Japan: Why not in China?
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Code : ITF0011
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Region : :China japan |
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Background In 1950, the Japan-China trade stood at only $4.7 million. Formal diplomatic relations between China and Japan were established in 1972 after a long hiatus, wherein diplomatic relations were not only expected to serve the economic modernization of China but also the economic security of Japan. As part of the efforts to promote trade, the Japanese government removed all restrictions on Ex-Im4 Bank credit financing. The Chinese and Japanese governments signed agreements on trade, reducing tariff barriers by one-third in January 1974, civil aviation inApril 1974,maritime transport in November 1974, and fisheries in August 1975... Political Issues – A Historical Perspective The trade relations between Japan and China have traditionally been used to achieve political ends. Initially, neither of the countries allowed their respective political differences to block the business relations. In the 1950s, a number of business and cultural delegations were exchanged between the two countries. Having convinced that trade concessions were ineffective in achieving political goals and protesting Japan’s tacit support to Taiwan, China in 1958 suspended its trade with Japan... Investing in China China has been very successful in attracting Foreign Direct Investment (FDI) in the last two decades. Over the period 1979 to 2000, China had an aggregate FDI of more than $340 billion. Even a worldwide slowdown in FDI failed to weaken China’s FDI boom. According to UNCTAD (2002), even though global foreign direct investment flows declined by nearly 50% in 2001, China still managed to absorb $46.8 billion in FDI in the same period, representing a 15% increase over the preceding year... |
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China’s Accession to WTO On December 11th 2001, China ratified the text of the agreement for its entry into the World Trade Organization (WTO). Trade liberalizationmeasures committed in the process of China’sWTO accession were expected to stimulate trade. As part of its WTO related commitments, the Chinese government was to take measures to facilitate inward direct investment. The Chinese government outlined a ‘three-pillar’ free trade policy – lowering of tariffs, abolishing non-tariff barriers such as mandatory import quotas, and deregulating the entry...
