» Business

Japan investment in China down 32%

Publication Date : 08-08-2014


Direct investment by Japanese companies in China dropped 32.5 per cent from a year before to $9.1 billion in 2013, while investment in Association of Southeast Asian Nations member countries rose 2.2 times to $23.6 billion, according to the Japan External Trade Organization.

In 2012, direct investment in China stood at $13.4 billion, exceeding the $10.6 billion spent that year in Asean nations. In 2013, however, Japanese investment in Asean countries overtook that in China, according to the JETRO Global Trade and Investment Report released Thursday.

The latest findings highlighted the current trend for Japanese companies to accelerate moves to enter into Southeast Asian nations rather than China, due to the deteriorating relationship between Japan and China and an increase in China’s labor costs.

Direct investment shows the amount spent by Japanese corporations for purposes such as acquiring foreign companies or building local plants. In 2013, total direct investment by Japanese firms increased by 10.4 per cent to $135 billion, hitting a record high for the first time in five years. The figure last marked a record high of $130.8 billion in 2008.

In 2011, investment in the Asean zone exceeded a then-record high of $19.6 billion. Specifically, investment in Thailand stood at $10.1 billion, followed by $3.9 billion in Indonesia, $3.5 billion in Singapore and $3.2 billion in Vietnam.

By country and region, the United States was the most popular destination for Japanese corporate investment, at $43.7 billion - up 36.7 per cent from a year before. Europe was the second most popular destination at $32.2 billion, up 3.9 per cent, followed by Asean, Central and South America and China.

In February, JETRO announced results of a survey conducted on 9,800 Japanese firms, with 3,471 companies giving valid answers. According to the survey, a historically low level of 54.6 per cent of companies said they were considering expanding their existing business or starting a new business in China.

“Many Japanese companies are building auto plants in Asean countries thanks to rising income levels,” a JETRO official said.


Mobile Apps Newsletters ANN on You Tube