From June 29 to July 2 Foreign Minister Ikeda visited Hong Kong to attend the Hong Kong hand-over ceremony, among other things. In the Japan-China foreign ministerial talks that were held on that occasion, the two sides agreed to coordinate the schedules for Prime Minister Hashimoto to visit China in early September and Premier Li Peng to visit Japan in early November. Then, after another round of foreign ministerial talks in Kuala Lumpur on July 28, on the occasion of the postministerial conferences of the Association of Southeast Asian Nations, the schedule for Prime Minister Hashimoto's visit to China was announced. Visiting each other's country There has been a tremendous increase in exchange between Japan and China since the normalization of diplomatic relations in 1972. Economic Relations Japan-China economic relations in general have been developing steadily in recent years, and there are much stronger ties of mutual dependence.
Japan is China's largest trading partner, and China is Japan's second largest trading partner.
Japanese direct investment in China has been growing significantly since 1984, and China is now the largest destination for Japanese direct investment among Asian countries. Because of the lifting of the tax-exemption status for imported equipment since April 1996 and other factors, however, new contracts have been dull. Japan's economic assistance to China is contributing to the development of the Chinese economy and bilateral economic relations. Japan-China trade has been increasing significantly in recent years, and since 1991 it has been reaching new heights every year. China is Japan's second largest trading partner, after the United States, and Japan is China's biggest trading partner.