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China's plan to have an increasing amount of its economic growth generated from domestic consumption opens opportunities to Japanese companies and encourages the Japanese to invest in the world's second-largest economy, former Vice-Premier Zeng Peiyan said on Thursday.
China resolved, during the recent global financial crisis, to change its sources of economic growth. As a result, the country is "turning into more of a global market and less of a global manufacturing powerhouse", Zeng said.
The policy change is "bringing fantastic business opportunities to Japanese companies", he added.
Zeng's remarks came during an opening ceremony held for the China-Japan Entrepreneurs Exchange Meeting of the Boao Forum for Asia, which took place in Japan's Yokohama.
China is Japan's largest trade partner, and Japan is the third-largest source of China's foreign direct investment, or FDI. By the end of 2011, Japan had $83 billion worth of accumulated investments in China.
For years, the majority of Japanese companies that have invested in China have done so because of the low-cost labor they found there. They set up factories and imported raw materials and components from Japan while exporting final products to overseas markets, particularly to developed markets.
As Chinese labor costs continue to rise, the world's second-largest economy is planning to have its growth depend more on domestic consumption and less on exports. Japanese companies, meanwhile, are "finding it necessary" to invest more in Chinese research and development and design and technology, similar to what a slew of international companies have done, Zeng said.
"This will help the two countries find new sources of economic growth and lead to more cooperation," he said.
China, as part of its plan to change its sources of economic growth, is concentrating more on attracting FDI. In new FDI industrial guidelines, China said it is welcoming investments into high-end manufacturing, services and research and development.
Among those that have heeded the call is Japan, which has been making large investments into China since it was shaken by a devastating earthquake in March last year.