More Japanese Firms Look to Investment in Southern China

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Last updated at: (Beijing Time) Tuesday, February 11, 2003

More Japanese Firms Look to Investment in Southern China

More Japanese companies, small and medium-sized enterprises (SMEs) in particular, are looking more to southern China, rather than east China, as their destinations of investment.

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More Japanese companies, small and medium-sized enterprises (SMEs) in particular, are looking more to southern China, rather than east China, as their destinations of investment.

Shigeru Kimura, director general of Japan External Trade Organization, Hong Kong (JETRO HK) -- a government investment promotion body, told a press conference here Monday that China will witness at least another 10 years of fast economic growth andmore Japanese SMEs are seeking opportunities to invest in southern China, especially in Guangdong province.

According to Shigeru Kimura, 54 percent of the total Japanese overseas investment was in eastern and southern China in 2001 and the figure was estimated to go up in the year of 2002.

He said cheap labor, low raw material costs, geographical location and close relations with Hong Kong are the main reasons attracting the Japanese SMEs to invest in southern China, Guangdong province in particular.

The huge domestic market is also a lure to the Japanese investors, he added.

If security conditions are improved and more international hospitals and schools are built, much more Japanese SMEs are expected to start their businesses in Guangdong province, he said.

So far, the Japanese investment in Guangdong is slightly less than that in Shanghai, but the situation will soon be changed, Shigeru Kimura noted.

He believed that the 2008 Olympic Games to be held in Beijing and the 2010 World Expo to be held in Shanghai will further boost China's economy. However, all the costs, including the costs of infrastructure, are expected to rise.

So southern China will be a reasonable place for future investment, he said, adding that the opening of Jusco and the operation of 24-hour border crossing at the Huanggang/Lok Ma Chau Border Checkpoint between Hong Kong and Shenzhen have also facilitated the Japanese businessmen.

A recent survey by JETRO's head office in Tokyo showed that over 50 percent of the Japanese enterprises in China made profits in 2002 and the enterprises see a much brighter future in 2003.

By last year, 285 Japanese enterprises have registered with the Japanese Chamber of Commerce in Guangdong, an increase of about 10percent from the previous year. Shigeru Kimura estimated that the real number could be over 3,000 as many did not register with the chamber of commerce.

The automobile, precision instruments and chemical industry areamong the most profitable sectors for Japanese investors in China.

JETRO so far has four offices in China's Beijing, Shanghai, Dalian and Hong Kong.

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