Japan's total investment overseas falls sharply<\/p>\n
Agence France-Presse, Tokyo<\/p>\n
Global foreign direct investment by Japan fell 26.3 percent in
\nthe year to March, although investment in China surged as firms
\nshifted factories there, the Ministry of Finance said Friday.<\/p>\n
Total investment overseas made during the year fell to 3,954.8
\nbillion yen (US$31.9 billion), with money invested in Japan's
\nlargest trading partner the United States plunging 40.6 percent
\nto 797.0 billion yen.<\/p>\n
\"Investment two years ago was very high because of the
\ntechnology boom,\" said finance ministry official Yoshihiko
\nMagofuku.<\/p>\n
\"But this has declined since then, also there have been less
\nmajor takeovers,\" he said.<\/p>\n
Bucking the trend, investment in China jumped 64.0 percent to
\n180.2 billion yen as technology giants -- such as Hitachi Ltd.
\nand Matsushita Electric Industrial Co. Ltd. -- increased
\nproduction there, the spokesman said.<\/p>\n
\"There is a growth of manufacturing (in China),\" said
\nMagofuku, adding the level of Japanese investment in the nation
\nwas the highest in five years.<\/p>\n
More Japanese firms are migrating to Asia where labour costs
\nare much cheaper and market potential is vast, economists said.<\/p>\n
But the manufacturing exodus is hurting Japan's economy as
\nfirms sacrifice Japanese workers, they said.<\/p>\n
\"What we are seeing is a very clear trend across the world of
\nmanufacturers with margins pressured going where the cheapest
\nworkers are,\" said West LB chief economist Andrew Shipley.<\/p>\n
\"It is an unstoppable incentive,\" he said noting Chinese wages
\nwere far lower than in Japan and still had room to rise but
\nremain attractive.<\/p>\n
\"There is also tremendous market potential (in the country),\"
\nhe noted.<\/p>\n
Major Japanese automakers Honda Motor Co. Ltd., Mitsubishi
\nMotors Corp. and Mazda Motor Corp. have recently announced plans
\nto boost car production and sales in China on the back of robust
\ndemand.<\/p>\n
Separately, Japanese electronics giant Toshiba Corp. has said
\nit would invest seven billion yen in creating one of the world's
\nlargest production bases for personal computers in China.<\/p>\n
The trend was pressuring Japan's unemployment rate, which
\nalready stood at a relatively high 5.2 percent in April, analysts
\nsaid.<\/p>\n
\"Japan must evolve and develop its economy to create wealth
\neven though its workers are highly paid,\" said Shipley,
\nsuggesting a shift to high-end software production and
\nentertainment from large-scale semiconductor manufacturing.<\/p>\n
\"Japan has to take measures to promote the emergence of
\ncompanies in these areas which are real growth areas of the
\nmodern economy,\" he said.<\/p>",
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