By Ryan Woo and Eduardo Baptista
BEIJING (Reuters) – A delegation of around 200 Japanese business leaders and CEOs returned to China this week for their first stop since 2019 as they sought to establish economic ties in the face of geopolitical headwinds that have tested bilateral relations.
Japanese economic delegations had visited China every year since 1975, but those visits lapsed during the COVID-19 era when China largely shuttered its borders due to its stringent pandemic policies.
On Thursday, delegates from the tough Keidanren, as the Japan Federation of Enterprises is known, and the Japan-China Economic Association met with Chinese Premier Li Qiang at the Great Hall of the People.
“Premier Li Qiang said China and Japan are going through a critical era lately in which they inherit the afterlife and pave the way for the future,” Chinese Foreign Ministry spokesman Wang Wenbin told a regular news conference.
“It is hoped that the Japanese economic community will actively exert an influence on win-win cooperation between China and Japan.”
Toshihiro Ueda, vice president of the Beijing-based Japanese Chamber of Commerce in China, told Reuters that the meeting with Li and the sessions “were very significant because they showed the preference of both sides to identify greater advertising relationships. “
“We had frank discussions on very broad topics and shared our perspectives to address the challenges,” said Ueda, who participated in the discussions.
Relations between Japan and China have been strained after the world’s second- and third-largest economies clashed over issues ranging from Japan’s release of treated radioactive water into the ocean to the detention of Japanese citizens suspected of espionage.
Japan’s restrictions on exports of complex chip-making apparatus to China have also fueled Chinese accusations that Japanese Prime Minister Fumio Kishida is following in the footsteps of the United States in “containing” China’s economic development.
But in a rare meeting between Kishida and Chinese President Xi Jinping in November, the two agreed that their countries would seek mutually favorable relations.
Japan relies heavily on China, where Japanese corporations have been investing for years in construction production chains and construction relationships with local partners.
China was both Japan’s top export market, at $145 billion, and its single biggest source for imports, at $189 billion, in 2022.
But the number of Japanese corporations planning to expand into China has fallen below 30% for the first time, according to an annual survey released last year, in which some corporations raised considerations about economic uncertainty and others pointed to geopolitical risks.
Last year, China arrested a Japanese executive, an employee of pharmaceutical manufacturer Astellas Pharma, on suspicion of espionage. The move has had a chilling effect on businesses, Japanese officials say.
“All of China’s police and judicial action is carried out on the basis of facts and law,” the Chinese spokesman said.
“As long as corporations operate legally, there’s no need to worry. We welcome corporations from all countries, including Japanese ones. “
An increasing number of Japanese corporations are also grappling with declining Chinese sales due to increasing competition, China’s economic uncertainty, and negative Japanese sentiment following the discharge of wastewater from the Fukushima plant.
Japanese automakers Toyota (NYSE:TM) and Nissan (OTC:NSANY) also face a declining market share in China as they lag behind their local competition when it comes to sourcing electric vehicles in China. the largest automobile market in the world.
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