Japan’s Ambassador to China Sees a Lot of Potential for Economic Cooperation

By Wang Liwei and Kelly Wang

Japan’s top envoy to China sees significant potential for economic collaborations between Beijing and Tokyo, stating that businesses from the two countries can complement each other in global markets rather than merely competing.

In an interview with Caixin in late February, Kenji Kanasugi, who has served as Japan’s Ambassador to China since December 2023, noted a growing presence of Chinese companies in Japan in recent years. At the same time, Japanese companies are forging deeper partnerships with their Chinese counterparts, particularly in the fields of electric vehicles (EVs) and artificial intelligence (AI).

Kanasugi highlighted the positive reception from Japan’s business communities after Beijing announced last November that it would resume the visa waiver for Japan. In response, Tokyo announced in the following month that it would relax certain visa rules for Chinese visitors, including adding the new 10-year multiple-entry visa category.

Kanasugi sees people-to-people exchange as an effective way to foster better public opinions, advocating for more ordinary Japanese citizens to interact with visiting Chinese tourists — and vice versa. Some Japanese still have safety concerns about coming to China. “We really hope to encourage more Japanese to visit China and see what’s happening on the ground firsthand,” he said. “Seeing is believing.”

As Japan’s port city Osaka is set to host the World Expo 2025 which begins next month — where China will feature one of the largest self-built national pavilions — Kanasugi views the event as an “important springboard” for fostering greater exchanges between the two nations.

Economic cooperation

Against the backdrop of a shrinking and aging population, Japan has been actively seeking foreign investment and eased its work visa policies to attract foreign labor and high-skilled talent. In recent years, Chinese companies including tech giant Huawei Technologies Co. Ltd. and automaker BYD Co. Ltd. have expanded their presence in Japan.

Huawei now operates 10 offices in Japan, employing around 1,200 people. “Huawei is well-rooted in Japan,” Kanasugi said during the interview, adding that Chinese e-commerce platform Temu under PDD Holdings Inc. has also made inroads. “If you look into Japanese [internet] services, you can see Temu advertisements everywhere,” he said.

Despite Japan’s slow adoption of EVs due to limited charging infrastructure, BYD sold 2,223 electric vehicles in Japan in 2024, marking a 54% year-on-year increase and surpassing Toyota’s 2,038 EV sales, according to industry reports quoting data from the Japan Automobile Dealers Association.

China has been Japan’s largest trading partner since 2007, while Japan continues to rank among China’s top three trading partner nations.

In the past, technology transfer between the two nations were largely one-sided, with China on the receiving end. Now, many Japanese automobile companies are forming partnerships with Chinese firms to leverage their expertise, especially in autonomous driving, the ambassador noted.

Since Japan faces the challenge of a declining workforce in drivers for taxis, buses and trucks, Kanasugi said an adaptation of autonomous driving can “benefit the Japanese society as a whole.”

In the AI field, Kanasugi noted the success of Chinese startup DeepSeek in building a competitive AI model. He added that Japan can learn from both Chinese experience as well as U.S. way of innovation.

“In our system, it’s often the case that unless we are 100% confident in our success, we don’t really try. But in the case of China, if you think that there is a 50% chance, you give it a try. And if you fail, you give it a try again. That’s one of the reasons why Chinese companies are so successful in adopting new technologies into day-to-day life,” the ambassador said.

In the global market, Kanasugi acknowledged that competition between Japanese and Chinese companies is inevitable in the global market. In Indonesia, where he served as Japan’s ambassador before his posting to China, Japanese automakers are seeing declining market share in the country with the influx of Chinese and South Korean carmakers.

However, he stressed that the two sides can also complement each other, giving the example of how established Japanese trading houses in Africa can help Chinese companies sell products there by providing an extensive network.

“There are elements of competition, but [also] a complementary element between Japanese companies and their Chinese counterparts,” the ambassador said.

Surging tourism

In 2024, Japan was the top destination for Chinese travelers during several major holidays. This January, which coincided with the Lunar New Year holiday, nearly 1 million Chinese tourists visited Japan, accounting for around a quarter of all foreign visitors that month, according to data from the Japan National Tourism Organization.

Kanasugi expressed hope for the momentum to continue, noting that Japan has prioritized inbound tourism as a key pillar of the country’s economic growth since the mid-2000s.

In 2024, spending by inbound tourists in Japan hit a record of 8.1 trillion yen ($51.6 billion), a significant increase from 5.3 trillion yen in 2023. Inbound tourism revenue has reportedly become Japan’s second-largest export sector, trailing only automobiles.

With the Osaka-Kansai Expo scheduled to open on April 13 and run for six months, Kanasugi hopes it will encourage more Chinese tourists to visit Japan, fostering increased exchanges between the peoples of both nations and inspiring more Japanese citizens to visit China.

To facilitate attendance, Japan has waived visa application fees for foreigners traveling to the country for the Expo.

Sino-Japanese relations were under pressure last year following attacks involving Japanese nationals in China. In September, the two sides agreed to maintain communication to prevent the incidents from hurting bilateral ties.

A few months later, the two countries’ foreign ministers met in Beijing at the end of last year and reached consensus covering areas including tourism, culture, youth and education. They also included making the 2025 Osaka-Kansai Expo a platform for exchanges and friendship between the two countries’ peoples.

Kanasugi, who previously served as Japan’s senior deputy foreign minister and director-general for Asian and Oceanian affairs as well as director-general for economic affairs, led the preparation for late former Japanese Prime Minister Shinzo Abe’s visit to China in 2018.

During a speech given at a reception in Beijing on Feb. 25, Kanasugi used a seasonal analogy to describe the development of China-Japan relations.

“Winter does not suddenly turn into spring overnight,” he said. “It arrives gradually, alternating between cold and warm while the signs of spring increase… But one thing is certain — after winter, spring will inevitably come.”

Contact reporter Kelly Wang (jingzhewang@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

Image: ochikosan – stock.adobe.com