News
Converting yen-denominated statistics for imports (preliminary) and exports (revised) released by Japan's Ministry of Finance in January 2013 to US dollars, the Japan External Trade Organization (JETRO) found that Japan's total trade with China dropped 3.3% to US$333.664 billion in 2012, marking the first drop since 2009.
Overview of 2012
Exports to China decrease for first time in three years
On the back of China's economic slowdown and the recent demonstrations, a serious decrease was seen in Japanese exports of general machines such as motors, construction and mining machines, steel and automobiles. In particular, those of automobiles drastically fell after the September demonstrations began; in comparison with the previous year, there was an 82.4% drop for the month of October, the year's largest decline, and a 63% drop for the entire period of September to December. That became one of the main factors for a decline in Japan's overall exports. On the other hand, those of metal processing machines showed sound growth with a 4.9% rise from the previous year. In particular, those of machining centers recorded continuously strong growth with a 27.5% rise.
2. Imports from China reaches record high, while growth remains at single-digit level
With imports, a continued increase was noted in foodstuff, car components and communication instruments fueled by the continuously expanding demand for smart phones in Japan. Meanwhile those of petroleum products, chemical goods, iron and steel and non-ferrous metal decreased because of sluggish domestic demand.
3. China's share of total Japanese trade drops for two consecutive years
Japan's exports with the world rose slightly, while Japan-China trade showed a decrease. As a result, China's share of Japan's total trade dropped for the second consecutive year by 0.9 points to 19.7% from the year earlier. China's share of Japan's exports declined by 1.6 points to 18.1%, marking the first fall in 15 years, while its share of Japan's imports dropped for the third consecutive year, falling by 0.2 points to 21.3%.
Outlook for 2013
1. The Chinese economy is picking up from the low seen in the third quarter of 2012, and Japan's exports to China seem to be on the way to recovery. However, since the Chinese government has been taking a stance toward emphasizing structural reform over its economic growth rate, it is unlikely that the government will implement large-scale stimulus measures to create domestic demand. Therefore, even if the exports to China improve, the growth rate will likely remain modest.
2. Imports from China are expected to see a continuous rise, fueled by development of local production of parts and raw materials in addition to finished products, strong demand for smart phones and Japan's economic recovery and expansion of public projects.
3. Considering the above, Japan-China trade throughout 2013 is expected to see an increase after the decline in 2012 and is even likely to exceed the previous record set in 2011.
