The Change Mariner

China Lifts Japanese Economy

New York Times:

The Japanese economy grew at a robust 7 percent annual pace in the fourth quarter of 2003, the Cabinet Office reported. After weakness early in the year, the strong showing last quarter by Japan, the world's second-largest economy, brought growth for all of 2003 to 2.7 percent.

True to form, exports were the engine behind the growth, pulling Japan well out of recession. But this time, the crucial demand for Japanese goods came not from the United States, but from China.

"We reckon that 80 percent of the growth in exports in the last 12 months is due to Chinese demand," said Jesper Koll, chief Japan economist for Merrill Lynch. "There is absolutely no question that here in Japan, all eyes are on China. If China slows down, Japan will crash."

Unlike past recoveries, which tended to be narrowly dependent on increased exports of cars to North America, current growth is more widely based as Chinese demand puts idle capacity in Japanese steel mills and semiconductor plants back to work.

Sales of construction and mining equipment to China by Komatsu jumped 47 percent last quarter, to $150 million. In 2005, the company said, it expects to sell $1 billion to China, more than double the 2002 level.

Posted by Bob King at February 18, 2004 10:23 AM | TrackBack
Related Categories: Country - China | Quadrant - Economic

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