How improved China-Japan relations will impact businesses

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Chinese Premier Li Keqiang is set to begin his trip to Japan – the first official visit by a Chinese premier to Japan in eight years. Premier Li's visit aims to improve bilateral ties, including that of trade. To get a sense of how improved ties could affect the business community, CGTN traveled to Dalian, a city in China's northeast that has become a popular investment destination for Japanese companies.

Takashi Okubo, the director of one of the world's leading linear motion manufacturers, has just celebrated his 62nd birthday. Every morning, he likes to walk around the production plant. Over the past 18 years, his company has evolved from basic assembly lines to a large transnational corporation in Dalian.

"Expansion in the Chinese market has been our top priority, especially after the Made in China 2025 plan debuted. The decisions we made here center around China's big picture," said Takashi Okubo, the director of THK Dalian Co.,Ltd.

Takashi Okubo, the director of one of the world's leading linear motion manufacturers, has just celebrated his 62nd birthday. /CGTN Photo

Over half of the Japanese firms that have expanded overseas are based in China, and many of these companies are saying that they are more profitable in China than back home.

It is true that business goes up and down, so do political ties between countries. The president of another Japanese firm in Dalian thinks the future success of Japan–China business relations is largely dependent on the direction of the Chinese economy, next to political factors.

Akira Noda, the president of Omron Dalian Co.,Ltd said: "We expect to see some good results from the high-level talks between the two countries, it is important for the business environment. At the same time, we will focus on shifting the strategies of cheap labor to the talent cultivation of Chinese employees."

Akira Noda, president of Omron Dalian Co.,Ltd /CGTN Photo

Over the past few years, China-Japan relations plummeted over territorial disputes in the East China Sea and Japan’s attitude to its wartime past. This was not an ideal environment for Japanese businesses looking to expand in one of the most profitable markets in the world.

There are over 1,800 Japanese companies that have set foot in Dalian since China's reform and opening-up. And being at the frontline of Sino-Japanese economic cooperation, what happens here can often send strong signals in terms of business fluctuations.

Over 1,800 Japanese companies have set foot in Dalian since China's reform and opening-up. /CGTN Photo

Being at the frontline of Sino-Japanese economic cooperation, what happens in Dalian can often send strong signals in terms of business fluctuations. /CGTN Photo

Song Fang, vice director of the local commerce bureau told CGTN that the difficult times were around 2012, Japanese companies seemed to hold back their expansions and were cautious about their operational strategies. But from last year, the situation has improved quite a lot.

Song Fang, vice director of the local commerce bureau in Dalian /CGTN Photo

As Chinese Premier Li Keqiang attends talks in Tokyo, marking the first official visit by a Chinese premier to Japan in eight years, Japanese companies that have performed well are deciding to maintain or even further expand their presence in China, according to a survey by the Japan External Trade Organization.

Matsuyama Masato, chairman of the Japanese Chamber of Commerce & industry in Dalian shares his thoughts with CGTN: "China has been a profitable market for Japanese companies, and a crucial part of their oversea operations, and for Japanese investments, bilateral ties can never be overlooked."

Matsuyama Masato, chairman of Japanese Chamber of Commerce & Industry /CGTN Photo