Japan to Acknowledge China as Economic RivalJapan will shortly acknowledge that it has lost its economic primacy in Asia and that China in particular is a growing competitive threat, the Yomiuri Shimbun reported on Wednesday.It said a government white paper, or policy document, due to be released later this month will urge Japanese companies to restructure more aggressively and make better use of information technology to combat rising regional competition. "Designating the Chinese economy...as a mighty rival, the white paper states that the era in which Japan led the Asian economies has come to an end and that a period of fierce competition among nations has begun," the Yomiuri said. A spokesman for the Ministry of Economy, Trade and Industry (METI), which will issue the white paper, declined to comment. The paper attributes China's stellar growth to a string of factors including a cheap and abundant workforce, high productivity, strong purchasing power and a pool of outstanding engineers and technicians. Whereas Japan's economy has stagnated for the past decade, China has continued to roar ahead and is on course to overtake Japan within a generation. Beijing has begun to project this economic muscle, broaching the idea of a free trade area with the 10-member Association of South East Asian Nations and joining Japan and South Korea in the the increasingly influential ASEAN Plus Three grouping. Poised to enter the World Trade Organisation, it became the world's second-biggest recipient of foreign direct investment in 1997 after the United States -- leaving Japan far behind, METI notes, according to the Yomiuri. Japanese firms have joined the rush to set up factories in China, and the ensuing flood of exports back home left Japan with a record $24.9 billion deficit in its two-way trade last year, an increase of 27 percent. In another telling sign of China's economic ascent, Japan for the first time imported more from China last year than it did from western Europe. Cheap Chinese goods are proving a hit with consumers and are helping to push down prices. But they are triggering a backlash from domestic farmers and textile makers whose market share is crumbling under the Chinese goods. Bowing to pressure from Japan's powerful farm lobby, the government last month slapped on huge temporary tariffs on imports of stone leeks, shiitake mushrooms and tatami straw from China, drawing protests from Beijing. As well as urging domestic structural reform, the METI paper recommends that the government boost cooperation with other Asian economies and take a more coordinated approach to its economic policy, the Yomiuri said. Source: chinadaily.com.cn |
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