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Trade Between Japan and China:Dramatic Expansion and Structural Changes

August 2003
Hitoshi Sasaki
Yuko Koga

The Economic Commentary series is edited and published by the Bank of Japan's Research and Statistics Department to provide material to deepen understanding on economic developments, mid-term economic themes, and economic indicators and statistics. The views expressed in the report are those of the authors and do not necessarily reflect the views of the Bank of Japan. The English version of this series is translated by our staff based on the Japanese original.

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Japan's trade with China, both in exports and imports, has been growing overwhelmingly over the past few years. In 2002 in particular, Japanese exports to China marked their highest growth of the past decade, sustained by strong domestic demand there and also by the effects of China's accession to the World Trade Organization (WTO) at the end of 2001.

As a result, in terms of changes in trade share by country/region during the past five years, China increased its share from 5 percent to 10 percent in exports and from 12 percent to 18 percent in imports. Particularly, as for imports by country, China is now Japan's largest trading partner, as imports from China exceeded those from the United States in 2002.

This brief report summarizes the developments and background of this dramatic expansion in trade between Japan and China.