January 8, 2014 5:13 am JST

60% of Chinese execs 'can't work with Japan firms': poll

Here's to better relations: Japanese tea master Sen Genshitsu raises a cup to harmony with China and South Korea in Seoul.

TOKYO -- Japanese, Chinese and South Korean corporate leaders hold strikingly different views on cooperating amid political tensions, a three-country survey finds.

     Just 13% of Chinese executives said they can separate business from politics to work with Japanese companies, while around 60% said they cannot.

     About 60% of South Korean business leaders said they keep cooperation with Japanese firms to a minimum out of political considerations. Nearly 8% said they cannot work together.

     By contrast, around 80% of Japanese executives said they can cooperate with companies from the other two countries.

     Japan's Nikkei, South Korea's Maeil Business Newspaper and China's Global Times collaborated on the poll, which was taken before Japanese Prime Minister Shinzo Abe visited a controversial Tokyo shrine last month, stirring wartime resentments in Seoul and Beijing.

     Opinion also differed on priorities for cooperation. For the Japanese, fostering global talent was the top response, cited by 45%. On the other hand, 47% of Chinese respondents and 49% of South Korean executives cited improving technology.

     When it comes to promising markets, nearly two-thirds of Japanese executives named Southeast Asia. About 38% said China, down 8 percentage points from the previous year's survey.

     "China plus one" has become a buzzword in corporate Japan as firms seek a second foothold overseas besides the world's second-largest economy. Southeast Asia, with a population of some 600 million, offers fertile ground for expansion.

     For Japanese companies, "it's wise to diversify investment to places like Southeast Asia to keep some distance from China and avoid getting sucked in," says Mitsumaru Kumagai, chief economist at the Daiwa Institute of Research.

     Meanwhile, 79% of Chinese executives cited China as a promising market, as did nearly 60% of South Korean business leaders. Hyundai Motor, Samsung and other Korean companies are growing their presence in China.

     Chinese executives came across as the keenest on investing in their own country in fiscal 2014. A fifth of executives said their firms were planning a significant increase in domestic capital spending compared with the previous year. A third of South Korean business leaders said their companies would invest somewhat more at home, while around 45% of the Japanese said domestic investment would stay about the same.

     Chinese executives were notably glum about the global economic outlook. Only 54% expected growth in 2014, compared with nearly 90% of Japanese business leaders and almost 70% of their South Korean counterparts. And 14% of Chinese executives reckoned that the global economy will worsen.

     Nearly 80% of Japanese business leaders expected China's growth to slow this year, compared with 68% of South Korean respondents and 55% of Chinese executives.

     Two-thirds of Japanese executives said the domestic economy was growing smoothly on the whole, despite some problems. But the most common response from their Chinese counterparts was that Japanese growth was beginning to diminish gradually, with a full 36% thinking so.

     Two-thirds of South Korean executives said their government was not doing enough to bring about economic growth. About half of Japanese business leaders felt the same about Tokyo. Chinese executives had more confidence in Beijing's economic policies: 59% said the government was doing enough, while only 34% said it was not.

     Among Japanese executives wanting the government to do more to boost growth, 74% called for lower corporate taxes and 62% for looser regulations. More than 30% of Chinese and South Korean business leaders also wanted deregulation.

(Nikkei)