A Marriage Made In Asia

Sino-Japanese ties worry the U.S.

In its dealings with Japan and China, the U.S. would do well to keep a weather eye on the fast-growing economic alliance being forged by the two Asian nations. For one thing, Japan's direct investment in China has begun to take off, jumping by 78% last year and outstripping U.S. investments by 40% (chart). Indeed, economist Chen Zhao of The China Analyst, a publication of the Bank Credit Analyst Group in Montreal, reports that Japanese companies now regard China as their main investment target and plan to place half of their overseas capacity increases there.

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