The economic and financial collaboration between China and Japan is built on a strong foundation with vast potential for future growth, according to discussions at the Tokyo parallel forum of the Annual Conference of Financial Street Forum 2024.

Wang Changqing, chairman of CSC Financial, said China and Japan have long enjoyed a solid foundation for economic and financial cooperation. The two countries have ample opportunities for collaboration and complementary strengths in technological innovation and green economy.

In particular, he emphasized the immense potential for cooperation on carbon peaking and neutrality, where both nations can share technologies and policy experiences to jointly advance green industry development.

China's capital markets have made remarkable progress and moving forward, these markets will continue to open up, enhancing their level of internationalization, he said. The potential for greater capital market cooperation between China and Japan is set to grow, he added.

In addition to the Tokyo parallel forum, this year's Annual Conference of Financial Street Forum, held at the Financial Street in Beijing from Friday to Sunday, also had branch venues in Hong Kong and Luxembourg.

Satoru Shibata, senior counselor for Japan and China financial cooperation at the Financial Services Agency of Japan, expressed hope that the two nations will deepen their cooperation in the financial sector, including expanding the exchange-traded fund, or ETF, portfolio and exploring more financial products.

Bilateral collaboration in the securities markets is well underway, Shibata said. In April 2019, the first China-Japan Capital Markets Forum was held in Shanghai, and in June 2019, ceremonies were held in both Tokyo and Shanghai to mark the launch of China-Japan ETF Connectivity, which saw the initial batch of four Chinese and four Japanese products listed and traded on the Tokyo and Shanghai stock exchanges, respectively.

"Finance and the real economy are closely linked, and there is still significant room for further progress between Japan and China," he said.

Yang Bojiang, director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, said China-Japan economic and financial cooperation carries strategic value for maintaining peace and stability.

"Cooperation between China and Japan is not only essential but also filled with potential and feasibility. The complementarity in their economic and industrial structures still outweighs the competition, enabling mutual benefit and win-win outcomes," Yang said.

Both countries could pursue deeper cooperation on common challenges arising from economic and social changes, he said. For example, they could strategically align and institutionalize efforts in industries such as healthcare and elderly care.

Yang also suggested that China and Japan should explore further collaboration in formulating rules for international cooperation.

Huang Wentao, chief economist at CSC Financial, said Japan's advanced technologies in high-end manufacturing, innovative pharmaceuticals, healthcare, elderly care, electronics, carbon neutrality and modern agriculture offer a solid foundation for China-Japan cooperation. The potential for future collaboration is vast, he added.

He highlighted Japan's successful long-term care insurance system as a significant opportunity for joint efforts in elderly care finance.

Hou Yunchun, former deputy director of the Development Research Center of China's State Council, said the growing demand for healthcare, elderly care services and financial products among the elderly populations in both countries opens up broad opportunities for financial cooperation in the silver economy.

In recent years, as China's overseas investments have increased, Chinese companies have been monitoring promising industries in Japan.

Kenji Abe, chief strategist at Daiwa Securities in Tokyo, said Japan is gradually emerging from deflation, with the central bank beginning to raise interest rates, though this process is still in its early stages.

While Japan faces a labor shortage in the long term, companies are investing heavily in digital transformation to enhance productivity. The focus on digitalization positions IT companies for strong performance, with the supply of IT systems emerging as a promising sector, he said.

Tatsuhito Tokuchi, a consulting senior fellow of the Asia Pacific Initiative at the International House of Japan, said new manufacturing industries are developing in Japan's Tohoku region, particularly those related to AI, semiconductors and chips, which are expected to positively affect the Japanese economy.

He emphasized the importance of communication between the Chinese and Japanese governments at all levels. "This will help businesses feel confident that trading in China and investing in both China and Japan, within the bounds of government regulations, is free, stable and secure," Tokuchi said.

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