JETRO Global Trade and Investment
Report 2022
－Global Economy in Turmoil,
Restructuring of business strategies required－
Overview
Japan External Trade Organization (JETRO)
Overseas Research Department
July 26th , 2022

Outline◼ JETRO Global Trade and Investment Report 2022 focused on disruptors in the global economy and theirimpacts on trade, investment, and business activities. International business is being made more
uncertain than ever before by the negative loop of local restrictions on economic activities, supply
constraints and difficulties with international logistics, Russia's invasion of Ukraine, and other disruptors.
◼ For trade, soaring prices of primary commodities such as energy and the sharp depreciation of the yen
have simultaneously increased the import costs, leading to deteriorated domestic company profits anddeclines in consumer confidence. Additionally, supply constraints and supply chain disruptions, such as
in semiconductors, have disrupted export growth and discouraged new investment in a wide range ofindustries. Japanese companies must review their business strategies with the assumption that these
disruptions will continue.
◼ Alongside the hegemony struggle between the US and China, the emergence of new threats due to
Russia's invasion of Ukraine has further accelerated the introduction and operational enhancement of
economic security policies by major countries. The strengthening of export controls and theintroduction of pre-screening of investments put new burdens on companies in terms of risk
management and procedures. Close attention must also be paid to the links between policy areas suchas human rights and decarbonization, and trade policy and import/export regulations.

◼ This report is intended to analyze the current state and outlook of the global economy in the midst of
this turmoil, from the perspectives of trade, direct investment, and trade policy. It also aims to provide
proposals to Japanese companies to help build business strategies for achieving sustainable growtheven in times of turmoil.
Copyright © 2022 JETRO. All rights reserved.

1Outline

Ⅰ. World and Japan’s Economy and Trade

Section 1: Current State of the World Economy
Section 2: World Trade
Section 3: Current State of Japan’s Economy and Trade
Section 4: Digital Trade

Ⅱ. Global FDI and Japan’s FDI

Section 1: Global FDI
Section 2: Global Digital Industries
Section 3: Japanese FDI and Company Trends

Ⅲ. Trends in Trade Rule Formation

Section 1: Trade Policies of Major Countries and Regions
Section 2: Movements in Global Rule Formation
Section 3: Current Status of FTAs Globally and in Japan

IV. Policies and Business for Sustainable Societies
Section 1: Major World Policies and Rules
Section 2: The Shift to Sustainable BusinessIndustry Movements
Section 3: Latest Trends in Businesses Addressing Climate
ChangeSource: Global and Japanese Trade and Investment Statistics
Copyright © 2022 JETRO. All rights reserved.

2

Ⅰ. World and Japan’s Economy and Trade
Disruption to Value Chains
During the COVID-19 Recovery Phase

Copyright © 2022 JETRO. All rights reserved.

3

Ⅰ． World and Japan’s economy and trade１

Current State of the World Economy◼

In 2021, world trade (trade in goods, estimated by JETRO) was $21,753.4 billion, and increased by 26.2% from the previous
year. The value of exports exceeded $20 trillion for the first time, marked at a record high.

◼

The growth rate of trade volume (9.4%) was lower than the growth rate of trade value (26.2%). This is likely related to highprices of mineral fuels, metals, and other resources, which pushed up the overall value of trade.
Quarterly changes in trade values of 33 major countries/
regions by product (YoY)

Trends in world trade（Billion USD）

1Q
17.6
17.6
17.4
27.1
5.8
13.2
15.9

（％）
2021
2022
2Q
3Q
4Q
1Q
42.8
21.8 19.5
14.9
40.9
14.1 10.4
6.9
30.7
16.3 13.0
7.0
32.4
17.6 15.1
- 3.8
84.6
5.1
0.1
- 0.3
35.1
12.9
6.8
- 1.3
35.4
26.2 23.7
18.5

10.6

22.4

25.0

28.1

17.5

10.8

24.6

13.1

10.1

10.4

31.8

34.6

30.3

29.9

25.3

17.6

55.3

35.2

38.0

27.9

77.1
- 3.0
- 7.2
27.1

92.5
92.5
32.8
58.9

47.4 - 7.8
86.8 103.0
105.9 153.7
135.6 131.9- 14.4
76.9
128.3
81.6

- 10.2

110.5

73.9

83.2

67.4

23.1

62.7

48.6

39.7

27.4

22.5

63.3

56.2

45.9

29.3

（％）

25,00030

20,00015,00010,0005,000
0Export value

Nominal (value) growth rate (right axis)
Real (volume) growth rate (right axis)
Source: JETRO's estimates and WTO data

Total
Machinery and equipment
General machinery
20
Electrical equipment
Transport equipment
10
Precision equipment
ChemicalPharmaceuticals and0
medical products
Foodstuff△ 10 Oils and fats & otheranimal/vegetable products△ 20 Other raw materials and theirproducts
Mineral ore△ 30
Mineral fuels, etc.
Coal
Natural gas, etc.
(Year)Petroleum andrelated products
Base metals and related
products
Iron and steel

Note: Only 33 countries/regions with quarterly data for 2022 are included.
Source: Trade statistics of respective countries and regions

Copyright © 2022 JETRO. All rights reserved.

4

Ⅰ． World and Japan’s economy and trade２

Trade in Digital Goods Reach Record Highs◼

In 2021, trade in digital goods (JETRO estimate, export basis) increased 21.3% year-on-year to $4.34 trillion, the highest value
in the last 20 years for which data are available.

◼

Continuing from last year, integrated circuits and other semiconductor-related goods saw expanded trade, while computersand peripheral equipment and other electrical and electronic components also contributed to export growth.

Trends in global trade in digital-related goods (export basis)

Export trends by main product(Unit: 100 million USD, %)(Billion USD)(％)

50,0002021

180

Product

170
40,000160 Computers and peripheral equipment (total)
150

30,000140130

20,000120
110

10,000

100
90

0

80

12

13

14

15

16

17

18

19

20

21(Year)

Exports of digital-related goods (left axis)
Export growth rate of digital-related goods (right axis) (2018=100)
Export growth rate of non-digital-related goods (right axis) (2018=100)
Source: JETRO estimates based on trade statistics of respective countries andregions.

Computers and peripheral equipment
Computer parts
Office equipment
Communication equipment
Cellular phones
Semiconductors and electronic components
Electron tubes/Semiconductors, etc.
Integrated circuits
Other electrical/electronic components
Imaging equipment
Audio equipment
Measuring equipment/instruments
Medical electronics
Semiconductor manufacturing equipment
Industrial robots
3D printers, etc.
DronesDigital-related goods (Total)

Value
7,052
4,619
1,632
122
6,624
2,881
11,693
1,485
10,208
6,004
1,467
156
3,140
1,492
1,232
66
76
1,208
40,340ComposGrowth Contrib
ition
rate
ution
ratio
17.5
11.5
4.0
0.3
16.4
7.1
29.0
3.7
25.3
14.9
3.6
0.4
7.8
3.7
3.1
0.2
0.2
3.0
100.0

Note: Estimated by JETRO. See “Appendix 1” for product classifications.
Source: Trade statistics of respective countries
and regions

18.1
16.7
24.4
26.1
13.5
12.2
28.6
23.7
29.3
23.1
20.8
5.9
16.2
11.6
34.6
24.6
22.1
27.6
21.3

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3.2
2.0
1.0
0.1
2.4
0.9
7.8
0.9
7.0
3.4
0.8
0.0
1.3
0.5
1.0
0.0
0.0
0.8
21.3

5

Ⅰ． World and Japan’s economy and trade３

China’s Exports Top the List for Integrated Circuits◼

China’s export value for integrated circuits is the largest in the world, with a growth rate exceeding 30%, which was matched bySouth Korea. Quarterly exports of semiconductor-related goods have maintained positive growth, although there was a slowdown
from the second half of 2021.

◼

World Semiconductor Trade Statistics forecasts further growth in the global semiconductor market in 2022, with a 16.3% increaseyear-on-year. While there were signs of market deterioration for some types of semiconductors, the forecasts reflected thestrength of potential demand in the overall market.
Exports of semiconductor related products
by country/region

Trends in growth rate of export value ofsemiconductor related products(Unit: 100 million USD, %)Rank

Product

Electron tubes/
Semiconductors,
etc.
Integrated
circuits
Semiconductor
manufacturing
equipment

1
2
3
4
5
1
2
3
4
5
1
2
3
4
5

2021
Country/Region

China
Japan
Malaysia
Germany
US
China
TaiwanSouth Korea
Malaysia
US
Japan
US
Netherlands
Singapore
South Korea

Value

489
105
83
82
78
1,566
1,452
1,093
596
528
305
263
200
132
92

Composition
ratio

（％）

50
Growth rate

33.0
7.1
5.6
5.5
5.3
15.3
14.2
10.7
5.8
5.2
24.7
21.3
16.3
10.7
7.5

Note: Composition ratio is the share of each product in the global total (JETRO
estimate).
Source: Trade statistics of respective countries and regions

36.4
14.3
8.2
22.9
21.0
32.1
26.0
31.9
20.7
19.6
29.1
34.3
32.3
52.3
9.9

40
30
20
10
0
△ 10

Semiconductors and electronic components
Integrated circuits
Semiconductor manufacturing equipment

△ 20

△ 30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2019

2020

2021

2022

Note: 1) Export growth rate (YoY comparison). 2) Compiled based on data from 33
countries/regions due to limitations. 3) For electronic components such as
semiconductors, only exact matches were extracted at the 6-digit HS code levelin 2021 due to HS code revisions in 2022.
Source: Trade statistics of respective countries and regions
Copyright © 2022 JETRO. All rights reserved.

6

Ⅰ． World and Japan’s economy and trade

４

First Trade Deficit in Two Years due to higher import prices◼

Concerning Japan's trade (customs-cleared basis) in 2021, exports increased 18.5% from the previous year to $758.6 billion andimports increased 21.7% to $773.4 billion. Both exports and imports increased for the first time in three years. There was also a
deficit in trade balance for the first time in two years.

◼

Between January and May 2022, both export and import volumes were negative. However, total imports increased bymore than 20%.
Japan’s import & export growth (year-on-year change)

Japan’s trade trends(Million USD, %)

2022

2019

2020

2021

705,682

639,950

758,578

312,453

- 4.4

- 9.3

18.5

2.3

720,765

635,707773,391

366,683- 3.7- 11.821.7

21.6-15,083

4,243-14,813-54,230(YoY difference)- 4,820

19,325-19,056-58,103

Export volume index

103.0

91.0

102.1

98.5

(Rate of change)

-4.4

-11.7

12.2

-2.1

Import volume index

104.6

97.9

102.8

101.8

(Rate of change)

-1.1

-6.4

5.0

-0.2

Total exports(Rate of change)
Total imports(Rate of change)
Balance of Trade

JanuaryMay(In both of the charts)
Note: 1) JETRO converted the figures disclosed in JPY into USD.
2) The volume index is on a 2015 basis.
Source: “Trade Statistics” (Ministry of Finance), “Foreign Exchange Rate” (Bank of Japan)

50
40
30
20
10
0
-10
-20
-30

（％）

Exports
Volume basis

1

（％）
50
40
30
20
10
0
-10
-20
-30
1

4

7

10

1

Value basis

4

2019

7

10

1

4

2020

7

10

1

2021

45

2022

Imports
Volume basis

4

7
2019

10

1

Value basis

4

7
2020

10

1

4

7

10

1

2021
Copyright © 2022 JETRO. All rights reserved.

45
2022

7

Ⅰ． World and Japan’s economy and trade５

No Increases in Export Volume Despite Yen Depreciation◼

The yen has been weakening rapidly in recent months. In June 2022, the real effective exchange rate index (2010=100) fell
below 60, marking the first weakening in the yen since August 1971.

◼

Examining Japan's exports from January to May 2022, the price index (unit price) was higher year-on-year, while the volume
index was lower. Due to the soaring prices of mineral fuels, which make up a large share of imports, there was a larger swing inprice increases than exports.
Real effective exchange rate index
for major countries/regions (monthly average)（2010=100）

Import/export volume and price index (Jan. to May 2022)（Volume: June to May 2021＝100）

120

140

China

Currency
130 Appreciation

Price＋
Volume ＋

US

120

110
Chemicals

110

India

100

Metals and related products

Textiles90

Eurozone 100

80

Foodstuff

Articles ofapparelMetals and related productsJapan

Raw materials

Machinery/equipment

60(Monthly)

50
15/01

Source: Bank of International Settlements

20/01

22/06

Mineral fuels
Total imports

Totalexports

70

2010/01● Export■ Import

Miscellaneous

Chemicals

90
90

100

110

120

130

140

Price ＋
Volume －（Prices: January to May 2021 = 100)
150 160 170 180 190 200

Note: Average of volume and price index (yen basis) for Jan. to May 2022. YoY = 100.
Source: “Trade Statistics” (Ministry of Finance), “Foreign Exchange Rate” (Bank of Japan)
Copyright © 2022 JETRO. All rights reserved.

8

Ⅰ． World and Japan’s economy and trade

６

Global Cross-Border Data Flow Increases 2.7x in 4 Years◼

Examining countries and regions with the largest amount of cross-border Internet bandwidth (data flows used in 2021,
Germany was in first place, followed by the US. In Europe, intra-regional data flow made up a large portion of the region’s data
flow.

◼

There is significant growth in data flow within Asia. Singapore's favorable location in Asia has made it a hub for data flow in
Asia, and it is a location for data centers for cloud services.

Cross-border data flow: top countries/regions and share by region0(Tbps)

100

200

300

World

800
400
785.6
360.0

Germany

173.4

US

162.0

France124.3

United Kingdom

93.2 Latin

The Netherlands

86.5

Singapore

76.0

China

60.9

Sweden45.2

Russia

41.8

Italy

34.8

Japan

33.0

Oceania0.9%

Africa2.0%

America

Middle
East
3.9%
North
America
11.3%

7.0%

2021

2017

Asia
19.2%

2021

Note: Region classification is based on TeleGeography definitions.
Source: TeleGeography

Europe55.7%

Bilateral cross-border data flow

Country/Region1
Germany
Netherlands
2
USBrazil3 United Kingdom Netherlands
4
Germany
France5
US
Mexico6
Singapore
Indonesia
7
FranceSpain
8France- United Kingdom
9US- United Kingdom
10
US
Canada
11
US
China
12
US
Japan
13
Germany
Russia14
Germany- United Kingdom
15
Germany
Austria16
China
Vietnam
17
FranceNetherlands
18
Germany
Turkey19Singapore
India
20
Singapore
China
Note: Highlighted areas are within same region.
Source: TeleGeography

Cross-borderInternet
bandwidth(Gbps)
27,517
25,234
21,601
21,032
20,383
19,712
16,818
16,58615,117
14,941
14,786
13,536
12,832
12,794
12,62010,983
10,881
10,812
10,392
9,809

Averageannual2021
growthshare (%)
rate 2017
to 2021
23.8
3.5
25.2
3.2
21.8
2.7
23.0
2.7
29.8
2.6
72.8
2.5
27.7
2.1
23.2
2.1
16.1
1.9
24.6
1.9
23.9
1.9
28.5
1.7
24.8
1.6
18.0
1.6
34.6
1.6
47.8
1.4
30.2
1.4
37.1
1.4
31.2
1.3
42.2
1.2

Copyright © 2022 JETRO. All rights reserved.

9

Ⅰ． World and Japan’s economy and trade７

Increase in Cloud Services Leads to Expansion in Data Centers◼

The demand for cloud services to support teleworking, video distribution, and network upgrades to support 5G is expanding,leading to surges in demand for data centers in many regions. In 2022, telecommunications and cloud-services giants suchas Salesforce, Meta, and NTT have announced plans to invest in data centers.

◼

Japan's data bandwidth partner is the United States at 13,536 Gb/s, accounting for 40% of the total share.

Global share of data center buildings in major countries and regions and location of data centers of major cloud-services businesses
UnitedKingdom
5.5％FranceNetherlands 3.2％
3.3％

Russia2.0％
Germany
5.8％

China
5.3％

Canada
3.9％

US
32.9％

Japan
2.5％
Japan's data bandwidth andpartner country share

Australia
3.3％● Google (GCP)◆ Amazon (AWS)▲ Microsoft (Azure)■ Meta● Share of data center locations by number of buildings

World
US
China
Singapore
South Korea
TaiwanAustralia
Philippines
Malaysia
Vietnam
Russia(Gigabits/second, %)32,96913,536
8,119
4,409
3,144
1,678
762
484
230
224
210

100.0
41.1
24.6
13.4
9.5
5.1
2.3
1.5
0.7
0.7
0.6

Note: The top 12 countries are listed according to share of data centers. Data centers may differ from actual locations due to space constraints.
Source: Company websites and Cloudscene

Mexico1.8％

Brazil
1.7％

Copyright © 2022 JETRO. All rights reserved.

10

Ⅱ. Global FDI and Japan’s FDI
Uncertainty Increasing in Business Environments:
Investment Facing a Difficult Phase Once Again

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11

Ⅱ. Global FDI and Japan’s FDI

1

Global FDI Recovers in 2021, but Regional Disparities Broaden◼

Global FDI increased 64.3% year-on-year, exceeding levels in 2019 prior to COVID-19.

◼

Developed countries and regions accounted for about 70% of the investment increase. In the US, FDI expanded 2.4 times to$367.4 billion, driven by increases in multinational companies’ retained earnings and mergers and acquisitions in theinformation and communications, commerce, and logistics and warehousing sectors.
Forecast of inward FDI in 2021 (net and flow)
for major countries and regions

Trends in global inward FDI (net and flow)(Units: Million USD, %)(Billion USD)
2,200

Value

2,000

$1,582billionWorld

Growth Composition
Contribution
rate
ratio

1,582,310

64.3

100.0

64.3

Developed countries

745,739

133.6

47.1

44.3

1,600

US

367,376

143.6

23.2

22.5

1,400

EU

137,541- 34.48.7- 7.5

Canada59,676

157.5

3.8

3.8

Japan

24,652

130.3

1.6

1.4

600

Emerging/
developing countries

836,571

29.9

52.9

20.0

400

China

180,957

21.2

11.4

3.3

200

ASEAN

175,229

43.6

11.1

5.5

Hong Kong

140,696

4.4

8.9

0.6

Latin America

134,458

56.0

8.5

5.0

Africa82,991

113.1

5.2

4.6

Middle East

55,334

58.9

3.5

2.1

1,800

1,200
1,000
800

0
FDI in developed countries
FDI in emerging and developing countries（年）(In both of the charts)
Note: Definitions of developed countries/regions and emerging/developing countries/regions are based on UNCTAD classifications.
Source: UNCTAD

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12

Ⅱ. Global FDI and Japan’s FDI

２

Cross-border M&As Slowed in Q2 of 2022◼

In 2021 the number of global cross-border mergers and acquisitions increased 36.6% to a record high of 14,364. The total
value of M&As was the second highest on record ($1,607.2 billion) after 2007. The EU, US, and UK achieved a V-shaped
recovery.

◼

However, China is seeing declining momentum in its economic recovery. Its M&A numbers began to decline from the end of2021, reaching the lowest levels since 2010 in the second quarter of 2022. The US also saw low levels of M&A for the first timein eight years since 2014.

Transition in total values of global cross-border
M&A and number of deal
(Billion USD)
（件）
(Case)
1,800
16,000
1,400
Value
Case
1,600
14,0001,200
1,400
12,0001,000
1,200
10,000
1,000

800
600
400
200

0

Source: Workspace(Refinitiv)(as of July 4, 2022)

8,000
6,000

EU27

US

UK

ASEAN

China

Japan

800
600

4,000

400

2,000

200

0

Number of cross-border M&A deals
in EU, US, UK, China and Japan (Quarterly)0
Note: Based on the nationalities of the acquired companies. 2) Data up to the second quarter of2022.
Source: Workspace(Refinitiv)(as of July 11, 2022)
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13

Ⅱ. Global FDI and Japan’s FDI

３

Global Greenfield Investment Rebounding◼

Global greenfield investment in 2021 increased 13.7% to 13,515 investments. There was still no V-shaped recovery to preCOVID 19 (2019) levels.

◼

Investments in IT/software and business services increased, but investment in major manufacturing sectors stagnated.

Number of greenfield investments worldwide (by region)

Number of Greenfield Investments by Major Industry Sectors

18,000（Cases）
16,0003,500 (Cases)

14,0003,000

12,000Top 3 manufacturing/non-manufacturingindustries in terms of
cumulative investment

2,500

10,000

2,000

8,000
6,000

1,500

4,000

1,000

2,000

Asia Oceania
Latin America

EuropeAfricaSource: fDi Markets（Financial Times）

North America
Middle East

IT/Software
Financial Services
Food/Beverages

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

500

Business Services
Agricultural Equipment
Automotive Parts
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14

Ⅱ. Global FDI and Japan’s FDI

４

Global Large Semiconductor FDI Plans (Announced after 2021)◼

While new FDI in manufacturing stagnated, investment in semiconductor manufacturing was brisk, supported bysubsidies and other support from the governments of major countries. Major players such as Intel, Samsung, and TSMC
continue to announce enormous investment plans.

◼

At least 12 new FDI plans with an investment value exceeding $2 billion will be launched between 2021 and May 2022.

Major planned outward FDIs in semiconductor manufacturing from 2021 (investment projects exceeding $2 billion)
Intel
(US)

Investingcompany

Date ofannouncement
March 2022

Samsung Electronics
February 2021
(South Korea)
Intel
(US)

March 2022

TSMC
(Taiwan)November 2021

Micron Technology
October 2021
(US)
Intel
(US)
Intel
(US)
UMC
(Taiwan)December 2021
December 2021
February 2022

GlobalFoundries(US)

June 2021

TSMC(Taiwan)July 2021

InfineonTechnologies(Germany)

February 2022

AT&S
(Austria)

June 2021

Investment
location

Investment project overview

Germany
Saxony-Anhalt

Will build a new large-scale semiconductor plant with production expected to begin in 2027. Plans toinvest over 80 billion euros in Europe with subsidies under the European Chips Act.
Announced construction of a manufacturing plant for contracted semiconductor production. Plans toUSreceive US government subsidies to produce cutting-edge system semiconductors used in 5G, AI
Texas
technologies, etc. Operations are scheduled to commence in the second half of 2024.
Additional investment of 12 billion euros in existing plant to double manufacturing space. Alongside
Irelandmanufacturing semiconductors of its own design, the company also provides contracted manufacturing.
County KildareIt`s plan includes the manufacture of semiconductors for automotive applications.
Japan
Received 476 billion yen in government subsidies to build a logic semiconductor production plant withKumamoto
extra investment from Sony and Denso. The company plans to produce logic semiconductors with circuit
Prefectureline widths in the 10 to 20 nanometer range. Shipments are expected to begin at the end of 2024.
Japan
Announced a $150 billion investment over 10 years in expanded semiconductor memory production andHiroshima
R&D worldwide. A new DRAM plant is reportedly being built in Hiroshima Prefecture as part of thePrefecture
project.
Malaysia
Established a new facility for semiconductor chip packaging processes and testing in Bayan Lepas, Penang
Penang Statethrough a local subsidiary. Production is expected to begin in 2024.
Part of a plan to invest over 80 billion euros in Europe. Plans to build a state-of-the-art back-end
Italy
manufacturing facility in Italy.
To meet demand for 5G and automotive-related products, the company will build a new plant to produce
Singapore
semiconductor chips in the 20-nanometer range. Production is expected to start in 2024.
Built a new 300mm wafer plant with investment from the Singapore government and customers. Aims to
Singaporestart operating by the end of 2023. Its combined production capacity with its existing plants will be
increased to 1.5 million wafers/year.
Increased production of 28-nanometer manufacturing process at its existing plant. Produces automotive
China
semiconductors and other products to meet growing customer demand. Mass production is expected to
Jiangsu Province
start in the second half of 2024.
Constructed three new manufacturing buildings at its existing plant to increase front-end production
Malaysia
capacity of wide bandgap power semiconductors (SiC/GaN). Shipments are expected to begin in the
Kedah state
second half of 2024.
As the company's first manufacturing site in Southeast Asia, this new plant will produce high-performance
Malaysia
printed substrates and integrated circuits. Production is scheduled to begin in 2024. Also promotes local
R&D.

Source: FDI Markets, company press releases, information from press, etc. (some only based on press information.)

Amount(billion USD)

Copyright © 2022 JETRO. All rights reserved.

19.3
17
13.4
8.6
7
7
5
5
4
2.9
2.2
2.1

15

Ⅱ. Global FDI and Japan’s FDI

５

History of the Semiconductor Supply Chain Disruption◼

Capital investment was weak in 2019 due to stagnation amongst semiconductors. After the COVID-19 outbreak, demand forsemiconductors for automobiles and machinery fell further. However, demand in some industries surged due to people staying athome, 5G technologies, and other developments.

◼

Starting in the second half of 2020, competition to acquire semiconductors rose due to the recovery of automotive and peripheralindustries. Tighter US export controls, fires at major factories, power shortages, and localized measures to halt factory
operations spurred on the semiconductor shortage.

What happened to the semiconductor supply chain after the spread of COVID-19

2019

Demand side (users)

Production and supply

Weakened demand,
semiconductor stagnation

Decline in capacity utilization rates /Suspensions in capital investment

Spread of COVID-19

Early 2020
onwards

Increase in demand for smartphones,
games, etc.
Decline in demand for automobiles andmachineryMid 2020
onwards

Monopolization of order slots by someindustries (data, smartphones, etc.)

Late 2020
onwards

Rapid recovery in automotive & related
demandCross-industry competition for
semiconductors

2021

Difficulties in acquiring semiconductors,delivery delays

2022(EVs, environmental infrastructure, etc.)

Soaring costs, shipping and sales
adjustments
Continuing shortages + new demand

Operational restrictions due tothe pandemic
Specialized production for someindustries

Employee shortages and continued
operation restrictions
Delayed shipments due to logistics
disruptions

Factors in Semiconductor Supply Disruptions◀Global movement restrictions and lockdowns◀Employee reductions due to layoffs + isolation measures◀Logistics disruptions due to increases in containerized cargo(continued thereafter)◀ Tighter US export controls to China (continued thereafter)

Insufficient production capacity,
especially for automotive applications◀Oct: Fire at semiconductor plant inJapan(automotive/industrial/consumer)
Supply networks disrupted, material prices ◀Dec: US adds China's SMIC to export control list
soar
◀February: Cold wave and power outage in the US (Texas)
Increased risk of localized production◀March: Fire at a semiconductor plant in Japan (automotive)
outages◀Jun. to Sept.: Social isolation in Southeast Asia and operation
restrictions
Growing production capacity shortage◀Oct. onwards: Electricity shortages in China
Capital investment increases,
but shortages continue(Full operations expected from 2024)

Source: Company interviews, JETRO business news briefs, reports from JETRO offices, etc.)◀February: Invasion of Ukraine, supply disruptions[Non-ferrous metals, neon, etc.]

Copyright © 2022 JETRO. All rights reserved.

16

Ⅱ. Global FDI and Japan’s FDI

６

Successive Investments in Data Centers and Submarine Cables◼

Examining worldwide digital technology investments, data center investments particular stood out. Google and AWS plan tobuild or invest in additional data centers around the world. In addition, there has been successive investments in submarine
cables. Google announced plans for Firmina, an undersea cable that will connect North and South America at high speeds.

◼

Amongst M&As there were a number of cases of major companies acquiring digital-related companies with promotion of DX(digital transformation) acting as backdrop.

Global digital-related greenfield investments (2021)
Company name

OriginInvestments

GoogleUS

24

Amazon Web Services
(AWS)

US

18

NTT Limited

Japan

16

Equinix

US

15

Huawei Technologies China

14

Microsoft

US

GIC Private Limited

Singapore
Canada

Omnillion

12

Primary projects- Investments in data centers in Canada, Israel, and others- Installation of submarine cables connecting Brazil,
Uruguay, and Argentina- Investment in data centers in New Zealand, UAE, etc.
- R&D investments in Germany- Investments in data centers in Indonesia and Malaysia- Construction of submarine cable connecting Singapore,
Malaysia and India- Investment in hyperscale data centers around the world- Invested in a second data center in Mexico- Invested in a training center in Angola- Invested in data center in Indonesia- R&D investments in Israel

Digital-related M&A (2021)
Value(Millions Inveofstmdollars) ents

Company name(acquiring party)

OriginSiemens

Germany

Cellnex Telecom

Spain

16,4089Hitachi

Japan

9,600

4

South Korea 9,000

2SK Hynix
SoftBank Group
Just Eat TakeawayJapan17,825 10

8,742

34

Netherlands 7,456

2

11 - Investments in data centers in Japan, Mexico, Ireland, etc.

Panasonic

Japan

7,127

3

9

RenesasElectronics

Japan

5,990

2

Sinch

Sweden

4,449

5

Iliad

France4,363

2Tata Consultancy
Services (TCS)

India

9

HCL Technologies

India

9

- Investment in data centers in Mexico, Argentina, etc.
- Additional investments in drone research facilities in the
US- R&D investments in Saudi Arabia and Netherlands- Invested in innovation center in Canada

Note: Digital-related industries are the five investment source industries as defined by fDi Market (software and IT services,semiconductors, telecommunications, business machinery and equipment, and consumer electronics), while referencing theinformation and communication technology industries defined by the OECD and other sources. Excludes production activity
projects. The ten companies are listed in descending order of number of projects.
Source: fDi Markets (Financial Times)

Note: Digital-related industries refers mainly to high-tech andtelecommunication industries. The ten companies are listed indescending order of amounts.
Source: Workspace (Refinitiv)
Copyright © 2022 JETRO. All rights reserved.

17

Ⅱ. Global FDI and Japan’s FDI

７

Japan’s Outward FDI Sees Little YoY Change in 2021◼

Japan’s outward FDI in 2021 increased by 2.6% from the previous year to $149.8 billion. While global FDI has experienced a Vshaped recovery, outward FDI by Japanese companies remains stagnant.

◼

Outward FDI halved between January and May 2022. There was decreased appetite for investment due to heightened
uncertainty in the global economy.
Trends in Japan’s outward FDI by type

Japan’s outward FDI by country/region(Million USD, %)(Billion USD)

260
240
220
200
180

Debt instruments

2021

Reinvestment of earnings

Asia

January-May
2022(P)
Growth rate

Growthrate

48,864

32.0

9,077

-63.3

Equity capital

China

10,020

-9.3

2,572

-33.9

Outward FDI

ASEAN

29,238

61.4

3,523

-77.9

Singapore

18,011

134.3

-263

-

Thailand

2,951

-19.9

996

-36.6

Indonesia

3,748

58.6

1,339

44.9

North America

62,795-7.8

13,874-53.9

62,094-6.3

13,099-55.6

Latin America

7,444

-42.3

3,359

-42.2

Oceania

-167

-

1,581

-

Europe30,268

59.9

9,183

-30.7

Germany

7,088

156.6

2,460

-59.9

UK

14,933

70.3

1,122

-69.9

World

149,814

2.6

37,580

-48.9

160
140
120
100

US

80
60
40
20
0
(Year)
Note: JETRO converted the figures disclosed in JPY into USD
Source: “Balance of Payments Statistics” (Ministry of Finance, Bank of Japan)

Note: JETRO converted the figures disclosed in JPY into USD
Source: “Balance of Payments Statistics” (Ministry of Finance, Bank of Japan)

Copyright © 2022 JETRO. All rights reserved.

18

Ⅱ. Global FDI and Japan’s FDI

８

High Returns in China, Impacts of Lockdowns a Concern◼

The ratio of return on outward FDI in China by Japan in 2021 was as high as 15.1%, far exceeding other major investment
destinations such as North America (4.4%,) Europe (7.6%) and ASEAN (7.4%).

◼

Concerns for 2022 include the impact of the economic slowdown associated with the zero-COVID-19 policy on the earnings ofJapanese companies in China.

The ration of return on outward FDI in major FDI destinations
16 （%）

Sales of overseas subsidiaries
North America
ASEAN
China (Inc. Hong Kong)
Europe(100 Million USD)
1,000

14

900
800

12

700

10

600

8

500
400

6

300

4

200

2
0

China
EuropeLatin America

Asia
ASEAN
North America

1000(Year)1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q(Year)
Note: The ratio of return on outward FDI = FDI return (by region) for each period / Average ofoutward FDI stock at the beginning and end of the period x 100 (%)
Source: Balance of Payments Related Statistics (Ministry of Finance, Bank of Japan)

2018

2019

2020

Source: “Quarterly Survey of Overseas Subsidiaries”(Jan. to Mar. 2022)

2021

2022

Copyright © 2022 JETRO. All rights reserved.

19

Ⅲ. Trends in Trade Rule Formation
Increased Risk of Fragmentation, Progress with Economic
Security Policies

Copyright © 2022 JETRO. All rights reserved.

20

Ⅲ． Trends in Trade Rule Formation１

Trade Policies in Response to International Affairs◼

Of the trade-related measures that countries and regions tentatively introduced in response to COVID-19, 109 measures toliberalize imports or reduce tariffs and 42 measures to restrict or ban exports were still in effect as of the end of June 2022.

◼

Restrictions and bans on imports and exports to Russia expanded immediately after its invasion of Ukraine.

Trade measures related to COVID-19

Trade measures related to Russia's invasion of Ukraine(Cases)60 (Cases)

140
120

109

100

56

50

40

80

29

30

60
42
40

20
13

31
28

20

12

10

5

17

Source: WTO and ITC, Temporary Trade Measures

29-Jun-22

22-Jun-22

15-Jun-22

8-Jun-22

1-Jun-22

25-May-22

18-May-22

11-May-22

4-May-22

27-Apr-22

20-Apr-22

13-Apr-22

6-Apr-22

30-Mar-22

23-Mar-22

9-Mar-22

16-Mar-22

2-Mar-22

Feb. 2020
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. 2021
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.]
Nov.
Dec.
Jan. 2022
Feb.
Mar.
Apr.
May
Jun.
Import liberalization/tariff reductions
Export restrictions/bans
License/approval permit related
Other restrictions
Import restrictions/bans

23-Feb-2200Export restrictions/bans
Import restrictions/bans
Import liberalization/teriff reductions
License/approval permit related
Other restrictions
Copyright © 2022 JETRO. All rights reserved.

21

Ⅲ． Trends in Trade Rule Formation

２

Restrictive Measures against Russia led by the US and the EU◼

The export bans and restrictive measures following Russia's invasion of Ukraine spread amongst countries and regions,particularly Europe, the US, and Japan, in an extremely short period of time. The US announced sanctions, including an export
ban, on the day of the invasion. EU sanctions followed on the next day.

◼

As of the end of June, 57 countries had implemented export bans or restrictions. In contrast, 182 countries and regions did
not invoke any punitive measures.
Export restrictions and bans related to invasion of Ukraine (as of June 30, 2022)

Countries and regions with export
restrictions on agricultural products• In principle prohibits exports and reexports to Russia of items on the
Department of Commerce’s Commerce
Control List (CCL) and is gradually
expanding the scope of restrictions.
• The same (FDP rules) applies to products
manufactured outside the US using USmade software and technology.

Source: ITC (accessed June 30, 2022)

Countries and regions with
export restrictions on
non-agricultural products• Prohibits export ofproducts/technology related to oil
refining, and aerospace industryrelated products/technology, etc.
• Tightened export restrictions on
semiconductors and otherimportant items/technologies
impacting the defense andsecurity sectors

Countries/regions with both ineffect• Prohibits the export of items/technologies
subject to international export control
regimes, general-purpose items that
contribute to military strength, petroleum
refining equipment, and luxury goods.
• Prohibits exports to specificorganizations, such as military-relatedorganizations (subject to expansion asneeded)Copyright © 2022 JETRO. All rights reserved.

22

Ⅲ． Trends in Trade Rule Formation

３

Growing Importance of Economic Security Amidst the
Global Environment◼

Russia's invasion of Ukraine is further increasing interest in economic security and heightening momentum for the introductionof related policies in major countries. Development has been made in formulating policies aimed at strengthening supply chains,enhancing industrial competitiveness, and preventing key technology leakage.

◼

Japan’s Diet passed the bill to promote Economic Security in May 2022. In addition, export controls under the Foreign Exchange
and Foreign Trade Acts were strengthened.

Examples of major policies motivated by economic security

Summary of Japan's economic security related bill
Framework and primary initiatives

Supply chain
disruption

Threat of advanced
technology leakage

US-China strategiccompetition, mainly
over technology

１． Securing critical supplies
Support for certified businesses that havesubmitted supply plans for goods designated bycabinet ordinance

２． Ensuring provision of core infrastructureroles

Policy development to promote economic security in each country and region
Industrial
competition

Supply chain
resilience

Protection for
infrastructure and data

Prevention oftechnology leaks

Prior reviews of outsourcing plans for
installation, maintenance, management, etc. forfacilities of security concern in 14 specified
fields.
３． Supporting the development ofadvanced technologies

Diversification /visualization support

Cooperation withallies and likeminded countries

Export controls
Supporting R&D andcapital investment inpriority areas

Source: METI, Cabinet Office

Government
procurement

Providing information and financial support for
R&D, etc. Establishing public-private councils
and think tanks

Screening inward FDI

４． Non-disclosure of Patent applications

Cybersecurity

Preservation of patents designated during
examinations (JPO to Cabinet Office). Foreign
filings are prohibited and compensation isprovided for losses that would normally be
incurred
Source: Cabinet Office
Copyright © 2022 JETRO. All rights reserved.

23

Ⅲ． Trends in Trade Rule Formation

４

U.S. Export Controls on China : Applications are Approved◼

The number of applications in the US has been increasing yearly as exports controls on China have been tightened. The
number of days for screening per case has also been becoming longer.

◼

In 2021, 67% of applications for export licenses to China were approved. For applications regarding Huawei and SMIC (between
April to November 2020), 70% and 90% were approved, respectively.
Results of application screening for export licenses
to China (2017 to 2021)(Cases)(Days)

7,000

90

80

6,000

70
5,000

60

4,000

50

3,000

40
30

2,000

20
1,000
0

Approval status of export license applications by t
he US Department of Commerce (Apr. 20 to Nov. 9 2020)
Cases(% of total)

Amount(Billion
USD)

Example items(subject to controls)

Approved

113(69.3%)

614.3

Semiconductors below 5G
Cryptographic information
security

Returned

48 (28.4%)

297.8

Sensor/laser
technologies, etc.

Denied2 (1.2%)

0.6

Cases
(% of total)

Amount(Billion
USD)

HuaweiTechnologies

Semiconductor
Manufacturing
International
Corporation(SMIC)

10
2017

2018

2019

2020

2021

Approved

2,888

2,883

2,666

2,645

3,990

Returned

539

576

613

925

1,407

Denied

73

77

130

177

526

Average number ofscreening days(right axis)

37

40

62

62

81

Source: US Department of Commerce0

Approved

188(91.3%)

418.9

Returned

17 (8.3%)

11.6

Denied1 (0.5%)

0.6

Unknown

Example items(subject to controls)
Semiconductor
manufacturing equipment
and materials, materials
processing technologies,
information security, etc.
Materials processing
Technologies,
information security, etc.
Unknown

Note: 1) Both companies are currently on the US Export Eligibility List (EL).
Permission is required even for ordinary exports which do not typically require an export license.
2) Number of cases and amount are based on examinations. May differ from actual export results.
Source: US House of Representatives Foreign Affairs Committee
Copyright © 2022 JETRO. All rights reserved.

24

Ⅲ． Trends in Trade Rule Formation

５

Coordination for Supply Chain Resilience◼

Since 2021, coordination between like minded countries it increase supply chain resilience has progressed. The goal is tostrengthen unity by mapping supply capacities for semiconductors and critical components, identifying vulnerabilities, andensuring security against risks.

◼

Japan is also strengthening its cooperation with the US and the EU. Supply chain resilience is also included as a major pillar in the
IPEF framework.
US-Malaysia

Japan, US, Australia, India (QUAD)

On May 11, a memorandum of understanding on
semiconductor supply chain resiliency was signed.

In September 2021, a framework for strengthening thesemiconductor supply chain was announced for launch at
the May 2022 QUAD meeting.

Japan-EU Digital Partnership

Adopted a semiconductor supply chain initiative and a common statement ofefforts to map supply capabilities, identify vulnerabilities, and enhance security ofsemiconductors and critical components.

Launch of the Japan-EU Digital Partnership at the Japan-EU
Summit in Tokyo on May 12
Pledged to strengthen cooperation in areas such as preventing supply chain disruptions
and R&D of next-generation semiconductor technologies (specified as a joint action).

US-EU Trade and Technology Council (TTC)
Agreed to launch at the June 2021 EU-US Summit, first meeting
held in September 2021, second meeting held in May 2022.

US-South Korea (Alliance)
On May 21, at the US-South Korea summit in Seoul, the two agreed
to commence regular ministerial-level meetings on supply chain
resilience, including semiconductors.

Aims to build a partnership for semiconductor supply chain rebalancing. Agreed tojointly establish early warning and monitoring mechanisms for risks and avoid
subsidy wars.

(1) Agreed to initiate regular ministerial-level meetings to promote and protect importantand emerging technologies, including semiconductors, in the public and private sectors,and (2) to strengthen supply chains for strategic products such as semiconductors.

Japan-US Commercial and Industrial Partnership (JUCIP)
Reached an agreement in Nov. 2021. At the first ministerial
meeting in May 2022, jointly formulated the Basic Principles on
Semiconductor Cooperation.

Indo-Pacific Economic Framework (IPEF)
On May 23, the US, Australia, Japan, India, South
Korea, NZ, and seven ASEANcountries
participated in the framework’s launch.

Will promote cooperation regarding supply chain enhancement, including
diversification and transparency of semiconductor manufacturing capacity,
contingency planning, and semiconductor R&D and workforce development.

Strengthening the supply chain, including semiconductors, as a major pillar of the framework

2021

Sept.
Source: Various materials

Nov.

2022

May
Copyright © 2022 JETRO. All rights reserved.

25

Ⅲ． Trends in Trade Rule Formation

６

Economic and Trade Frameworks in the Indo-Pacific Region◼

The CPTPP (entered into force in December 2018) and RCEP (entered into force in January 2022) are leading the way as mega FTAs.

◼

Fourteen countries have pledged to participate in the IPEF, including the QUAD (Japan, the US, Australia, and India) plus seven
ASEAN countries, South Korea, NZ, and Fiji.

◼

The participants launch discussion on the four pillars, including digital economies and supply chain cooperation.

IPEF Participating Countries and Other Existing Frameworks
Canada Mexico Chile Peru

IPEF
US
India

South
Korea

Fiji
Overview of the IPEF Pillars(as discussed)
PillarJapan Australia New Zealand

CPTPP/TPP-11
RCEP

ASEAN

Singapore Vietnam Brunei Malaysia
Indonesia Philippines Thailand
Cambodia Laos Myanmar

Primary content (joint statement)

Trade• Creative approaches in trade and technology policies• Cooperation in digital economies

SupplyChains• Coordination of crisis response measures, expanded
cooperation for impact mitigation• Securing access to semiconductors, vital minerals, etc.

Clean
• Development and deployment of clean energy
Energy/technologies
Decarbonizati •Supporting infrastructure development and providingontechnical cooperation, etc.
Infrastructure
Tax• Preventions for money laundering and bribery enacted
Antiand enforced
corruption
Source: Joint Statement (February 2022) and US government documents.

China

US-side considerations• Digital economies: standards related to data free flow and data localization, addressing
privacy and unethical use of artificial intelligence (AI)• Labor, environment and responsibility of companies to provide explanations.
• Coordination of early warning systems, supply chain visibility for vital mineral resources,
improved traceability of critical sectors, and diversification efforts• New measures for renewable energy, carbon removal, energy efficiency standards, andmethane emissions• Sharing of tax-related information and penalizing bribery pathways in line with UN
standards
Copyright © 2022 JETRO. All rights reserved.

26

Ⅲ． Trends in Trade Rule Formation

７

Protectionist Measures Surfacing in the Digital Sector◼

As digitization advances, countries has introduced its own regulations for data management. In many cases, domestic laws
impose protectionist measures, such as restrictions on the cross-border transfer of data and requirements that data be storedor processed within a specified jurisdiction.

◼

18 of 74 countries surveyed in an OECD survey have cross-border data movement restrictions and 24 have data localization
requirements.
Digital protectionism measures in major countries (by region)
Restrictions on cross-border data transfer

Regions surveyed(74 countries total)

Requirement for data localization
Regulating
country(24)

Specific example- Thailand: Act on personal information
9 countries
protection(56%)- China: Data Security Act, etc.

8 countries(50%)- Indonesia: Government regulations onelectronic systems and transaction operations- China: Cyber security laws, etc.
- Vietnam: Cyber security laws (*)

Europe(34)

3 countries - Kazakhstan: Personal data protection laws
(9%)
- Russia: Federal laws on personal data

10 countries - Greece: Electronic communications data act(29%)- Russia: Federal laws on personal data

North America/Latin America(14)- Brazil: Personal data protection laws (*)
3 countries- Bolivia: Communications and information(21%)
technology laws, etc.

2 countries(14%)- Brazil: Government regulations related to
information and communications- Mexico: Federal communications laws

3 countries - Saudi Arabia: Framework for cloud(30%)
computer regulations

4 countries(40%)- Saudi Arabia: Cyber security system- Turkey: Rules on (electronic) payments, etc.

Regulating
country(18)

Asia-Pacific (region)(16)

Middle East/Africa(10)Specific example

Note: Countries and regulations marked with a * are not counted as surveyed regions or regulating countries in the OECD survey.
Source: Compiled from OECD Digital STRI (Services Trade Restrictiveness Index), (published in February 2022) and other sources.

Copyright © 2022 JETRO. All rights reserved.

27

Ⅲ． Trends in Trade Rule Formation

８

Twelfth WTO Ministerial Conference (MC12) Agrees on
Multinational Rules◼

At MC12 it was decided to maintain the current practice of not imposing custom duties on electronic transmissions.

◼

In addition to the above, attendees discussed responses to emergency situations such as food insecurity and COVID-19. They
also agreed on the direction in which multinational efforts should be made, including on negotiations for fisheries subsidies.

Primary results from the 12th WTO Ministerial Conference (MC12)
Sector/Points of
Discussion

Primary Areas of Agreement

・ Current practice of not imposing customs tariffs on electronic transmissions to be maintained until the 13th
Ministerial Conference (MC13) scheduled for 2023.
However, if MC13 is held after March 31, 2024, the Ministers or the General Council will decide by that date whether or
not to extend it.
・ Periodic reviews will also be conducted, including scope, definition, and impact.
・ Attendees expressed concern that disruptions, record prices, and excessive volatility in the trade of food and agricultural
products could undermine member food security.
Emergency
responses to food ・ They determined that emergency measures introduced to address food security concerns minimize trade distortion to
insecurity
the greatest extent possible, and be temporary, targeted, transparent, and reported and implemented inaccordance with WTO rules.
・
Determined that patents used for the manufacture and supply COVID-19 vaccines could be used without theUse of patentsright holder's consent to the extent necessary to deal with the pandemic.
required for・
Attendees determined this would apply to all developing country members and encouraged developing country
production ofmembers with the capacity to produce COVID-19 vaccines to make a binding commitment not to use this decision.
COVID-19 vaccine
No custom duties
on electronictransmission

Fisheries
subsidies

WTO reforms

Source: WTO

・ Member countries as a whole agreed to prohibit subsidies for IUU fishing (illegal, unreported, and unregulated fishing)along with subsidies for overfished stocks provided without requiring efforts to restore the stocks.
・ Agreed to continue negotiations based on the issues presented prior to the MC12 meeting to propose additional
provisions for MC13 towards achieving a comprehensive agreement.
・ Members committed to working toward necessary reforms in the WTO.
・ While reaffirming the basic principles of the WTO, attendees envisioned reforms to improve all of the WTO's functions.
・ The General Council and subsidiary bodies will carry out their work, assess progress and, if appropriate, consider
decisions to be submitted to the next Ministerial meeting.
Copyright © 2022 JETRO. All rights reserved.

28

IV. Policies and Business for Sustainable Societies
A Wave of Stricter Laws and Compliance Requirements
Arriving for Companies

Copyright © 2022 JETRO. All rights reserved.

29

Ⅳ． Sustainable Societies

１

Disclosure Standards Aiming for Expanded ESG Investment
and Convergence◼

ESG investment, a form of investment that incorporates environmental, social, and governance factors, is expanding every year.
The concept of considering sustainability and risk management in company management, including human rights andclimate change countermeasures, is spreading.

◼

There are several international ESG disclosure standards for companies that investors refer to. The IFRS Foundation announced
the creation of a new standard -setting board- the International Sustainability Standards Board (ISSB) in November 2021.
The ISSB is in the process of formulating the IFRS sustainability disclosure standard as a new standard.

Sustainable investment assets in major countries（Billion USD）
35,000Austrasia
Japan
US

CanadaEurope30,000Comparison of major global ESG disclosure frameworks
Name of current
disclosure standard

Establishment
date of
Applicable sectors
disclosure
framework
2000

Overall ESG

CDP

2000

Climate change,
water and forest

CDSB Framework

2007

Environment andclimate change

2010

Finance,overall ESG

Created a disclosure format called integrated
reporting, which links financial and nonfinancial information and explains how thecompany creates long-term value.

Overall ESG

Provides standards for companies to disclose
financially relevant sustainability information toinvestors. Provides disclosure standards for 11
sectors and 77 industries.

Climate change

Provides a consistent framework for companies
to disclose climate change-related risk andopportunity information to investors andothers

20,00010,000

IIRC

5,000
SASB Standard

0

2016

2018

2011

2020

Source: GSIA, Global Sustainable Investment Review

Identifies companies’ economic, environmental,
and social impacts and discloses them in asustainability report. In 2016, GRI transitioned
from providing guidelines to setting thestandards for sustainability reporting.
Sends questionnaires on climate change, waterand forest to companies with high market
capitalization, companies are rated at theirinformation disclosure and environmental
activities based on the responses, and theresults are announced to the public.
A framework that defines an approach fordisclosing environmental and climate change
information in companies’ primary reports thatis useful to investors

GRI Standard

25,00015,000Main purpose/characteristics

TCFD
Recommendations

2015

Source: Websites of respective standards organizations

Copyright © 2022 JETRO. All rights reserved.

30

Ⅳ． Sustainable Societies

２

Legislation Makes Due Diligence Mandatory◼

The number of countries, especially in Europe, that mandate human rights due diligence through legislation is gradually
increasing, as voluntary efforts are deemed insufficient. In February 2022 the EU (European Commission) published a draft
directive on due diligence that encompassed human rights and the environment.

◼

According to OECD guidance, human rights due diligence processes and measures can be broadly classified into six categories.
Over the course of a series of continuous cycles, leading European, US, and Oceania companies are deepening their efforts year
by year.

Mandatory human rights due diligence in Europe, US and Australia
Country /RegionU.S.
California

Laws / Regulations

Implementation Date

California Transparency in Supply Chains Act

Jan 2012

U.K.

Modern Slavery Act 2015

Jul 2015

FranceDuty of Vigilance Act

Mar 2017

Australia

Modern Slavery Act 2018*

Jan 2019

EU

Supply chain due diligence obligations for Union importersof tin, tantalum and tungsten, their ores, and gold
originating from conflict-affected and high-risk areas

Due diligenceobligations applied
from Jan 2021

NorwayAct relating to enterprises’ transparency and work on
fundamental human rights and decent working conditions

Jul 2022

Germany

Supply chain due diligence Act

Jan 2023

Netherland

Child Labor Due Diligence Act

Not determined

CanadaEU

An Act to enact the Fighting Against Forced Labor andChild Labor in Supply Chains Act and to amend theCustoms Tariff
Directive on corporate sustainability due diligence

Not implemented(The bill introduced on
Nov 2021)
Not implemented(The bill introduced on
Feb 2022)

Note: NSW put the Modern Slavery Bill 2018 into force in NSW in January 2022 separately from the Australian Commonwealth.
Source: Compiled from company websites and news reports.

Due Diligence process and Supporting measures

5. COMMUNICATEHOW IMPACTS ARE
ADDRESSED

2. IDENTIFY & ASSESSADVERSE IMPACTS

1.EMBEDRESPONSIBLE
BUSINESS CONDUCTINTO POLICIES &MANAGEMENTSYSTEMS

4. TRACKIMPLEMENTATION
AND RESULTS

6. PROVIDEFOR OR
COOPERATE IN
REMEDIATIONWHEN
APPROPRIATE

3. CEASE, PREVENTOR MITIGATE
ADVERSE IMPACTS

Source: OECD Due Diligence Guidance for Responsible BusinessConduct
Copyright © 2022 JETRO. All rights reserved.

31

Ⅳ． Sustainable Societies

３

Avoiding Human Rights Risks by Utilizing Outside Resources
Like Experts◼

Examining examples of efforts by European, US, and Oceanian companies in each of the human rights due diligence processes,
there is an increased trend towards responding to these risks by effectively utilizing external resources such as various
experts and non-profit organizations.

◼

More companies are becoming involved in human rights risk management, with examples being reported not only from large
companies but also from small and medium-sized companies.
Examples of human rights due diligence practices
Company name(industry)(1) Incorporation into
management systems(2) Risk identification
and assessment(3) Stopping,
preventing, andreducing negative
impacts(4) Follow-up surveys

Nationality

Overview

L'Oreal(Cosmetics)

FranceEstablished an advisory committee for diversity, equity, and inclusion with 12
outside experts in 2021. Monitors for major risk exposures.

Bel & Bo
(Apparel, small/medium)

Belgium

Analyzed the high risks related to fire and building safety at work sites in
Bangladesh, where it outsources production. Signed and monitors the country's
fire and building safety agreements.

Thales(Electronics)

FranceAsks suppliers and subcontractors around the world to sign a corporate
responsibility charter respecting its commitment to human rights, social
responsibility, etc.

Tony's Chocolonely(Chocolate)

Produces and sells chocolate made from slavery-free cocoa beans. 1% of its net
Netherlands income is donated to a foundation established by the company to help eradicate
child labor on cacao plantations.

Umicore(Materials)

Belgium(5) Information
disclosure

PepsiCo(Foods)US(6) Corrective
measures

Legrand(Equipment)

FranceDeveloped its own framework for sustainably sourcing cobalt and regularly
evaluates its suppliers for compliance with human rights and environmental
standards.
Set up a consultation desk for complaints from consumers and business partners
about violations of laws and regulations.
Suppliers identified as having environmental and human rights risks wereencouraged to implement improvement plans. All suppliers showed
improvements by 2020.

Source: Compiled from company websites and news reports.

Copyright © 2022 JETRO. All rights reserved.

32

Ⅳ． Sustainable Societies

4

Links Between Import Regulations and Crackdown Measures◼

US Customs has become more aggressive in its use of WROs (Withhold Release Orders). It withheld nearly $500 million incargo in the past year.

◼

If shipments are withheld under the US Uyghur Forced Labor Prevention Act, which went into effect in June 2022, importers will
be subject to a strict burden of proof, including proof of proper due diligence practices and supply chain tracking
information.

US Customs imports withheld (fiscal years 2018 - 2021)（100 Million USD）

（Number）

600

1,500

1,469

Import value of withheld
shipments (left axis)

Documents required for the release of withheld cargo under the
Uyghur Forced Labor Prevention Act (examples)
A Information on due diligence systems

486

500

Number of shipments
withheld under the WRO(right axis)

400

Examples of responses required by companies- Engagement with suppliers and stakeholders- Whether due diligence is conducted and verified

1,000

B Supply chain tracking information- Order forms, invoices, certificates of origin, etc.
- Production records (instructions, site visit reports, etc.)

300

C Information on supply chain management measures

200

500

314

100

0

50
6
2018

2020

2021

Note: The US fiscal year runs from October 1 to September 30.
Source: U.S. Customs and Border Protection

D Evidence that the goods are not mined, produced, or
manufactured in whole or in part in Xinjiang Uygur
Autonomous Region- Documentation to track the goods’ supply chain

12
2019

- Internal controls for risk prevention and mitigation

0（Year）E Evidence that the goods of Chinese origin were not mined,
produced, or manufactured in whole or in part by forced labor- Information on workers (e.g., wages, output, internal controls toensure they are working voluntarily)
Source: U.S. Customs and Border Protection
Copyright © 2022 JETRO. All rights reserved.

33

Ⅳ． Sustainable Societies

５World Moves Towards Specific Targets for Decarbonization◼

The 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) was held
in Glasgow, the UK, to discuss CO2 emission reductions and the elimination of coal-fired power generation to achieve the 1.5°C
target agreed in the Paris Agreement.

◼

Major countries are accelerating and strengthening their decarbonization efforts, setting ambitious (proposed) targets for2030 and 2035 years for reducing greenhouse gas (GHG) emissions. Aims include increased use of renewable energy andtighter vehicle emission controls.

International movements related to COP26
Description- COP26 was held in the UK from October 31 toNovember 13, 2021. Agreed to the Glasgow Climate
Pact.
- The agreement includes the following four points:(1) To continue efforts to limit temperature rise towithin 1.5°C of pre-industrial levels
Agreement
at COP26 (2) To continue efforts to achieve financial assistancetargets provided by developed countries todeveloping countries(3) To complete the Paris Rulebook(4) To continue discussions on creation of a fund fornatural disasters, etc.
Internation - Global Methane Pledgeal- Aims to to reduce global methane emissions by 30%
frameworks
from 2020 levels by 2030.
in whichJapan
participated - Glasgow Breakthrough- Aims to accelerate development and deployment ofclean technologies and reduce costs by 2030.

Internation - Declaration on accelerating the transition to zeroalemission vehicles
automotive- Aims to ensure all new vehicles sold worldwide areframeworks

zero-emission by 2040. Japanese and Japaneseaffiliated manufacturers did not participate in thisdeclaration.

Main policies/aims of major countries and regions
Country/
RegionMajor goals announced after 2021

US

- Transition the electric power sector to produce zero CO2 emissions by 2035 (January 2021)- Expand offshore wind power generation to 30 GW by 2030 (March 2021)- Issued a presidential decree that at least 50% of new vehicles (passenger cars and light trucks)
must be zero-emission by 2030 (August 2021)- Reduce methane gas emissions by 30% compared to 2020 levels by 2030 (September 2021)- Produce and supply 3 billion gallons of aviation fuel derived from sustainable aviation fuel (SAF)
annually by 2030 (September 2021)

EU- Proposed 61% reduction of GHG emissions in the EU-ETS sector by 2030 compared to 2005 levels(July 2021)- Proposal to create a new EU-ETS for road transport and buildings (July 2021)- Proposed 100% reduction of CO2 emissions from new passenger cars and light commercial
vehicles by 2035 compared to 2021 levels (July 2021)- Proposed production of 10 million tons of renewable hydrogen by 2030 (December 2021)- Proposed import of 10 million tons of renewable hydrogen by 2030 (May 2022)- Proposed raising proportion of renewable energy to 45% by 2030 (May 2022)

China- Will reduce ratio of non-fossil in energy consumption to about 25% by 2030
- Will reduce CO2 emissions per unit of GDP to 65% of 2005 levels by 2030
- Will increase installed capacity of wind and solar power generation to at least 1,200GW by 2030
(All of the above are from October 2021)

Japan- 100% of new cars sold to be electrified by 2035 (January 2021)- Will create at least 100 leading decarbonized regions that will achieve decarbonization by 2030
(June 2021)

Source: Government websites and business briefs from various countries
Source: Government websites and business briefs from various countries
Copyright © 2022 JETRO. All rights reserved.

34

Ⅳ． Sustainable Societies

６

Not Addressing Decarbonization Risks Loss of Business◼

Following instructions from head offices and stricter regulations in destination countries and directives or requests fromsuppliers, the most influential reason for decarbonization efforts is policies by stakeholders in the supply chain surrounding
a company.

◼

The entire supply chain, including not only the company itself but also its customers and suppliers, must work toward
decarbonization and disclose information on these efforts. Failure to comply with customer requests and related regulations
can create a risk of losing business
Reason for decarbonization efforts
by Japanese Companies Operating Overseas(Multiple answers、%) 0

20

40

Decarbonization initiatives demanded of companies
60

80

Policies for addressing decarbonization for key stakeholders[Government-facing] Addressing various CO2 reduction regulations

Instruction/recommendation
Instruction/recommendationfromthe headquarters(parent company)
from the headquarters…

- Automobile emission regulations

68.9- Emissions trading systems

Regulations
incentives
byRegulations
andandincentives
by the31.5
and local…
centralthe
andcentral
local governments
Instruction/request
from
Instruction/requestfrom customers
20.1
customers(Japanese…
(Japanesecompanies)
Instruction/requestfrom customers
Instruction/request
from
14.7
(Non-Japanesecompanies)
customers (Non-Japanese…
Request from investors

13.2

Request from consumers

11.8[Shareholder, Investors-facing] Disclosure of information on decarbonization
efforts- Disseminating information on the company's decarbonization efforts[Customer-facing] Compliance with procurement standards, including customer
decarbonization policies- Reporting own emissions and responding to customer requests for emission reductions- Proposing and providing green products and services (new business)[Supplier-facing] Compliance with procurement standards, including own
company’s decarbonization policies- Identify supplier emissions and request reductions.
[Other-company facing (same or other industry)] Collaborating on decarbonization

Request from employees
Request from the public and/or
NGOs
Others- Cooperating in emission reductions and participating in various initiatives

5.0- Proposing and providing green products and services (new business)

3.4

n=4,669

10.3

Source: 2021 JETRO Survey on Business Conditions of Japanese Companies
Operating Overseas[Internal-facing] Implement decarbonization initiatives- Calculate own company's emissions and set emission reduction targets- Promote understanding of decarbonization initiatives and human resource
development

Source: Various sources

Copyright © 2022 JETRO. All rights reserved.

35

Supplementary and Reference Materials

Copyright © 2022 JETRO. All rights reserved.

36

１

World Economic Outlook, Real GDP Levels of Major
Countries and Regions◼

Considering the impact of Ukraine conflict and other factors, international organizations have lowered their world economic
outlook for 2022.

◼

Real GDP of the world in 2021 was higher than its level in 2019 (before COVID-19 pandemic). However, the degree of recovery
varies between countries.
Real GDP levels of major countries and regions

World economic outlook (real GDP growth) by international organizations(Unit: %, % points)
Organization

2021

World
Bank

5.7

OECD

5.8

IMF
UnitedNations

6.1
5.8

2022
2023
(Difference(Difference
from previous from previous
projections) projections)

Date ofannouncement(previous
projections)

2.9(-1.2)

3.0(-0.2)

Jun. 2022(Jan. 2022)

3.0(-1.4)

2.8(-0.5)

3.6(-0.8)

3.6(-0.2)

3.1(-0.9)

3.1(-0.4)

Note: Growth rates for 2022 and 2023 are estimates.
Source: World Bank, OECD, IMF, and UN announcements

Ratio toGlobal GDP(%)
Country/region
2021

Real GDP level2019 = 100

2020

2022

2021

(Forecast)

World

100.0

97

103

107

China

18.6

102

111

115

Jun. 2022(Dec. 2021)

US

15.7

97

102

106

India

7.0

93

102

110

Japan

3.8

96

97

99

Apr. 2022(Jan. 2022)

Germany

3.3

95

98

100

Russia

3.1

97

102

93

Indonesia
UnitedKingdom
Mexico

2.4

98

102

107

2.3

91

97

101

1.8

92

96

98

South Korea

1.7

99

103

106

Taiwan

1.0

103

110

113

Thailand

0.9

94

95

98

May 2022(Jan. 2022)

Note: 1) “Ratio to global GDP” is based on PPP (purchasing power parity). 2) India
uses fiscal years. 3) Highlighted areas exceed 100 (the 2019 standard).
Source: “WEO, April 2022” (IMF)

Copyright © 2022 JETRO. All rights reserved.

37

２

Rising Consumer Prices and Monetary Tightening Measures◼

The Consumer Price Index (CPI) has risen since 2021. It involved a combination of factors, including the resumption of
economic activity, supply-side constraints such as shortages of labor and semiconductors, etc., as well as rising primarycommodity prices due to the situation in Ukraine.

◼

There has been a noticeable move towards raising policy interest rates to quell inflation, and there are concerns about impacts
on consumption and investment.
G20 Consumer Price Index change rates

Policy interest rates in G20 countries and regions（YoY Comparison ％）Russian invasion of
Ukraine commences

Declaration on the
COVID-19 pandemic
10
8
6
4
2
0

(Monthly)

△2
1

7

2019
Source: OECD.Stat

1

7

20

1

7

21

1

5

22

Country/region
Argentina
Australia
BrazilCanadaChina
Eurozone
India
Indonesia
Japan
South Korea
MexicoRussiaSaudi Arabia
Republic of South Africa
TurkeyUnited Kingdom
US

December 2020
38
0.1
2
0.25
3.85
0
4.0
3.75
- 0.1
0.5
4.25
4.25
1.0
3.5
17
0.1
0～0.25（％）

June 2022
52
0.85
13.25
1.5
3.7
0
4.4
3.5
- 0.1
1.75
7.75
9.5
2.25
4.75
14
1.25
1.5～1.75

Note: 1) Policy interest rate is applied at the end of each month. 2) Highlighted areas arecountries/regions with higher policy interest rates as of June 2022 compared to December
2020.
Source: "Central bank policy rate statistics" (BIS) and websites of national and regional
Copyright © 2022 JETRO. All rights reserved.
central banks.

38３Inflation and Minimum Wages in Major Countries (2022)◼

Inflation in 2022 will exceed 7% worldwide. It is particularly high in emerging European countries including Russia, Latin
America, Middle East and Central Asia, and Sub-Saharan Africa.

◼

Minimum wages continue to rise in various countries and regions. Malaysia and Germany have implemented increases of 25%
during the year.

Inflation forecasts for major countries and regions

Minimum wage increases in major countries (2022)(Unit: %, % points)

2021

Increase
Rate (%)

Wage revision

Revision month

Sichuan, China

182,100 yuan/month

April

Shenzhen, China

7.3

2,360 yuan/monthJanuary

5.1

9,160 won/hour

January25

1,500 ringgit/month

May

5.9

4.68 million dong/month

July

Region/Country2022
Difference
from previous
forecasts

Y-o-Y

Y-o-Y

World

4.7

7.4

Developed countries

3.1

5.7

＋3.6
＋3.4

US

4.7

7.7

+4.2

South Korea
Asia
Malaysia
Oceania
VietnamEurozone

2.6

5.3

+3.6

Philippines

6.1

570 pesos/day

June

Japan

-0.3

1.0

+0.4

Australia

5.2

21.38 AUD/hour

July

2.2

3.5

+0.7

Germany

25

12 euro/hour

China

0.9

2.1

+0.3

India

5.5

6.1

+1.2

5.6

11.07 euro/hour

ASEAN-5

2.0

3.5

+1.1

6.6

9.5 GBP/hour

April

9.5

27.1

+20.0

22

172.87 pesos/day

January

6.7

21.3

+16.5

10.2

1,212 real/monthJanuaryLatin America

9.8

11.2

+3.5

49.5

47,850 pesos/monthJune, August

Middle East/Central Asia

13.2

12.8

+4.3

Sub-Saharan Africa

11.0

12.2

+3.6

Emerging Asian
countries

Emerging European
countries
RussiaNote: Forecasts for April 2022. The difference from previous forecasts is the difference from October 2021.
Source: "WEO, October 2021" and "WEO, April 2022” (all from the IMF)

Europe France
United Kingdom
MexicoLatin
BrazilAmerica
Argentina

January, July,
OctoberJanuary, May,
AugustNote: Includes planned increases. France is provisional data from before official announcement.
Sichuan Province is Category 1. Vietnam is Region 1 (Hanoi, Ho Chi Minh City, etc.) Philippines isthe Manila metropolitan area and non-agricultural sector.
Source: Prepared based on government announcements and JETRO business briefs.
Copyright © 2022 JETRO. All rights reserved.

39

４

Trade among Major Countries and Regions (2021)◼

As in the previous year, China ranked first in exports and second in imports, while the US ranked second in exports and first inimports.

◼

China's exports to the US grew 27.5% year-on-year. This was its second consecutive year of growth and the largest in the past
decade.
World Trade Matrix, Exports (2021)(Units: Million USD, %)Imports

World
USMCA

Exports
World

EU

Japan

East Asia

RCEP

US

APEC

China

ASEAN

22,131,428 3,840,621

2,879,817

6,531,415

710,319

4,934,739

5,582,004

2,330,050

1,665,633

10,839,921

2,755,087 1,382,488

779,000

317,145

90,553401,829

486,476

183,322

101,924

1,981,844

1,758,586

583,941-

272,305

74,970347,880

416,065

151,065

94,0991,100,261

EU

6,628,429

561,018

472,376

4,039,765

73,759453,474

539,271

264,478

94,168

1,281,390

Japan

756,166

154,980

135,775

69,869-383,950

347,648

163,599

113,388602,026

East Asia

6,135,553 1,164,571

995,275

765,358

334,102

1,986,930

2,307,857

559,606

1,035,699

4,259,350

RCEP

6,862,334 1,268,414

1,083,995

818,071358,448

2,400,789

2,698,319

751,741

1,121,893

4,824,509

USMCA
US

China

3,368,217

696,665

577,636

519,182

165,902712,574

875,142-483,636

2,086,316

ASEAN

1,709,839

283,545257,857

152,700

113,586

778,654889,973

282,910376,128

1,314,119

11,311,643 2,813,558

2,001,409

1,407,290

508,417

3,627,108

4,055,133

1,565,118

1,339,407

7,933,777

APEC

Note: 1) Prepared on an export basis. 2) East Asia is China, South Korea, Taiwan, and ASEAN. 3) Export figures of Taiwan are not recorded in DOTS, so trade statistics of Taiwan wereused. 4) The global and national/regional export figures in this table differ from the data used in "I. World and Japan's economy and trade".
Source: "Direction of Trade Statistics (June 2022 edition) (IMF) and trade statistics of Taiwan.

Copyright © 2022 JETRO. All rights reserved.

40

５

Quarterly Trade Growth for Major Countries and Regions◼

The quarterly export value of the 33 major countries and regions have maintained positive year-on-year growth since thefourth quarter of 2020. Quarter 1 2022 was up 14.9% year-on-year.

◼

However, there are concerns about the impact of the Ukrainian conflict and China's management city-wide lockdowns on thevalue of exports in the second quarter and beyond.

Quarterly trade growth for major countries and regions (From quarter 1 2021 to 2022)(Unit: %)Exports

Imports

2021
1Q

2Q

2022
3Q

4Q

1Q

2021
1Q

2Q

2022
3Q

4Q

1Q

Total of 33 majorcountries/regions

17.6

42.8

21.8

19.5

14.9

14.1

42.9

23.9

23.5

21.2

China

48.6

30.4

23.9

22.7

15.6

27.6

43.7

26.5

24.4

10.9

US

2.8

50.7

23.4

22.7

18.4

11.7

37.6

19.3

18.7

22.6

Germany

12.3

47.6

11.9

7.7

3.1

12.0

43.3

16.6

16.9

16.0

ASEAN5

12.6

40.1

21.6

26.8

19.6

9.9

43.8

30.3

32.4

22.7

Japan

8.8

42.5

20.4

6.4

4.4

5.4

22.0

32.3

26.8

22.8

Note: 1) The 33 countries and regions are Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Hong Kong, India,
Indonesia, Ireland, Italy, Japan, Luxembourg, Malaysia, Netherlands, the Philippines, Portugal, Singapore, Republic of South Africa, South Korea, Spain, Sweden,
Switzerland, Taiwan, Thailand, United Kingdom, and United States. 2) Growth rate of imports/exports to the world. 3) ASEAN5 is the total of Indonesia, Malaysia, thePhilippines, Singapore, and Thailand.
Source: Trade statistics of respective countries and regions

Copyright © 2022 JETRO. All rights reserved.

41

６
◼

Global Services Exports

In 2021, the world trade in services (export basis) increased by 16.8% year-on-year. However, trade value was lower than in2019 before the pandemic. The growth in transport was attributed to a significant increase in international logistics costs.

World services exports per-item and major country (2019 to 2021)(Unit: 100 million USD, %)

2019

2020

Value

Value

2021
Value

Composition
ratio

Growth rate

Contribution

Total service-related exports (worldwide)

62,01750,86359,421

100.0

16.8

16.8

By sector

Goods-related services

2,307

1,963

2,193

3.7

11.7

0.5

Transport

10,398

8,565

11,502

19.4

34.3

5.8

Travel

14,742

5,526

5,937

10.0

7.4

0.8

Other services

34,571

34,81039,789

67.0

14.3

9.8

8,538

6,840

7,479

12.6

9.3

1.3

United Kingdom

4,135

3,830

4,149

7.0

8.3

0.6

China

2,821

2,781

3,927

6.6

41.2

2.3

Germany

3,506

3,134

3,808

6.4

21.5

1.3

Ireland

2,571

2,793

3,367

5.7

20.6

1.1

France

2,956

2,545

3,026

5.1

18.9

0.9

Netherlands

2,737

2,232

2,463

4.1

10.3

0.5

India

2,141

2,027

2,363

4.0

16.5

0.7

Singapore

2,152

2,095

2,295

3.9

9.5

0.4

Japan

2,049

1,580

1,639

2.8

3.7

0.1

By country US

Source: WTO data
Copyright © 2022 JETRO. All rights reserved.

42

７
◼

Global Trade in Digital-Related Goods (2021)

In terms of trade in digital-related materials, China ranked first in both imports and exports, with the US in second place. Thisranking has not changed since 2010. China's exports account for more than a quarter of the world's total, nearly four times
that of the second largest country, the US
Global and top 10 countries (exports and imports) for trade in digital-related goods (2021)(Unit: 100 million USD, %)Exports
Ran Country/regi
k
on

Value

Imports

Composition
ratio

Growthrate

Country/regionCompositio
Growth rate
n ratio

Value

World

40,340100.021.3 World

42,474

100.0

19.8

1

China

10,613

26.3

23.1 China

8,075

19.0

22.1

2

US

2,789

6.9

14.4 US

5,568

13.1

18.7

3

Taiwan2,293

5.7

25.9 Germany

1,908

4.5

14.8

4

South Korea

2,174

5.4

24.8 Netherlands

1,759

4.1

15.4

5

Germany

1,950

4.8

13.7 Singapore

1,678

4.0

24.6

6

Netherlands

1,927

4.8

16.6 Taiwan

1,633

3.8

30.2

7

Vietnam

1,733

4.3

49.6 South Korea

1,502

3.5

22.6

8

Japan

1,650

4.1

17.5 Japan

1,394

3.3

11.5

9

Malaysia

1,197

3.0

19.2 Vietnam

1,104

2.6

18.2

10 Mexico

1,141

2.8

12.9 Mexico

882

2.1

15.1

Note: 1) World, Vietnamese and Mexican amounts are estimates.
2) Hong Kong, which has a high volume of re-exports, was not included. Singapore's exports were valued by excluding re-exports.
Source: Trade statistics of respective countries and regions
Copyright © 2022 JETRO. All rights reserved.

43

８
◼

World Trade Matrix for Semiconductor Integrated Circuits

Asia accounts for nearly 90% of trade in semiconductor integrated circuits, including exports and imports. China's share is
extremely high when imports and exports via Hong Kong are included, and in recent years its imports and exports with South
Korea, Taiwan, and ASEAN have expanded in particular.

Trade in semiconductor integrated circuits (2021, percentage of world)(Unit: %)Imports

World

Asia

100.0

Hong
South
Japan
China
Taiwan ASEAN
Kong
Korea
87.8
2.2
35.4
21.1
5.0
7.2
16.0

86.9

81.4

Japan

3.3

3.1

China

15.3

14.7

0.2

Hong Kong (China)

20.7

20.0

0.1

17.8

Korea

10.7

10.3

0.1

4.6

2.4

Taiwan

14.2

13.7

1.0

4.4

4.1

1.1

22.6

19.5

0.7

4.9

6.5

0.8

Malaysia

5.8

5.1

0.2

1.0

1.1

Singapore

11.0

9.8

0.4

1.9

Vietnam

3.2

2.6

0.0

US

5.2

3.2

EU

6.0

Other areas

0.0

Exports
World
Asia

ASEAN

2.1

US

Other
areas

EU
2.6

6.1

1.2

32.5

20.2

4.5

6.5

14.6

1.9

2.4

0.6

0.8

0.3

0.3

0.9

0.8

0.1

0.1

0.0

6.9

2.1

2.1

3.1

0.1

0.3

0.1

0.3

0.7

0.8

0.2

0.2

0.1

1.0

2.2

0.1

0.1

0.1

3.0

0.2

0.3

0.1

1.8

4.7

1.1

1.4

0.3

0.2

0.5

2.0

0.3

0.3

0.1

3.9

0.4

1.1

2.0

0.4

0.6

0.1

1.7

0.6

0.0

0.1

0.1

0.3

0.2

0.1

0.1

1.2

0.4

0.3

0.4

0.8

0.4

0.3

2.1

0.0

1.1

0.1

0.1

0.2

0.5

0.4

2.9

0.2

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Note: 1) Prepared on an export basis. 2) ASEAN includes 10 countries. Hong Kong and Singapore amounts include re-exports. EU includes intra-regional trade.
3) Other regions include Oceania, Latin America, the Middle East, and Africa.
Source: Trade statistics of respective countries and regions
Copyright © 2022 JETRO. All rights reserved.

44

９
◼

Japan's Trade in Digital Goods (2021)

In Japan's digital-related trade (exports), semiconductor manufacturing equipment (18.5% of total exports) grew nearly 30%,
driving overall growth. Industrial robots, which grew by nearly 40%, accounted for a 35.8% share of total world exports.

Japan's trade in digital goods (2021) per-major product(Units: Million USD, %)Exports (2021)
Product
Computer
peripherals

Composition
Growth rate Contribution
ratio

Value

World trade
share

Imports (2021)
Composition
Growth rate Contribution
ratio

Value

World tradeshare

11,941

7.2

10.3

0.8

1.7

25,013

17.9

△ 2.3

△ 0.5

3.4

199

0.1

28.0

0.0

1.6

407

0.3

△ 6.3

△ 0.0

3.5

3,640

2.2

7.8

0.2

0.5

30,157

21.6

13.1

2.8

4.4

152

0.1

5.7

0.0

0.1

17,990

12.9

20.2

2.4

5.7

Semiconductors and electronic
components

44,437

26.9

16.7

4.5

3.8

30,333

21.8

29.9

5.6

2.3

Electron tubes/
Semiconductors, etc.

10,506

6.4

14.3

0.9

7.1

5,029

3.6

9.5

0.3

3.3

Office equipment
Communication equipment
Cellular phones

Integrated circuits

33,931

20.6

17.5

3.6

3.3

25,304

18.2

34.9

5.2

2.1

Other electrical/
electronic components

30,474

18.5

16.1

3.0

5.1

16,939

12.1

11.6

1.4

2.8

Imaging equipment

4,131

2.5

0.2
△ 0.0

6,825

4.9

0.4

548

0.4

9.7
△ 9.2

0.5
△ 0.0

4.7

0.0

6.1
△ 42.72.8

64Measuringequipment/instruments

27,765

16.8

17.1

2.9

8.8

12,902

9.3

9.9

0.9

4.1

Medical electronics

5,908

3.6

9.3

0.4

4.0

6,460

4.6

10.6

0.5

3.1

Semiconductor manufacturing
equipment

30,490

18.5

29.1

4.9

24.7

4,652

3.3

△ 3.4

△ 0.1

0.0

Industrial robots

2,373

1.4

37.7

0.5

35.8

73

0.1

△ 12.0△ 0.0

1.2

3D printers, etc.

423

0.3

10.7

0.0

5.5

76

0.1

△ 9.4

△ 0.0

1.2

3,136

1.9

11.0

0.2

2.6

5,017

3.6

12.8

0.5

4.5

165,027

100.0

17.5

17.5

4.1

139,416

100.0

11.5

11.5

3.3

Audio equipment

DronesDigital-related goods (Total)

3.8

Note: 1) See “Appendix 1” for product classifications. 2) Drones were defined by JETRO, as the exact HS code is not defined. May include products other than drones. 3) World
trade share is the share of each item in world trade (JETRO estimate).
Source: “Trade Statistics” (Ministry of Finance)

Copyright © 2022 JETRO. All rights reserved.

45

10

Global Cross-Border M&A (Top)Top 10 Global Cross-Border M&A Deals by Value (2021 and H1 2022)

Date (completed)2021

Acquiring company

Nationality

Target company

Industry

Investments, securities,
trustsJan.

Next Alt SARL

Luxembourg

Jul.

AstraZeneca PLC

United Kingdom Medical supplies(Million USD, %)Nationality

Industry

Value

Post-deal
Stake

Altice Europe NV

FranceBroadcasting

44,898100.0

Alexion Pharmaceuticals Inc

US

Medical supplies

39,602

100.0

Universal Music Group NV

USPublishing/printing

32,01860.0

Sept. Shareholders

FranceInvestments, securities,
trustsNov.

IrelandBusiness services

GE Capital Aviation Services Inc US

Credit31,244100.0

USInvestments, securities,
trustsGrab Holdings Inc

Software31,104100.0

AerCap Holdings NV

Dec.

Altimeter Growth Corp

Singapore

Dec.

Canadian Pacific Railway Ltd Canada

Transport, logistics

Kansas City Southern

US

Transport, logistics

30,846

100.0

May

Seven & i Holdings Co Ltd

Japan

RetailSpeedway LLC

US

Other retail21,000

100.0

Jan.

Peugeot SA

FranceTransport equipment

Fiat Chrysler Automobiles NV

United Kingdom

Transport equipment

20,572

100.0

Jan.

LVMH Moet Hennessy LV SE France

Other retailTiffany & Co

US

Other retail

16,443

100.0

Apr.

Siemens AG

Germany

Communicationequipment

Varian Medical Systems Inc

US

Precision equipment

16,365

100.0

Jan.

BHP Group Ltd

Australia

Mining

BHP Group PLC

United Kingdom

Mining86,204

100.0

Feb.

S&P Global Inc

USBusiness services

IHS Markit Ltd

United Kingdom

Business services

43,460

100.0

Jan.

Square Inc

US

SoftwareAfterpay Ltd

Australia

Other finance

27,670100.0

EPP NV

Netherlands

Investments, securities,
trusts26,262

100.0

Mar.

Redefine Properties Ltd

South Africa

Investments, securities,
trustsApr.

Investor Group

US

Investments, securities,
trustsMileway BVNetherlands

Real estate leasing,brokerage

23,741-Gores Guggenheim Inc

US

Investments, securities,
trustsPolestar Performance AB

SwedenTransport equipment

19,745

100.0

Feb.

Investor Group

US

Investments, securities,
trustsAramco Gas Pipelines

Saudi Arabia

Petroleum/natural gas(petroleum refining)

15,50049.0

Feb.

Investor Group

CanadaInvestments, securities,
trustsAusNet Services Ltd

Australia

Electricity, gas, water

13,314

100.0

Jun.

Aker BP ASA

NorwayPetroleum/natural gas(petroleum refining)

Lundin Energy AB-oil & gasbusines

SwedenPetroleum/natural gas(petroleum refining)

10,990

100.0

Jun.

DoorDash Inc

US

Software

Wolt Enterprises Oy

Finland

Logistics

8,110

100.0

2022
Jan. to Jun. June

Source: Workspace (Refinitiv) (data as of July 11, 2022)

Copyright © 2022 JETRO. All rights reserved.

46

11
◼

Number of Outward Greenfield Investments by Japan

In 2021, Japan performed 476 outward greenfield investments. This number fell below 500 for the first time since 2003, the firstyear available for comparison, and was the smallest number for two consecutive years. Investment slowdowns are evident inJapan’s mainstay auto parts and industrial equipment industries.

Number of outward greenfield investments by Japan (2008 to 2021, 8 major industries)
200
180(Cases)160

Automotive Components
Agricultural Equipment
Chemical Products
Vehicles

140
120
100
80
60
40
20
0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Note: Major industries are based on the cumulative number of investments from 2003 to 2021, with the top 8 industries selected.
Source: fDi Markets (downloaded on June 27, 2022)

Copyright © 2022 JETRO. All rights reserved.

47

12

SDG-Related Investments Using Japanese Technology◼

The spread of COVID-19 has re-awoken a global awareness of the importance of achieving economic development andsustainability at the same time, leading to increased interest in the Sustainable Development Goals (SDGs).

◼

As SDG initiatives spread worldwide, some Japanese companies are collaborating to realize the SDGs overseas as well.

Digital x SDGs: Examples of overseas collaboration by Japanese companies

Japanese Company/
Local
Organization
Company/Organization

Yokogawa Electric
Corporation

Date

Vergennes Waterworks
District, Los Angeles
2021
County, California, USA MarchContent

Applicable SDG- Commenced a demonstration experiment toimprove the efficiency of treating reclaimed water
for drinking by proposing digitalized practicaltechnologies for optimizing equipment operation
and water quality management.
- Semi-automation of advanced membrane filtration
technology using AI, realizing energy savings andoperational support.

- Trial installation of TUMIQUI Smart Kit, whichenables anyone to easily use electricity and
Senegal Ministry ofcommunication without requiring installation, at 10
SUCRECUBE Japon
2021
Healthunelectrified village clinics in Senegal.
Inc.
February
TUMIQUI JAPON SASU
- Providing electricity and communications in thesevillages has greatly improved the medical
environment.
Indian Institute ofTechnology Hyderabad,
ListenField
Jayashankar Telangana(Partnership with2021
State Agricultural
University ofJanuary
University, International
Tokyo)
Institute of Information
Technology Hyderabad
Source: Each company’s website- Developed an agricultural support platform tostreamline data analysis techniques such as genome
selection and genome-related research or
accelerating plant reproductive processes.
- Now performing research regarding sustainablecrop production amid climate change.
Copyright © 2022 JETRO. All rights reserved.

48

13
◼

Outward Cross-Border M&As by Japanese Companies

In 2021, outward M&As by Japanese companies increased 40% year-on-year to $85.9 billion. The number of deals remained
unchanged. Hitachi and Panasonic are accelerating digital transformation through acquisitions of US software companies.

Top 5 Outward Cross-Border M&As by Japanese Companies(2020 to first half of 2022)(Million USD, %)Date(completed)

2020

2021

2022
Jan. toJun.

Target company

Jun. Asahi Group Holdings, Ltd.

Carlton & United Breweries

Australia

Beverages

11,320100.0Jul. Hitachi, Ltd.

ABB Power Transmission andDistribution Division

Switzerland

Electronic/electricalequipment

9,400

80.1

Eneco

Netherlands

Electric power

4,519

100.0

Feb. Tokio Marine Holdings, Inc.

Privilege Underwriters, Inc.

US

Insurance

3,100

100.0

Jan. Astellas Pharma Inc.

Audentes Therapeutics, Inc.

US

Drugs

2,654

100.0

May Seven & i Holdings Co., Ltd.

Speedway LLC

USRetail Trade(convenience store)

21,000100.0Jan. Nippon Paint Holdings Co., Ltd. Nipsea International Limited

Singapore

Chemical

9,922

100.0

Jul. Hitachi, Ltd.

GlobalLogic, Inc.

US

Software

9,600

100.0

Sept. Panasonic Corporation

Blue Yonder Group, Inc.

US

Software

7,100

100.0

Renesas Electronics
Aug.
Corporation

Dialog Semiconductor Plc

United Kingdom

Semiconductor

5,675

100.0

Apr. KUBOTA Corporation

Escorts Limited

India

General machinery

1,010

36.9

Jun. Sony Group Corporation

Epic Games, Inc.

US

Software1,000-

Apr. MITSUI & CO., LTD.

Mainstream Renewable Power
LimitedIreland

Electricity (renewableenergy)633

27.5

Jan. Iida Group Holdings Co., Ltd.

Russia Forest Products Limited

RussiaLumber and related
products

525

75.0

Feb. Nippon Steel Corporation

G Steel, GJ Steel

ThailandIron and steel

419

100.0

Mar.

Mitsubishi Corporation, Chubu
Electric Power Co.,Inc.

Source: Workspace (Refinitiv) (data as of July 04, 2022)

Nationality

Value

Post-deal
stake

Acquiring company

Industry

Copyright © 2022 JETRO. All rights reserved.

49

14

Japan’s Inward FDI Flows and Stock◼

Japan’s inward FDI in 2021 decreased by 55.6% to $27.3 billion from the previous year. Although a significant decrease fromthe previous year, equity capital was at a record high level, approximately five times that of the previous year, helping support
FDI in Japan.

◼

As of the end of March 2022, the stock of FDI in Japan exceeded 42 trillion yen, or 7.8% of GDP.

FDI stock in Japan

Japan’s inward FDI by type
70
60

（％）

(Trillion yean)(Billion USD)
45

Equity capital

Reinvestment of earnings

40

50

Debt insturuments

3540Japan’s inward FDI

Debt insturuments

7.8

9.0
8.0

Reinvestment of earnings

30

7.0

Equity capital
FDI Stock／nominal GDP (right

6.0

30

25

20

20

4.0

10

15

3.0

0

10

2.0

-10

5

1.0

-20

0

0.0

（Year）
Note: JETRO converted the figures disclosed in JPY into USD
Source: “Balance of Payments Statistics” (Ministry of Finance, Bank of Japan)

axis)

Note: Nominal, seasonally adjusted series are used for 1Q2022 GDP.
Source: “International Investment Position of Japan" (Ministry of Finance, Bank
CopyrightOffice)© 2022 JETRO. All rights reserved.
of Japan), "National Accounts of Japan" (Japan Cabinet

5.0

50

15
◼

Inward Cross-Border M&As to Japanese Companies

In 2021, inward M&As to Japanese companies increased 34.1% year-on-year to $13.9 billion. They totalled 167 deals, the highest
in the past 10 years. The largest deal was by PayPal in the US to acquire payment services startup Paidy for $2.7 billion.

Top 5 Inward Cross-Border M&As to Japanese Companies (2020 to first half of 2022)(Million USD, %)Date(completed)

2020

2021

Target company

Industry

Nationality-

Industry
Investor group

Value

Post-deal
Stake

Jun. UNIZO Holdings Company, Limited

Real estate

Lone Star (US) and others

4,375

100.0

Apr. Showa Aircraft
Aspen’s Japanese operations (SouthJan.
Africa)Transport equipment

Bain Capital, LP

USInvestment company

848

100.0

Drugs

Sandoz (under Novartis)

Germany

Drugs

441

100.0

-

Investment company

369

100.0

349

98.5

Aug.

Logistics facilities owned by Redwood
Real estate
Group

ESR., AXA Investment Managers

Mar.

Two complexes owned by Mapletree
Real estate
Investments

Mapletree

Singapore

Investment company

Oct. Paidy Inc.

Other finance

PayPal Holdings, Inc.

US

Other finance

2,731

100.0

Takeda Consumer Healthcare
Mar.
Company Limited

Drugs

Blackstone Group Inc.

US

Investment company

2,288

100.0

Chemicals (cosmetics)

CVC Capital Partners

Investment company

1,524

100.0

Nov. Trygroup Inc.

Educational services

CVC Capital Partners

Investment company

980

100.0

Mar. Rakuten Group, Inc.

Business services

Tencent Holdings Ltd.

China

Business services

606

4.1

Real estate
management

KKR

US

Investment company

1,937

100.0

Mar. NIPPO

Construction

Goldman Sachs Group, Inc.

US

Investment company

1,865

100.0

Feb. SNK Corporation

Software (Games)

Electronic Gaming Development

Saudi Arabia Investment company

415

96.2

M&G

UnitedKingdom

Investment company

415

100.0

Lone Star Funds

US

Investment company

411

100.0

Jul.

Apr.

2022
Jan. toJun.

Acquired company

Mar.

Shiseido Company, Limited(Personal Care business)

Mitsubishi Corporation/
UBS Realty Inc.

Real estate held by Blackstone Group Real estateInc.
management

Mar. Senqcia Corporation

General machinery

Source: Workspace (Refinitiv) (data as of July 04, 2022)

UnitedKingdom
UnitedKingdom

Copyright © 2022 JETRO. All rights reserved.

51

16
◼

Russia-Related Business (Primary Questionnaires, etc.)

According to Yale University, the number of companies withdrawing from business in Russia as a result of the invasion of
Ukraine had exceeded 300 by the end of June 2022. More than 40% of Japanese companies had suspended business in Russia
as of the end of April (or had plans to do so).

Japanese companies' business in Russia: Prospects for the next 1-2 years

Business in Russia by companies from major countries(as of June 30, 2022)(Company)Company
Netherlan
dsClassification
Withdraw
Suspension
Scaling backBuying time
Digging in

305
497
168
160
243

10
13
9
6
4

UK

(%, single answer)

US
43
40
3
7
1

(Only those companies that responded that they have Russia-related business)

109
161
66
40
29

China Japan
0
5
1
4
41

3
32
5
7
13

Source: "Yale CELI List of Companies," Jeffrey Sonnenfeld and Sonnenfeld
and Yale Research Team)

Percentage of Russia's inward FDI balance by country/region (2020)
Rank
1
2
3
4
5
Reference

Investment origin
CyprusBermudaNetherlands
United Kingdom
Bahama
US
Japan
China

Source: "Coordinated Direct Investment Survey" (IMF)

Composition ratio (%)
32.3
10.7
8.6
7.2
5.3
0.9
0.5
0.5

n=1,142

Unsure34.2

Already suspended, no plans toresume19.6

Already suspended but plan toresume13.9

Scaling back

12.8

Remain the same

11.5

Suspension (planned)

7.4

Expansion

0.6

0.0

40.9% of allcompanies havesuspended
operations (includes
plans to stop)

10.0

20.0

30.0

40.0

Copyright © 2022 JETRO. All rights reserved.

52

Source: Participants of JETRO's "Ukraine Webinar" on April
25. Questionnaire results

17

Restrictive Import Measures Against Russia (energy, etc.)◼

As of the end of June 2022, 43 countries had introduced import restriction measures against Russia. In addition, more than 40
countries had introduced tariff reductions and other import liberalization measures to ensure resource and food supply
stability. 187 countries have not yet invoked import-related measures.

◼

Even among the countries invoking measures, measures to restrict energy imports are unaligned due to per-country
differences regarding energy.
Policies on energy-related imports related to Russia's invasion of Ukraine (as of June 30, 2022)• Crude oil imports are prohibited with some
exceptions. Decided on June 3, 2022 →Effective within 6 to 8 months• Coal imports banned from August 2022.
• Natural gas import reduction policy to bephased in (not yet implemented)• Imports of crude oil, petroleum, gas, andcoal are all banned from March 8, 2022.
• MFN treatment for imports from Russia
withdrawn (effective April 8)

Imports from major countries/regions to Russia (Jan. to May 2022)• Policy of phased reduction andsuspension of coal and crude oiland petroleum imports (announced
on April 8, 2022 and May 8, 2022)• MFN treatment for imports from
Russia withdrawn (effective April
21)(Million USD, %)Value

Growth rate

Composition ratio*

EU

101,089

70.6

38.2

China
UnitedKingdomUS40,816

48.6

14.0

6,693

- 19.2

4.5

10,493- 8.1

3.6

South Korea

8,090

38.0

3.4

Japan

7,728

62.0

2.2

India

8,325

175.2

1.9

Note: Share of each country/region in Russia's total exports (2021)
Source: Trade statistics of respective countries and regions

Countries/regions with import
restrictions/ bans in effectSource: ITC (accessed June 30, 2022)
Copyright © 2022 JETRO. All rights reserved.

53

18

Example of Introducing Policies Incorporating Economic Security(Trade Policies)◼

Externally, Japan, the US, and Europe are working together to prevent the outflow of key technologies.

◼

The US is ahead for export controls. Meanwhile, China is preparing countermeasures against extra-terrestrial application of export
controls, including those from the US. There is a concern that companies will find themselves stuck between the US and China.
Examples of economic security-related policies in the US, Europe, Japan, and China

Country/region

Trade policy
◆

◆
US

◆
◆
◆

Europe

◆
◆
◆

China

◆

◆
Japan

◆

Passed the Export Control Reform Act (ECRA) in 2018. There is no comprehensive listing of emerging and basic technologies
but these are being added gradually The executive branch also expanded the Entity List (EL) to include China and othercountries. In principle, US technology exports are treated as impermissible.
Legislation (FIRRMA) to strengthen the screening of investments in the US was enacted in 2018. Non-controlling investments incritical technology and infrastructure are also subject to screening.
Additional tariffs of up to 25% have been imposed based on Chinese IP theft. Expanded import restrictions on products that rely
on forced labor
Domestic procurement ratios changed in government procurement regulations (60% in 2022 → 65% in 2024 → 75% in 2029).
More local preferential treatment for critical products
A draft regulation on anti-intimidation measures was proposed as a countermeasure against extra-terrestrial countries in
December 2021. A wide range of measures can be taken at the discretion of the Commission against economic intimidation (e.g.,Chinese customs embargoes triggered by the Taiwan issue).
Inward investment will be monitored as a potential threat. It is encouraging all members to adopt screening systems.
Identified 137 items that are highly import-dependent. 34 of them were analyzed to be vulnerable due to low substitutability
and include energy, pharmaceuticals, etc.

Promulgated the "Unreliable Entities List" regulation in September 2020. There is concern that trade and investment restrictions
may be imposed if placed on the list.
In January 2021, the "Regulation to Prevent Extra-Territorial Application of Foreign Measures" was promulgated to enable claims
for damages laws of other countries being applied extra-territorially. Risk of companies becoming trapped.
The Foreign Exchange Law was revised in May 2022. Export controls were enhanced, including restrictions on foreign residents
under the influence of foreign governments
It is collaborating with allies on critical and emerging technologies.

Source: Materials published by each company and JETRO business briefs
Copyright © 2022 JETRO. All rights reserved.

54

19

Example of Introducing Policies Incorporating Economic Security(Industry Policies)◼

Major countries have begun to strengthen their industrial capacity in critical technologies and infrastructure. Amongst this,
there are noticeably large investments in semiconductors.

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Efforts are underway to identify necessary materials and required support to strengthen the supply chain.

Examples of economic security-related policies in the US, Europe, Japan, and China
Country/region

Industrial policy

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US

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Europe

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China

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The Infrastructure Investment and Jobs Act was passed in November 2021. Plans are underway to use 550 billion dollars forlogistics and power.
A major investment bill (budget to support basic research and semiconductor manufacturing) is under heavy deliberation.
Budget adjustments, including 5G and manufacturing relocation subsidies, are underway.
Measures were also proposed to strengthen the supply chain in February 2022. They includes support for key mineral
resource technologies (processing, refining, etc.), revitalizing circuit boards, etc. (including intellectual property measures),and for the manufacturing industry, export support by the US Export-Import Bank and financial support for small-scale
players
In February 2022, the European Commission established a roadmap for increasing strategic independence for key technologies
and value chains. This includes public-private cooperation to eliminate external dependence on batteries, scarce resources,hydrogen, etc., and flexible infrastructure subsidy approvals.
The European Chips Act was proposed by the European Commission in February 2022. It aims for a global market share of over
20% for next-generation technologies.
At least 43 billion euros will be invested through public support and private investment“Made in China 2025" targets 70% domestic production in key areas, including AI, quantum information, robotics, etc., with
R&D investment to increase by 7%/year.
Under the "China Integrated Circuit Industry Investment Fund," China will invest more than 5 trillion yen in semiconductors.

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Japan

The bill to promote economic security was passed in May 2022, providing:(1) Support for certification of companies to ensure supplies of necessary materials (2) Advanced screening of critical equipment in
14 key infrastructure fields (3) Financial support for technological developments and establishment of think tanks (4) A patent
nondisclosure system (JPO→Cabinet Office)Source: Materials published by each company and JETRO business briefs

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JETRO Global Trade and Investment Report 2022

+81-3-3582-5177
International Economy Division,
Overseas Research Department
Japan External Trade Organization (JETRO)

ori@jetro.go.jp
1-12-32 Akasaka, Minato-ku, Tokyo
107-6006 Japan◼

Note：The original Report is available only in Japanese. Figures may not sum up to the total because some are less than one unit.

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Disclaimer of liability: Responsibility for any decisions made based on or in relation to the information provided in this overview shall rest sorely on thereader. Although JETRO strives to provide accurate information, JETRO will not be responsible for any loss or damages incurred by readers through the useof such information in any manner.

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