Japanese Economy Benefits From China's Expansion of Domestic Demand

Thanks to China's policies to boost domestic demand, operating conditions of some Japanese enterprises are expected to recover in the second half of this year.

Japanese materials industries such as metal and chemical industries have shown signs of turnaround, including falling inventories, rising exports and increased operating rates, as a result of the influence of China's expansion of domestic demand, according to a report released on February 23 by The Nikkei.

After seeing the operating rate for a factory in the Philippines during the first half of January at a mere 20 percent, Nippon Mining & Metals Company, a producer of electrolytic copper foil that is widely used in electronic components, had planned to stop factory operations for three months. However, thanks to increased demand from China for mobile phones and base station equipment, the factory has currently restored its operating rate to 80 percent. Its production of fibrous materials to be exported to China is also picking up.

Mitsubishi Chemical Corporation, which cut production of polyester raw material by 10 percent at the end of last year, has presently returned to 100 percent. The output of raw materials for vinyl resin that is used for exported building materials tripled in January.

A Japanese producer of vinyl resin materials has raised the operating rate of its factories in Japan to 90 percent, higher than the figure of 70 percent from the end of last year. Additionally, according to Japanese media reports, Toyo Denki Seizo K.K., a railway equipment producer, received orders from China totaling over one billion yen. The company has assigned all orders to its factory in Yokohama for production. The factory is struggling hard to complete the orders in time by means of double-shifts and outsourcing.

Japan's GDP contracted sharply during the period from October to December of last year. Most experts estimate that the material industry will not fully recover until at least after March of next year.

By People's Daily Online