As the global economic landscape continues to change, companies based in the Japanese market are facing unprecedented challenges and opportunities. On the one hand, Japan’s economic slowdown, aging population, and drastic changes in consumption habits have brought tremendous pressure to companies operating in Japan. On the other hand, the rise of the digital wave, the concept of sustainable development, and the industrial transformation policy actively promoted by the Japanese government have opened up new blue oceans for keen entrepreneurs. In such a market environment full of variables, companies can only remain invincible in the fierce competition by constantly adjusting their strategies.

For Chinese companies that have already taken root in Japan, the situation is even more complex and changeable. The subtle changes in Sino-Japanese relations, the adjustment of trade policies, and the evolution of consumers’ perception of multinational brands in both countries all require companies to have a high degree of strategic flexibility. At the same time, with the in-depth promotion of the “Belt and Road” initiative and the formal entry into force of the Regional Comprehensive Economic Partnership Agreement (RCEP), the economic and trade cooperation between China and Japan has ushered in a new historical opportunity. This provides an unprecedented development platform for Chinese companies that have deeply cultivated the Japanese market, but it also puts higher demands on the strategic vision and execution capabilities of enterprises.

In this context, timely adjustment of business strategies is not only important, but also urgent. Those companies that can accurately grasp the pulse of the market and flexibly adjust their strategic direction will gain an advantage in future competition. On the contrary, companies that stick to tradition and cling to shortcomings may soon be eliminated by the market. Therefore, in-depth analysis of the current situation of the Japanese market, accurate interpretation of the industrial policies of China and Japan, objective assessment of the company’s own strengths and weaknesses, and formulation of practical and feasible strategic adjustment plans have become a must-face issue for every company that is determined to develop in the Japanese market for a long time.

This article will explore in depth how Japanese companies can make effective strategic adjustments from multiple dimensions, in order to provide useful reference and inspiration for entrepreneurs who are struggling in the Japanese market. Through systematic analysis and practical suggestions, we hope to help more companies find their correct positioning in the ever-changing Japanese market, seize opportunities, and achieve sustainable development.

Analysis of the current situation of the Japanese market

The Japanese economy is in a critical period of recovery and transformation. In recent years, driven by “Abenomics” and digital transformation, Japan’s macroeconomic environment has shown a stable and improving trend. Despite facing structural challenges such as an aging population and low fertility rates, the government has actively implemented fiscal stimulus policies and monetary easing measures in efforts to maintain economic growth. Inflation remains low, providing a relatively stable environment for business operations.

Japan’s industrial structure is undergoing profound changes. While traditional manufacturing continues to upgrade, the proportion of service and high-tech industries continues to increase. In particular, Japanese companies are accelerating their layout in the fields of artificial intelligence, the Internet of Things, and big data. The government strongly supports the “Society 5.0” strategy, promotes the development of industries in the direction of intelligence and greening, and brings new opportunities for innovative companies.

Consumer behavior presents new characteristics. Japanese consumers pay more attention to the quality of life, and the demand for healthy, environmentally friendly and personalized products is growing. The popularity of online shopping and mobile payment has changed the traditional retail landscape. At the same time, affected by the declining birth rate, the silver market has great potential, and there is a strong demand for products and services suitable for the elderly. In addition, the younger generation of consumers has a high acceptance of new things, and social media marketing has a significant effect.

Japan is at the forefront of the world in terms of technological innovation and digital transformation. The full coverage of 5G networks lays the foundation for the construction of the Internet of Things and smart cities. Robotics technology is widely used in manufacturing and service industries to improve production efficiency. Emerging technologies such as blockchain and cloud computing are reshaping traditional industries such as finance and logistics. Large companies have set up innovation centers, and small and medium-sized enterprises are also accelerating digital transformation to cope with market changes and enhance competitiveness.

Overall, although the growth rate of the Japanese market has slowed down, it is still the world’s third largest economy, with a mature business environment and a huge consumer market. For companies that are interested in entering or expanding the Japanese market, accurately grasping market trends, responding to industrial changes, following consumer trends, and actively embracing technological innovation will be the key to formulating an effective business strategy.

Interpretation of Industrial Policies of China and Japan

1. Japan’s industrial revitalization policy

In recent years, the Japanese government has actively promoted industrial revitalization to cope with challenges such as an aging population and slowing economic growth. The “Society 5.0” strategy is its core, which aims to use digital technology to promote social innovation. The strategy focuses on supporting the development and application of emerging technologies such as artificial intelligence, the Internet of Things, and big data. At the same time, Japan has also introduced policies related to “digital transformation” (DX) to encourage companies to carry out digital transformation and improve production efficiency.

In terms of specific industries, Japan focuses on supporting new energy, medical health, robotics and other fields. For example, the “Green Growth Strategy” proposes the goal of achieving carbon neutrality by 2050, which brings huge opportunities for the new energy industry. In addition, the Japanese government also supports the innovation and development of small and medium-sized enterprises and encourages enterprises to explore overseas markets through tax incentives and subsidies.

2. Support policies for Chinese companies going overseas

The Chinese government attaches great importance to supporting enterprises to “go global” and has implemented a series of encouraging policies. The “Belt and Road” initiative provides an important platform for Chinese enterprises to explore international markets. The “Guiding Opinions on Promoting International Capacity and Equipment Manufacturing Cooperation” issued by the State Council has identified key industries and regions, and pointed out the direction for enterprises to go global.

In terms of financial support, financial institutions such as the Export-Import Bank of China and the China Development Bank have provided special loans and financing services. At the same time, the Ministry of Commerce, the National Development and Reform Commission and other departments have jointly launched reforms to the overseas investment filing system, simplified the approval process, and lowered the threshold for companies to go overseas. In addition, China has also established overseas economic and trade cooperation zones to provide a clustered development platform for companies going overseas.

3. Policy synergies and opportunities between the two countries

There are many synergies between the industrial policies of China and Japan, which has created a broad space for cooperation for enterprises on both sides. First, in the field of digital economy, both countries attach great importance to the development of emerging technologies such as artificial intelligence and 5G, which provides opportunities for Chinese technology companies to enter the Japanese market. Secondly, in the field of environmental protection and new energy, both China and Japan have set ambitious emission reduction targets, which has opened up new horizons for cooperation in related industries such as clean energy and electric vehicles.

Furthermore, in the healthcare industry, facing the needs of Japan’s aging society and the rapid development of China’s medical technology, the policies of both countries support cross-border cooperation and innovation. In addition, both countries are promoting the international development of small and medium-sized enterprises, which creates favorable conditions for technical exchanges and market cooperation among small and medium-sized enterprises.

It is worth noting that Japan’s “open innovation” policy echoes China’s innovation-driven strategy, providing a policy basis for the two countries to deepen cooperation in R&D, technology transfer, etc. Enterprises can make full use of these policy synergies to seek breakthroughs in market access, technological cooperation, talent exchange, etc., to achieve mutual benefit and win-win results.

By deeply understanding and grasping these policy directions, Chinese companies in Japan can better adjust their business strategies and find their own foothold and development opportunities in the fiercely competitive Japanese market. At the same time, this also provides new ideas and possibilities for cooperation between Japanese local companies and Chinese companies.

Enterprise status assessment

The assessment of the current status of the enterprise is the basis for formulating an effective strategic adjustment plan. In the Japanese market, it is crucial for Chinese enterprises to accurately grasp their own strengths and weaknesses. First of all, the analysis of internal resources and capabilities should focus on the core competitiveness of the enterprise. This includes intangible assets such as technical patents, brand influence, and management experience, as well as tangible resources such as production equipment and capital reserves. It is particularly important to note that in the Japanese market, quality control capabilities and continuous innovation capabilities are often the key factors that determine the success or failure of an enterprise.

Market positioning and competitive advantage analysis requires companies to objectively examine their role in the Japanese market. This involves not only the unique selling points of products or services, but also factors such as pricing strategies and target customer groups. It is worth noting that Japanese consumers’ high demands for quality and service may challenge the traditional advantages of many Chinese companies. Therefore, identifying the right market segments and leveraging differentiated competitive advantages have become the key to success in Japan.

Financial status and profit model assessment is crucial for the sustainable development of enterprises. This includes in-depth analysis of indicators such as revenue structure, cost composition, and profit margin. In the Japanese market, due to high operating costs, many companies may need to adjust their pricing strategies and cost control methods. At the same time, considering factors such as the fluctuation of the yen exchange rate, it is also particularly important to establish a healthy cash flow management mechanism.

Finally, the evaluation of organizational structure and talent reserves is directly related to the execution of the enterprise. In Japan, flat organizational structures are often more popular, which is conducive to quick decision-making and market response. In terms of talent, we should pay attention to both localized recruitment and cultural integration of Chinese and Japanese employees. Especially at the management level, it is necessary to cultivate compound talents who understand Chinese corporate culture and are familiar with the Japanese business environment. Establishing an effective cross-cultural communication mechanism and employee training system will become an important guarantee for the steady development of enterprises in the Japanese market.

Through a comprehensive assessment of the current situation, companies can clearly understand their strengths and weaknesses in the Japanese market and lay a solid foundation for subsequent strategic adjustments. This will not only help avoid potential risks, but also help companies accurately grasp market opportunities and win a place in the fiercely competitive Japanese market.

Direction of Strategic Adjustment

In the context of the ever-changing Japanese market environment, companies must actively adjust their business strategies to maintain competitiveness and achieve sustainable development. The following details the strategic adjustment directions that companies can take from four aspects: business model innovation, market expansion strategy, operational efficiency improvement, and organizational change and talent strategy.

1. Business model innovation

The key to success in the Japanese market is continuous innovation. First, the localization strategy of products and services is crucial. Companies should conduct in-depth research on the needs and preferences of Japanese consumers, adapt existing products or develop new products specifically for the Japanese market. For example, they can consider combining China’s advanced technology with Japan’s sophisticated manufacturing to create products with unique competitive advantages.

Secondly, digital transformation and intelligent upgrading are the only way for enterprises to maintain their competitiveness. Japan has a leading edge in fields such as artificial intelligence and the Internet of Things. Enterprises can improve production efficiency and optimize customer experience by introducing advanced technologies. For example, they can use big data analysis and AI technology to provide personalized services to customers, or improve production flexibility and quality control through intelligent manufacturing.

Finally, cross-border cooperation and ecosystem building can help companies quickly expand their influence. In Japan, industrial chain cooperation and business ecosystems are very developed. Companies can seek cooperation with local Japanese companies and research institutions to jointly develop new technologies or new products. At the same time, actively participating in or building an industry ecosystem can help companies obtain more resources and opportunities.

2. Market expansion strategy

Market expansion is the key to business growth. First, companies need to reposition their target customer groups. The Japanese market is highly segmented and consumer demands are diverse. Companies should choose the most suitable market segments based on their own advantages, such as the younger generation, the elderly or specific professional groups, and develop targeted marketing strategies.

Secondly, diversification of marketing channels is also very important. In addition to traditional offline channels, companies should also make full use of Japan’s developed e-commerce platforms and social media. For example, they can consider cooperating with well-known Japanese e-commerce platforms such as Rakuten and Amazon Japan, or conducting precision marketing through social media such as LINE and Twitter.

Finally, brand building and cultural integration are the key to winning the trust of Japanese consumers. Companies need to have a deep understanding of Japan’s cultural traditions and social values, and skillfully integrate brand concepts with Japanese cultural elements. For example, they can emphasize the quality and details of the product, and highlight values ​​that Japanese consumers care about, such as environmental protection and social responsibility.

3. Improved operational efficiency

Improving operational efficiency is the basis for enterprises to survive and develop in the fiercely competitive Japanese market. First of all, supply chain optimization is the top priority. The Japanese market has extremely high requirements for product quality and delivery time. Enterprises need to establish a stable and efficient supply chain system.

Secondly, cost control is as important as lean management. The Japanese market is highly competitive and profit margins are limited. Enterprises need to control costs through refined management. We can learn from the lean production concepts of Japanese companies to reduce waste and improve efficiency. At the same time, we can consider adopting models such as shared service centers to centrally handle back-end business and reduce operating costs.

Finally, data-driven decision-making is a powerful tool to improve operational efficiency. Enterprises should establish a complete data collection and analysis system and use big data technology for market forecasting, inventory management, customer relationship management, etc. Through data analysis, enterprises can more accurately grasp market trends and make more scientific decisions.

4. Organizational change and talent strategy

Organizational change and talent strategy are key factors for companies to adapt to the Japanese market. First, it is crucial to establish a localized management team. Companies should actively introduce local Japanese talents, especially in key positions such as marketing, sales, and customer service. At the same time, they should also focus on cultivating compound talents who understand Chinese corporate culture and are familiar with the Japanese market.

Secondly, the integration of corporate culture is the foundation for long-term development. There are significant differences between Chinese and Japanese corporate cultures. Companies need to absorb the excellent cultural elements of Japanese companies while maintaining their own characteristics. For example, they can learn from the Japanese companies’ attention to details and pursuit of perfection in their work attitude, while maintaining the innovative spirit and flexibility of Chinese companies.

Finally, it is very important to establish a talent training and incentive mechanism suitable for the Japanese market. Japanese employees generally value career stability and long-term development. Companies can design long-term incentive plans, such as career development path planning and continuous training systems. At the same time, they must also respect Japanese corporate culture, such as emphasizing teamwork and avoiding overly radical individual performance appraisal methods.

Through the above strategic adjustments, enterprises can better adapt to the Japanese market environment, enhance competitiveness and achieve sustainable development. However, the specific adjustment strategy still needs to be refined and adjusted according to the company’s own situation and the characteristics of the industry in which it is located.

Risk Management and Compliance

When doing business in the Japanese market, risk management and compliance are key links that companies cannot ignore. As a society ruled by law, Japan has extremely strict requirements for corporate compliance operations. At the same time, as a foreign-funded enterprise, it also faces unique challenges. Therefore, establishing a sound risk management system and compliance system is not only a guarantee to avoid legal disputes, but also the cornerstone of sustainable development of enterprises.

1. Compliance with laws and regulations

Japan’s legal system is complex and strict, with numerous regulations related to business activities. Companies need to have a deep understanding of and strictly abide by relevant laws such as the Company Law, the Labor Standards Law, and the Personal Information Protection Law. It is particularly important to note that Japan has strong protection for labor rights, and companies should pay special attention to compliance issues in labor contracts, working hours, vacation systems, etc.

In addition, there are special regulatory laws and regulations for specific industries, such as finance, medical care, and food. Enterprises should hire professional legal advisors based on their own business characteristics, conduct regular compliance reviews, and adjust business strategies in a timely manner to ensure that corporate operations are always carried out within the legal framework.

2. Intellectual Property Protection

Japan is an advanced country in intellectual property protection, with a complete patent, trademark, and copyright protection system. For companies operating in Japan, it is important to protect their own intellectual property rights and avoid infringing on the rights of others. Suggestions for companies:

• Apply for patents and register trademarks in Japan in a timely manner to protect independent innovation achievements.
• Establish an intellectual property management system and conduct regular asset review and risk assessment.
• Sign confidentiality agreements with employees to prevent technology leaks.
• In product research and development, marketing promotion and other aspects, we fully respect and avoid infringing on the intellectual property rights of third parties.

3. Financial risk control

Financial risk control is the key to a company’s sound operation. In Japan, companies need to pay special attention to:

• Strictly abide by Japanese accounting standards to ensure the accuracy and transparency of financial statements.
• Establish a sound internal control system to prevent fraud and corruption risks.
• Reasonable tax strategy planning is necessary to save taxes legally while avoiding violating anti-tax avoidance regulations.
• Pay close attention to exchange rate fluctuations and take appropriate foreign exchange risk management measures.

In addition, companies should also pay attention to cash flow management and maintain good capital turnover to cope with market fluctuations and emergencies.

4. Crisis public relations and public opinion management

In Japan, where information is highly transparent, every move of a company may become the focus of public attention. Once a crisis occurs, if it is not handled properly, it is likely to cause irreparable damage to the company’s reputation. Therefore, companies need to:

• Establish a crisis early warning mechanism, identify potential risks, and develop emergency plans.
• Establish a professional public relations team and train spokespersons with Japanese cultural sensitivity.
• Maintain good communication with the media, consumers and regulatory agencies, and establish a relationship of mutual trust.
• Make good use of platforms such as social media to actively spread positive information and shape a good corporate image.

When a crisis occurs, companies should be honest, transparent and responsible, disclose information in a timely manner, take remedial measures and minimize negative impacts.

In short, risk management and compliance work run through the entire process of business operations. In a highly developed market economy system like Japan, only by integrating risk awareness into corporate culture and building a comprehensive risk management system can companies remain invincible in the fierce market competition and achieve long-term sustainable development.

Strategic Implementation Path

After formulating a comprehensive strategic adjustment plan, how to effectively implement it becomes the key to success or failure. This section will provide practical strategic implementation guidelines for Japanese companies from four aspects: short-term action plans, medium- and long-term development plans, key performance indicator setting, and strategic execution monitoring and adjustment mechanisms.

1. Short-term action plan

The short-term action plan is the first step in strategic adjustment, usually covering a period of 3-6 months. The main goal of this stage is to respond quickly to market changes and lay the foundation for the medium- and long-term strategy. It is recommended that companies first hold a “strategic kick-off meeting” to clarify the new strategic direction and build team consensus. Subsequently, a “100-day action” approach can be adopted to focus on rapid improvements in several key areas. For example, priority can be given to promoting product localization transformation, establishing a localized marketing team, and optimizing the supply chain. At the same time, a detailed timetable and division of responsibilities should be formulated to ensure that each action has a clear execution entity and completion deadline.

2. Medium and long-term development plan

The medium- and long-term development plan usually covers a time span of 1-3 years and is a roadmap for achieving strategic goals. At this stage, companies should develop a more systematic and comprehensive action plan. First, it is necessary to set clear business growth goals based on market forecasts and corporate vision. Secondly, formulate specific implementation plans around core strategic directions, such as business model innovation, market expansion, and operational efficiency improvement. For example, you can plan product iteration routes, channel expansion strategies, and technology upgrade schedules. In addition, long-term work such as optimization of organizational structure and formulation of talent training plans should also be considered. It is recommended to adopt a “rolling planning” approach and adjust and update it every year according to actual conditions.

3. Key Performance Indicator (KPI) Setting

A scientific and reasonable KPI system is an important tool to ensure the effective implementation of the strategy. When setting KPIs, the SMART principle (specific, measurable, achievable, relevant, and timely) should be followed. Multi-dimensional KPIs can be set for different strategic goals and business characteristics. For example, market expansion can include the number of new customers acquired, brand awareness enhancement, etc.; operational efficiency can include cost reduction ratio, turnover rate improvement, etc.; product innovation can include new product launch speed, degree of localization, etc. It is important that the setting of KPIs should be broken down layer by layer to ensure that the company’s overall goals can be implemented in various departments and positions. At the same time, establish a KPI evaluation and incentive mechanism and combine it with employee performance appraisal and compensation system.

4. Strategic execution monitoring and adjustment mechanism

The successful implementation of a strategy is inseparable from effective monitoring and timely adjustments. It is recommended that companies establish a “strategy management office” to coordinate the implementation of the strategy. Regular (e.g. monthly or quarterly) strategic review meetings should be held to evaluate the implementation progress, analyze the causes of deviations, and formulate improvement measures. Use digital tools to establish a strategic execution dashboard to monitor the achievement of various KPIs in real time.

In addition, a rapid response mechanism should be established to track market changes or competitor movements in real time and initiate emergency plans when necessary. It is important to maintain strategic flexibility and adjust specific measures in a timely manner according to changes in the internal and external environment, but to adhere to the overall direction of the strategy. It is recommended to conduct a comprehensive strategic review every year to ensure that medium- and long-term plans always remain forward-looking and competitive.

Through systematic planning and effective implementation of the above four aspects, enterprises can transform grand strategic blueprints into practical action plans, promote the continued steady development of their business in Japan, and gain an advantageous position in the fiercely competitive Japanese market.

Case Analysis

In the Japanese market, many companies are facing the challenge of strategic adjustment, among which there are both successful examples and failed lessons. By analyzing these cases, we can better understand the key factors and potential pitfalls of strategic adjustment.

1. Cases of successful business strategy adjustment

UNIQLO’s transformation in the Japanese market:

Uniqlo started out as an ordinary clothing retailer, but through strategic adjustments, it successfully transformed into a fast fashion giant in Japan and even the world. The company repositioned itself as a “technology company” and focused on the research and development and innovation of functional clothing. Uniqlo also invested heavily in digital transformation and established an omni-channel sales network that integrates online and offline. At the same time, the company focused on localized design and launched product lines that meet the needs of Japanese consumers. These strategic adjustments enabled Uniqlo to stand out in the fiercely competitive Japanese clothing market and become an industry leader.

Sony’s business restructuring and innovation:

Faced with fierce competition in the digital product market, Sony has carried out drastic business restructuring. The company decisively divested its loss-making PC business and focused on developing high-profit areas such as imaging, games and financial services. Sony has also increased its R&D investment and made layouts in emerging technology fields such as artificial intelligence and virtual reality. Through these strategic adjustments, Sony has successfully reversed its decline and re-established its leading position in consumer electronics and entertainment.

2. Failure cases and lessons learned

Yamada Denki’s expansion mistakes:

As one of the largest electronics chain retailers in Japan, Yamada Denki adopted an aggressive expansion strategy in the early 2010s, opening a large number of new stores and acquiring competitors. However, the company underestimated the saturation of the Japanese electronics market and the rise of online shopping. Overexpansion led to a surge in operating costs, while sales revenue failed to grow accordingly. Ultimately, Yamada Denki had to close a large number of stores and lay off employees, which seriously affected the company’s market position and brand image. This case warns us that strategic adjustments must be based on accurate judgment of market trends, and blind expansion may bring disastrous consequences.

Laox’s localization failed:

After being acquired by Suning, Laox, a former Japanese electronics retail giant, tried to revive its business by introducing a Chinese business model. However, the company failed to fully consider the shopping habits and preferences of Japanese consumers, and the hypermarket model it forcibly promoted was incompatible with Japan’s refined and personalized service culture. At the same time, the company failed to adjust its strategy in time to cope with the impact of e-commerce. This led to Laox’s continued losses and shrinking market share. This case shows that when conducting cross-cultural operations, it is necessary to deeply understand the local market and adjust the strategy appropriately, rather than simply copying the original model.

In summary, successful strategic adjustment cases all reflect the importance of accurate grasp of market trends, clear understanding of one’s own advantages, and execution. Failed cases warn us that ignoring market changes, blindly expanding, or sticking to outdated models may lead to serious business difficulties. In a mature and ever-changing market like Japan, companies must maintain keen insight and flexibly adjust their strategies in order to remain invincible in the fierce competition.

Conclusion

In the complex and ever-changing business environment of the Japanese market, corporate strategic adjustment is not a one-off process, but a long-term task that requires continuous attention and flexible response. Successful entrepreneurs know that the core of strategic adjustment lies in establishing a dynamic mechanism that can quickly perceive market changes and respond in a timely manner. This requires companies to have not only a forward-looking vision, but also the determination to innovate themselves.

Sustainability means that companies need to regularly evaluate the effectiveness of their strategies and continuously optimize and adjust their directions based on market feedback and internal performance. This periodic self-examination can help companies stay sharp in the highly competitive Japanese market and avoid complacency. At the same time, sustainability also means long-term commitment to employees, partners and customers, and building a stable and resilient business ecosystem.

Flexibility is the key for enterprises to deal with emergencies and seize fleeting opportunities. Consumer preferences, technological trends and policy environment in the Japanese market are constantly changing, and enterprises need to develop the ability to make quick decisions and execute efficiently. This flexibility is not only reflected at the strategic level, but also implemented in daily operations, encouraging innovative thinking, establishing a flat organizational structure, and improving the overall adaptability of the enterprise.

At present, the economic and trade cooperation between China and Japan is facing a new historical opportunity. With the implementation of the Regional Comprehensive Economic Partnership (RCEP), the cooperation space between the two countries in the fields of trade, investment, and technological exchange has been further expanded. Chinese companies in Japan should actively seize this opportunity, use their own advantages, and deeply participate in the process of Japan’s industrial upgrading and economic recovery.

At the same time, we must also realize that opportunities and challenges coexist. China and Japan compete in certain areas, and geopolitical factors may also affect bilateral relations. Therefore, companies need to fully consider these factors when formulating strategies and manage risks while seizing opportunities. Establishing a diversified supply chain, strengthening cross-cultural communication capabilities, and deepening localization strategies are all effective means to deal with potential risks.

Finally, we want to emphasize that successful strategic adjustments are not only related to the development of the enterprise itself, but also an important way to contribute to China-Japan economic cooperation. Every Chinese enterprise that succeeds in the Japanese market is a private ambassador of China-Japan friendship, sowing the seeds of hope for the healthy development of bilateral relations. Let us work together to find opportunities in challenges, create value in changes, and jointly write a new chapter in China-Japan economic and trade cooperation.