China Watch Blog has learnt that Japanese companies have lost further ground to Chinese and South Korean companies in winning overseas infrastructure projects, dealing a blow to a planned pillar of Japan’s economic growth, the Japan trade ministry said.
From 2005 to 2010, Japanese companies won orders for infrastructure abroad, such as railways and power plants, worth around $20 billion (1.65 trillion yen) a year. But in 2010, the figure for South Korea stood at $64.5 billion while that for China was $134.4 billion. Both numbers were four times the levels five years earlier.
Those statistics were revealed by the Japan Ministry of Economy, Trade and Industry at a subcommittee meeting of the Industrial Structure Council on April 5, the Asahi Shimbun reported.
The council plans to put together a report in November to strengthen Japan’s competitiveness in exporting infrastructure. It is expected to enter discussions on a policy of nuclear-plant exports in September.
Total demand for infrastructure in fast-growing Asia and Africa has expanded to around $1 trillion a year, about three times the level a decade earlier.
For deals worth more than $1 billion in 2010, South Korea won 14 orders, including power plant construction. Japan secured just three contracts, including natural-gas processing equipment.
Region by region, Japan is facing an uphill battle.
In the value of orders for 2010, South Korea ranked second in the Middle East. China was tops in Asia and Africa. Japan, meanwhile, slipped to 11th place in Africa from fourth in 2002 and saw its standing drop in all the three regions.
Chinese and South Korean companies offer lower prices compared with Japanese firms, due mainly to lower wages in their countries.
The strong yen has also led to even higher prices offered by Japanese companies.
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