Money flow changes direction, from China to Japan

7 years ago by in China, Featured

China has traditionally been a destination for Japanese investments, but the trend is being lately reversed, with Chinese companies buying more and more financially troubled Japanese firms.

In this way, China’s increasing wealth could become a serious help for Japan’s stagnant economy, according to a WSJ analysis.

In the last six-seven months, several such investments took place. Futong paid $78 million to buy 19 percent in SWCC Showa Holdings, Haier invested $130 million in Panasonic, while Lenovo contributed with $175 million to a joint-venture with NEC where it controls 51 percent.

The largest investment, $808 million, was made by Taiwanese Hon Hai group, also known as Foxconn and which operates large facilities in China, to acquire 10 percent at Sharp.

“Japanese companies have long assumed they would not be bought by Chinese companies,” says Takashi Nomura, an expert in Chinese businesses at Nishimura Asahi, a leading Japanese law firm. “Now, receiving capital injections from Chinese companies and seeking their help in penetrating the Chinese market is seen as a viable option.”