TOKYO – China was consuming more than 20% of Japanese exports for the first time last year, largely driven by its ability to offset the effects of a coronavirus pandemic on its economy more faster than other major trading partners.
China imported 15.08 trillion yen ($ 146 billion) worth of Japanese goods in 2020, according to preliminary data released Thursday by Japan’s Ministry of Finance, jumping on the U.S. to become a major leader Japan to export for the first time in two years.
This came despite some Japanese businesses warning of the risk of over-reliance on China, due to the U.S. trade war and other uncertainties.
China and the US have been changing again as Japan’s main trading partner since the late 2000s. Last year, China accounted for 22% of all exports, while the US slowed at 18.4%.
Total Japanese exports fell 11.1% to 68.4 trillion yen as a result of weak demand from Europe and U.S. Chinese exports, however, gained 2.7%.
One notable growth area was Japanese passenger vehicles, which jumped 15.9% to 910.3 billion yen. Toyota Motor saw sales in China climb around 10% last year to 1.79 million vehicles, led in part by its luxury brand Lexus.
“China made a rapid recovery from COVID and increased sales,” the Toyota executive said.
Auto parts supplier Musashi Seimitsu Industry boosted China-linked exports by double-digit in value terms last year. Although there was a decline in the first half of 2020, recovery came back from June. The company has also successfully addressed demand from electric vehicles.
“Our allotment [of exports] to China, where sales of electric and other vehicles are strong, they will expand further, ”said Musashi Seimitsu Industry chief executive.
The car industry was not the only one to benefit from Chinese demand. Paper exports to China jumped 26.6% in value. Shipments of cardboard material rose 93% to 880,000 tons last year, according to preliminary data from the Japan Paper Association.
Waste paper is used to make cardboard, but the Chinese government has begun to tighten restrictions on such an introduction of their environmental policy. Anticipating the additional barriers in obtaining cardboard material, Chinese importers have imported more from abroad.
“Exports to China will continue to increase,” said Toru Nozawa, chairman of the Japan Paper Association and president of Nippon Paper Industries.
Steel is also in high demand. China has put public works investments at the forefront and center of its economic stimulus measures. Opposing a decline in domestic demand, Tokyo Steel Manufacturing began exporting steel to China for the first time in a decade.
But Japanese companies have expressed concern about the risk of increased reliance on exports to China. In the 2010s, the share of Japanese exports going to China remained stable from 17% to 19%.
One Chinese business of auto parts supplier generated more than 20% of consolidated sales in December, up from 10% last spring. The company aims to boost the shares of its revenue from Western markets as well as other Asian countries.
“There are various risks in China, such as political intervention,” said a representative at the automation provider.