China becomes Japan's biggest trading partner surpassing US
BEIJING: In a first, China has surpassed the United States to become Japan's largest trading partner. The move is expected to have a softening
effect on China-Japan disputes over an island and have wide implications in Asian region including India.
"Japan's exports to China also set a record, making the country Japan's largest export destination and eclipsing the US for the first time," the Japan External Trade Organization said in a statement discussing the bilateral trade situation for the first half of this year. Though trade volumes between the two countries have actually fallen, the slide is much less than the reduction in Japan's trade with other countries including the US, it said.
Japan's trade with the US accounted for just 13.7% of its total world trade in the January-June period. Its trade with China accounted for 20.4% of the total trade volume giving Beijing tremendous clout over its neighbor's economy. South Korea, another neighbor, accounted for 6.1%.
Japan's exports to China fell 25.3% from a year earlier to $46.5 billion dollars. Japanese imports from China slipped 17.8% to $56.2 billion dollars, JETRO said. JETRO has also projected a decline of Sino-Japanese trade for the whole year of 2009, the first yearly contraction since 1998 Asian financial crisis.
JETRO offered an interesting observation while making predictions for the second half of 2009. "Due to weak growth in personal incomes, Japanese consumers will turn more towards inexpensive clothing and food items from China — but this will have limited impact on a value basis," it said.
Japanese imports of low-priced parts and materials from China (used in finished goods production in Japan) are likely to decrease again in 2009, as an early recovery in both internal and external demand is thought unlikely, it said.
JETRO said the Chinese government’s economic stimulus package had an impact on the country’s imports and this led to some recovery in bilateral trade in the second half of 2009.
