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Business Trends

Japan companies board the Belt and Road train

Trans-Eurasian logistics and inland China development present fresh opportunities

A cargo terminal in Duisburg, Germany, is filled with colorful containers shipped across Eurasia from China. (Photo by Yuri Masuda)

DUISBURG, Germany -- Japanese companies are jumping on the bandwagon of China's Belt and Road Initiative in search of fresh business opportunities.

Cargo rail between Europe and China has exploded from fewer than 20 runs in 2011 to around 3,000 last year. The German industrial city of Duisburg, a stop on the trans-Eurasian route, symbolizes the network's development over the past few years. Colorful containers of red, blue and green were recently seen filling a more than 200,000-sq.-meter cargo terminal there.

Japanese companies are joining the fray to capture rising demand for cross-continental freight transport. Nippon Express launched air and sea shipments between Japan and China in May so as to extend the Europe-China route to Japan.

The company considers its wide network of offices and warehouses across Europe more extensive than Chinese rivals and sees its many footholds in Asia as more competitive than European logistics companies.

 "Many Japanese companies ship or sell automotive parts and electronic devices to manufacturing bases in Europe. We will cultivate such demand," said Takuya Ozeki, the chief of Nippon Express's European air cargo operations.

Yusen Logistics' warehouse in Duisburg is among the largest run by Japanese companies in the city. Processing trade, where multinational companies produce parts in China and assemble them in Europe, is vibrant, and the company is eager to ride the wave. "Japanese companies have ample business opportunities as freight movement picks up between China and Europe," said a Yusen Logistics official.

Japanese companies have found business opportunities in other parts of the Belt and Road rail network. In Poland, infrastructure and energy projects have been awarded to Japanese companies as well as Chinese companies, said Naofumi Makino, director general of the Japan External Trade Organization's Warsaw office.

Mitsubishi Hitachi Power Systems has set up an office in Warsaw and is negotiating fossil-fuel power plant projects and presenting proposals to customers.

In inland China, Fujitsu plans to triple its staff in Xi'an to 1,500 by the end of fiscal 2020, and is considering setting up a data center in Chongqing. Fujitsu expects demand will rise for IT systems to support the development of railways and other infrastructure.

Mitsubishi Heavy Industries plans to produce centrifugal chillers -- used in large buildings' air conditioning -- in Dalian. In the past, low price was paramount for the Chinese, but now they want "the latest and top-of-the-line products from the start," an official at the Japanese company said.

The advanced features of Japanese hydraulic excavators and forklifts have been in high demand in China. Construction work there tends to last long hours and machinery with durability and engine power are favored.

Chinese demand for hydraulic excavators, made by non-Chinese companies, rose 72% on the year in April, according to an estimate by Hitachi Construction Machinery.

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