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Japan’s trade with China hits new record

TOKYO - Japan’s trade with mainland China jumped almost 10 percent in the six months to June, setting a record high for a seventh straight year despite diplomatic frictions, a trade body said on Monday.

Total trade between the two Asian economies came to 99.2 billion dollars in the first-half period, up 9.9 percent from a year-earlier, the Japan External Trade Organization (JETRO) reported.

It said that Japan’s trade with China was likely to reach a new record for an eighth straight year in 2006, topping 200 billion dollars.

In the six months, Japanese exports rose 15.3 percent -- more than double the growth rate in the same period last year -- to 42.8 billion dollars, led by strong shipments of auto parts and digital home appliance components.

Japanese companies, particularly auto makers, are shifting production to China to take advantage of its lower production costs and shipping the finished goods back to Japan to sell.

Japanese imports from China rose 6.1 percent to 56.3 billion dollars, marking a sharp slowdown in growth mainly due to a slump in steel imports, JETRO said.

While Japan and China have seen severe diplomatic frictions in recent years, there has been little obvious impact on commercial ties.

Japan’s trade with mainland China accounted for 16.8 percent of its total external trade in the first half of 2006.

“Exports of electronic parts from Japan to China will continue to expand and imports from China to Japan will also increase as Japanese manufacturers continue to shift their production bases to China,” JETRO predicted.

Fujio Mitarai, president of the Japan Business Federation (Nippon Keidanren), on Monday called for the Japanese government to build “a positive relationship with China”.