Japan's Economic Ties with China: A Focus on Industrial Investment

Eric Harwit, Adjunct Fellow, East West Center and

Professor of Asian Studies, University of Hawaii

September 16, 2008, Noon - 1:00 pm

John A. Burns Hall, Room 3118, 3rd Floor

This presentation analyzes the rapid growth of Japanese industrial investment in China over the past 25 years, and the ways it was shaped by Chinese industrial policy. It highlights the role of Japanese corporations in expanding ties with the PRC, and points out the ways they successfully expanded market share in key sectors.

The presentation first chronicles the early years of Japanese investment following China's economic reforms of the early 1980s. It focuses on key sectors such as consumer electronics, information technologies, and automobiles. By the mid-1990s, the strength of the PRC economy and Chinese political imperatives dictated Japanese companies would have to play a role transferring knowledge. Today, major Japanese corporations have set up research and development centers in the PRC.

The presentation, based on case study archival fieldwork and interviews done in both Japan  and China, concludes that Japan has belatedly begun to follow the path of other nations that  early on traded technology transfer for market access. However, Japanese corporate protectionism likely remains strong enough to safeguard the most vital knowledge while still expanding companies' roles in the PRC economy.

Eric Harwit is an EWC adjunct fellow, and professor of Asian studies at the University of Hawaii. He has written several articles and books on industrial development in China. His two most recent books are China's Automobile Industry (M.E. Sharpe, 1995), and China's Telecommunications Revolution (Oxford University Press, 2008). His current research focuses on foreign investment in China as well as China's investment overseas.