market as nonsensical
- 350 Japanese exhibitors attended this year’s China International Import Expo (CIIE), showing an eagerness to explore the Chinese market despite ongoing tensions
- Trade and investment between China and Japan has slackened amid strained bilateral ties, but some Japanese firms still say it ‘would make no sense’ to exit the vast market
In an address by Premier Li Qiang to the China International Import Expo (CIIE) held in Shanghai earlier this month, Japanese pharmaceutical giant Takeda was selected to be given a specific mention.
The company was touted as an example of the ample opportunities that could be found by foreign enterprises who chose to do business in the country.
When drafting the address, Li’s speech-writers and CIIE organisers were instructed to find a well-known Japanese company whose business had prospered in China in the last two to three years to illustrate “attractiveness and foreign firms’ enduring confidence”, according to a source with direct knowledge of the matter.
Prosperity may only begin to cover it. A dozen of the Osaka-based drug makers’ cutting-edge medications that have debuted or been presented at previous expos were chosen for coverage in the national health insurance system by regulators, opening their products to the nearly 96 per cent of the country’s population under public plans.
“Companies from our major [trading] partners can continue to thrive in China and defy all the complexities,” commerce minister Wang Wentao said when touring Takeda’s 800-square-metre (8,600 sq ft) booth.
Beijing’s clear interest in boosting the confidence of foreign companies amid the economy’s uneven post-Covid recovery and volatile geopolitical changes appeared to be welcomed by Japan, as 350 of its exhibitors were in attendance at this year’s CIIE.
But trade and investment between the two huge economies has slackened. Total trade slumped by 12.2 per cent year on year to US$262.79 billion in the first 10 months of 2023, according to China customs data.