Hedging China risks, Japanese firms turn to booming Southeast Asia

Pulling out (investment) from China will be more difficult than pouring into small countries. Anyway, let japanese businesses struggle in overseas markets for years to come.

Yeah the logistics alone is going to be a BIG problem.....

Great! Those 263 rich cambodians will easily replace 1.000.000.000 chinese as market that can finally bring Japan bak to its trading glory!

Good thinking!

Foxconn is investing around $5 billion in Indonesia for the next 5 to 10 years. It's not just Japan but other countries and even China in the future might build its factories oversea as it move towards a more high value production with increasing wages.

The one benefits the most are no doubt ASEAN countries but as some mentioned here, Japan is going to have a really hard time competing with other companies on smaller markets while others are enjoying China's huge growing market with Japan not doing anything much defending over there.

Good thinking.

Obama is heading to Myanmar shortly. I wonder if he is thinking the same strategy? I would not be too surprised.

JapanGalNov. 12, 2012 - 01:34PM JST

The Japanese will prevail. Get out of China in my opinion.

It is not according the opinion of Toyata, Honda, Nissan and Panasonic. The nature of business is making money! Not conflicting with politics. According the article, SE Asia is booming. However all of the booms have burst too. The question is How long will the boom last? Boom is driven by consumer spending. SE Asia population and middle class populace are very different from each nation. For example, Thai, Malaysia and Indonesia purchasing power and growth are superior than Philippines, Burma and Cambodia.

Even all nations combined population will be still smaller than China. Their individual GDP are still smaller. It is also true China economy has peaked. It is slowing right now. However it is unwise for losing largest populated nation as market.

1 billion Chinese who can be turned on and off a product based on where the company is headquartered, regardless of the history or that he product s made by Chinese workers by state controlled propaganda, as a tool for foreign policy by an authoritarian dictatorship are not worth as much from a marketing point of view as you seem to think.

Japan should do more homework. Japanese companiese will run into more corruptions and problems than China. As with many developing nations, corruption remains a problem in Southeast Asian countries. Last year, Vietnam ranked third after Indonesia and Cambodia in the list of most corrupt countries in the region and their goverment is ill-equipped to fight the corruption. Japanese companies should be careful of the investment in Cambodia, Indonesia, Philippines, Vietnam, Myanmar, and India are more corrupt than China.

People in these countries are are not tolerant of corruption, but they can not do much about it and they do not know how to prevent it. Corruption is pervasive in Southeast Asian countries and people feel that their goverment is incapable of doing anything about it. They can file complaints to the goverment, but nothing really happens.

JeffLee Nov. 15, 2012 - 07:45AM JST That's hilarious!! Japan is an instigator of corruption in SE Asia. You never heard of the scandal over Vietnam's East-West Highway, for example? Japanese officials offered bribes to secure the contract to build the highway.

Japan is historically one of Vietnam’s largest ODA donors. The PCI corruption scandal in 2008, Japanese Ambassador to Vietnam, Mitsuo Sakaba, announced that Japan was suspending USD$690 million in ODA until Vietnam took “meaningful” steps to eliminate corruption and avoid future abuses.

JeffLee Nov. 16, 2012 - 07:04AM JST It's plain old corruption, no matter how you look at it, and Japan is a major player.

This is why the ODA from Japan or any other countries would help if there is alot more transparency and auditing with every projects. So whatever the project is, Vietnamese and Japanese goverment should find a way to put the information out there and the project's components and who is going to benefit. This will help in reducing incidents of misuse of ODA, and not just ODA, but even governmental resources. Vietnam's auditing procedures should be more in line with international standards as well as more transparency to the contractors. For Japan, it might be easier to do business in Myanmar than Vietnam.

Ho Chi Minh is Osaka

God, I hope not!

The Japanese will prevail. Get out of China in my opinion.

Japanese companiese will run into more corruptions and problems than China.

That's hilarious!! Japan is an instigator of corruption in SE Asia. You never heard of the scandal over Vietnam's East-West Highway, for example? Japanese officials offered bribes to secure the contract to build the highway.

The Japanese have long been using their ODA to pressure local authorities to contract only with Japanese companies. They're true experts in this field.

In other words, "how dare you Vietnamese create conditions in which Japanese businessmen can give out bribes." I recall the PCI officials retorted at the time: "Hey, that's how we do business here."

Remember, the Japanese construction business gave the world the word "dango" (bid rigging, an essential business practice in Japan), which has become an English word. To portray them as innocent babes in the wood is just plain naive.

Japan's ODA in VN is primarily aimed at securing future contracts for Japanese corporations, such as the high-speed rail project. It has little to do with helping Vietnam. In fact, the VN parliament has vetoed the bullet train project, complaining that it would be too expensive and elaborate for the country's actual needs. The Japanese have responded by pressuring the president's office to get the green light. The Japanese want the lucrative contracts!

It's plain old corruption, no matter how you look at it, and Japan is a major player.

Pulling out (investment) from China will be more difficult than pouring into small countries. Anyway, let japanese businesses struggle in overseas markets for years to come.

China is necessary evil, fact!, and Japanese firms will struggle ( comparatively) more than other foreign investors but it is unwise to rely overly on China as we know, not just for Japan but for everyone else as well. China does not respect any international law or conventions and will have its own agenda when it come to trade, patent and anything else for that matter and may even become isolate before we know it. And just as in elsewhere, they will also become lazy and discontented and will end up being a huge poo pit and that will happen sooner than we think. The basic fundamental economic theory from my school days was to diversify and I’m sure it is still the case today. I’m just suppressed that Japanese have waited this long!