More than 50% of imported goods come from China, this is the reason Tokyo cannot "forget" Beijing

Tokyo is increasingly dependent on Beijing's supply chain, even "surpassing" Washington, according to a new white paper released by Japan's Ministry of Economy, Trade and Industry. Accordingly, in 2022 alone, of the imported products on which Japan depends heavily, more than two-thirds will come from China while only one-eighth will come from the US.

Of the imported products that Japan depends on, more than two-thirds come from China while only one-eighth comes from the United States. (Source: Xinhua)

The detailed assessments, released on July 9, provided trade data on about 4,300 items imported in the same year by Japan, the United States, Germany and the Group of Seven (G7) industrialized nations as a whole.

The white paper shows that Japan is more dependent on one country - usually China - for imports of a wider range of consumer and industrial products than its G7 peers.

The report applies the Herfindahl-Hirschman Index (HHI) - a measure of market concentration, in which a value above 50 for a given product means that the country is dependent on the other country in the supply chain.

Overall, Japan is heavily dependent on imports for nearly 47% of the 4,300 products surveyed. In particular, more than half are from China, corresponding to 1,406 specific items, accounting for nearly 70% of the 2,015 items that Japan must import from abroad in 2022.

Stephen Nagy, director of policy studies at the Yokosuka Council for Asia-Pacific Studies in Tokyo, analyzed that the China-Japan economic relationship remains “highly complementary,” and predicted that Japan's dependence on Chinese goods is expected to continue.

“Both countries are in a situation where they need each other and I don't see any momentum towards decoupling,” said Stephen Nagy.

The weak yen makes Japan more attractive to Chinese exporters, the expert added, noting that Tokyo is not advocating a decoupling like Western countries but aims to “insulate sensitive parts of the relationship” from Beijing.

However, Japan will restrict China's access to dual-use chips and technologies that are used for both civilian and military purposes.

In 2022, Tokyo passed the Economic Security Promotion Act to develop more resilient supply chains while promoting infrastructure security and the use of critical technologies.

In addition, Japan has expanded financial support for companies to encourage reshoring and diversification of business from China, especially in strategically important industries such as semiconductors.

However, Japan, China and South Korea later agreed to resume negotiations on a trilateral free trade agreement at a summit in May 2024.

Rumi Aoyama, director of the Institute of Contemporary China Studies at Waseda University, said the deal was a “clear signal” from the leaders of the three regional powers that economic ties were important and must continue.

As China's second-largest exporter, Japan's exports fell to $157.49 billion in 2023 from $171.98 billion in 2022, according to Chinese customs data.

Last year, Tokyo was also the top buyer of air conditioners and rare earth minerals, the second-largest importer of smartphones, and the fourth-largest importer of laptops and organic chemicals from Beijing.

In the “handheld devices under 10kg” category, which largely includes laptops, China’s exports to Japan fell 0.5% last year to $4.22 billion from $4.67 billion in 2022, the data showed.

China exported more than 40% of its rare earths to Japan last year, and the value of its exports to Japan fell 24.66% to $218.66 million in 2023 from $209.2 million in 2022.

Source: https://baoquocte.vn/hon-50-mat-hang-nhap-khau-tu-trung-quoc-day-la-ly-do-tokyo-chua-the-quen-bac-kinh-278557.html