OSAKA, Japan—Makers of consumer goods, basking in a warm spell between Asia’s two biggest economies, have discovered that the factories in this country have an advantage China can’t match. They can put “made in Japan” on the label.

That is why Wang Lin, executive director of Shanghai ShenXing Brush-making Co., decided to open a factory in Osaka to make toothbrushes to sell in his home country. “Because living standards are rising in China, consumers are looking for good stuff,” Mr. Wang said. “Chinese people have a good impression…


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