2014

ーOn making Japan a base for international business circulationー
Overview

C O N T E N T S

2014 JETRO Global Trade andInvestment Report

10

Points

１. World trade and investment on its way to recovery. Moderate resurgence of world economy

２

２. Japanese trade marks deﬁcits for three consecutive years

３

３. Japanese outward FDI reaches record high４

４. Realization of FTAAP through the promotion of TPP and RCEP

５

５. Asian consumer markets becoming solid both in scale and quality

６

６. Strategic development of promising overseas markets

７

７. New developments among Japanese companies seen in reorganization of their overseas bases

８

８. Foreign-aﬃliated companies regard Japanʼs expensive business costs as obstacle. Signs of improvement can also be seen

９

９. Nationwide eﬀort necessary to increase inward FDI into Japan

10

10. Challenges Japanese corporations face in making Japan hub of international business circulation

11◆ JETRO activities promoting “Cool Japan”

12◆ JETRO activities for promoting direct investment in Japan

13◆ JETROʼs global network

14◆Detailed materials can be downloaded from the following website.
http://www.jetro.go.jp/en/news/releases/20140807856-news〈〈 Exclusion of liability clause 〉〉
Responsibility for decisions made based on the information provided in this leaﬂet shall rest solely on readers.
Though JETRO strives to provide accurate information, JETRO will not be responsible for any loss or damage
incurred by readers through the use of the information.

World trade and investment on its way to recovery.
Moderate resurgence of world economy.

1◆World trade (commercial goods export) slightly rose by 1.6% from the previous year to the history recordof $18.3 trillion driven by China, developed countries such as EU and US although it was depressed by
Japan and emerging and developing countries like Russia. By commercial goods, trade volume of IC andmobile phone were increased, on the other hand natural resources such as a crude oil were decreased.
◆Global FDI ﬂows increased for the ﬁrst time in two years to $1.45 trillion, up by 9.1% from the previous
year, with 61.0% occupied by emerging and developing countries.
◆The global economy has been recovering moderately. The economies of developed countries are on thepath of recovery, while those of emerging and developing countries are growing slowly. The current
framework of emerging and developing countries leading the global economy will remain in the future,with their contribution accounting for approximately 70%.
World trade trends (exports)

Global inward FDI trends(Export value,US$ billion)

25.0

18,00020.0

16,00015.0

14,000

10.0

12,0005.0

10,000

0.0

8,000

−5.0

6,000

−10.0

4,000

−15.0

2,000

−20.0

0

−25.0

2000 01

02(US$ billion)(Growth,%)

20,00003

04

Export Value

05

06

07

08

09

Export Growth(nominal)

10

11

12

20.0

0

13
（Year）

10.0
0.0

2000 01 02 03 04 05 06 07 08 09 10 11 12 13 （Year）
FDI in emerging/developing economies

Export Growth(real)

FDI in developed economies

The ratio of FDI in emerging/developed economies (right axis)
Source: UNCTAD.

Emerging and developing economiesʼ
contribution to global economic growth

3.2

3.4

4.0

1.4

1.3

1.8

2.4

United States

2.8

1.9

1.7

3.0

5.0

Euro Area

- 0.7

- 0.4

1.1

1.5

4.0

Japan

1.4

1.5

1.6

1.1

(Growth,%)(Projections) (Projections)

5.1

4.7

4.6

5.2

Europe

1.4

2.8

2.8

2.9

Russia and CIS

3.4

2.2

0.9

2.1

Asia

6.7

6.6

6.4

6.7

China

7.7

7.7

7.4

7.1

India

4.7

5.0

5.4

6.4

ASEAN5

6.2

5.2

4.6

5.6

Latin America and the Caribbean

2.9

2.6

2.0

2.6

Middle East and North Africa

4.9

2.5

3.1

4.8

Sub-Saharan Africa

5.1

5.4

5.4

5.8

Emerging and developing economies

30.0

500

2015

Advanced economies

40.0

1,000

2014

3.5

60.0

1,500

（％）

World

70.0

50.0

GDP growth by country and region
2013

61.0%

2,000

Note: The 2012 and 2013 export values, and 2013 nominal growth rate are estimated by JETRO.
Sources: ”IFS, May2014”(IMF) and statistics from individual countries/regions.

2012

（％）

2,500

(Difference in growth rate [Emerging anddeveloped economies-Advanced economies])

7.0

6.0
Projections

6.0
5.0

3.0

4.0

2.0
3.0
1.0
2.0

0.0

Emerging and developing 1.0
economieʼs contribution:
approximately 70%

-1.0

0.0

-2.0
-3.0
1990 92

Note: The deﬁnitions of advanced countries and emerging and developing countries follow
the World Economic Outlook. The ASEAN5 refers to Indonesia, Malaysia, Philippines, Thailand,
and Vietnam. Middle East and North Africa includes Afghanistan and Pakistan.
Source: "WEO, July 2014″（IMF）.

9496

98 2000 02

04

06

Emerging and developing economies

08

10

12

14

16

-1.0
18 19
(Year)

Advanced economies

Growth diﬀerence(right axis)
Note: Contribution is calculated based on the weighted PPP(Purchasing Power Parity) for 2013.
Source: ”WEO, April 2014”(IMF).

Copyrightⓒ2014 JETRO. All rights reserved.

2

2

Japanese trade marks deﬁcit for three consecutive years◆Japanʼs trade in 2013 declined in both exports and imports, resulting in a deﬁcit for three consecutive
years. A signiﬁcant decrease was seen in transport equipment and electric equipment, compared tothose of 2008. Meanwhile, general machinery was in good shape.
◆The current account surplus is continuing to decline to $31.7 billion in 2013, inﬂuenced by the increased
trade deﬁcit. However, the deﬁcit in trade in services decreased. The trade balance in transportation andtravel improved, and there was an increase in trade surplus for royalties and license fees.
Japanʼs trade

Japanʼs trade balance by product (2008‒2013)（US$ million, %）2012

Exports: US$775.9 billion → US$719.2 billion (-US$56.7 billion)
YoY Change- 2.4

719,205- 10.3

Import888,5844.2

838,889- 5.6

Trade balance- 87,250- 54,973- 119,684- 32,435

Export144,686- 10.4

129,851- 10.3

Import189,0193.0

182,192

- 3.6

China
ASEAN
U.S.
EU

Export129,7885.8

111,671- 14.0

Import129,603

4.0

118,644- 8.5

Export140,624

11.9

133,199- 5.3

Import76,4603.0

70,322- 8.0

Export

81,742- 14.372,173- 11.7

Import83,5204.0

78,995- 5.5

Imports: US$756.1 billion → US$838.9 billion (+US$82.8 billion)
Transport
equipment

801,335

GeneralMachinery

ExportElectric
equipment

YoY Change
World

Surplus of US$19.8 billion in 2008 → Deficit of US$119.7 billion (-US$139.5 billion)

2013

Surplus of US$173.3 billion → Surplus of US$140.2 billion (-US$33.1billion)
Volume of automobiles exports: 8.29 million → 5.82 million (-2.48 million)(Reference) Volume of Japanese automobiles produced overseas:
11.65 million → 16.76 million (+5.1million)
Surplus of US$92.3 billion → Surplus of US$72.9 billion (-US$19.5 billion)
Volume of exports for printing machines excluding machine parts: 1.91million → 0.92 million (-0.99 million)
Volume of construction machines exports: 0.21million → 0.15 million (-0.06 million)
Volume of machining centers exports: 12,000 → 20,000 (+8,000)
Surplus of US$60.8 billion → Surplus of US$11.5 billion (-US$49.3 billion)
Volume of video/digital camera exports: 42.82 million → 12.84 million (-29.98 million)
Volume of mobile phone imports: 7.95 million → 34.58 million (+26.62 million)
Deficit of US$248 billion → US$265.3 billion (-US$17.3 billion)

Mineral fuelNote: 1) Yen-based values converted to dollar-based values by JETRO. 2) There are cases where
the lowest digit may not match because of rounding error. 3) YoY change in trade balance
indicates increase or decrease from the previous year. 4) EU consisted of 27 countries in 2012,
and 28 in 2013. The YoY changes for 2013 was based on the trade value of 28 countries.
Therefore, they are not consistent with the result calculated from figures on the table.
Source: “Trade Statistics” (Ministry of Finance).

Volume of crude oil imports: 240 million KL → 210 million KL (-30 million KL）
Import unit price: US$101.9/barrel → US$110.5/barrel
Volume of LNG imports: 69.26 million ton → 87.49 million ton (+18.23 million ton)
Import unit price: US$652/ton → US$828/ton

Note: Figures in parentheses indicate the increase or decrease during 2008 to 2013. There arecases where the lowest digit may not match because of rounding error.
Source: “Trade Statistics” (Ministry of Finance), Japan Automobile Manufacturers Association, Inc.)

Japanʼs current account balance

Japanʼs service trade balance（US$ billion）（US$ billion)

Royalties and license fees
expand trade surplus(13.7billion dollars)

20

300

169.2 billion dollars

250

10

Income balance

200
0

150
100

Transportation deﬁcit
narrowed (-7.4 billion dollars)

-10

50

Travel deﬁcit narrowed(-6.8billion dollars)

-20

0
-30

-50
-100

-40

-150
-200

-50
2005

06

07

08

Trade balance
Direct investment income
Other investment income
Current transfers balance

09

10

11

12

13 (Year)

Service balance
Portfolio investment income
Conpemsation of employees
Current acount balance

2005

06

07

08

09

10

11

12

13

(Year)

Transportation

TravelConstruction

Insurance

Financial

Royalties and license fees

Other business

Others (note)

Service balance

Note: “Others” includes the communications, computer and information, personal, culturaland recreational, and government services, n.i.e.
Source: “Balance of Payments” (Ministry of Finance, Bank of Japan) and “Foreign Exchange Rate” (Bank of Japan).

Source: “Balance of Payments” (Ministry of Finance) and “Foreign Exchange Rate”(Bank of Japan).

Copyrightⓒ2014 JETRO. All rights reserved.

3

3

Japanese outward FDI reaches record high◆Outward FDI of Japan broke its record for the ﬁrst time in ﬁve years, reaching $135 billion with anincrease of 10.4%. While the investment toward ASEAN marked a record high of $23.6 billion, thosetoward China decreased by 32.5% to $9.1 billion.
◆Amount of return on outward FDI in 2013 totaled$68.2 billion. By region, investment returns from Asia
was the largest, followed by North America, then Europe. An increase in rate of returns on outward FDI
centering on Asia must be achieved.
◆Rate of return on investments toward Japan has greatly increased, compared to those toward othercountries. With the recovery of the Japanese economy, the Japanese market has become attractive forforeign companies.
Japanʼs outward FDI ‒ Comparison between
China and ASEAN

Japanʼs outward FDI by country and region (net flow)(US$ million)
160,000(US$ million)

ASEAN

25,000140,000
120,000

20,000100,000

China
15,00080,00060,00010,00040,00020,0005,000

02001 02

03

04

05

06

07

08

09

10

11

12

13

14 (Year)1-5（P）

Other

EuropeCentral and South America

North America

Asia

World

0

2005

06

07

08

09

10

11

12

13

14 (Year）
1-5（P）（Month）Note:
1) Data excludes investment in the ﬁnance and insurance sectors of Thailand in relation to theﬂoods in the country. (Q4, 2011: US$3.924 billion, Q1, 2012: -US$3.674 billion).
2) Figures have been calculated based on the new standards set in the sixth edition of IMF
Balance of Payments Manual since January 2014.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan)

Note:1) Yen-based values are converted to dollar-based values by JETRO.
2) Only the data for “world” was revised in 2011. Since detailed information has notbeen announced, original values are used for regional data.
3) Figures have been calculated based on the new standards set in the sixth edition of
IMF Balance of Payments Manual since January 2014.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan).

International comparisons of rate of returns
on inward FDI

Rate of returns on Japanʼs outward FDI bycountry and region
（%）
16.0

（%）
14.0

14.0

12.0

12.0

10.4

10.0

10.0

9.2
8.0

7.4

8.0

7.1

6.4
5.6
4.8

6.0
4.0

6.0
4.7
4.0
3.8

4.0

2.0

2.0

0.0
2003

04

05

06

World average

07
China

08

09
ASEAN

10

11
US

12

0.0

13
(Year)

EU

2006

07
Japan

Note:
1) (Rate of returns on Japanʼs outward FDI) = (Current direct investment income credit)/ (Stock of outward direct investment during the period) x 100 (%).
2) The number of EU member countries was 15 until 2003, 25 between 2004 and 2006,
27 between 2008 and 2012, and has been 28 since 2013.
Source: “Balance of Payment Statistics” , “International Investment Position”(Ministry of Finance, Bank of Japan)

08
China

09

10
S. Korea

11

12
US

13 (Year)
GermanyNote:1) (Rate of returns on inward FDI) = (Current direct investment income debit) / (Blanceof inward direct investment during the period) x 100 (%).
2) The statistics for China are only available up to 2012.
Source: "BOP, June 2014“ (IMF). “Balance of Payment Statistics” “International
Investment Position” (Ministry of Finance, Bank of Japan).
Copyrightⓒ2014 JETRO. All rights reserved.

4

4

Realization of FTAAP through the promotion of TPP and RCEP

◆Negotiations for ﬁve mega-FTAs, the TPP, RCEP, TTIP, Japan-EU and China-Japan-South Korea FTA, arecurrently progressing. The Japanese governmentʼs Growth Strategy sets a target of raising the FTA
coverage ratio to 70%（18.2% as of year 2013）.If the FTAs (including Mega-FTAs) currently undernegotiation become in force, Japan will increase its coverage to about 80%.
◆International Investment Agreements, including FTA investment chapters, are in force between Japan and28 other countries and regions. Those agreements currently occupy 29.1% of Japanʼs outward FDI stock.
◆Procedures for applying for a certiﬁcate of origin or satisfying rules of origin are a burden on Japanesecompanies using FTAs. Eﬀorts to expand the utilization of self-certiﬁcation system of approved
exporters and ﬁne-tuned public relations activities tailored to SMEs need to be continued.
Proportions of mega-FTAs in relation to the world in terms of economy and population
Economic scale(note(1))

Population scale(note(2))

Countries/regions

Trillion dollars％

100 million people％

Trans-Pacific Partnership agreement (TPP)

27.8

37.5

8.0

11.4

12

Regional Comprehensive Economic Partnership (RCEP)

21.3

28.7

34.4

48.8

16

China-Japan-South Korea Free Trade Agreement(CJK)

15.3

20.7

15.4

21.9

3

EU-Japan Economic Partnership Agreement(EUJ)

22.3

30.1

6.3

9.0

29

Transatlantic Trade and Investment Partnership (TTIP)

34.2

46.2

8.2

11.7

29

Free Trade Area of the Asia-Pacific(FTAAP)

42.6

57.6

28.0

39.9

21

World

74.0

100.0

70.4

100.0

189

Note:
1) Figures were calculated based on nominal GDP in 2013. 2) Figures are from 2013. 3) Only four countries from ASEAN ‒ Brunei, Malaysia, Singapore and Vietnam ‒ participate in TPP. Cambodia, Laosand Myanmar do not participate in FTAAP (APEC). 4) Percentage values show the ratio in comparison to the world. The total of the percentages for each agreement exceeds 100% since many countries
are participating in more than one FTA.
Source: "WEO, April 2014"(IMF).

Japanʼs outward FDI stock of partnercountires that Investment Agreementswith Japan are in force

Problems faced by exporters using FTAs
(%)

0.0

10.0

20.0

30.0

40.0

50.0

(US$ million,%)Country/region

Stock

Share

ASEAN

136,258

12.2

China

98,132

8.8South Korea

29,8502.7

Hong Kong

19,8201.8

India

13,738

1.2

Taiwan11,808

1.1

Switzerland

4,947

0.4

Mexico4,241

0.4

Saudi Arabia

3,906

0.3

Russia2,499

0.2

325,19729.1

54,112

4.8

Treaties in force: Total

60.0
52.9
53.8
52.3

Certiﬁcate issuance application required on
every occasion of exporting

48.3
Administrative workload to meet rules of origin

42.8
35.8

Troublesome to deal with rules of origin
which diﬀer across item goods

30.7

55.7

42.5

28.7
30.2
27.6

Charges for issuance of a certiﬁcate of origin

19.6
18.9
20.1

Long period of time to obtain a certiﬁcate of origin

Reference: Signed
Australia

Note:1) Stock ﬁgures are as of the end of 2013.
2) Fifteen partner countries are excluded from the total since theirstatistics are not available.
3) Investment agreements include FTA investment chapters.
Source: “International Investment Position” (Bank of Japan).

All（n=495）

Large-scale ﬁrms（n=212）

SMEs（n=283）

Note:1) Companies utilizing FTAs for exports from Japan were surveyed.
2) The top ﬁve items were chosen as excerpts for the table.
Source: “Results of JETROʼs FY2013 Survey on the International Operations of Japanese Firms”(JETRO).

Copyrightⓒ2014 JETRO. All rights reserved.

5

5Asian* consumer markets becoming solid both in scale and quality◆Household consumption expenditures in Asia are 1.5 times those of Japan as of 2012. The market scalein Asia is continuing to expand due to the growth of population and an increase in income levels.
◆Consumption in Asia is changing in quality as well as quantity. Expenditure is growing moresophisticated. The demand is shifting from basic goods into durable consumer goods and further on toservices.
◆Some capital cities of major ASEAN countries mark a per capita GDP of over $10,000.
*In this section, Asia represents three economies: China, India and ASEAN.

Household consumer expenditure in
Asia by purpose

Household consumer expenditure in Asia
(nominal)(Japan=100)
150

（％）
40.0

125

(Japan's standard in each year=100)350
300（Japan＝100）

35.0

250

100

200
30.0

75

150
50

100

25.0
25
0

（Japan＝100）

50
2000 01

02

ASEAN

03

04

05

India

06

07

08

09

10

11

0

20.0
(Year)

12

2000 01

02

03

04

05

06

07

08

09

10

11

12

13 14* 15*(Year)

Alcohlic beverages and tobacco

China

Purchase of cars, motorcycles and other vehicles

Ratio of Asia in emerging and developing countries(right axis)

Pharmaceutical products, medical appliances and equipment

Note: The deﬁnitions of emerging and developing countries follow the United
Nations.
Source: “National Accounts Main Aggregates Database” (United Nations).

Audio-visual, photographic and information processing equipment
Telecommunications services
Financial services

Education

Package holidays

Note: * indicates predicted ﬁgures. Source: Euromonitor International.

GDP per capita in major Asian cities (2010/2012)(US$, 10,000 people)

Country

City

China

India
Malaysia

GDP per capita Population(National)

6,078

135,404

Shenzhen(Guangdong)

19,532

1,055

Guangzhou(Guangdong)

16,784

1,284

Tianjin

14,766

1,413

Shanghai

13,5302,380

Beijing*

13,863

2,069

Wuhan(Hubei)

12,596

1,012Country
Thailand(National)
Bangkok*Indonesia(National)
Jakarta*

Philippines(National)
Metro Manila*

Vietnam(National)

1,515

122,719

National Capital Territory of Delhi*

3,280

1,694

(National)

10,3872,934

Cambodia

17,376167

Myanmar

Kuala Lumpur*

City(National)

GDP per capita

Population

5,390

6,789

14,044844

3,591

24,447

11,947

999

2,790

9,580

7,391

1,155

1,753

8,876

Ho Chi Minh

4,117

768

Hanoi*

2,253

696(National)

926

1,525

(National)

876

6,366

Notes:
1)* indicates the capital or a region where the capital is located. 2) Chinese cities with populations larger than 10 million were chosen.
3) The GDP per capita and population of Malaysia and the population of Philippines are as of 2010, while those of other countries are as of 2012.
Source: "WEO, April 2014", IFS (IMF), CEIC, National Economic and Social Development Board(Thailand), “Hanoi Statistical Yearbook 2012”.

Copyrightⓒ2014 JETRO. All rights reserved.

6

6Strategic development of promising overseas markets◆Export of agricultural, forestry and ﬁshery products marked a record high of ￥550.5 billion in 2013, a
22.4% increase from the previous year. Overseas subsidiaries in the Japanese service industry(non-manufacturing) have been increasing by approximately 92% since 2003, showing that Japanesecompanies are rapidly expanding overseas.
◆Medical equipment markets are projected to grow centering in emerging countries such as China. It is
expected that export competitiveness of the industry will be enhanced as the manufacturing companies
play an active role in export.
◆Japan lags behind other countries in making inroads into Africa. While Africa has great potential for expansion,
support systems must be strengthened for Japanese companies to obtain suﬃcient information and avoid risks.
Japanʼs agricultural, forestry and fisheryexports

The number of overseas subsidiaries byindustry

1,000

-20.0

0

-30.0

27.4%
increase

148.4%
increase

1.7%
increase

2003

Note: Includes alcoholic beverages, cigarettes and pearls.
Source: “Exports and imports of Agricultural, Forestry, and Fishery Products” (Ministry ofAgriculture, Forestry and Fisheries).

2012

Note: Major sectors with large sales amounts in manufacturing and non-manufacturingindustries are shown. Other sectors are also included in the total data.
Source: “Basic Survey of Overseas Business Activities (2012)” (METI).

The market size of the medical equipment inmajor Asian emerging countries
600

nuYear changemaFishery Products

Forestry Products

rvi

13

Wh
o
bus lesale
ine
ss

12

Se

Agricultural Products

11

em

10

Ch

2009

ica
l
Inf
o
com rmatmu ion a
nic nd
ati
on
Tra
nsp
ort
ma ation
chi
ne

1,000
0

65.8%
increase

77.1%
increase

tur Otheing r nind onust
r

-10.0

2,000

63.3%
increase

fac

2,000

3,000

try

0.0

94.9%
increase

4,000

us

3,000

5,000

The whole non-manufacturing industry:
91.6% increase

ind

10.0

The whole manufacturing industry:
46.3% increase

g

4,000

6,000

ce

20.0

7,000

lin

5,000

（No. of companise）

tai

（％）
30.0

Re

（100 million yen）
6,000

FDI stock in Africa by country (2012)(Market size in 2009=100)(million dollars)
70,000500

8-9 times greater than Japan
61,38160,000400

58,91057,97850,00040,000300

Over 3 times
greater than Japan

30,00021,730200

20,000
6,892

10,000100
0U.S.

United Kingdom

France

China

Japan

2,470
South Koreamtna

Note: The deﬁnition of Africa is based on the source materials.
Sources: Japan: "Balance of Payments Statistics" (Ministry of Finance,Bank of Japan), China:"Statistical Bulletin of China's Outward Foreign Direct Investment", All other countries:"International Direct Investment Statistics 2014"(OECD).

Vie

d
an
ail
Th

Ko
rea

po
re

2013（Prospect）

So
uth

es

Sin
ga

pin
ilip

a

sia

Ph

lay
Ma

esi
on

ia

Ind

Ind

Ch
ina

0

2018（Forecast）

Source: “Worldwide Medical Market Forecasts to 2018.”
Copyrightⓒ2014 JETRO. All rights reserved.

7

New developments among Japanese companies seen inreorganization of their overseas bases

7◆Reorganization of overseas bases by Japanese companies is being undertaken. Partly due to the rise inemployment costs, Japanese companies are increasingly transferring their bases and functions to
ASEAN countries out of China. Moreover, there has recently been a trend of Japanese companies inThailand advancing into neighboring countries, called “Thai Plus One.”◆13.7% of Japanese companies, registered for JETROʼs individual assistance service for launchingbusinesses in emerging countries, hope to enter countries other than those of East Asia or ASEAN. More
SMEs hope to set up business in Latin America or Southwest Asia.
◆There are signs of a movement, called “Made by Japanese”, to export products to a third country fromoverseas bases. In South Africa, the number of Japanese-manufactured automobiles imported fromJapanʼs overseas bases such as India is as twice as big of that of from Japan.
Breakdown of Japanese companies hoping to
expand their business in regions other thanSoutheast Asia or East Asia

Countries in which Japanese companies haveestablished or are expected to establish
overseas bases for “Thai Plus One”
Philippines
5.0%

Other
8.4%

3.2

Laos
7.3%

47.4

Indonesia
30.3%

8.4 4.2
3.2

Cambodia
9.6%
Myanmar
17.6%

33.7

0%

Vietnam
21.8%

20%

40%

Latin America

Southwest Asia

AfricaEurope60%80%Middle East100%

Russia/CIS

Note: As of July 2014, there were 695 valid respondents out of 1,195 companies, registered for
JETROʼs individual assistance service for launching businesses in emerging counties (1,449
companies applied in total). Among the respondents, 95 companies hoping to operate theirbusinesses in regions other than Southeast Asia or East Asia were surveyed.

Note:1) Multiple answers allowed.
2) Figures for each country indicate the ratio to the total of 261 responses.
Source: “For the 2nd half of 2013 Survey of Business Sentiment by Japanese Corporation in
Thailand” (Japanese Chamber of Commerce in Bangkok, Thailand).

The number of Japanese-manufactured passenger cars imported to South Africa from a third country(No. of Unit)

300,000

250,000

200,000

No. of of passenger cars
imported by major countries
United Kingdom

22,309Japan

29,601

South Korea

52,619
Break down of local sales ofpassenger cars manufactured
by Japanese companies(local production/imported)

150,000

Germany

66,121

Imports from Japan(29,601 units)

100,000

50,000India

Imports from third country (58,000 units)

99,612

Local production (26,000 units)0Note:1) The number of passenger cars imported to South Africa by major country shows the top ﬁve exporting countries of HS8703, to South Africa.
2) The number of passenger cars manufactured and imported by Japanese manufacturers is based on data from a local company which does research on passenger cars and small-sized commercial
vehicles. An approximate calculation was made for a portion of the data in which the two types of vehicles could not be distinguished.
Source: “The South African Merchandise Trade statistics”.
Copyrightⓒ2014 JETRO. All rights reserved.

8

Foreign-aﬃliated companies regard Japanʼs expensive businesscosts as obstacle. Signs of improvement can be seen.

8◆The beneﬁts of FDI into Japan are its large-scale economy, sophisticated infrastructure and humanresources. However, foreign-aﬃliated companies evaluate expensive business costs including tax rates
as hindrance to investment.
◆Comparing business costs, property costs in other cities in Asia can be higher than those of Tokyo. The
diﬀerences in employment cost for some occupations have been signiﬁcantly reduced.
◆There are many foreign-aﬃliated companies that have a large share in markets for Japanʼs domestic consumer
goods. Foreign-aﬃliated companies are the top sellers in beverages, contact lenses and accessories.
Top 5 incentives and obstacles of the investment environment in Japan
AttractivenessWorld BankIMD

UNCTAD

1

Resolving insolvency

Skilled workforce

2

Protecting investors

Reliable infrastructure

Availability of low-cost labour and skills
Enabling infrastructure

3

Ease of trading across borders

High educational level

Presence of natural resources

4

Ease of getting electricity

Strong R&D culture

Market attractiveness5

Ease of getting credit

Eﬀective labor relations

ー

27th/189 countries/regions

24th/60 countries/regions

10th/177 countries/regions

Overall rankingsof Japan
Notes

Ranking based on percentage of Ranking of 4 indexes on attractiveness.
Ranking of 10 indexes on
responses by companies. Multiple "Labor force" and "Infrastructure" werethe ease of doing businessanswers up to 5 choices.
both ranked ﬁrst.
Obstacles
World Economid Forum (WEF)

Ministry of Economy, Trade and Industry

JETRO

1

Tax rates

Business cost

Business cost

2

Restrictive labor regulations

Uniqueness of the Japanese market

Exclusivity and uniqueness of the Japanese market

3

Ineﬃcient government bureaucracy

Communication in a foreigh language

High level of customers' demand

4

Policy instability

Administrative procedures/authorization system

Regulations/authorization system

5

Insuﬃcient capacity to innovate

Securing human resources

Diﬃculies in securing human resources

n.a.

n.a.

Overall rankings
9th/148 countries/regionsof Japan
Notes

Ranking based on percentage of Ranking based on the number
Ranking based on percentage of
responses by companies.
of companies that responded.
responses by companies.
Multiple answers up to 5 choices. Multiple answers up to 4 choices. Multiple answers up to 5 choices.

Source:“Doing Business 2014” (World Bank), ”World Competitiveness Yearbook 2013” (IMD), ”World Investment Report2012” (UNCTAD), “The Global Competitiveness Report 2013-2014” (WEF), “Survey of Trends in Business Activities ofForeign Aﬃliates (2012)” (METI), “Results of JETROʼs survey of foreign ﬁrms regarding obstacles and necessary
improvements in doing business in Japan” (JETRO).

Comparison of business cost among major Asian cities（dollar、％、month）

Shanghai Hong Kong

Wages

Tokyo

495

1,728

1,851

1,432

2,523

Manufacturing：Mid-level engineers

867

2,148

2,392

2,947

3,475

Manufacturing：Department chief

1,485

3,492

3,218

4,584

4,653

Non-manufacturing：Clerical staﬀ

908

2,168

2,301

2,396

2,591

Non-manufacturing：Department chief

2,230

4,152

3,711

4,489

4,901

42.0

5.0

25.4

16.0

19.2

1.8

1.9

3.4

2.4

4.0

Oﬃce rent(monthly)（per sq.m)

52

109

57

66

35

Store/showroom rent in the city
center(monthly)（per sq.m）

206

368

32

309

46

Industrial estate (land)purchaserate (per sq.m)

222

477

320

999

1,433

Social security burden ratio

Publicutility rate

Singapore

Manufacturing：Worker（Employer's）（％）
Bonus payments（months）

Real
estateSeoul（billion dollar）

Kanto

2530.0Brazil2474.6

Kinki

981.0

South Korea

1114.5

Chubu

930.4

Indonesia

845.6

Hokkaido/Tohoku

717.8

Turkey774.7

Kyushu602.5

Switzerland

658.9

Chugoku

355.3

Thailand345.7

Shikoku

175.3

New Zealand

162.7

Note: Regional GPA outputs were converted to dollar-based values
by JETRO.
Source: "WEO, April 2014” (IMF), “Report on Prefectural Accounts”(Cabinet Oﬃce).

Foreign-affiliated companies
occupying the large shares in
the Japanese corsume market（％）

Categories/Companies

Company ranking in
Shares the Category（Café/Bar）
Starbucks Corp（U.S）

2.6

2nd

23.2

1st

Philip Morris International Inc（U.S）

24.5

2nd

British American Tobacco Plc（U.K）

11.4

3rd

（Soft drink）
Coca-Cola Co,（U.S）（Tobacco）（Coﬀee）
Nestlé SA（Switzerland）

32.6

1st

Mondelez International, Inc（U.S）

16.0

2nd

12.3

2nd

（Fast food）
McDonald's Corp（U.S）（Glasses：contact glass）
Johnson & Johnson Inc（U.S）

17.1

1st

Bausch & Lomb Inc（U.S）

3.5

3rd

（Personal ornaments）

Housing rent for resident agent(monthly)

2,703

2,966

2,167

4,654

2,761

Electricity rate for general use（per kWh）

0.13

0.18

0.09

0.21

0.24

Water rate for general use（per cu.m)International comparisons ofJapanʼs gross regional product(nominal) (FY2011)

0.76

0.86

0.78

1.74

2.04

Note:
1) In the case that ﬁgures vary, the intermediate values are selected.
2) The monthly base salaries are used as the value for wages in manufacturing and non-manufacturing industries.
3) Refer to source materials for detailed information or real estate.
Source: “The 24th Survey of Investment Related Costs in Asia and Oceania (May 2014)” (JETRO).

Richemont SA, Cie Financière（Switzerland）

6.5

1st

LVMH（France）

5.9

2nd

PPR（France）

3.8

3rd

Note:
1) The deﬁnitions of each sector are those proposed by the Euromonitor.
2) The shares for soft drinks and cigarettes are calculated based on the
trade/retail volume, while in other categories, they are calculated based onservice/retail value.
Source: “Euromonitor International”

Copyrightⓒ2014 JETRO. All rights reserved.

99Nationwide eﬀort necessary to increase inward FDI into Japan◆Presidents and prime ministers of major countries engage in promotion of their own countries. Since competition
to attract foreign companies is becoming intensiﬁed, it is essential that the whole country participate in thisinitiative. European countries and the US are expanding these eﬀorts to local government levels.
◆JETRO has supported over 10,000 projects for investment into Japan since 2003, among which 1,136
companies have successfully established their bases in Japan. We are especially reaching out toindustries of environment, health, tourism and retail or R&D bases.
◆The number of foreign travelers visiting Japan reached a record high of over 10 million in 2013, which had
a positive impact on the Japanese economy. In order to acquire even more tourists from abroad, utilizationof local industrial facilities and factories is expected, under a campaign referred to as “industrial tourism”.
Regional Investment Promotion Agencies(IPAs)
which owns representative office in Japan

Action taken by other countries toincrease inward FDI

U.S.
AlabamaArkansas
FloridaGeorgia
Iowa
Indiana
KentuckyMississippi
MissouriNebraska
U.K.
England
Scotland
Wales
Northern Ireland
Germany
BayernHamburg
Hessen
North RhineWestphalia
SaxonyPresident Obama established a federal investment promotion
project referred to as “Select USA” (June, 2011).

U.S.

The President held “Select USA Summit” in Washington. 1,200
investors from over 58 countries participated (October, 2013).
“Strategic Investment Attraction Council” was held byFrance President Hollande, attended by 34 foreign companies
located in France (February, 2014).

U.K.

Prime Minister Cameron invited executives of 18 Japanesecompanies located in the UK and conducted hearings regarding
matters necesarry to expand investment in the UK (February, 2014).
A program in which a minister is appointed to each major
investment project implemented by foreign companies isbeing conducted.

South
Korea

President Park Geun-hye invited executives of foreign companies
located in South Korea to hear about such matters as obstacles
when doing business in South Korea (April, 2013 and January, 2014).

China

Premier Li Keqiang invited foreign residents in China anddelivered a policy of attracting excellent human resources toChina (January, 2014).

Source: Compiled by JETRO from various news articles.

IPAs

U.S.
IPAs
North Carolina State governmentState government
Ohio
Jobs OhioEnterprize Fｌorida
OregonState government
Georgia Department ofExports pennsylvania's products,
Pennsylvania
Economic Development
techonologies & services
Iowa economic development Tennessee
State governmentState government
Texas
State government
Virginia Economic Development
State government
Virginia
PartnetshipState government
Washington
Export Washington
State government
West Virginia
State governmentState government
South Carolina State government
IPAs
London & Partners
Scottish Development International
Welsh government
Invest Northern Ireland
IPAs
Investment in Bavaria
HWF Hamburg Business Development Corporation
Hessen Trade & Invest GmbH
Department of Commerce

NRW. Invest GmbH
Saxony Economic Development Corporation

Source:The American State Oﬃces Association (ASOS), JETRO website.

Breakdown of JETROʼs achievements attracting
FDI into Japan (FY2003-2013 based on thenumber of successful cases)

The number of local industrial facilities which attract foreign travelers（Number）

60

56（number、％）

By Industry

number % share

By function

number % share

50

Service208

18.3

Sales oﬃce

875

77.0

Software/Contents

200

17.6

Representative
oﬃce

138

12.1

40

Electric, electronic parts

80

7.0

R&D base

34

3.0

30

Machinery76

6.7

Procurement base

30

2.6

Automobile parts

73

6.4

Finance base

16

1.4

Information andcommunication

65

5.7

Production base

13

1.1

38

20

20
10

Note: The total of composition ratios does not add up to 100% since only the data for majorindustries/functions are shown.

0

30

28

16

15
10

Hokkaido Tohoku Kanto

Chubu

Kinki Chugoku Shikoku Kyushu/
Okinawa

Note: Calculated from the number of local industrial facilities which are actively
attracting foreign tourists and are listed on the JETRO website as of July 29.
Source: JETRO website.
Copyrightⓒ2014 JETRO. All rights reserved.

10Challenges Japanese corporations face in making Japan hub ofinternational business circulation

10◆A shift from “measures on intellectual property”, those centered around the problems of counterfeiting, piracy, andpatent rights, to “strategies on intellectual proerty”, those including protection of trade secrets, must be undertaken.
◆Business innovation through the promotion of “brain circulation” between Japan and Silicon Valley must
be created by Japanese companies. Support for small and medium-sized venture companies to expand
overseas is also necessary.
◆It is best that a "diversity in business" be established with urgency, where foreign students and thosewith diverse backgrounds and abilities can perform at their full potential to create innovation.
Strategies of SMEs for patents and trade secrets(Response weighting (%))

38.3

Although aware of the signiﬁcance of patents and trade secrets, we have no particular set policy.

37.0

We actively ﬁle patent applications for any ideas/concepts something which could be authorized.

9.8

We keep patent applications to a minimum and protect intellectual property as trade secrets.

8.3

Patent applications and trade secrets are not so signiﬁcant.
We follow set guidelines whether we apply for patents or protect trade secrets.

6.6

Source: “Basic Survey Repot on SME Intellectual Property Activities” from FY2013 Analytical Examination Project on SME IP Support Policy (Japan Patent Oﬃce).

Current state of “brain circulation”
Japan

Countires/regions with brain circulatlion established
Historical backdropof brain circulation
Background of
establishingbrain circulation

Present situation ofbrain circulation○Highly skilled personnel in Taiwan, Israel, China and India experienced difficulties infinding good research/employment opportunities for some time after the WWII.
○They migraged to Silicon Valley and other regions in the US, in search foropportunities to study aboroad and for employment, by the thousand.

○Brain circullation did not occur in Japan, where the rapid reconstruction and economic
growth provided excellent circumstances for research and employment after the WWII.
○The fear of brain drain out was more dominant than the benefit of brain
circulation.

○Since 1980, highly-skilled personnel who were employed or educated in the US havebegun to return to their native countries, with their economies rapidly growing.
○The experience in the US enable them to transfer internatinal technology and thecreation of added value to their native countries.

○Highly skilled personnel is fostered through internal transfer in Japanesecompanies principally implementing lifetime employment.
○Means of brain circulation across companies was not utiilized in fostering
highly skilled personnel. Human resources were not developed by meansof brain circulation, a transfer of personnel across companies.

○Social and economic (eco) systems encouraging entrepreneurs, such as Sillicon Valley,
have been established in Hsinchu in Taiwan, Tel Aviv in Israel, Shanghai in China andBangalore in India.
○Highly skilled personnel returning to their native countries have contributed to thefounding and development of new industries, by utilizing Silicon Valley's network.
○In regards to the number of foreign companies going public on the NASDAQ
exchange, Israel marks second after China.

○Cases where the Japanese founded companies in Silicon Valley, or inJapan by utilizing Silicon Valley's network, is few in number.
○Unique manufacturing venture companies, using Silicon Valley's
ecosystems, are finally beginning to appear.
○The entrepreneurship environment ranks 120th in the world. (World Bank
Doing Business).

Source: Compiled by JETRO.

The number of international students who graduated fromJapanese colleges and were employed by Japanese companies(People)45,000

Person of non-finding employment

35,00030,00025,00024,951

20,00015,00025,589 23,950 27,535

30,060 30,680

Company
nameForeign

Prefecture Type of business employees/
Total
employees

Cutting work of
Kanekoparts in health
Manufacturing Saitama
care/aviation/sCo., Ltd.
pace fields

Jobfinder

40,000

Successful cases where foreign graduates from Japanese college play an active role

29,98830,57323,1985,705

07,911 9,411 9,684 8,736

2004 05

06

07

08

8,722
6,073 6,663 7,910

09

10

11

12 (Year)

Note: 1) “International students” are those enrolled in universities, colleges,
specialized vocational high schools, professional training colleges. 2)Year
indicates ﬁscal year, meaning that 12 begins in April 2012 ends in March 2013.
3) The number of “non-employed foreign students” is obtained by deducting“employed students” from ”gaduated international students”. International
students, whose paths after graduation are unknown, are included.
Source: Japan Student Services Organization (JASSO).

2/80

In order to negotiate overseas directtransactions, which have been realized through
JETROʼs overseas exhibitions, they have
employed foreigners who are currently being
trained as sales engineers.

Fujii
Corporation
Co., Ltd.

Niigata

Snowblower/G
rassmower
manufacturer
and seller

1/143

They offer foreign students a half-year internship. They
have hired a person from Bangladesh who graduatedfrom a Japanese local college and majored in electricaland electronic sciences in graduate school. He is
engaging in product development and writing
manuals for overseas customers using his sufficientknowledge of technical terms. Proper attention toforeign religion, customs and culture are given by thecompany and his employees.

Kikusui
SakeCo., Ltd

Kochi

Sake brewing
company

1/60

They employed an American female to develop a
new kind of sake for overseas export to attract.
They successfully produce unique sparkling sakeand expanded their business.

Tokyo

Websiteconst- ruction,
Softwaredevelopment

2/22

They accept Internship of foreign students,
including Turkish students who are now
employed as the team leader of the newsoftware development due to their highagilities in the IT field.

7/233

Every year, they employ at least one foreign
student. They have accepted exchange
students from East Asia who are studying at a
local college in Okinawa, to meet the demands
from tourists from East Asia to hold a luxurious
wedding ceremony in Okinawa. They engage incoordinating with East Asia countries andworking as ceremony staff.

10,0005,000

Actual exmple

DUNKSOFT
Co., Ltd.

Okinawa
WatabeWedding
Corporation

Okinawa

WeddingService

Note: The cases were selected from companies with less than 300 employees including foreigners.
Source: “2013-14 Best Practices from 100 Selected Diversity Firms” (METI).
Copyrightⓒ2014 JETRO. All rights reserved.

11

◆

JETRO activities promoting “Cool Japan”

Japan is a country rich in culture and history, and also a leading center of design and innovation. Fromtraditional crafts with a modern appeal to gourmet foods and cutting-edge textiles, the Japanese
Government has created a campaign called “Cool Japan” to redeﬁne its reputation as a pioneer in design,
fashion, entertainment and cuisine. JETRO has an important role in promoting the Cool Japan concept by
supporting unique, attractive products and services to be showcased all over the world.
Japan
CuisineDesignFashionEntertainmentJapan

Asia, Europe, US, etc.

1) Promoting the CoolJapan concept andrelated products to
expand exports.

Cool Japan products which havepenetrated overseas markets

OutboundInbound

Tourism2) Promoting tourism
to attract foreign visitors

Promoting the allure of Japan

1) JETRO provides various support to SMEs to expand Cool Japan related activities overseas.

Inviting potential buyers fromaround the world

Business consultation

Business seminar

Participating in overseas trade fairs
Test marketing in emerging markets

Dispatching business delegations
to promising countries and areas

2) JETRO cooperates with The Japan Tourism Agency (JTA), the Ministry of Economy, Trade and Industry(METI) and the Japan National Tourism Organization (JNTO) to increase the number of foreign visitors.
Copyrightⓒ2014 JETRO. All rights reserved.

12

◆

JETRO activities for promoting direct investment in Japan

Government
establishments overseas

Local governments
Cooperation

Cooperation

Overseas oﬃces/Invest Japan specialists（1）

Providing information
on Japanese businessenvironment●Invest Japan website●Seminars and symposia

Domestic oﬃces

（2）

（3）

Finding and developing
businesses interested ininvesting in Japan

Supporting businessstartups through IBSCs●Approach by Invest Japan
specialists●Visiting companies and exhibitions●Temporary oﬃces (IBSCs)●Advice from specialists（4）

Increasing business
opportunities withJapanese companies●Business matching events●Individual consultation●Providing information

HQ/Invest specialists
Consultation hotline forinvesting in Japan

Cooperation

Hotline for requesting
regulatory reform

Relevant government authorities(1)Providng information on Japanese business environment……Promoting investing in Japan via Invest Japan website (available in six
languages), brochures, Invest Japan seminars/symposia.

(2)Finding and developing businesses interested in investing in Japan……Approach by Invest Japan specialists, ﬁnding businesses interested ininvesting in Japan by visiting companies and exhibitions, individual consultation, providing information about Japanese market and industries, helping build
business models, providing information about regulations, supporting establishment of branch oﬃces, solving problems related to regulations and business.

(3)Supporting business startups……Oﬀering temporary oﬃces (IBSCs located in six major cities in Japan). Consultation by professionals(taxation/accounting, incorporation, human resource and labor, visa, real estate, etc.).

(4)Increasing business opportunities with Japan……Supporting business matching with Japanese companies.
●Cooperation with local governments……Providing information on locations all over Japan, market and industry information, incentives provided
by local governments, and supporting promotional activities by local governments.

●Cooperation with government establishments overseas……Finding businesses interested in investing in Japan by cooperating withgovernment establishments overseas.

●Cooperation with relevant government authorities……Arranging meetings with oﬃcials of regulatory agencies, relaying requests for regulatory
reforms to the Japanese Government.

Invest Japan website(available in six languages)

Distributing information via
seminars/symposia, etc.

Business matching events,
increasing business opportunities
with Japan

Providing temporary oﬃces(IBSC)

Copyrightⓒ2014 JETRO. All rights reserved.

13

Vientiane

IbarakiHamamatsu

Saga

For more information,please contact:

Japan External Trade Organization

International Economic Research Division
Overseas Research Department
ORI@jetro.go.jp
TEL：03-3582-5177

FAX：03-3582-5309