Business leaders from Australia and Japan urged Canberra not to overlook Tokyo while the Gillard government focuses on the Chinese economy as the world gears for the Asian century.
The call was made at the 50th yearly Australia-Japan Joint Business Conference which opened this week in Sydney. Japan used to enjoy a long and strong trade relationship with Australia. However, observers said the relationship is hindered by the slow progress on a bilateral free trade agreement apparently caused by Tokyo's being protective of its farmers while Australia keeps on pushing harder for greater access to the country's agricultural market.
In 2007, China overtook Japan as Australia's largest trading partner while the world's third-largest economy continued to be slowed down by deflation and large public debt.
Japan is Australia's second largest trading partner and accounts for over.19 per cent of all exports, mainly coal and iron ore. However, rather than just being a supplier of raw commodities to Japan, Australian could be a serious player in Asia.
"Australia needs to move quickly to take advantage and not remain fixated on China as the only game in town because I think ignoring Japan may be to our detriment," The Australian quoted Jason Hayes, head of PricewaterhouseCoopers' Japan practice.
He said Australia could take the cue from leading Japanese firms which are heading the new push in other growing trade opportunities into China, Thailand, Vietnam, India, Indonesia and Burma. By tapping into the Japanese expansion into other Asian nation, it would help Aussie firms improve their engagement in the region and would have an impact on Australia's growth.
"The penetration of Japan into Thailand, Vietnam and China is far, far deeper than Australia's has been. They might have had some difficulties, but they have had far more longevity in those markets and have a lot more experience than Australians companies do," said ANZ Japan chief Peter Davis.
"The whole focus in Australia is on investment from China, when indeed the more significant investment over the last 10 years has been from Japan, and the Japan rate of investment has been increasing rapidly in the last three years," he added.
Hugh Morgan, one of the country's leading business leaders, pushed for the free trade agreement since what is at stake goes beyond trade issues but includes the political and social relationships between the two nations.
"Time is passing and other events are happening and it's a matter of urgency for our countries to press on with (the free trade agreement) . . . . We have made great progress with other countries - there are things happening - and we haven't solidified in a formal sense anything really structural since 1957," Mr Morgan was quoted by The Australian.