By Feng Zhaokui (China Daily)
Updated: 2007-08-21 15:56

A few commentators particularly hostile toward China went so far as to suggest Japan should step up activities that "inflate bubbles" so as to make "China's bubble economy" burst sooner. Many average investors were thus worried they might suffer financially.

On the security issue, the "China threat theory" is all the rage these days as some influential scholars and media entities have misinterpreted China's peaceful development as an effort to revive "the Chinese empire" and restore the "territorial map" of the past, claiming all countries that used the word "peaceful" had ulterior motives.

With this pretext, Japan has tightened control on the export of technologies that could be used for military purposes and even punished companies that sold unmanned aircraft, designed for farm use, to China. Unmanned aircraft and other military robotic hardware are one of the next-generation weapon systems the United States is developing as part of its future military strategy.

In the area of high-tech transfer, Japanese manufacturers not only have to be mindful of their government's close watch but also keep in mind a lesson from the "Toshiba incident" of the 1980s (the Japanese conglomerate was severely punished by Washington for selling a digitally-controlled multi-axel processing center that can be used in making advanced submarine propellers to Russia) and remember they are under ever closer monitoring by the US.

This reality is no doubt seriously hampering direct investment and technology transfer to China by Japanese companies.

On the environmental front, despite gaining the title of "the world's factory", China has paid dearly in terms of environmental damage, especially in the eastern coastal regions, where the eco-environment has been harmed as industrialization expands.

China is now restricting the development of manufacturing enterprises that consume too much energy and water, while applying tighter vetting of foreign manufacturers seeking to invest in the country. Because the manufacturing industry occupies a significant portion of Japan's investment in China, the tighter eco-environment regulations have affected Japanese manufacturers' investment in China.

Even so, Japanese enterprises will continue to invest in China in the future, though this writer thinks the direction and focus will be different from what it has been so far. It might take on some new trends.

First, the Chinese government is pushing for the implementation of its scientific development philosophy, which offers enormous opportunities for Japan's energy-saving and environmental protection industries. From China's perspective, it needs to absorb advanced technology and management in energy saving and environmental protection from foreign countries.

It is only logical for Japan, as a model of energy efficiency, to be a key investor in our country's relevant industries. It would help encourage Japanese enterprises to invest in China's energy saving and environmental protection projects if the two countries carry out cooperation in the area with Japan transferring related technology to China.

Second, food is more important than everything else. It is natural for China, with its population of 1.3 billion, to view agriculture and farm produce as a key to maintaining food security and social stability. If China acquires the latest farming technology from Japan it will not only help improve China's agricultural production but also enable the country to export more.

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