Unlimited potential

CastGlobalGroup advises on investment opportunities in China

JANUARY 2021 Business Spotlight / Text by Toby Waters

One of the silver linings of the Covid-19 pandemic was a thawing of relations between Japan and China. As the virus spread in Wuhan, Japan sent masks and money in aid. When the pandemic arrived in Japan, China reciprocated by sending 12,500 coronavirus test kits. In addition to improving regional stability, closer ties could present even better opportunities to invest in the Middle Kingdom, according to Tatsuo Murao, founder and CEO of CastGlobalGroup.

CastGlobalGroup is a Tokyo-based consulting firm that specialises in advising on cross-border matters involving mainland China. Murao began his career in law as a China specialist and worked as the Shanghai representative for a major law firm in the 1990s. After founding his own practice in 1999, he quickly became known in Japan for his expertise on China-related issues.

“All the law firms in Japan at the time made transactions with the United States their priority,” he says. “But luckily, in 1999, Japan and the US agreed to allow China’s accession to the World Trade Organization. After that, many Japanese companies wanted to invest in mainland China, and several enterprises sought me out to be their advisor. Aside from myself, it was difficult to find lawyers well-versed in the China market.”

The case for China
Murao recognises that China has long been considered by many to be an undesirable place for businesses to invest in. But his nearly three decades of experience working alongside Chinese businesses, entrepreneurs, and consumers has given him first-hand insights into the country’s emerging strengths as a market, as well as the evolving attitudes of its people.

“Since 2013, Chinese people’s views on Japan have fundamentally changed,” he explains. “When the renminbi became stronger than the yen and former Prime Minister Shinzo Abe relaxed visa restrictions, more Chinese tourists could come to Japan. This meant that more of them had the opportunity to experience Japanese culture and goods. As a result, a great number of Chinese people have come to appreciate Japan.”

He also points to the Chinese government’s recent crackdown on the airing of anti-Japanese television programmes that do not accurately reflect historical fact as a sign of the nation’s willingness to improve cross-border cooperation.

Murao is most enthusiastic about the dramatic economic growth China has experienced over the past few decades and what this means for investment prospects in the country. Even throughout 2020, he was encouraged by the China market’s resilience in the face of the pandemic.

“China was one of the few countries to successfully boost its nominal GDP during the Covid-19 outbreak. In 2020, China’s nominal GDP exceeded $15 trillion, compared with the United States’s $20 trillion, and Japan’s $5 trillion. According to the Japan Center for Economic Research, it will exceed the United States’s nominal GDP by 2028,” he says. “Regardless of whether or not you like China, we have a duty to look at this situation realistically.”

As one of China’s neighbours, Japan has much to gain from being more open to China and increasing investment in the country, according to Murao. He also notes that European firms seeking long-term growth need to take the China market seriously.

“We always hope more European companies invest in Japan. At the same time, with 120 million people, Japan is more limited than China’s market of over 1.4 billion people,” he notes. “European investment is always welcomed by ordinary Chinese consumers, who love fine European goods.”

The need for knowledge
While the EU is already China’s second-largest trading partner, and Japan its third-largest, Murao emphasises that businesses wanting to break into China or further expand their presence there must have a solid understanding of the market and mindset of the Chinese people if they want to be there over the long term. It’s in this regard that consultancies such as CastGlobalGroup can offer advice essential to a firm’s survival and growth in China.

In addition to its Japanese headquarters in Tokyo and 20 other offices nationwide, CastGlobalGroup has a subsidiary in Shanghai along with branch offices in Beijing, Guangzhou, and Suzhou. This allows the firm to provide on-the-ground insight into the intricacies of doing business in particular Chinese provinces. It also has subsidiaries in Hong Kong and Taiwan, in cooperation with Li & Partners, and can support those looking to gain a foothold there.

CastGlobalGroup employs lawyers qualified in Japan, China, Hong Kong, and Vietnam, along with a large number of judicial scriveners, tax attorneys, and intellectual property attorneys. Through the knowledge and experience of these professionals, clients can access a full suite of legal, accounting and taxation, and human resources and labour management services.

“We have over 120 specialists, who together hold 10 different types of government licence,” Murao says. “We’re the only firm that has a staff with such a diversity of qualifications.”

While China is CastGlobalGroup’s main focus, it has also recognised the growing importance of Association of South-East Asian Nations (ASEAN) members to the regional economy, and has established subsidiaries in Ho Chi Minh City, Vietnam, and Yangon, Myanmar.

“ASEAN countries are now enjoying great economic development year on year,” according to Murao. “That said, the nominal GDP of Japan, South Korea, ASEAN, and India combined is less than China’s. More than ever, it is worth learning about what China is and who the Chinese people are.”

The potential for reward
Despite the cultural and political differences that exist among Japan, EU nations, and China, Murao is confident that businesses willing to invest in China are making the right decision — and those that do will reap the rewards of that decision.

“Nobody can imagine a future without China,” he adds. “If you take the time to research the China market and learn about the nation’s people, you’ll be able to leverage all of its benefits for your profit.”•