Hidenori Hashimoto, a member of the Japanese House of Representatives, says doing business in China is problematic for Japanese companies in light of recent hostilities between the two nations, leaving Japanese investment vulnerable to the whims of the Communist Party. But Cambodia could benefit.

“That’s why Japanese business people and companies are starting to look for new places to do business, such as Cambodia,” he said. “Recently, it’s become too hard for Japanese businessmen to operate in China. Geopolitical frictions, internal political problems, not to mention a rise in labour costs, China was becoming less and less attractive,” Hashimoto said.

“The regional politic relationships among Japan, China and South Korea are not good,” he added. “The difficulty is in China, so that’s why we have to find other countries in Asia for doing our business.”

China’s loss, in other words, can be Cambodia’s gain.

Cambodia has become most “safe” in Southeast Asia, according to Hashimoto.

“Thailand, which had been a top investment destination, has become politically unstable, Myanmar is under military control and is thus unpredictable, while Vietnam is a communist country with an antipathy towards capitalism,” Hashimoto said. “Right now, more Japanese investment is moving to Cambodia because it is the most politically stable among the mainland ASEAN countries. Here’s a better choice.”

Still, to fill the void left by Japanese business fleeing China, Japan needs more trading partners. So Japan is also working to hammer out the details of the Trans-Pacific Partnership (TPP), a proposed regional free trade agreement that is currently being negotiated by 12 countries in the Asia-Pacific: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

If Japan can successfully negotiate the trade pact, Japan and those ASEAN countries will strengthen their relationship and international partnerships.

“After we sign the TPP agreement, we will in one go create a market for Japanese foreign investment that is bigger than the China market. China’s economy is growing, but because of our diplomatic issues, it is not a friendly investment environment. That’s why the ASEAN member countries are very important for Japan.”

Japan has been the leading donor of humanitarian and development aid to Cambodia since 1992, and it is committed to aiding the region.

“[The] Japanese government will never change its mind, it will always support ASEAN countries,” Hashimoto said, before going on to highlight one of the country’s central goals.

“In terms of GDP, America is number one, number two is China, number three is Japan. But we aim to be number one,” Hashimoto added.​​