Why Japan - JETRO

Why Japan ?

Masashi Nakazono JETRO Genève

Copyright (C) 2016 JETRO. All rights reserved.

Prepared for Handelskammer beider Basel & JETRO seminar on 4 Nov 2016

2 Copyright (C) 2016 JETRO. All rights reserved. 2

Who are we ?

Japan External Trade Organization (JETRO)

• Governmental organization to promote mutual trade and investment between Japan and the rest of the world

• Established in 1958

• Overseas offices: 74 (in 55 countries)*

• Japan offices: Tokyo Headquarters, JETRO Osaka,

46 regional offices, the Institute of Developing

Economies (IDE-JETRO) *

• Employees: 1,735 (998 in Japan and 737 overseas)**

*As of April 2016

**As of January 2016

3

JETRO’s Overseas and Domestic Network

74 overseas offices

46 domestic offices


Who are we ?

4 4 Copyright (C) 2016 JETRO. All rights reserved.

1. Trade & Investment between Japan and Switzerland

2. Why Japan ?

3. Making Japan the most business-friendly country in the

world

5

Sources Prepared by JETRO “Japan's Outward and Inward Foreign Direct Investment” From The Ministry of Finance “Balance of Payment Statistics” and Bank of Japan foreign exchange rates.



9.3 billion USD (2015 stock)

6.4 billion USD (2015 stock)

Investment between Japan and Switzerland

6

3.0 billion USD(2015)

From Federal Custom Administration (FCA).


6.4 billion CHF(2015)


Trade between Japan and Switzerland

7

Inward FDI stock in Japan

Inward FDI into Japan by region

7 Copyright (C) 2016 JETRO. All rights reserved.

Europe

47% North

America 29%

Asia 16%

Central and

South America

6%

Oceania 2%

Data Source: Ministry of Finance Japan “International Investment Position of Japan (historical data)”

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(Trillion yen)

23.3

6.1

19.4

Approximately

$230 billion

1. Trade&Investment between Japan and Switerland

8

Japanese Government commits inward FDI to expand to 350 B USD by 2020 from 230 B USD in 2014

Inward FDI into Japan

Japan：BOJ: Balance of Payments (Data Based on the BPM6), Cabinet Office SNA (National Accounts of Japan) Other Countries ：UNCTAD “World Investment Report 2015”, FDI database

Foreign Direct Investment Portion by GDP (%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Japan China Korea Germany France USA UK

4.8%

10.5% 12.8%

19.3%

25.6%

31.1%

56.5%





2. Why Japan ?

3. Making Japan the most business-friendly country in

the world


2. Why Japan?


2. Why Japan?

1.9% Increase

GDP (Real GDP seasonally adjusted)

Improved

Business confidence (Tankan Index of Bank of Japan,

manufactures)

Greatly Improved

Improving Economic Indexes Under Abenomics


519 Trillion yen

530.8 Trillion yen

Large firms -3 Medium-sized firms -5 SMEs -12

Large firms 6 Medium-sized firms 3 SMEs -3

Before launch of Abe administration

Now

Stock Price (Nikkei Stock Average)

Increase 10230.36 yen 17446.41 yen

12

(28 Oct, 2016 Closing price)

(Sep 2016)

(Apr-June 2016)

(2012 Average)

(2012)

(Dec 2012)

(Sep 2016)

(26 Dec 2012) Launch of Abe administration

3.0% 4.3% Unemployment rate

2. Why Japan?


Target of Foreign Visitor Arrivals in 2020

0

5'000'000

10'000'000

15'000'000

20'000'000

25'000'000

30'000'000

35'000'000

40'000'00040M arrivals in 2020

20M arrivals in 2015

2. Why Japan?


The number of foreign visitors to Japan in 2015: 20 million Their Consumption in 2015: 3.4 trillion JPY (34 B USD)

Source：Japan National Tourism Organization, Press release, Jan. 19, 2016 Japan Tourism Agency, Consumption Trend Survey for Foreigners Visiting Japan, Press release, Jan. 19, 2016

(billion yen)

6'219

8'358

10'364

13'413

19'737

814

1'085

1'417

2'028

3'477

0

500

1'000

1'500

2'000

2'500

3'000

3'500

4'000

0

5'000

10'000

15'000

20'000

25'000

2011 2012 2013 2014 2015

Foreign Visitor Arrivals

Consuimption amount (B. yen)

■ Foreign Visitor Arrivals and their Consumption Amount

2. Why Japan?


2. Why Japan?


1'453

1'786

1'860

2'066

2'144

2'346

2'829

2'941

3'852

4'601

10'360

17'419

0 5'000 10'000 15'000 20'000

Australia

Canada

Russia

India

Italy

Brazil

France

UK

Germany

Japan

China

United States

Gross domestic product 2013 (US dollars, Billions) World Development Indicators database, World Bank, 18 Sep. 2015

Japan’s GDP is Over 500 trillion yen. A leading world economy that boasts large-scale economic power.

(source: Statistics Bureau, Ministry of internal Affaires and Communications “World Statistics 2014”, Cabinet Office)

World Ranking of GDP

2. Why Japan?


Kyushu region 602.5 Belgium 534.6 488

International comparison of regional GDP in Japan (nominal, FY2013)

2. Why Japan?

(Unit $1 billion)

Nagoya region

Tokyo region Osaka region


“The reason why P&G tests its new disposable diapers in Japan is because Japanese housewives are the strictest

consumers.”-----------------Prof. Michael E. Porter

Sophisticated Market

2. Why Japan?


2. Why Japan?


2. Why Japan?

21

Source: Created from Ministry of Internal Affairs and Communication, “Survey Result on Science and Technology Indicators 2014 ” Date source: OECD “Main Science and Technology Indicators, ” etc.

Rank Country Percentage of GDP (%)

1 Japan 3.75

2 German 2.98

3 U.S. 2.79

Rank Country Number of

researchers per 10,000 people

1 Japan 52.0

2 Canada 45.6

3 German 42.5

Research funding percentage of GDP (G7 comparison)

Number of researchers per 10,000 people (G7 comparison)

Science and technology related research is conducted spiritedly in Japan. “Research funding as a percentage of GDP” and “Number of researchers per 10,000 people” are among the largest in the world.

Innovation Hub

Copyright (C) 2016 JETRO. All rights reserved. 21

4th - France (2.29%), 5th - UK (1.73%), 6th - Canada(1.69%), 7th - Italy (1.27%), 8th - Russia (1.12%)

4th - US (40.2), 5th - UK (39.7), 6th - France(38.3), 7th - Russia (31.0), 8th - Italy (12.7)

2. Why Japan?


2. Why Japan?

25 4

11

Yoshinori OHSUMI: 2016 in Physiology or Medicne on the discoveries of mechanisms for autophagy

Satoshi OMURA: 2015 in Physiology or Medicne on the therapy against infections caused by roundworm parasites


2. Why Japan?

24

Business-Friendly Infrastructure


Source: World Economic Forum, “The Global Competitiveness Report 2016-2017”

Source: Ministry of Economy, Trade, and Industry(METI), “Survey on Attitudes of Foreign Companies toward Direct Investment in Japan Report 2014”

Easy environment for business

Foreign companies validate Japan’s infrastructure

24

2. Why Japan?

2 nd


2. Why Japan?


2. Why Japan?

Japan’s Business Cost

27

(USD)

(USD)

Source : JETRO

Source : JETRO


Tokyo Brussels

Mumbai

Seoul

Paris

Singapore

London

Hong Kong

0 20 40 60 80 100 120 140 160 180

Tokyo Brussels

Seoul

Paris

Hong Kong

Mumbai

London

Singapore

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

Office rent (monthly/per sq.m)

Housing rent for expatriates (monthly)

2. Why Japan?


Nearly 100 airports operate nationwide

Excellent Japanese transport infrastructure spreading throughout Japan

2. Why Japan?


2. Why Japan?


2. Why Japan?

6th in the world.

RANK

Source: MONOCLE, UK

31

1. Tokyo 2. Vienna 3. Berlin 4. Melbourne 5. Sydney 6. Stockholm 7. Vancouver 8. Helsinki

：

12.Fukuoka 14.Kyoto

Comfortable Living


Most livable Japanese cities as chosen by the world

2. Why Japan?


2. Why Japan?



2. Why Japan ?

3. Making Japan the most business-friendly country in

the world

34

Challenges in doing business in Japan

Rank 2013 Survey 2015 Survey

1

High business costs Complicated business systems and structures

2

Particularities of Japanese market

Difficulty in finding human resources

3

Difficulty in communicating in non-Japanese languages

Difficulty in communicating in non-Japanese languages (in business)

4

Complicated business systems and structures

Particularities of Japanese market

5

Difficulty in finding human resources

High business costs


3. Making Japan the most business-friendly country in the world

35

Structural Reform

Opening up the electricity market

Regulatory reforms of Medicine and medical equipment


3. Making Japan the most business-friendly country in the world

Corporate Tax Reform

Down to the

20% range from this April

Reduction of the corporate tax rate


2. Why Japan?

Copyright (C) 2016 JETRO. All rights reserved. 37

JETRO Genève 80 Rue de Lausanne, 1202 Genève [email protected] https://www.jetro.go.jp/switzerland/ Tel. +41 22 732 1304

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Why Japan - JETRO