Found in translation
Canon's new electronic dictionary is both a product and a symbol of Japanese-Chinese economic cooperation.
By Eamonn Fingleton, FORTUNE

(FORTUNE Magazine) - If you want to take the temperature of Japan's economic relations with China, forget recent heated exchanges over Japan's World War II legacy.

Focus instead on something cool - really cool: the tiny Wordtank V90, the latest entry in Japan's electronic-dictionary market.

Canon's Wordtank V90
Canon's Wordtank V90

Introduced in April by Canon (Research), the Japanese camera and copier company, the V90 is to electronic dictionaries what the Ferrari is to racecars.

Smaller than a paperback book, it is the most advanced Japanese-English-Chinese dictionary ever made. Its main selling point is that it provides the Japanese - the more than 100,000 living in China and the three million who travel there each year - with a supersmart tool to talk turkey with the Chinese.

The V90 is such a hit that even at $350 it's flying off the shelves. The device is both a product of the burgeoning Sino-Japanese economic relationship (trade between the two countries has increased fivefold in the past decade) and a metaphor for it.

You need only flip over the sleek device to get the point. There, next to the model number, are the words MADE IN CHINA. Although Canon doesn't officially say so, the V90 is made under contract at a Taiwanese-owned plant in Dongguan, where 2,500 workers, most of them women in their early 20s, assemble pocket calculators and electronic dictionaries on a factory floor the length of three football fields.

The plant reportedly makes one-fifth of the world's pocket calculators, which are marketed under a variety of Japanese brand names. Although electronic dictionaries are a tiny part of Canon's business - an estimated $70 million out of $32 billion last year - sales of advanced models have been increasing by nearly 20% a year, says Teruo Nagahata, who heads the Canon Hong Kong subsidiary that developed the V90.

Advanced features

The growth can largely be attributed to innovative features, such as the ability to read handwritten input. A user can draw an unfamiliar character with a stylus on a touch-sensitive screen, and the dictionary will serve up the meaning. If it doesn't recognize the character, it offers its 20 best guesses.

That's a lot faster and easier than leafing through a phone-book-sized dictionary of thousands of Chinese characters.

The V90 can also pronounce words and display the correct sequence of strokes for each character. China is the fourth place the pocket-calculator industry has hung its hat since it was pioneered in the U.S. in the 1960s.

It migrated to Japan in the 1970s, and the Japanese outsourced it to Taiwan in the 1980s. With Japanese approval, the Taiwanese subcontractors made the jump to mainland China in the late 1990s.

While the final assembly of the V90 is done by low-cost Chinese labor, most of the serious value is created elsewhere, not least in Japan.

The most important component, the CPU, is manufactured in Japan by Seiko Epson. Meanwhile the V90's SDRAM is made in South Korea, and its flash memory and touch-sensitive screen are made in Taiwan.

As the Koreans and Taiwanese depend in turn on Japan for high-tech materials and the factory in China is full of equipment made by Matsushita (Research) and Fuji Machine (Research), the Japanese win at all levels.

Sino-Japanese economic relations are a two-way street that comes as no surprise to Shenzhen consultant George Zhibin Gu, author of China's Global Reach. He points out that the Japanese in China, as elsewhere, follow highly centralized policies.

Any time they can influence the choice of equipment or components in Chinese manufacturing, they tend to favor those they know, which more often than not means Japanese suppliers. The relationship is seen on both sides as win-win.

Indeed, it is not that different from how imperial Japan's Greater East Asia Co-Prosperity Sphere of the 1930s was supposed to work. Oddly, "co-prosperity" is one word the V90 can't handle.

Eamonn Fingleton lives in Japan and is the author of In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.