World and Nation

Japan looks beyond its borders for investors after catastrophes

AIZU-WAKAMATSU, Japan — Mayor Shohei Muroi knows it is a tough sell to get new companies to invest in this struggling industrial city just 60 miles from Japan’s most notorious nuclear plant.

So in September, Muroi did the unthinkable. He flew to China to ask a fast-growing maker of heavy machinery to set up shop in his town. His move was a stark role reversal in a nation more accustomed to sending factory jobs to China, rather than recruiting them to move the other way.

“We’ve come to a point in Japan where we can no longer grow without outside help,” Muroi said in an interview. “Whether you are based in China or America, we want you to please come do business in Aizu-Wakamatsu.”

A year after natural and nuclear catastrophes forced wrenching change on Japan’s economy, which was already listless from years of downsizing and moving factories offshore, the country is finding it must do what it has long resisted: welcome foreign manufacturers.

The new dynamic in Japan also signifies part of a larger regional power shift. A small but rapidly increasing amount of foreign capital comes from its rising neighbor, China, which last year surpassed Japan as the world’s second-largest economy and is looking to diversify its export-oriented approach to business.

Other recent Chinese manufacturing deals with Japan include plans for a plastics plant in Tottori and a heavy machinery factory in Kochi, both in western Japan.

Last month, the government invited a delegation of 80 Chinese trade officials and executives for an investment tour. Japan says it aims to double the flow of foreign direct investment into the country in the next decade. A special focus is on the three prefectures most affected by the March 2011 disasters: Iwate, Miyagi and Fukushima, where Aizu-Wakamatsu is. “The Chinese are starting to look like saviors,” said Kotaro Masuda, an economist at the Institute for International Trade and Investment in Tokyo.