Japan increasingly dependent on Asia
Japan increasingly dependent on Asia
SINGAPORE (AFP): Japan is in many ways now more economically dependent on neighbors than they are on Tokyo, whose clout is being challenged in the region by new economic powers, a report received here yesterday.
"Talk of a Japanese-dominated economic bloc in Asia -- something that was taken very seriously in the 1980s -- sounds increasingly empty," said the Hong Kong-based Political and Economic Risk Consultancy Ltd.
Its fortnightly journal Asian Intelligence said the so-called "dragons" -- Hong Kong, Singapore, Taiwan and South Korea -- were collectively investing far more money in Southeast Asia than Japan was by the late 1980s.
And in China, overseas Chinese investors have so outstripped the Japanese that Tokyo for the first time finds its "ability to influence the pace and direction of industrialization in a neighboring country very limited."
"Moreover, this just happens to be the country that probably poses the biggest economic and political threat to Japan in the medium term -- hardly a comforting prospect for Tokyo," the report said.
"We are not saying that Japan is irrelevant. Its economy is too large and externally oriented not to have a strong gravitational pull on every country in the region. However, if Japan is Asia's moon, China is its sun," it added.
Asia's share of Japan's trade has risen to nearly 40 percent over the past decade, while the United States' share has fallen to 27 percent, the report said.
It noted that in 1995, Japan's trade surplus with the United States shrank 17 percent from the year before to 45.56 billion dollars, while its surplus with Asia rose 15 percent to 70.75 billion dollars.
"Japanese companies are increasingly dependent, therefore, on markets in Asia for their livelihood. This is a vulnerability for Japan, not Asia," the report said.
Japanese imports from Asia are rapidly growing but much of this is from Japanese-owned factories abroad "and on terms that the host countries of these investments often consider to be exploitative," the report said.
It cited lingering resentment in Asia over Japan's wartime past, and said Tokyo was also more "renowned for its desire to keep control of key technology than it is for its willingness to provide technical assistance."
Even Japanese aid, seen in some countries as a form of reparation for World War II abuses, has caused bitterness when loans turn out to be very expensive because of the rising yen, the report said.