Wednesday, June 16, 2004
Japan boosts investment in US, China in 2003-04
Reuters Tokyo, June 16
Japanese businesses boosted their investment in the United States and China in the fiscal year ended March 2004, raising their presence in two countries that enjoyed particularly strong growth, data showed on Wednesday.
Japan's direct investment in the United States, the country's biggest single trading partner, rose 19.4 per cent in 2003-04 compared to a year earlier to 1.2 trillion yen ($10.97 billion), the Finance Ministry said.
Direct investment in China jumped 65 per cent to 355.3 billion yen, showing firms continued to tap the country's pool of cheap labour and growing consumer market. Japanese direct investment in China has nearly doubled in the past two years.
The gains came despite a 9.2 per cent drop in overall direct investment in 2003-04, which was dragged down by a 24.1 per cent cut in investment in Europe.
Of the 4.1 trillion yen in overall direct investment, the United States accounted for 29.3 per cent and China 8.7 per cent. Europe accounted for 35 per cent and Asia, including China, 17.7 per cent.
Foreign direct investment (FDI) in Japan, meanwhile, fell 3.2 per cent to 2.1 trillion yen.
Prime Minister Junichiro Koizumi has said he wants FDI in Japan to double by 2008, and in late March Japan ratified a tax treaty with the United States that could cut the tax bills of US firms in Japan by as much as 10 per cent.
But many foreign businesses have said more incentives were necessary if Japan wanted to achieve that target, particularly with the rise of neighbouring China as a magnet for foreign investment.
© HT Media Ltd. 2004.