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Japanese Investors moving out of China into India

Tensions between China and Japan are running high these days.  And from the looks of it, it doesn’t seem like this will come down anytime soon.  One of the consequences of this is that the Japanese companies are switching from China to India as the investment destination.

“Strong growth and big population” are the main factors that make India interesting for Japanese companies, explained Makoto Suzuki, the head of Mitsui and Co. India Ltd., a group that is active in IT and infrastructure, among others.

Interestingly, this comes at a time when the Japanese firms are investing at a record level in overseas acquisitions and investments, crossing $100 bn mark for the first time!

Japanese companies are on a shopping spree abroad this year, Dealogic said, with $101.7 billion invested in 573 overseas acquisition up to now this year. It is the first time when the $100 billion threshold is surpassed, with the previous record standing at $84 billion in 2011

There is a re-alignment of forces – economic at first and eventually military as well – across the Asian region.  And, if China continues on the course that it is on, it will create more enemies closer home than far away in the US.