The Analysis Of Impact On Japanese Economy Through Direct Investment To China

This paper describes the development of China's economy by Japan's direct investment since the reform of the Mainland; analyzes the characteristics, impacts to Japan's economy and industrial concavity through its direct investment. The author also proposes the possible solution for promoting the bilateral economic win-win between Japan and China.Since 1979, Japan has significantly increased the investment to China for to its labor resource, natural resources and market advantage. Along with her entry to WTO, China encourages foreign investment by opening market with less/non restrictions to oversea enterprises. Japan's concern to China's rapid growth and future development spreads among all industries.The following describes characteristics of Japan's direct investment in China in the 21st century:1.Continuation of investment in manufacture industries focusing on electrical, transport machinery, general mechanical, steel and chemical area;2.Concentration of investment regions moving from coast line to interior prefecture, from Pearl River Delta to Yangtze River Delta, penetrating the domestic market with focus on commercial production and retail business; 3.Reduction of private and medium-size enterprises in Japan due to oversea investment in China; 4.Expansion of "market share" in China's domestic market to fulfill the rapid economic development and increase of demand; 5.Increase of joint ventures, WFOP (Whole foreign-owned enterprise) and reduction of co-operation.Japan's industrial restructuring and appreciation of yen has encouraged Japan'sinvestment at China and promoted Japan to become the most important source of trading business partner for Mainland corporate. Therefore, Japan's direct investment at China has significant impact to Japanese economy.Japan's direct investment in China creates rather positive outcome to Japan rather than negative impact. Furthermore, instead of directly causing concavity within Japanese commerce, direct investment in China only leads relocation of Japan manufacture industry. Japan's direct investment in China has promoted the elevation of the Japanese industrial rationalization and the development of bilateral trade.In the finality, focusing stable development of direct investment, the author analyzes the nature of the investment itself and proposed application for bilateral economic win-win situation.