Japan-China, Japan-US Research Business Potential

In2008, the financial crisis prevented the positive development of Japanese economy, andJapanese economy came back to sluggish; in2011, the earthquake and tsunami happened, and theeconomic recovery of Japan had to postpone; in2012, as the “right wing” came into power, the“diaoyu island” put Sino-Japan relationship into negative status, both the political relations andeconomic relations affected, as a result, Japan`s export decreased sharply. While in domestic Japan,the investment and consumption increase were limited by lower confidence, therefore, exportwould be the only way to revitalize Japan`s economy in short term.As China and US are the two largest trade partner with Japan, the development of bilateraltrade matters a lot. Especially the potential trade volume will be the dominant factor when makingtrade policy.After review the history of bilateral trade relations including Japan-China and Japan-US, thisarticle will analyze potential trade volume through TI, RCA and TC index and gravity model. Inconclusion, compared to Japan-US, the potential trade volume of Japan-China is larger and willhave a greater impact on Japanese foreign trade.Thus Japanese government needs to pay much more attention on promoting bilateral traderelation between Japan and China, and try to get virtual gains through regional cooperation,monetary exchange and FDI investment. However, all the potential cooperation depends onJapanese attitude toward disputations and his behaviors. Take the international status andexpectation into consideration, Chinese government also needs to act positively and initiatively toseize the opportunity.