After the United States, China and Japan's operations are the second and third largest economies in the world. China and Japan trade about $350 billion worth of goods and services to the other party every year. This makes them as one of the biggest trade partner relationship in the world. In recent years, China's economic growth promotes economic, and external countries try various devices to participate in merging and acquisition.

Japan and China as neighboring countries

In addition, Japan is also very interested in the goods and services and is a potential new class of consumers in China. The most obvious reason is that China having the largest population of more than 1.3 billion. By contrast, Japan is a small island, with a population of just around 127 million. However, the Japanese population has high qualifications and is listed in the  first ten of the world's largest population of citizens with good qualifications. The Japanese's interest is building a factory in China to produce Honda and Toyota. The Japanese yen is still a strong currency against other currencies, this makes the Japanese goods more expensive, and allowed the decline in exports of the country. In order to overcome this obstacle, Japan tried to produce its automobile and electronic products directly in the overseas market. This decrease the cost of production and make the price more reasonable for potential customers.

Japan

This connection had resulted in a strong bond between Japan and China. Japan is China's largest trading partner concerning import. In 2011, Japan accounted for 11.2% of China's total imports. Surprisingly, only 7.8% of the Chinese exports to Japan which qualifies China as Japan's third largest trading partner compared against the United States (17.1%) and Hong Kong (14.1%). Even though Japan is not a big country, it is China's largest import and export trade partner. China accounts for 21.5%, of the total amount of the imports from Japan in 2011 and 19.7% of the total export.

China

The relationship between Japan and China had resulted in a high net export of China and it is seen as a good sign due to the benefits that both side had been able to receive. Japan was able to produce and sell their products at a lower cost while China had earned from net exports.

In my opinion, the relationship between Japan and China is not to be underestimated. The country are considered one of the few countries with the largest economy in the world and mutually interdependent. It is a good thing for countries to cooperate to generate the economic growth of each country.

Reference: http://www.economywatch.com/economies-in-top/?page=full

Written by Yeong Quan