January 2021 marked the launch of the Biden administration in the United States and the Xi Jinping administration's new five-year plan in China. China has set the goal of doubling its citizens' incomes by 2035, and there is a strong possibility that it will surpass the US as the world's largest economy in the process. The US views the rise of China with alarm, and its hardline stance is unchanged for now, even with the change in administrations. US-China tensions will likely continue for some time, but we should follow trends within the Biden administration closely.

The new US administration is expected to deepen its partnerships with its Japanese and European allies while making further efforts to prevent the leakage of advanced technologies that would encourage China's economic growth. China, on the other hand, is likely to prioritize its relationship with Japan, including their deep economic ties, in order to make its economic growth possible. Certainly, the Japan-US alliance is Japan's top priority, and there are limits to Japan's collaboration with China, particularly in advanced industries. In terms of the environment, however, there are global trends towards decarbonization, including in the US, and China will be interested in Japan's technology and experience in the reduction of environmental burdens from the manufacturing industry, as well as carbon recycling. China will be similarly interested in high-quality Japanese services as part of the expansion of its consumer market, a key pillar of economic growth in its new five-year plan.

I recently learned from a conversation with a cancer research institute that a large number of people from China travel to Japan for treatment, paying many times more than Japanese normally would. This is doubtless due to high trust in Japan's medical care. Additionally, there is growing attention to local Japanese cuisine and home cooking through social media postings by Chinese tourists visiting Japan, and the number of Japanese restaurants in China has increased by 60% over the past two years. I also hear that brick-and-mortar bookstores in China, which have suffered due to e-commerce, are making a comeback by remodeling themselves into more sophisticated retail spaces with cafes and other amenities, similar to what has been popular in Japan.

Once the Covid-19 pandemic subsides, there will once again be a great number of Chinese visitors to Japan. This is a good opportunity for Japanese companies to appeal directly to China's middle class, which is the main driver of China's consumer market. While there are a number of concerns at the national level regarding relations with the US and national security, perhaps political and economic issues should be considered separately. There is a saying in Chinese that private citizens lead the way for action by the government. Strengthened economic exchange could lead to more stable bilateral relations. I believe it is important first for businesses to engage.