Japan Inc sours on China; can India gain? (opens the source in a new tab)
- Japanese firms with a presence in China fell to 10,118 in June, the lowest since the survey began in 2010: down 22% in two years and almost 30% from the 2012 peak of 14,394.
- Reasons cited include China’s property slump, rare-earth export curbs, overcapacity, state-backed rivals, worsening relations and detentions of Japanese nationals.
- Japanese money is moving into India’s finance, not just factories: SMBC bought 20% of YES Bank (~$1.6bn), MUFG 20% of Shriram Finance (~$4.45bn), and Mizuho’s securities arm a majority of Avendus.
- 10,118
- Japan firms in China, June
- ~1,400
- Japanese firms in India
Why it matters Japan is buying into India’s banks, not just building factories.
Other side China is too big to abandon, and the US, Vietnam, Indonesia and Thailand compete for the same capital. Skill shortages and reliance on Chinese inputs could cap India’s gains.