Corporate Japan appears to be shedding its long-held suspicion of Chinese investors after a big jump in the value of acquisitions in Japan by mainland companies this year.
Last week’s agreement by Panasonic to sell the white goods division of its Sanyo subsidiary to Haier, the Chinese refrigerator and washing machine company, put the value of inbound Chinese investment at $575.5 million to the end of July, according to Dealogic, more than four times the total for last year.
Japanese executives have tended to view ambitious, cash-rich Chinese companies as a threat, liable to pillage struggling Japanese groups for technology and other assets and accelerate Japan’s relative economic decline.
Hiromasa Yonekura, chairman of Japan’s Keidanren business lobby, said that any buying spree by Chinese groups “may cause sudden unrest or fear in the mind of the public”.
But at least some Japanese companies are starting to see Chinese expansion in a new way – as an opportunity to unload unwanted legacy businesses and accelerate restructuring.
Panasonic bought Sanyo in 2009 for its advanced “green” businesses, such as rechargeable batteries and solar cells, and saw little value in its relatively low-end fridges and washers.
Its deal with Haier followed an agreement early this year between Lenovo and NEC to create a joint venture in personal computers, under which Lenovo has the option eventually to take over NEC’s entire PC business.
Other recent deals have targeted everything from solar panels to clothing and golf clubs.
The sums involved remain modest and a fully fledged opening by Japan to Chinese investment will take time. Japanese companies are notoriously slow to sell underperforming assets – “especially to Chinese groups”, says one Tokyo-based banker.
Still, the case for more deals looks strong, particularly in electronics – an industry where Japanese groups are looking to become leaner and more focused, while their Chinese counterparts are seeking global know-how and trusted brands.
Winning over picky Japanese consumers is seen by many Chinese companies as a key step in conquering high-end, mature markets. Just as appealing is the international sales networks built up over decades by the Japanese. Sanyo, for instance, enjoys a higher market share for its white goods in the fast-growing economies of south-east Asia than it does in Japan.
Despite warnings by the business lobby, the Japanese public seems to be taking the rise in Chinese acquisitions in its stride. Internet reaction to the Sanyo-Haier deal focused on whether Haier would get Sanyo’s popular Gopan bread maker, which makes bread out of rice. The deal does not include it.
Additional reporting by Kathrin Hille in Beijing.