Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
321
Part II Our challenges for exploring new global frontiers
Chapter 1 Current status and challenges of Japan’s external economic relationships
【Key points of Part II, Chapter 1】
・The value of receipts in the current account in 2015 came to 126 trillion yen (up 5.1% compared with
the same month in the previous year), recovering to the level before the Lehman Shock. While goods
exports accounted for around 60% of the total, the center of growth is shifting to investments and
services exports.
・The value of goods exports reached 75.6 trillion yen (up 3.45% compared with the previous year), the
highest level since the Lehman Shock, but the dependence of exports on “the United States,”
“automobiles” and “the Tokai-Koshin region” was prominent due to a lack of sufficient adaptation to
changes in the Chinese market.
・ While many major OECD countries are pursuing economic growth through the expansion of
exports, the ratio of exports to GDP (export ratio) for Japan is low and the growth in the ratio is also
low.
・ In Japan, the ratio of goods and services exports and inward and foreign direct investments to GDP
is low compared with in major European countries, which are also facing a slowdown in domestic
demand due to a population decline. In order to achieve sustainable growth, it is necessary to raise
productivity by adequately capturing overseas demand in addition to acquisition, the employment of
highly-skilled professionals and foreign students, and promoting the international movement of
workers.
Section 1 Challenges for Japan’s current trade and investments
This section will provide an overview of trends in Japan’s international balance of payments and
examine the characteristics of Japan’s external economic relationships.
As for the current account balance, Japan recorded the smallest-ever current account surplus and the
largest-ever trade deficit in 2014, but in 2015, the current account surplus grew substantially, to 16.4
trillion yen, led by services exports and primary income. This section will examine changes in the center
of growth in Japan’s goods trade, services trade and foreign direct investments by looking at trends
concerning these items.
1. Current status of Japan’s external balance
First, we will look at trends in Japan’s current account balance in recent years.
The value of receipts in Japan’s current account in 2015 increased 5.1% compared with the previous
year to 126 trillion yen, surpassing the level before the global economic crisis and reaching the highest-
ever level.1 The value of payments declined 5.5% compared with the previous year to 110 trillion yen,
and as a result, the current account balance recorded a surplus of 16.4 trillion yen, representing a
significant increase of 12.5 trillion yen from the previous year (Figures II-1-1-1 and II-1-1-2).
1 Balance of payments, on a second preliminary basis (Ministry of Finance)
322
Figure II-1-1-1 Changes in Japan’s current account balance
Source: "Balance of Payments" (Ministry of Finance and Bank of Japan)
Figure II-1-1-2 Changes in the value of payments in Japan’s current account
Source: "Balance of Payments" (Ministry of Finance and Bank of Japan)
The value of goods exports, which accounted for around 60% of the total receipts, reached 75.3
trillion yen, the highest level since the global economic crisis, but the center of growth is shifting to
primary income (contribution to the growth of 5.1% compared with the previous year: 1.9%), which
63.571.369.7
63.669.166.969.572.6
82.3
91.5
105.5
118.6113.1
79.8
94.893.992.4
106.2
120.2126.3
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Secondary income Primary income Services exports Goods exports
56.159.7
54.750.6
55.0 56.5 55.8 56.462.6
72.7
85.2
93.798.2
66.2
75.4
83.587.6
101.7
116.3109.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Secondary income Primary income Services exports Goods exports
323
represents investment income, among other items, and services exports (contribution: 1.9%).2,3 The
current account balance was also affected by trends in the world economy as a whole, such as excess
production capacity and lower resource prices, which were reviewed in Part I (Figure I-1-1-3).
This section looks at the current account balance in recent years while leaving detailed analysis of
individual topics to later sections.4
Figure II-1-1-3 Value of receipts in Japan’s current account and composition of contributions
to the growth (2015)
Source: "Balance of Payments" (Ministry of Finance and Bank of Japan)
(1) Growing dependence of goods exports on the United States and transport equipment
The value of goods exports in 2015 increased 3.45% compared with the previous year to 75.6 trillion
yen (customs-clearance basis5), the highest level since the global economic crisis. However, due to a
2 The contribution by goods exports to the growth of 5.1% in the current account surplus was only 1.0%.
The contribution by secondary income was 0.3%. 3 White Paper on International Economy and Trade 2015 examined Japan’s competitiveness in cross-
border trade from the three viewpoints (“three strengths”)—“competitiveness in exports,” “competitiveness
in attracting people and enterprises” and “competitiveness of Japanese multinationals”—and presented
suggestions for Japan’s external economic policies. For the details of the analysis results, refer to Part 2 of
the same white paper. 4 The component items of Japan’s external balance will be discussed in individual chapters of Part II of this
white paper. Trends in the services account balance and in the balance relating to travel are explained in
Part II, Chapter 2, Section 1 and Part II, Chapter 2, Section 2, respectively. The status of goods trade in
regions across Japan is explained in Part II, Chapter 3, Section 1. 5 There are differences between trade statistics and balance of payments in the value of goods exports and
imports due to differences in the accounting method of expenditures. Specifically, (i) the value of imports in
trade statistics include transportation fares and insurance premiums, while these items are included in the
Value (trillion yen)Contribution to the growth
(total 5.1%)
Secondary income 2.1 0.3%
Primary income 29.3 1.9%
Services exports 19.7 1.9%
Goods exports 75.3 1.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
324
lack of sufficient adaptation to changes in the Chinese market, the dependence of exports on the United
States as a destination country and on transport equipment as an export item is growing.
The breakdown of the contribution to the average annual growth rate of 2.33% in exports since 2010
shows that by country, the contribution by the United States (1.37%) was by far the largest, eclipsing
the contribution by Asian NIEs (0.13%), the EU (0.10%), China (0.04%) and others (0.68%). By item,
the contribution by transport equipment (0.8%), including automobiles, was very large compared with
the contribution by other items, including machinery (0.3%) and electrical machinery (0.2%). In
particular, the contribution by transportation equipment exported to the United States came to 0.61%,
indicating a heavy concentration of exports on this category (Figures II-1-1-4 and II-1-1-5 and Table 11-
1-1-6).
Figure II-1-1-4 Export partners' shares in 2015 and contribution of countries and regions to
the export growth rate
Source: "Trade Statistics of Japan" (Ministry of Finance)
Figure II-1-1-5 Shares of export items in 2015 and contribution to the export growth rate by
item
Source: "Trade Statistics of Japan" (Ministry of Finance)
services account in the balance of payments. In addition, (ii) in trade statistics, goods cleared through customs
(customs boundary) are accounted for, but in the balance of payments, goods for which ownership is
transferred between residents and non-residents are accounted for, regardless of whether or not they are
cleared through customs (for the details, refer to the website of the Ministry of Finance).
U.S.
20.1%
EU
10.6%
China
17.5%
Asian
NIEs
21.7%
Others
30.1%
Export partners'
shares (2015)
1.37%
0.10%
0.04%
0.13%
0.68%
0.00% 0.50% 1.00% 1.50%
U.S.
EU
China
Asian NIEs
Others
Foodstuff
0.8%
Raw materials
1.5%
Mineral fuels
1.6%
Chemical
products
10.3%Products by
material
12.2%
General
machinery
19.1%Electrical
equipment
17.6%
Transportation
equipment
24.0%
Others
13.0%
Shares of
export items
(2015)
0.1%
0.1%
0.0%
0.2%
0.1%
0.3%
0.2%
0.8%
0.5%
0.0% 0.2% 0.4% 0.6% 0.8% 1.0%
Foodstuff
Mineral fuels
Products by material
Electrical equipment
Others
325
Table II-1-1-6 Contribution to the export growth rate by country and item
Contribution
US EU China Asian NIEs Others World
1. Foodstuff 0.01% 0.00% 0.00% 0.02% 0.02% 0.05%
2. Raw materials 0.01% 0.00% 0.01% 0.00% 0.03% 0.05%
3. Mineral fuels 0.00% -0.01% -0.02% 0.03% 0.04% 0.04%
4. Chemical products 0.06% 0.01% 0.10% 0.00% 0.06% 0.24%
5. Products by material 0.10% 0.01% -0.05% -0.13% 0.19% 0.12%
6. General machinery 0.32% 0.03% -0.11% -0.08% 0.16% 0.31%
7. Electrical equipment 0.15% -0.01% 0.02% 0.01% 0.02% 0.18%
8. Transportation
equipment
0.61% 0.08% -0.04% 0.04% 0.13% 0.82%
9. Others 0.12% -0.01% 0.14% 0.23% 0.02% 0.51%
Total 1.37% 0.10% 0.04% 0.13% 0.68% 2.33%
Note: Annual average growth rates (contribution) from 2010 to 2015
Source: "Trade Statistics of Japan" (Ministry of Finance)
A heavy concentration of exports on a particular category like this is also observed with respect to
exporting regions and sectors within Japan.
A look at the growth rates of the value of direct exports6 by domestic manufacturing industries by
region shows that the growth rate was high in Hokkaido (21.3%) and Hokuriku (12.7%) between 2010
and 2014 (Figure Ⅱ-1-1-7).
6 Prepared from the “Census of Manufacturer” (Ministry of Economy, Trade and Industry). In the Census
of Manufacturer, the value of direct exports from each business facility is indicated, making it possible to
identify the value of direct exports by prefecture through the tabulation of raw data. However, compared
with business statistics such as trade statistics and the international balance of payments, this data has some
demerits, such as that it covers only manufactures, that it excludes business facilities with a workforce of
three or less and that it is insufficient in terms of promptness of announcement.
326
Figure II-1-1-7 Average annual growth rate of exports of the manufacturing industry by region
(2010-2014)
Source: "Census of Manufacturers” (METI)
Meanwhile, regarding the share of regions in the value of direct exports by manufacturing industries
in 2014, the share was large for Tokai-Koshin (32.7%), Kanto (22.6%) and Kinki (18.6%). As for the
contribution to the average annual growth rate of 2.6% between 2010 and 2014, Tokai-Koshin was a
large contributor by region and transportation equipment made considerable contributions by sector.
The contribution by the category combining these two, namely, the manufacturing of transportation
equipment in Tokai Koshin, came to 1.48%7 (Figures II-1-1-8 and II-1-1-9 and Table II-1-1-10).
Figure II-1-1-8 Shares of regions in Japan’s exports (2014)
Source: "Census of Manufacturers” (METI)
7 In addition, trends in exports from regions were analyzed in Part II, Chapter 3, Section 1.
21.3%
1.1%3.1%
5.3%
12.7%
1.8%0.3% -2.6% -4.9%
-10%
-5%
0%
5%
10%
15%
20%
25%
Hokkaido
0.4%
Tohoku
3.3%
Kanto
22.6%
Tokai-Koshin
32.7%
Hokuriku
2.5%
Kinki
18.6%
Chugoku
11.6%
Shikoku
2.3%Kyushu and
Okinawa
6.0%
Shares of regions
(2014)
327
Figure II-1-1-9 Regions’ contributions to Japan’s export growth rate (from 2010 to 2014)
Source: "Census of Manufacturers” (METI)
Table II-1-1-10 Contributions to the export growth rate in the manufacturing industry by
region and industry (from 2010 to 2014)
Source: Arrangement of "Census of Manufacturers" (METI)
On the other hand, the value of goods imports in 2015 declined 8.7% compared with the previous
year to 78.5 trillion yen. As the decline came against the backdrop of a fall in the crude price since the
second half of 2014, the value of imports of mineral fuels, which accounted for 23.2% of the total import
value, registered a steep decline of 34.2% compared with the previous year.
The effects of excess production capacity can be also observed. Regarding steel, the volume of
0.1%
0.0%
0.7%
1.6%
0.2%
0.3%
0.0%
-0.1%
-0.4%
-0.5% 0.0% 0.5% 1.0% 1.5% 2.0%
Hokkaido
Tohoku
Kanto
Tokai-Koshin
Hokuriku
Kinki
Chugoku
Shikoku
Kyushu andOkinawa
Hokkaido Tohoku KantoTokai-
KoshinHokuriku Kinki Chugoku Shikoku
Kyushu
and
Okinawa
Total
Food 0.003% -0.001% 0.004% 0.007% 0.000% 0.005% 0.001% 0.000% 0.000% 0.018%
Beverages, cigarettes, feed 0.000% 0.000% -0.001% -0.003% 0.000% 0.002% 0.001% 0.000% 0.012% 0.011%
Textiles 0.000% 0.000% 0.001% -0.013% 0.003% 0.002% 0.003% 0.014% 0.009% 0.018%
Lumber and wood products (excluding furniture) 0.000% 0.000% 0.001% 0.001% 0.000% 0.000% 0.000% 0.000% 0.000% 0.002%
Furniture and fixtures 0.000% 0.000% 0.016% 0.003% 0.000% -0.001% 0.000% 0.000% 0.000% 0.018%
Pulp, paper, and paper products 0.003% -0.007% 0.011% 0.005% 0.000% -0.005% -0.003% 0.000% 0.001% 0.005%
Printing and related industries 0.000% 0.000% 0.005% 0.002% 0.000% -0.047% 0.000% 0.000% 0.000% -0.041%
Chemicals 0.000% 0.013% 0.133% 0.062% 0.027% 0.053% -0.026% -0.017% 0.018% 0.263%
Petroleum and coal products 0.002% 0.005% 0.136% 0.004% 0.000% 0.177% 0.050% -0.008% 0.020% 0.386%
Plastic products (excluding those otherwise listed) 0.000% 0.000% 0.097% 0.004% 0.020% 0.006% 0.007% 0.023% 0.008% 0.164%
Rubber products 0.000% 0.001% -0.008% 0.008% 0.000% -0.002% 0.025% 0.000% 0.015% 0.039%
Tanned leather, leather products, fur 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000%
Ceramics, stone and clay products 0.000% 0.001% -0.016% 0.033% 0.004% -0.075% -0.002% 0.002% 0.021% -0.033%
Iron and steel 0.011% 0.002% 0.069% -0.104% 0.003% 0.303% -0.044% 0.000% 0.014% 0.253%
Nonferrous metals 0.000% -0.007% -0.061% -0.010% -0.002% 0.018% -0.018% -0.010% 0.030% -0.061%
Metals 0.000% 0.012% 0.021% -0.001% 0.001% 0.008% 0.000% 0.000% 0.005% 0.046%
General-use machinery 0.000% 0.012% -0.085% 0.001% 0.006% 0.063% -0.017% 0.006% -0.013% -0.027%
Production-use machinery 0.002% 0.034% 0.151% 0.178% 0.159% 0.083% 0.049% -0.009% 0.044% 0.691%
Business-use machinery 0.000% -0.004% -0.016% -0.027% -0.024% -0.062% -0.003% 0.000% -0.005% -0.141%
Electronic parts, devices and electronic circuits 0.017% 0.066% 0.017% -0.239% 0.053% 0.271% 0.031% 0.058% -0.020% 0.254%
Electrical machinery -0.004% 0.012% 0.031% 0.280% 0.000% -0.047% 0.004% -0.037% -0.020% 0.219%
Information and communication electronics equipment -0.001% -0.094% -0.096% -0.049% 0.000% -0.212% -0.027% 0.000% 0.000% -0.479%
Transportation equipment 0.027% -0.006% 0.308% 1.484% -0.003% -0.240% 0.008% -0.090% -0.500% 0.988%
Other manufacturing industries 0.001% -0.001% -0.030% -0.005% 0.002% 0.046% 0.001% 0.001% 0.003% 0.019%
Total 0.060% 0.037% 0.687% 1.619% 0.250% 0.347% 0.040% -0.069% -0.359% 2.612%
328
exports fell only 1.0% compared with the previous year, but the value of exports posted a steep drop of
7.3% due to a decline in the unit price. The value of exports of machinery, including machinery used for
construction and mining, also declined 3.6% compared with the previous year, and on the import side,
both the volume and value of exports of iron ore fell.
On the other hand, the value of exports of agricultural, forestry and fishery products hit a record high
of 745.2 billion yen (up 21.8% compared with the previous year) due to rising income levels in emerging
countries, among other factors.
The ratio of goods and services exports to GDP in Japan is low compared with the ratios in major
European countries, which, like Japan, are facing an aging society coupled with a low birthrate. The
ratio to GDP is smaller for Japan than for Germany and China, both of which are recording a current
account surplus, as is Japan. Moreover, the ratio for Japan is smaller than the ratio for Germany even if
the value of trade within the EU is excluded from the figure for the latter country (Figures II-1-1-11 and
II-1-1-12).
Figure II-1-1-11 Goods and services exports of Japan, China and Germany as a percentage of
GDP
Source: UN National Accounts Main Aggregates
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014
China's exports China's imports Germany's exports
Germany's imports Japan's exports Japan's imports
329
Figure II-1-1-12 Changes in exports of the EU countries (as a percentage of GDP) (exports to
outside the EU)
Note: Exports from an EU country to another are deemed as domestic trade and are not included in
exports.
Source: Global Trade Atlas and IMF (World Economic Outlook, April 2015)
(2) Shift to consumption in China and Japan’s exports to China
Japan has been strengthening its relationship with China in terms of trade and investment. Until now,
many Japanese companies have established affiliates in China, and Japan’s exports to China have been
expanding, led mainly by exports of intermediate goods (parts and materials, such as steel and chemicals,
machinery components related mainly to electronics, etc.) and capital goods (machine tools,
construction machinery, etc.) for Japanese affiliates there as part of an international division of
production (global value chain) targeted at the United States and Europe as final demand regions
(Figures II-1-1-13 and II-1-1-14).
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany Japan Spain
Italy France UK
330
Figure II-1-1-13 Changes in the number of Japanese affiliates overseas and their sales
Note: As for China, only the mainland is covered.
Source: "Survey of Overseas Business Activities” (METI)
Figure II-1-1-14 Japan’s exports to China by goods
Source: "RIETI-TID” (Research Institute of Economy, Trade and Industry)
0
5
10
15
20
25
30
35
40
0
1
2
3
4
5
6
7
8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sales (right axis)
Number of companies
(1,000 companies) (Trillion yen)
Num
Sales
0
20
40
60
80
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capital goods
Consumer goods
Parts and components
Processed goods
Materials
Total
Fin
al
go
ods
Interm
ediate
go
ods
(Billion dollars)
331
However, as shown above, China’s position as a manufacturing base is changing due to rising labor
costs and other factors. In view of the rising ratio of local procurement by Japanese manufacturers’
affiliates in China and the Chinese government’s shift of policy priority from investment to consumption,
the growth in exports of intermediate goods and capital goods may weaken compared with the past.
Many of the industries which are active in establishing affiliates in China are export-oriented ones, such
as information and communication electronics equipment, electrical machinery, iron and steel and
chemicals (Figure II-1-1-15). On the other hand, among non-manufacturing industries, the wholesale
trade industry alone is outstandingly active in establishing affiliates in China, while other industries
expected to benefit substantially from robust consumption, such as retail trade and services, are not so
active. If the shift from investment to consumption for which the Chinese government aims is realized,
this mix of industries active in establishing affiliates in China may put Japan at a disadvantage in
capturing the expanding Chinese market. Meanwhile, the main offices of Japanese affiliates in China
are located primarily in coastal areas (Figure II-1-1-16).
Figure II-1-1-15 Japanese affiliates in China (2013)
Note: As for China, only the mainland is covered.
Source: "Survey of Overseas Business Activities” (METI)
0
2
4
6
8
10
12
14
0
200
400
600
800
1000
1200
1400
Foo
d
Tex
tiles
Lu
mb
er, pap
er, pu
lp
Chem
icals
Petro
leum
and co
al
Ceram
ics, ston
e and clay
Iron
and steel
No
nfe
rrous m
etals
Metals
Gen
eral-use m
achin
ery
Pro
du
ction
-use m
achin
ery
Busin
ess-use
mach
inery
Electrical m
ach
inery
Info
rmatio
n an
d co
mm
un
icatio
n electro
nics
equip
men
t
Tran
spo
rtation e
qu
ipm
ent
Oth
er man
ufactu
ring
indu
stries
agricu
lture, fo
restry, fish
eries
Min
ing
Con
structio
n
Info
rmatio
n an
d co
mm
un
icatio
ns
Tran
spo
rt
Who
lesale
Retail
Serv
ices
Oth
er non
-manu
facturin
g in
du
stries
Sales (right axis)
Number of companies
(1,000 companies) (Trillion yen)
Number of
companies
Sales (right axis)
332
Figure II-1-1-16 Location of Japanese affiliates (FY2013)
Note: This is a simplified map. The locations of head offices are shown.
Source: "Survey of Overseas Business Activities” (METI)
As a reference for considering the future of business in China, we will look at the recent import trend
in China by item from two viewpoints. One is the viewpoint of major items for which the import value
is large, and the second is the viewpoint of items for which the recent growth rate is high even if the
import value is not large now.
First, among items for which the import value is large are machinery, including electrical machinery,
resources including mineral fuels, and chemicals. Regarding machinery and chemicals, Japan has a large
share (Table II-1-1-17). In these sectors, competition with the ROK and Taiwan are intense. Next,
prominent among items for which the growth rate is high are products related to food safety and
sophistication of eating habits (meat, grains including animal feed, powdered milk, wine, coffee, etc.),
art works and products used to enjoy everyday life, including cosmetics, and this reflects a rise in the
living standard (Table II-1-1-18). The growth is also high for pharmaceutical products (mainly drugs),
presumably reflecting the effects of the aging of society. However, although Japan has a large share in
Chinese imports of perfumes and cosmetics, there are concerns that it may not be necessarily succeeding
in capturing the expanding market with respect to many items.8 As for the sources of imports of
consumer goods such as apparel and footwear, Italy, along with emerging countries, has a large share,
indicating that demand for luxury goods is emerging with respect to daily products as well.
8 In some cases, Japanese affiliates in China may be supplying products manufactured locally, but local
production is not covered by this analysis, which focuses on imported goods.
333
Table II-1-1-17 Major imported items of China (top items based on the import value)
1. Items for which the import value is large (total of five years/2011-2015)
Share Rank
85 Electrical machinery 7 22.4 Taiwan (21%), ROK (19%), Japan (9%) 9.0% 3rd
27 Mineral fuels 1 15.6 Saudi Arabia (11%), Russia (10%), Angola (8%) 0.6% 24th
84 General machinery -2 9.8 Japan (17%), Germany (13%), ROK (11%), US (10%) 16.7% 1st
26 Ores -2 7.3 Australia (43%), Brazil (13%), Chile (7%) 0.0% 84th
90 Precision machinery 2 5.7 ROK (21%), Taiwan (16%), Japan (15%) 14.6% 3rd
87 Automobiles 7 4.1 Germany (29%), US (19%), Japan (18%) 17.8% 3rd
39 Plastics 1 3.9 ROK (17%), Japan (13%), Taiwan (13%) 13.2% 2nd
29 Organic chemicals 0 3.3 ROK (22%), Japan (14%), Taiwan (11%) 13.8% 2nd
74Copper, copper
products-4 2.7 Chile (22%), Japan (8%), Australia (6%) 8.2% 2nd
12 Oilseeds 8 2.2 Brazil (43%), US (33%), Argentina (10%) 0.1% 21st
HS ItemGrowth rate
(%)
Share in
exports (%)Major exporting partner (based on shares in 2015)
Japan
2. Items for which the import value is large (2015)
Share Rank
85 Electrical machinery 2 27.0 Taiwan (21%), ROK (19%), Japan (9%) 9.0% 3rd
27 Mineral fuels -37 12.4 Saudi Arabia (11%), Russia (10%), Angola (8%) 0.6% 24th
84 General machinery -13 9.8 Japan (17%), Germany (13%), ROK (11%), US (10%) 16.7% 1st
90 Ores -6 6.2 ROK (21%), Taiwan (16%), Japan (15%) 14.6% 3rd
26 Precision machinery -30 5.9 Australia (43%), Brazil (13%), Chile (7%) 0.0% 84th
87 Automobiles -22 4.3 Germany (29%), US (19%), Japan (18%) 17.8% 3rd
39 Plastics -13 4.1 ROK (17%), Japan (13%), Taiwan (13%) 13.2% 2nd
29 Organic chemicals -22 3.0 ROK (22%), Japan (14%), Taiwan (11%) 13.8% 2nd
12Copper, copper
products-13 2.5 Brazil (43%), US (33%), Argentina (10%) 0.1% 21st
74 Oilseeds -19 2.4 Chile (22%), Japan (8%), Australia (6%) 8.2% 2nd
Share in
exports (%)Major exporting partner (based on shares in 2015)
JapanHS Item
Growth rate
(%)
Note: 1. Top 10 items among the HS2 items. Figures in brackets are the share in imports of individual
countries.
2. China is excluded from major trading partners (re-import).
Source: Global Trade Atlas
334
Table II-1-1-18 Imported items of China (top items based on the growth rate)
1. Items for which the growth rate is high (from 2010 to 2015/annual average of five years)
Share Rank
97 Art works 73.9 0.02 Hong Kong (1%), Switzerland (1%) 0.0% -
10 Grains 44.2 0.6 US (30%), Australia (23%), France (12%) 0.03% 18th
19Cereal flour and milk preparations
(powdered milk, etc.)25.8 0.2
Netherlands (22%), Ireland (11%), Germany
(11%)0.9% 18th
02 Meat 25.1 0.4 Australia (15%), Brazil (15%), New Zealand 0.0% -
33 Perfumes and cosmetics 24.7 0.3 France (25%), ROK (18%), Japan (15%), US 14.7% 3rd
61 Apparel (knit) 23.2 0.1 Vietnam (15%), Italy (12%), Bangladesh (7%) 1.6% 14th
08 Fruit and nuts 23.0 0.4Thailand (19%), Chile (16%), Vietnam (15%),
Philippines (10%), US (9%)0.1% 33rd
30 Pharmaceutical products (drugs, etc.) 21.6 1.2Germany (23%), US (14%), France (8%), Italy
(8%), UK (6%)3.7% 8th
09 Coffee and tea (coffee, etc.) 21.6 0.0Vietnam (21%), Indonesia (15%), Malaysia
(11%), Sri Lanka (10%)0.6% 19th
21 Prepared foods 21.2 0.1 US (19%), Australia (7%), Malaysia (7%) 5.4% 6th
62 Apparel (other than knit) 21.1 0.2 ROK (17%), Italy (15%), Vietnam (10%) 1.4% 13rd
22 Beverages and spirits (wine, etc.) 21.0 0.3France (37%), Australia (11%), US (7%), Chile
(5%), Germany (5%)0.9% 17th
64 Footwear 19.7 0.2 Vietnam (36%), Italy (20%), Indonesia (14%) 0.4% 17th
16 Prepared seafood 19.1 0.01 Peru (56%), Thailand (12%), ROK (10%) 3.0% 5th
43 Fur and fur products 18.8 0.1 Denmark (38%), Finland (13%), Canada (11%) 0.0% 28th
24 Cigarettes 18.7 0.1 Zimbabwe (32%), Brazil (15%), US (11%) 2.3% 10th
88 Aircraft 17.7 1.7 US (63%), France (22%), Germany (10%) 0.0% 14th
06 Trees and flowers 16.2 0.0 Netherlands (51%), Japan (18%), Thailand (7%) 18.4% 2nd
11 Cereal flour 16.1 0.1Thailand (65%), Vietnam (19%), Netherlands
(3%), Germany (3%)0.1% 20th
JapanHS Item
Growth rate
(%)
Share in
exports
(%)
Major exporting partner
(based on shares in 2015)
2. Items for which the growth rate is high (2015)
Share Rank
10 Grains 51.4 0.6 US (30%), Australia (23%), France (12%) 0.03% 18th
19Cereal flour and milk preparations
(powdered milk, etc.)36.5 0.2
Netherlands (22%), Ireland (11%), Germany
(11%)0.9% 18th
22 Beverages and spirits (wine, etc.) 35.8 0.3France (37%), Australia (11%), US (7%), Chile
(5%), Germany (5%)0.9% 17th
33 Perfumes and cosmetics 33.7 0.3 France (25%), ROK (18%), Japan (15%), US 14.7% 3rd
21 Prepared foods 27.2 0.1 US (19%), Australia (7%), Malaysia (7%) 5.4% 6th
75 Nickel 26.6 0.3 Russia (44%), Canada (9%), Australia (7%) 5.7% 5th
64 Footwear 19.6 0.2 Vietnam (36%), Italy (20%), Indonesia (14%) 0.4% 17th
31 Agricultural chemicals 17.2 0.2 Russia (22%), Belarus (21%), Canada (19%) 0.1% 19th
08 Fruit and nuts 17.1 0.4Thailand (19%), Chile (16%), Vietnam (15%),
Philippines (10%), US (9%)0.1% 33rd
43 Fur and fur products 16.9 0.1 Denmark (38%), Finland (13%), Canada (11%) 0.0% 28th
17 Sugar and candy 16.5 0.1 Brazil (45%), Thailand (12%), Cuba (10%) 0.5% 13rd
02 Meat 16.4 0.4 Australia (15%), Brazil (15%), New Zealand 0.0% -
09 Coffee and tea (coffee, etc.) 16.0 0.02Vietnam (21%), Indonesia (15%), Malaysia
(11%), Sri Lanka (10%)0.6% 19th
81 Other base metals 14.5 0.1 Congo (42%), US (16%), Japan (8%) 8.3% 3rd
20 Prepared vegetables, fruit and nuts 14.2 0.1 US (27%), Brazil (11%), ROK (10%), Thailand 0.3% 31st
06 Trees and flowers 14.1 0.01 Netherlands (51%), Japan (18%), Thailand (7%) 18.4% 2nd
61 Apparel (knit) 11.8 0.1 Vietnam (15%), Italy (12%), Bangladesh (7%) 1.6% 14th
23Food residues (scrap meat, sake
lees)11.1 0.3 US (53%), Peru (22%) 0.3% 24th
30 Pharmaceutical Products (drugs, etc.) 8.4 1.2Germany (23%), US (14%), France (8%), Italy
(8%), UK (6%)3.7% 8th
92 Musical instruments 6.0 0.02 Japan (33%), Indonesia (27%), Germany (11%) 33.0% 1st
HS ItemGrowth rate
(%)
Share in
exports
(%)
Major exporting partner
(based on shares in 2015)
Japan
Note: 1. Top 20 items among the HS2 items based on the growth rate. However, items for which the
import value is extremely low were excluded. Figures in brackets are the share in imports of individual
countries.
335
2. Trading partners for the majority of the import value of art works are not classifiable. China is
excluded from major trading partners (re-import).
Source: Global Trade Atlas
A look at the trend in China’s imports by type of goods shows that the share of consumer goods has
been steadily growing against the backdrop of the rising living standard and the shift from investment
to consumption although the present share is still small (Figure II-1-1-19).
Figure II-1-1-19 Changes in the share of goods in China’s imports
Note: 1. HS6 items are classified according to the BEC, which is then categorized into the five categories
of goods for tallying.
2. Conversion from the HS to the BEC was conducted using the conversion table on the UN Comtrade’s
database. However, since the descriptions do not correspond to each other on a one-to-one basis, there
may be some gaps in tallying.
3. Conversion tables for HS1997, 2002, 2007 and 2012 were used depending on the subject year.
Source : Global Trade Atlas and UN Comtrade
Now, we will take a look at exports to China (imports into China) from major countries, including
Japan. The value of exports to China from Japan has been declining since peaking in 2011 while the
value of exports from other major countries has been increasing (Figure II-1-1-20). In the case of Japan,
the impact of the Great East Japan Earthquake must be taken into consideration, but surely there are also
other factors, such as the effects of the mix of items in terms of capturing demand for consumer goods
for which other countries have recorded high growth, for example.
0
10
20
30
40
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Materials
Processed goods
Parts and components
Capital goods
Consumer goods
(%)
336
Figure II-1-1-20 Changes in China’s import values by country
Note: The chart covers major developed countries and emerging countries for which the import value is
high.
Source: Global Trade Atlas
Described below is an overview of the trend in the mix of items imported by China from major
trading partner countries and the growth rate of imports. Figure II-1-1-21 shows changes in Chinese
imports from Japan, with the horizontal axis indicating the mix of items as of 2008 (10 major items in
terms of the share) and the vertical axis indicating the average annual growth rate between 2008 and
2015. Regarding the growth in imports from Japan since the global economic crisis, imports of
precision machinery, automobiles, plastics and organic chemicals grew, whereas imports of electrical
machinery, for which Japan has the largest share, general machinery, and steel were sluggish, In
contrast, imports from the United States grew with respect to a broad range of items, with particularly
high growth rates recorded for precision machinery, aircraft and automobiles (Figure II-1-1-22). In the
case of imports from Germany, imports of automobiles and precision machinery increased, and
particularly high growth was registered for pharmaceutical products. Other major countries, including
France, the United Kingdom and Italy, also had shares and recorded growth concerning not only
machinery but also consumer goods, including pharmaceutical products, beverages and spirits,
perfumes and cosmetics, apparel, and woven fabrics of animal hair, although their areas of strength are
different. As for imports from emerging countries, imports of mineral fuels and steel from the ROK
were sluggish, but imports of electrical and general machinery from the country grew. In the case of
imports from Taiwan, electrical machinery, which accounts for nearly 40% of the imports from there,
led the growth in overall imports from there.
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Japan US UK Germany
France ROK Taiwan
(Billion dollars)
Global
economic
crisis (2008)
337
Figure II-1-1-21 Composition of items imported to China from Japan and their growth rates
Note: Among HS2 items, top 10 items in terms of import value for the most recent year (2015) are
shown. Other items are categorized into “others.”
Source: Global Trade Atlas
-8
-6
-4
-2
0
2
4
6
8
0 20 40 60 80 100
Electrical
machinery
PlasticsPrecision
machinery
Automobiles
General
machinery
Steel products
Chemicals
Copper and copper products
Organic
chemicals
Iron and steel
Composition ratio by import item from Japan (2008)
Gro
wth
rate of C
hin
a’s import fro
m Jap
an (fro
m 2
008 to
20
15
)
(%)
(%)
OthersTotal of all
items: -0.8%
(Annual average growth rate/from 2008 to 2015)
338
Figure II-1-1-22 Composition of items imported to China from major countries and their
growth rates
(Annual average growth rate/from 2008 to 2015)
0
5
10
15
20
25
30
0 10 20 30 40 50 60 70 80 90 100
(United States)
Electrical
machinery
Plastics
Precision
machinery
Automobiles
General
machinery
OilseedsChemicals
Lumber and
pulp
Organic
chemicals
Aircraft
Composition ratio by import item from the US (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m th
e US
(from
2008 to
2015)
(%)
(%)
Others
Total of all
items: 8.7%
-5
0
5
10
15
20
25
30
0 20 40 60 80 100
(Germany)
Electrical
machinery
Plastics
Precision machinery
Automobiles
General
machinery
Steel products Chemicals
Aircraft
Organic
chemicals
Pharmaceutical
products
Composition ratio by import item from Germany (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m G
ermany (fro
m 2
00
8 to
20
15
)
(%)
(%)
Others
Total of all
items: 6.6%
339
-20
-10
0
10
20
30
40
50
60
70
0 20 40 60 80 100
(France)
Electrical machinery
Pharmaceutical
products
Precision
machinery
Perfumes and
cosmetics
General
machinery
Beverages and spirits
Grains
Aircraft
AutomobilesOrganic
chemicals
Composition ratio by import item from France (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m F
rance (fro
m 2
00
8 to
2015)
(%)
(%)
Others
Total of all
items: 6.9%
-20
-10
0
10
20
30
40
0 20 40 60 80 100
(United Kingdom)
Electrical
machinery
Pharmaceuti
cal products
Precision
machinery
Automobiles
General machinery
Copper and
copper products
Lumber and pulp
Mineral fuels
ChemicalsPlastics
Composition ratio by import item from the UK (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m th
e UK
(from
20
08 to
20
15
)
(%)
(%)
Others
Total of all
items: 6.9%
340
-30
-20
-10
0
10
20
30
0 20 40 60 80 100
(Italy)
Electrical machinery
Pharmaceutical products
Precision machinery
Wool and woolen
textiles
General machinery
Plastics
Leather materials
and leather
Apparel (other than knit)
Steel products
Inorganic chemicals
Composition ratio by import item from Italy (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m Ita
ly (fro
m 2
00
8 to
2015)
(%)
(%)
Others
Total of all
items: 5.3%
-10
-5
0
5
10
15
20
0 20 40 60 80 100
(Republic of Korea)
Electrical machinery
PlasticsPrecision
machinery
Automobiles
General
machinery
Iron and steel
Copper and copper products
Mineral fuels
Organic
chemicals
Chemicals
Composition ratio by import item from the ROK (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m th
e RO
K (fro
m 2
00
8 to
20
15)
(%)
(%)
Others
Total of all
items: 6.5%
341
Note: Among HS2 items, top 10 items in terms of import value for the most recent year (2015) are
shown. Other items are categorized into “others.”
Source: Global Trade Atlas
While imports from Japan are heavily tilted towards machinery, metals and chemicals, imports from
other developed countries cover a relatively broad range of items, particularly consumer goods in the
case of imports from European countries. If Chinese imports of consumer goods continue to expand
steadily, the mix of items imported from Japan may put the country at a disadvantage.
In view of the above, Japan may have to gradually change the current state of its trade and investment,
which is heavily tilted towards intermediate goods and capital goods. For Japan, it is important to take
actions so that it can capture the expanding market for consumer goods while watching the future course
of China’s structural reforms.
(3) Improvement in the services account balance due to an increase in the number of tourists to
Japan
Due to the effects of structural changes in emerging countries and the shift of priority in industry to
services, Japan’s services exports in 2015 amounted to a record high of 19.7 trillion yen (up 13.9%
compared with the previous year) and the number of visitors to Japan came to 19.74 million (up 47.1%),
also a record high. The services account deficit decreased by 1.5 trillion yen compared with the previous
year, marking the smallest deficit since 1996, the earliest year for which comparable data are available
(Figure II-1-1-23).
-15
-10
-5
0
5
10
15
20
0 20 40 60 80 100
(Taiwan)
Electrical machinery
Plastics
Precision machinery
Glass
General
machinery
Iron and steelCopper and
copper products
Artificial
fibers
Organic
chemicals
Chemicals
Composition ratio by import item from Taiwan (2008)
Gro
wth
rate o
f Chin
a’s im
port fro
m T
aiw
an (fro
m 2
00
8 to
2015)
(%)
(%)
Others
Total of all
items: 4.9%
342
Figure II-1-1-23 Changes in Japan’s services import and export values (trillion yen)
Source: "Balance of Payments" (Ministry of Finance)
Although Japan’s services account balance improved substantially, the improvement is very small
compared with the growth in global services trade. For example, Japan’s contribution to the growth of
the global value of services trade in the past 10 years (average annual growth of 7.2%) is very small
(0.2%). In particular, Japan is lagging in exports of business services with high value added (Figures
II-1-1-24 and II-1-1-25).
Figure II-1-1-24 Changes in global goods and services trade
(Billion dollars)
Source: WTO database
19.7
-21.3 -5
-4
-3
-2
-1
0
1
2
3
4
5
-25
-20
-15
-10
-5
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Services exports Services imports Services account balance (right axis)
Average annual growth rate of goods exports (2005-2014)
Average annual growth rate of services exports (2005-2014)
Value of goods
exports Value of services
exports
(Year)
343
Figure II-1-1-25 Growth rate of the export of “professional services” of major countries and
contribution ratio by item (2010-2014)
Note: Average annual growth rates from 2010 to 2014. Due to statistical restrictions, the contribution
ratio of “others” of Japan shows the total of the contribution ratios of “specialized and management
consulting” and “technological and trading services.”
Source: OECDStat, Office for National Statistics (UK) and Bank of England
As for the trends in services account balance and the balance relating to travel, refer to Part 2,
Chapter 2.
(4) Summary
As shown above, looking at Japan’s external economic relationships from the viewpoint of the
balance of payments, it is clear that Japan’s goods trade depends on exports to the United States and
exports of transport equipment such as automobiles and that exports to China are heavily tilted towards
machinery, metal and chemicals, indicating the possibility that Japan may fail to capture new demand
for consumer goods. Services account balance depends on the improvement in the balance relating to
travel. This indicates the possibility of increasing dependence on a particular area, and Japan is required
to develop ways of earning income on a global scale in a broad range of sectors.
US UK Germany Japan
R&D Specialized and management consulting
Technological services in such areas as construction, engineering and science, which fall
under technological and trading services
Operational lease Trade-related services
Others Total of professional services
344
2.Need to deepen external economic relationships and Japan’s current situation
Various studies have shown that companies’ productivity is closely related to their overseas business
expansion. 9 This paragraph will provide an overview of past studies concerning the relationship
between productivity and overseas business expansion and will also analyze Japan’s current situation
through international comparison in terms of the ratio of trade and foreign direct investment to GDP.
(1) Past debates on the relationship between companies’ overseas business expansion and
productivity
First, according to a new trade theory focusing on heterogeneity between companies within the same
industry, the fixed cost10 necessary for serving the market varies according to the method of doing so
and the cost is from low to high in the order of serving the market through (i) domestic supply, (ii) supply
via exports and (iii) foreign direct investment. Moreover, in order to serve the market through each
method, it is necessary to secure sufficient productivity to earn profits in an amount larger than the fixed
cost. Consequently, the productivity of companies expanding into overseas markets through export or
foreign direct investment is expected to surpass that of companies not expanding into overseas markets
(Figure II-1-1-26)11.
9 Regarding the effects of companies’ expansion into overseas markets in improving productivity, refer to
the detailed analysis in White Paper on International Economy and Trade 2013. 10 Specifically, when starting export, in addition to the fixed cost necessary for doing business
domestically, companies have to bear the fixed cost necessary for export, such as marketing expenditures,
including expenditures on local information gathering activity, and expenditures on systems of sales and
distribution services. When making foreign direct investment, in addition to the fixed cost necessary for
export, companies are presumed to have to bear the heavy cost of establishing and maintaining local
subsidiaries. 11 For example, in relation to changes in the balance of outward foreign direct investment to GDP.
a company with a productivity level of “X” can earn profits in the domestic market but cannot do so in
overseas markets through export or foreign direct investment, and as a result, the company focuses
exclusively on supply to the domestic market without expanding into overseas markets. Meanwhile, a
company with a productivity level of “Y” supplies products to overseas markets in addition to the domestic
market in order to maximize its profits, but opts for export, rather than foreign direct investment, because it
can earn more profits through export. On the other hand, a company with a productivity level of “Z” opts
for foreign direct investment, through which it can earn more profits than through export.
345
Figure II-1-1-26 A model for a company’s productivity and overseas expansion
Source: “The Internationalization of Japanese Firms: New Findings Based on Firm-Level Data” by
Wakasugi and Todo (2010) (RIETI Discussion Paper Series 10-P-027)
Meanwhile, it has been pointed out that export not only has the effect of making the economy of
scale work more effectively by capturing foreign demand but also produces the so-called “learning-
from-exporting” by providing opportunities for companies to encounter new knowledge and technology
abroad. The export learning effect refers to raising productivity as a result of striving to improve the
levels of technology and quality and achieving innovation by absorbing technology in response to the
needs in overseas markets.12
The positive effects of economic partnership agreements are also due in large part to a rise in
productivity. According to “an analysis of economic effects of the TPP agreement”13 conducted by the
government task force on the TPP at the Cabinet Secretariat, expansion of trade and investments to be
caused by the TPP will raise productivity and increase the supply of labor and capital stock, leading to
the realization of a truly “strong economy”. Specifically, the analysis pointed out three endogenous
growth mechanisms whereby the TPP drives the economy: (i) expansion of exports and imports → a
rise in trade openness → a rise in productivity; (ii) a rise in productivity → a rise in the real wage rate
12 In relation to the learning effect of foreign direct investment, many Japanese companies have expanded
into Silicon Valley and the surrounding region in order to absorb advanced technologies. The number of
companies which have expanded into the region has reached the highest level since the survey started in
1992. Regarding the status of their specific operations and the challenges identified based on hearings
held there, refer to the analysis in Section 2 of this chapter. 13 Published on December 24, 2015.
346
→ an increase in the supply of labor; (iii) a rise in real income → increases in savings and investments
→ an increase in capital stock → expansion of production capacity.
(2) Weak growth in Japan’s goods and services exports compared with major European countries
Next, we will look at Japan’s present situation through an international comparison in terms of the
ratio of goods and services trade to GDP.
Although the ratio of exports to GDP (export ratio) for Japan has been increasing somewhat in recent
years, it has stayed low compared with the ratios for other major OECD countries in terms of both goods
exports and services exports.
The ratios of goods export to GDP for the ROK and Germany are relatively high at around 40%. In
the case of Germany, the export ratio excluding exports to other EU countries is still higher than the
export ratio for Japan (Figure II- 1-1-27).
Figure II-1-1-27 Ratio of goods exports to GDP for Japan and major Europe countries
Note: Figures for Germany (exports to outside of the EU) are based on data from 2005 onward.
Source: OECD Stats, Global Trade Atlas, WTO Statistics, and UN National Accounts Aggregates
As the analysis in Part I, Chapter 3.2. shows, the ratio of services exports to GDP for Japan is low
compared with the export ratios for major European countries although Japan’s services trade has grown
significantly in recent years. The ratio of services exports to GDP is high for the United Kingdom. As
in the case of Germany’s goods exports, the U.K. services export ratio excluding exports to other EU
countries is still higher than the export ratio for Japan (Figure II-1-1-28).
31%
28
%
18
%
10
%
8%
12
%
7%
41
%
39
%
16
%
15
%
9%
17
%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
ROK Germany UK Japan US Germany
(exports
to outside
of the
EU)
UK
(exports
to outside
of the
EU)
2000
2014
347
Figure II-1-1-28 Ratio of services exports to GDP
Note: Figures for Germany (exports to outside of the EU) are based on data from 2005 onward.
Source: OECD Stats, Global Trade Atlas, WTO Statistics, and UN National Accounts Aggregates
While many major OECD countries, including Germany and the ROK, have been pursuing
economic growth through the expansion of exports since 2000, the export ratio for Japan has remained
low (Figure II-1-1-29).
Figure II-1-1-29 Ratio of services exports to GDP
Note: Changes between 2000 and 2014 are shown.
Source: UN National Accounts Aggregates
7.7
%
5.8
%
4.3
%
2.8
%
1.5
%
5.1
%
1.9
%
11.4
%
7.6
%
7.0
%
4.1
%
3.5
%
7.6
%
3.5
%
0%
2%
4%
6%
8%
10%
12%
UK ROK Germany US Japan UK
(exports to
outside of
the EU)
Germany
(exports to
outside of
the EU)
2000
2014
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Germany Japan ROK UK US
(1,000 dollars)
GD
P p
er c
apit
a
Ratio of exports to GDP (goods and services)
348
(3) Manufacturing industries lagging in foreign direct investment
Next, we will compare the trends in foreign direct investments (FDIs) by Japan and other major
countries.
A comparison with other major countries in terms of the ratio of the balance of foreign direct
investments to GDP for other major countries shows that although the ratio has grown rapidly since the
1990s for the Western developed countries in terms of both inward and outward FDIs, the growth rate
has been low for Japan in terms of both inward and outward FDIs, although outward FDIs have grown
somewhat (Figure II-1-1-30).
Figure II-1-1-30 Ratio of inward and outward foreign direct investments to GDP for major
countries
Source: “Statistics on Direct Investments in Major Countries” (Institute for International Trade and
Investment)
A comparison between Japan and other major countries in terms of the balance of outward FDIs by
industry shows that manufacturing industries’ FDI ratio to GDP for Japan is 13.4% (2013), mostly
similar to the ratios for other major countries (3.7% in the United States, 9.7% in the United Kingdom,
13.0% in France and 11.3% for Germany). However, non-manufacturing industries’ FDI ratio for Japan
is very low at 15.6% (2013) (39.1% in the United Kingdom, 32.5% in France, 32.0% in Germany and
22.8% in the United States). As in the case of services trade that was mentioned earlier, Japanese
nonmanufacturing industries’ overseas expansion is at a low level compared with their foreign
counterparts’ overseas expansion (Figure II-1-1-31).
Japan Germany US UK
France China ROK
Rat
io o
f in
war
d d
irec
t in
ves
tmen
t bal
ance
to
GD
P
Ratio of outward direct investment balance to GDP
349
Figure II-1-1-31 Change in ratio of foreign direct investment balance to GDP
Source: “Statistics on Direct Investments in Major Countries” (Institute for International Trade and
Investment)
(4) Summary
As shown above, it was confirmed that in order to achieve economic growth through a rise in
productivity, it is necessary to deepen economic relationships with other countries and regions but that
Japan is inferior to major European countries in terms of both the ratio of goods and services trade to
GDP, and the ratio of the balance of inward and outward FDIs to GDP. The next section will look at the
relationship between the deepening of external economic relationships and innovation with a particular
focus on human resources. Meanwhile, Chapters 2 and 3 will conduct analysis concerning such matters
as the expansion of services trade including tourism and the expansion of exports from regions, including
exports by small and medium-size enterprises (SMEs) and middle-sized enterprises.
20082011
2012
2014
20082011
2012
2008
20112013
2008
20112012
2013
2008 20112013
0%
5%
10%
15%
20%
25%
0% 10% 20% 30% 40% 50%
Man
ufa
cturi
ng
Non-manufacturing
Japan Germany France UK US