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P RO M ISINGC OU NT RIESJAPAN ES E C O M PA N IESG O G LO BA L

S P E C I A L F E AT U R EJAPANESE COMPANIES GO GLOBAL

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JAPANESE COMPANIES GO GLOBALThe Japan Bank for International Cooperation (JBIC)
conducts and releases a Survey Reporton Overseas Business Operations
by Japanese Manufacturing Companies every year.
The results of the survey reveal the latest trends
among Japanese companies
that make foreign direct investments,
including how they respond to challenges such as
supply chain resilience and prices hikes,
and the countries they view as promisingfor overseas business development.
In this issue’s special feature,staff in charge of the survey and JBIC representatives
from offices in India and Vietnam,
which were selected as promising countries,
explain the reality of Japanese companies’
overseas business operations.

President
FUJIX CO., LTD.

NAKAGOME
Masaharu
After graduating from Seikei
University and working at
an automotive parts wholesaler, he joined Fuji Horn
Manufacturing (the predecessor of FUJIX), which was
founded by his father, andbecame president in 1985.
He makes a point of visiting
his overseas subsidiaries
regularly to maintain close
communication with thelocal staff.

A manufacturer
wiretrends
harnesses
crucialbusinessfor electronic
products
Data
reveals theof
latestin overseas
development
diversifies
byJapaneseproduction
companiesbases for supply chain resilience

FUJIX has been able to diversify the items it produces in-house
response
to heightening
geopoliticalrisks, the research
trend to review
supply chains is acceleratingby Inboldlytackling
customer requests
and constantand development.
andwill
impactallindustries.
In addition to the U.S. and China, it has expanded operations to Vietnam. By building a labor-intensive,its future,China
a strong
presence,
Despiterising concerns
over
mass
production
system, thecompanyseeks
to maintains
establish stableglobalsupply and expand production.
with more than one-third of companies saying it is a difficult-to-replace supplier.
While nearly 50 percent of companies are engaging in independent efforts to address price hikes, such as automating
the manufacturing process, about 70 percent of companies are passing on the higher costs to customers.

“We analyze trends not as dots, but lines
and, at times, planes,” says ITAGAKI
Shinichi of the Strategic Research
Department, Corporate Planning Group,
who leads the team for the Survey
Report on Overseas Business Operations
by Japanese Manufacturing Companies
conducted by the Japan Bank forInternational Cooperation (JBIC).
The survey, which started in 1989,
is based on quantifying the results ofquestionnaires sent to companies, butthat alone will not provide a full picture. Of the more than 500 companies
that responded to the questionnaire,the team visited some 30 of them toconduct detailed interviews. If the companies contacted by e-mail or phone
are included, it comes to an even larger

number. Setting aside time to do suchinterviews gives additional depth to thesurvey analysis. As this is a tremendous
undertaking requiring some six months
from the formulation of the survey items
to the compilation of the final report,
requests for explanation come in frommany companies after the release of thereport, keeping ITAGAKI busy travelingwithin and outside Japan.
This fiscal year, in addition to theregular questions, including “overseas
business performance,” “business prospects for medium-term,” and “promisingcountries/regions,” additional topics wereadded such as the “shape of supply chains
under fragmented global economy” andthe “impact of global price hikes on business development.” ITAGAKI explainssome of the notable points here.

Survey overview: This is a survey by questionnaire ofcompanies regarding foreign direct investment, which was
conducted and collected by JBIC from Julythrough September 2023. The number ofsurveyed companies was 987, with valid
responses obtained from 534, for a valid
response rate of 54.1 percent. The full reportis available online.

What have Japanese companies
been doing to make their supply
chains more resilient against
geopolitical risks?

2
10

JBIC TODAY

MAY 2024

A Recognizing that they need toTrends in votes for promising countries (1992-2023)

Overseas expansion with“customer first” in mind andbuilding a model factory conforming80
to local environmental regulations

Promising Countries

such as rubber production and heat dissipation for industrial equipment, paving
respond,more
half ofofthe
theway forthe thanproduction
not comonly
panieshave butalready
implemented
wire
harnesses,
items suchas rubbermeasures.andIn fact,even before
theparts.
outproducts
aluminum
die-cast
breakcompanyof the COVID-19
pandemic2020,
The
now deals
in asin many
againstthe backdrop
issuessuch asas60,000products. ofTheircustomers
the U.S.-China
economicsecusay:“In terms conflict,of the numberof items
rity aroundsupply chains
was already
FUJIX
manufactures,
its organizational
being discussed.
Though
hadsmallbeen
structureis on thescale thisof five
recognizedfor overcompanies
five years grouped
now astomedium-sized
a common challenge facing companies
together.”
expandingoverseas,“We makeoperations
it a point to
respond its
toimportancehas needs
been underlined
bynew
the
our
customers’
and propose
Russianinvasionof thinking
Ukraine,about
along what
with
ideas
while
alwaysthe ongoing
U.S.-China
only
our company
canconflict.
deliver,” says
However, forming
dual istrack
supplyNAKAGOME,
whose mottoto aggressively
challenges
producechains takeis nooneasy
matter forandcompanies.
results
live upto customer
expectaMakingthatchanges
to contracts
is notsomething Manufacturing
tions.
that can be done
a newimmediately,
product is notasnegotiationsthat
somethingusually
can takebe donesix months
overnight,
to ayear.theybut
Nevertheless,will neverfollowingtell thethe
customer
impactsof the Ukraine
something
is notinvasion,
possible.
40 Everything
percent ofcompanies,
will
be doneparticularly
to meet customer
large enterprises,
requests.
reviewed
The
company
their procurement
has built its sources
impressiveforraw materials,
track
record indicating
through sucha shiftongoing
beyondaddressing
researchandshort-term
development
impacts.
efforts.
Through history, there have always

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with close support such as employee
benefits. Today, local employees who
have been with the company since its
establishment have become senior management, and smooth communication
is now possible through their masteryof Japanese. Consistent technical guidance provided within the company has
brought their production technology to alevel surpassing that of Japan.
In order to comply with China’s
environmental regulations, in 2017 a
new production site was established in
Nantong, also in Jiangsu Province. Whileadvancing factory automation with thesupport of a loan from JBIC, the facility
also received “model green factory”
certification.

has a friendly stance toward Japan. The
Vietnam factory is slated to begin operations in October 2024. Similarly, a JBIC
loan will be used to increase production
capacity. Over the next three years, thisfactory will aim to achieve the same levelof quality and supply as its counterparts
in China.
“In Japan, we will explore further
customer needs and specialize in highmix, low volume production. In China
and Vietnam, we will build a labor-intensive, mass production system for stablesupply to our Japanese customers doing
business on a global scale. This balanceis important,” stresses NAKAGOME. To
this end, FUJIX is now moving full steam
ahead to launch its production base in
Vietnam.

FUJIX’s “customer-first” policy of
responding promptly and precisely toclient needs is also at the foundation of60
its overseas expansion. In order to keep
up with the latest trends in automotive
parts, and because a client had set up
a production base in Chicago, Illinois,40
the company established its U.S. subsidiary there in 2002. Around that sametime, FUJIX’s production base in Japanwas becoming unable to keep up with20
the growing volume of orders. “For acompany such as ours, which is labor-intensive, we cannot expect to grow if we
The bitter experience of the pandemic
continue to manufacture only in Japan.”
prompted diversificationThis
0 assessment led to the establishmentof 03
geopolitical
92
93
94
95
96
97
98
99
00
01
02
04 05 06risk
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 (year)
in that same year of a wholly owned proFUJIX CO., LTD.
duction base in Jiangsu Province, China,“We faced a three-month lockdown in
1951
Company establishednear Shanghai.
Shanghai due to the COVID-19 pandemic.
Established FUJIX USA, INC. in
Quality cannot be compromised
The situation was such that we couldn’t
Chicago, Illinois, the U.S.
even while pursuing mass production
even go to our materials manufacturer
2002
Respondent companies listed up to five countries they considered promising for business development
Established KUNSHAN FUJIX
andreduction.
“Inthree
China,
lan- were ranked
just 100
meterscompanies.
away, making us unable
in the cost
mediumterm (the next
years),theand theseas promising
ELECTRONIC CO., LTD. in Kunshan,guage barrier presented communication
to satisfy our customers’ demands.”
Jiangsu, China
challenges at first, so we transferredThatbitterexperiencemade
Established SHENYAN FUJIX
been know-how
countries andafflicted
bythat
a company
is inaffected bya verylargeaware
numberare risks
concerned
ourby regions
drawingdetailedhimkeenlyof theof a
2011the more
ELECTRONIC
CO., LTD.
Liaoning,
political instability,
such as therecounts
Middleexternal Shenyang,factors, suchas China
the chemical
about China’s
trajectory,
likely having
depictionsof the products,”
businessmodelthat depends
on aEast. Geopoliticalonce
limited,manufacturers
I justFUHAI
mentioned,
the morea negative impact
onChinatheir futurebusiNAKAGOMEof the risks,variousapproaches
production
base into provide
Established
PRECISION
are now
ness activities.
However,China
has
ready they
are to passon price(Nantong)
hikes.
taken
at impactingthat time. global
While supply
keenly chains,
aware
products
to customers
aroundthestillworld.
ELECTRONIC
INDUSTRY
2017
CO., LTD. in Nantong, Jiangsu,
andthecanno longer
ignored by any
a strong
presence
in geopoliticalthe market, risks
withofchallenges
of becommunication,heInorder todiversify
Amid China
this drastically shifting market
industry. The
possibilityof theIsraelmorestrengthen
than one-thirdof the chains,companies
persistedin hisefforts while
endeavorand
their supply
theenvironment,
what
is happening
Established
FUJIX
ELECTRONIC
Gazatoconflict,whichthebrokelast year,
citing it astook
a difficult-to-replace
suppliering
understandlocalout
culture.
Hecompany
action to establish
a prowith
JBIC'ssupportfor companies
2023
VIETNAMCOMPANY
LIMITED in
spreadingto neighboring
countriesof raw materials,
parts, andmanufacturduction
base in Vietnam,
a country
where
also
built relationshipsof trust with
local
Vietnamexpandingoverseas?
ing equipment.
demands
vigilance.
for upcomingthepopulation is set to grow and which
stafffrom rural
areas As
by providingthemEnhancing supply chain resilience
impacts, 2024 is an “election year,”
What about the impacts ofis an area we have been putting parwith national elections taking place inglobal price hikes and the prolonged
ticular focus on since 2021. Our efforts
more than 40 countries. These include
depreciation of the Japanese Yen?
go beyond supporting Japanese comnations ranking high in the survey as
panies to also actively assisting local
Almost all of the companies—some“promising countries for business development in the medium-term (the next
enterprises. Including indirect support
90 percent of them—responded thatthree years)”: India (1st), the U.S. (4th),
through local financial institutions, suchtheir operations were impacted by theIndonesia (5th), and Mexico (7th). In thisas two-step loans, JBIC comprehenglobal rise in prices of materials, composense, geopolitical risks are increasing insively supports the manufacturing andnents, energy, and other commodities.
many countries and regions.
marketing operations of businesses that
Geographical disparities were minimal,
make up supply chains.
with the impact of price hikes felt in all
China, which used to regularly top
regions. On the other hand, the impact of
the list of promising countries,
foreign exchange rates varied by indushas dropped to No. 3 this time.
try. For example, a weak yen is a tailwind
Is its presence declining for
Wire harnesses (left) are FUJIX’s key products, offering for
con-exports such as automobiles, but is acompanies
expandingoverseas?
figurations
optimized
for automobiles,
industrial equipment,
major headwind for chemical manufacand various other fields. The company is expanding its proDirector
In addition
to atheongoing
U.S.-China
dealing with soaring raw material
ductionto include
varietyof products
such as rubber turers
andDivision 1, Strategic
conflict,theslowdownof theimport costs.
insulation
paper(right), molded
resineconomy
products (top middle),
Research Department
andaluminumparts(bottom
middle).
Corporate Planning
itself, and the tightening of domestic
Nearly 50 percent of the companies
Group, JBIC
regulations, exemplified by China’s
are working to reduce energy use at their
ITAGAKIanti-espionage law that was amended
own facilities, and are taking measures
Shinichiand enforced in July 2023, are casting asuch as reducing labor costs by automaJoinedmillion
JBIC in(JBIC
2002.portion),
After assignments
theIn December
a loanwas signedandwith FUJIX
for a loan of USD5.7
co-financedincluding
withlarge shadow over the situation.
In this 2023,tion
ofagreement
manufacturing
introducing
Representative
Office incomponents
New York, the
MUFG Bank. By supporting the establishment of a manufacturing and sales
base for electricalbyCountry
FUJIX Credit
IoT
and
DX
to
streamline
operations.
survey,morethan half of companies
with
Loan
Summary
Department,
the Strategic
Research
Department,
ELECTRONIC VIETNAM COMPANY LIMITED, a FUJIX subsidiary in Vietnam, thisloan contributes
towardmaintaining
and andthe secondment to Cabinet Secretariat, he assumed his
However,
there are limits
to suchinitiaoperation bases in China responded
that the international
improvingcompetitivenessof Japaneseindustry.
current post in 2023. Graduate of the Faculty oftives, and about 70 percent of companies
they are concerned. While only about 1
Economics, Kyoto University (BA). Graduate of
Sanford School of Public Policy, Duke University (MA).
have passed on price increases. It seems
percent reported feeling direct impacts,

A

A

A

MAY 2024

JBIC TODAY

311

S P E C I A L F E AT U R EJAPANESE COMPANIES GO GLOBALJBIC local representatives report from on the ground in“No.1 INDIA” and “No.2 VIETNAM ”

India is garnering intense interest from Japanese companies.
Given how rapidly the country is changing, perceptions must constantly be updated.
Many Japanese companies have already established operations in Vietnam. As companies fromother countries rush to enter this market, it is time to consider how Japanese companies can strengthen their presence.
Expectations are growing in both countries for Japanese investment
in cutting-edge fields and transfer of environmental technology.

In the FY2023 ranking of promisingcountries and regions for investment,
India came in first and Vietnam ranked
second. IMAHORI Shinichiro of JBIC
Representative Office in New Delhi, and
IKENAGA Azusa of JBIC Representative
Office in Hanoi, along with NAKAJIMA
Ryuji of the Strategic Research
Department, Corporate Planning Group,
which conducted the survey, discussthese two nations with so much promise.
NAKAJIMA: India came in first in the
FY2023 rankings for the second year ina row. It received an even higher shareof votes than last year, with about halfof the responding companies citing it aspromising. Moreover, 45.8 percent of thecompanies that cited India as a promising country said they have actual plansfor operations in the country, illustrating
just how high expectations are.
IMAHORI: Since I assumed my post in
India one and a half years ago, I havebeen witnessing firsthand the world’s
growing interest in the country. Factors
such as its young population, with anaverage age of 28, its competitive levelof wages, talented IT human resources,
government support for manufacturing
through Production Linked Incentive
Scheme, and the trend of increasing consumption by its growing middle-income
class make it an attractive destination
for investment. However, although thenumber is increasing, there are still
only about 1,500 Japanese companies
operating in the Indian market, andfewer than 10,000 Japanese residents
in the whole country. So, this is just the
beginning.

1

INDIA

Gurgaon, a new business city near Delhi, has many
Japanese and other foreign companies.

NAKAJIMA: Because Vietnam does nothave any major issues, Japanese companies feel that the country is stable,
and this led to its rise from the previous
year’s fourth place to second. Do you
feel such momentum in Vietnam?
IKENAGA: This is my fourth year in
Vietnam. Sometimes Vietnam is praisedfor its rapid economic growth, but my
impression is that with the population
surpassing 100 million, this country is
experiencing stable and steady economic growth, and that stability is themain appeal of Vietnam. Other positive
factors such as the vibrant local market,
good public safety, and balanced diplomatic stances appeal to the companies
looking for an overseas base, andexplain Vietnam’s high position in thesurvey. Also, I feel that Vietnam stands
out within ASEAN as a country withmany cultural similarities to Japan.
Indeed, a diverse range of companies

have already established operations in
Vietnam, with the Japanese Chamberof Commerce and Industry in Vietnam
now having more than 2,000 member
companies, and the number of Japanese
residents approaching 20,000.
NAKAJIMA: Have your impressionschanged since you started living in India
and Vietnam?
IMAHORI: When Japanese people hear“India,” the first image coming to mind
is still probably the Taj Mahal or theGanges River. However, when one actually visits urban areas, a different vista
spreads out. A notable example is thecity of Gurgaon near Delhi. It is a beaconof modernity with a concentration ofhigh-rise buildings and startups. In theevenings you can see people enjoying
wine and craft beer on the terraces offashionable restaurants in the business
district. Large-scale developments ofoffice and commercial facilities are also
underway in Hyderabad and Bangalore
in South India. I believe the fastest way
to update your perception to the “newIndia” is to come and experience it firsthand.
IKENAGA: A lot of people from overseas
tell me that their image of Vietnamese
people is “down-to-earth,” but from my
own experience here, what I strongly
sense from the people I come in contact
with are strong ambitions and positive
aspirations for a better life. Most women
work to increase the household income,and double-incomed families invest
heavily in education, while also enjoying
luxurious leisure and shopping fromtime to time. Through them, I can directlysense the expansion of the middle class

A vista unlike that formerly imagined spreads out
before you in today’s India.
Come visit this changing country to see for yourself.
Representative
JBIC Representative Office in New DelhiIMAHORI Shinichiro
Joined JBIC in 2020 after working for TEPCO and JERA. Assumed his current position in 2022 after engaging in loans for resource projects in the Energy Solutions Finance Department. On weekends, he studies
at the Indian School of Business MBA program. Graduated from Keio University, Faculty of Economics.

in Vietnam. In my friends’ houses I can
see the latest home appliances, imported
baby goods, and many other things that
I thought were still relatively expensive
keeping in mind the average wage ofVietnam. But rather than being lavish,
I feel that they are very discerning consumers. They will take the time to thinkover their purchases, taking into accountthe cost-performance and brand power,
to see if it is worth paying the high price.
NAKAJIMA: What do you think are theexpectations of Japanese companies
from India and Vietnam?
IMAHORI: I believe there are high expectations for technology. This especiallyapplies to semiconductors, battery
storage, electronic devices, and otherindustrial sectors where India is aiming
for self-reliance to enhance economic
security. The Indian government is eager
to attract foreign investment, and I cansense their strong expectations—theywant highly capable Japanese companies in these fields to rapidly set up
operations and establish manufacturingbases in India. In the energy sector,
expectations are around Japanesecompanies in hydrogen and biofuel production, and waste-to-energy. Regardinghydrogen, with low electricity tariffs anddevelopment costs, India has the rightenvironment to produce highly competitive green hydrogen. We are closely
monitoring this trend, since there arealso projects aiming to export this toJapan.
IKENAGA: Vietnam has maintained ahigh level of GDP growth since 1990,
averaging around five percent annually,
with foreign investment as the driving
force. In order to maintain economic
growth, continuing efforts to attract overseas investment and building up highly
skilled domestic human resources willbe crucial. In addition, as the Vietnamese
government has set a goal of achievingcarbon neutrality by 2050, the development of renewable energy sources andother approaches are urgently needed.
The Vietnamese government has been
asking Japan to contribute to economic
modernization and decarbonization

through large-scale investments, andrecently we see ourselves being compared to the other countries. Korean
companies, in particular, have a strong
presence in Vietnam; their cumulative
direct investment to Vietnam is the top
among the others, and about 10 times
more Koreans than Japanese are living
here. With U.S. semiconductor companies and others planning to expand
their business in Vietnam, we feel it is
now essential to support Japanese companies here in a way that makes theirpresence more visible and felt.
NAKAJIMA: What kind of unique challenges do Japanese companies face,when it comes to developing operationsin India and Vietnam? It’s difficult tounderstand this from Japan.
IMAHORI: Only a few Japanese regionalbanks supporting SMEs (small andmedium-sized enterprises) have set up
operations in India, so we would likemore of them to take the initiative andcome here. Another major challenge isthe opaqueness of the legal system andthe complexity of administrative procedures. For example, there are cases ofdifferentiated tax rates due to different
interpretations by customs officials. In
addition, a considerable burden is placedon manufacturers in bringing in certain
items from Japan due to the extremelycomplicated procedures they need togo through to acquire certification that2

VIETNAM

Vietnamese women actively join the workforce,increasing household incomes and showing appetite
for consumption.

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they meet Indian standards. The Japan
Chamber of Commerce and Industry
in India has compiled these issues andsubmitted a request to the Indian government, and we are also working on
various fronts to improve the situation.
NAKAJIMA: That’s very important. If
local suppliers procure locally, Japanesecompanies will not be able to compete
on price. Local procurement would be
about 70 percent lower in price.
IKENAGA: We have a different situation
when it comes to regional banks, asnearly 40 of them have staff in Vietnam.
JBIC also co-finances loans with regionalbanks, especially for investment projects
by SMEs, which are on the increase.
SMEs greatly contribute to the formationof industrial clusters in Vietnam, and theregional banks’ support for them is vital.
NAKAJIMA: It seems that the growing
presence of Japanese regional banks
in Vietnam is also linked to an increaseof Japanese corporate operations in
the country. Among the companies thatcited Vietnam as a promising country, thepercentage of SMEs has been growing.
On the other hand, with regard to India,
some companies pointed out issues
such as the lack of human resources
for managerial positions, difficulties incommunicating with the staff, and theinability to meet deadlines.
IMAHORI: I think language plays a significant role in these challenges. Indians
are extremely proficient in English, theirsecond official language, and discussions in English proceed at a pace similar
to in the U.K. and U.S. The need for staff
stationed in India being well versed in
English is often overlooked. Indiansalso make good use of social media inboth their private lives and business,particularly WhatsApp. Not only throughemails, but close communication byphone, social media, and in person is
also essential. I believe it is crucial tolocalize management and supply chainsas much as possible while making thebest of outstanding young Indian talent.
IKENAGA: In the Vietnamese public
sector, decision-making takes time, anddelays in issuing permits and approvals

Vietnam’s ongoing growth depends on continued
foreign investment and a buildup of human resources.
Representative
JBIC Representative Office in Hanoi

IKENAGA Azusa
Joined JBIC in 2010. Assumed her current position in 2020 after assignments including the Country
Credit Department and the Strategic Research Department. In Vietnam, she is engaged in project formation support, local policy dialogues, and field research. Now, she lives away from her husband withher daughter in Hanoi. Graduated from Kyoto University, Faculty of Law.

S P E C I A L F E AT U R EJAPANESE COMPANIES GO GLOBALAs JBIC, we strive to understand these
aspects of Vietnam, and based on that,
we are trying to improve the businessenvironment for Japanese companies
through our dialogues with the ministries and agencies, as well as individual
projects.
NAKAJIMA: Meanwhile, aren’t there
companies that are considering India
and Vietnam as a stepping stone for thehave become major issues for the companies doing business there. I believethat this is partly due to the sociocultural
factors unique to Vietnam, such as thetendency to pursue personal accountability for the institutional decisions
that they made in the past, which makes
it hard for decision-makers. And thebureaucratic administrative procedures
still rely on paper-based documents.

India and Vietnam: Japan’s outward FDI (foreign direct investment)
and the share of votes for promising investment countries(billion yen)

700

(%)

600

60

500
400

40

300
200

20

100
0

92

94

96

98

00

02

04

06

08

10

12

14

16

18

20

22

0

(year)

-100
-200

-20

(billion yen)

(%)

500

50

400

40

300

30

200

20

100

10

0

92

94

96

98

00

02

04

06

08

10

12

14

16

18

20

22

0

(year)-10-100

Both India and Vietnam have seen a rapid expansion of direct investment from Japan since 2005, and theirshare of votes has increased. Although India shows fluctuations by year, the government has been strongly
promoting market entry. In Vietnam, companies centering on the manufacturing industry have been steadily
setting up operations, while recent years have seen an increase in non-manufacturing industries.

I hope the results of the survey andlocal views will be reflected in JBIC efforts.
Division 1, Strategic Research Department
Corporate Planning Group, JBIC

NAKAJIMA Ryuji
Joined JBIC in 2023. At the Strategic Research Department of the Corporate Planning Group, heengages in collecting and analyzing information on the overseas business development of domestic manufacturing companies. Graduated from Keio University, Faculty of Business and Commerce.

6

JBIC TODAY

MAY 2024

development of further overseas operations?
IMAHORI: There are initiatives underway to utilize India as an export hub for
expansion of operations to East Africa.
Aside from being geographically close,
there is a considerable population ofpeople of Indian heritage in Kenya,
Tanzania, and other East African countries. Leveraging these Indian sales anddistribution networks in Africa can prove
to be beneficial.
IKENAGA: We hear from companies thatthey wish to strengthen the role andfunction of their Vietnam base within
the ASEAN region’s supply chain.
(billionThereyen)is also a noticeable trend of 500
shifting
production capacities from China to
Vietnam. Indeed, I believe that Vietnam’s
400
promising prospects are due not only to
its economic growth but also to its bal300
anced geopolitical position.
NAKAJIMA: I hope the results of thesurvey and these local views will200
also bereflected in JBIC’s work.
IMAHORI: JBIC’s loan and equity invest100
ment in India surpassed JPY500 billion
in the last two years, and momentum is
0 linegrowing. JBIC provides support in
92 94
with the needs of Japanese companies.
This includes involvement in the-100development of the Dholera Industrial Area, ahigh-tech production base for semiconductor companies, and the launch of an
India-Japan fund with the Indian government. I hope that companies will firstmake it a point to visit and experience
the new India.
IKENAGA: In Vietnam, Japanese companies are expanding their operations
from city centers like Hanoi, Ho Chi Minh
City, and Da Nang, to more suburban
areas and other provinces. To support
the long-term operations of Japanesecompanies all over Vietnam, not only do
we provide loans to manufacturing companies in Vietnam, but we also support
projects that contribute to strengthening
the electric power infrastructure, or contribute to supplying renewable energy tothese companies, as a way to improvethe business environment.

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Promising countries ranking from 3 to 10
A look at some standout countries
Continuing with a look at the 3rd to 10th ranked promisingcountries for investment, which followed India and Vietnam.
The features, strengths, and challenges of four of these countries—Indonesia, Mexico, the Philippines, and Germany—
that are attracting attention, and
JBIC’s respective initiatives are summarized here.

5th

INDONESIA

Despite its obscure legal system,(%)
Southeast Asia’s largest market is attractive 50

96

98

00

Indonesia has a population of over 275
million, the largest in Southeast Asia,
40
and enjoys stable economic growth.
Against the backdrop of its growing
purchasing power, it is also expanding30
from a production base to a consumer
market, with many companies seeing
20
strong growth potential in the local
market. Japanese companies havelabor costs present challenges. JBIC is
been setting up operations in the counproviding support to enhance the resil10
try since before World War II, a history
ience of supply chains for the still robustthat is longer than that of other ASEAN
motorcycle and automobile industries,
member states. On the other hand,and also bolstering
support for the0
02 the04obscure
06 08
12 and14 rising
16 18 energy
20 22
legal10systemtransition to carbon neutrality.
(year)

7th-10

MEXICO

Despite security issues,
its location next to the U.S. gives it a geographic advantage
About half of the companies that listed
Mexico as promising were automobile
related. In addition to inexpensive
labor costs, the advantage of geographical proximity to the U.S. has
made it a North American supply
base for assembly manufacturers.
There are also high expectations forit as a near-shoring destination for
the U.S. market, where labor costs
continue to rise. With the U.S. market
shifting to EVs, there are plans to sellgasoline-powered vehicles in Mexico.
Although labor costs are low due to

8th

10th
about half of the working population
being non-regular employees, challenges remain around public safety
and securing talent. JBIC will continue
to support the development of automobile part manufacturing and sales.

GERMANY

Despite the economic impacts fromthe invasion of Ukraine,
it has an established reputation
for technology and quality

THE PHILIPPINES

Despite human resources issues,
its labor costs are low and growth prospects are high
The geographical proximity of thePhilippines to Japan and the fact thatmany Japanese companies have been
establishing operations in the country
since shortly after WWII are advantages in terms of market entry. The
country has an established reputation
for low labor costs and market growthpotential. On the other hand, skill
shortages and the income gap as wellas concerns about public safety due to
conflict in the Mindanao area are citedas challenges to market entry. Due tothese reasons, it has not yet becomea destination for production bases
and other risk diversification. JBIC iscurrently working to expand support
for energy transition.

Germany has a high reputation for firmly honoringbusiness commitments such as price negotiations,and has gained the strong trust of Japanese companies, especially those in the manufacturing industry.
Its technology and quality of workmanship are alsohigh. Due to the strong impact of Russian invasionof Ukraine, its growth is currently lower than Japan’sand economic recovery cannot be expected for sometime to come. Although this presents a challenge, its
decarbonization measures are the most ambitious inEurope. It is also the only major European country
that ranked in the top 10 promising countries. JBIC isproviding support for the expansion of manufacturing
facilities for EV parts and the production of automotive
and exhaust system parts.
MAY 2024

JBIC TODAY

7

Our People and Their Work

Director
Division 2, Social Infrastructure
Finance Department
Infrastructure and Environment Finance GroupYONEYAMA Satoru

JBIC engages in various projects around the world.
Senior JBIC staff on the front line share their thoughts
and stories behind their projects.

Supporting supply chain resilience enhancement for Japanese manufacturers in India

Loan schemes built after tough negotiations
benefit both local companies
and Japanese manufacturers in India

Joined the bank in 2001. Assumed his
current position in 2022 after assignments including the International
Finance Department I (in charge ofChina), secondment to the InterAmerican Investment Corporation (IIC),
Human Resources Management Office,and the Corporate Finance Department(engaged in M&A support, etc.).
Graduated from Keio University, Facultyof Law, and University of Southern
California, School of Law.

JBIC indirectly supported Japanese automakers and construction equipment manufacturers in India through loans to local banks.
YONEYAMA Satoru shares the story of the two projects and the negotiation skills cultivated.

Indian-style negotiation skills cultivatedwithin JBIC proved their worth
Tough negotiations come with the territory for projects in India, where driving a
hard bargain is ingrained in the culture.
India also tends to be rank conscious,
explains YONEYAMA Satoru of JBIC’s
Infrastructure and Environment FinanceGroup. He says, “This makes it important
to discern when to take the negotiations
from the working level to the management level. We worked closely with the
JBIC Representative Office in New Delhi
to make sure this point was covered.” Sobringing higher-ranking personnel to thenegotiating table can break deadlockedtalks.
Another negotiation art is setting up
meetings at crucial junctures. “Progressis sluggish if only email or other suchforms of communication are used, so
you need to set up meetings. Althoughsome meetings were held online, there
was a period when almost every monthsomebody from our team traveled to
Mumbai to keep the negotiations going,”
according to YONEYAMA.
In March 2021, JBIC announced aloan to support for enhancing the supply

chain resilience of Japanese automakers in India, announcing the same forJapanese
construction
equipment
manufacturers in the country in April
2023. Both are two-step loans provided
through Indian banks to the suppliersand dealers of Japanese affiliates, aswell as sales finance businesses forthe purchase of the Japanese affiliates’
products. Indian-style negotiation skills,
cultivated within JBIC, proved theirworth here.

For the banks and for manufacturers,
a two-front strategy differingfrom regular loans
In these two projects, which did not
directly involve the Japanese companies, JBIC played a pivotal role indirect negotiations with Indian banks,
while also simultaneously advancing
discussions with the Japanese affiliates—a challenging, two-front strategy.
For the Indian banks, JBIC researchedand selected which had strong capabilities in the sectors to be supported,and negotiated terms and conditions
while explaining the loan scheme, which
would also support local parts manufacturers. With regard to the manufacturers,

Two-step loan for indirect support to Japanese-affiliated manufacturers
Case 1: Automobiles / Case 2: Construction equipment

the significance of providing indirect
support to Japanese companies was
explained, and discussions were conducted to narrow down the list of local
suppliers that should be eligible forloans.
“As JBIC is entrusted with the mission of enhancing the international
competitiveness of Japan’s manufacturing industry, in order to make thisscheme one that would benefit Japaneseaffiliates, we visited them to explain
the significance of supporting local
suppliers. We consequently gained
their support in establishing this loan
scheme.”India’s reputation as an IT powerhouse is well-established, but its
manufacturing industry and government
investments in infrastructure are also
attracting increased attention recently.
India’s economy grew by 6.7 percent
in 2022, and many companies have an
expectation about its prospects. Thisis reflected in the JBIC Survey Reporton Overseas Business Operations by
Japanese Manufacturing Companies,
where India ranked top for two consecutive years as a promising country formedium-term business expansion.

In the 2021 support for enhancementof supply chain resilience of Japaneseaffiliated automakers, a loan agreement
for up to USD600 million (JBIC portion)
was signed with the State Bank of India.
In addition to supporting Japanese automakers in India, who were suffering fromthe impact of the COVID-19 pandemic,
this scheme also aimed to support the
manufacture and sales of eco-friendly
vehicles. “The Indian government has
been introducing fuel economy andemissions regulations since 2017 to
reduce greenhouse gas emissions andresolve increasingly serious air pollution. So this project is also in line with
India’s environmental protection policy,”
says YONEYAMA.

The satisfaction of engaging
in meaningful efforts
that benefit both Japan and its partners
Why not use this same loan scheme tosupport Japanese companies in othersectors? This was realized through a2023 loan agreement for up to USD60
million (JBIC portion) with IndusInd Bank
Limited to support Japanese-affiliatedProject
Summary

construction equipment manufacturers.
YONEYAMA and his team had takennote of India’s plans for much-needed
improvements to its logistics infrastructure. Under India’s national infrastructuredevelopment plan, PM Gati Shakti, atotal of INR100 trillion is earmarked forinfrastructure development projects.
According to YONEYAMA, the reason
for targeting the sector was that “theIndian construction equipment market
is the third largest in the world in termsof units sold. Notably, Japanese affiliates
hold about a 60 percent share of the
Indian construction equipment market
for excavators, with high growth prospects.”
Under its “Make in India” policy, thegovernment has been calling for direct
investments in India’s manufacturingindustry to make the country the “factory of the world.” Against this backdrop,
both Japanese affiliates taking on risks
in this country and the Indian companies
that supply them, as well as local banks,
would feel the benefits of these two
projects.
“JBIC is in a unique position toconceive projects that can benefit not
only Japan but also partner countries
and companies. This may be whatmakes this job so rewarding,” remarks
YONEYAMA. Though he notes that thosein charge of fast-growing India are kept
extremely busy, he is already looking
ahead to his next challenge.

In March 2021, a syndicated loan agreement was signed with the State Bank of India amounting to up to USD1 billion (JBIC portion:
USD600 million) to provide funds necessary for the local supply chains of Japanese automobile manufacturers. In March 2023, a
syndicated loan agreement was signed with IndusInd Bank amounting to up to USD100 million (JBIC portion: USD60 million) to provide
funds necessary for the local supply chains of Japanese construction equipment manufacturers.

Press releases on support for Japanese automobile manufacturers (left) and support
for Japanese construction equipment manufacturers (right)
8

JBIC TODAY

MAY 2024

MAY 2024

JBIC TODAY

9

S P E C I A L F EAT U R E

TOP 10(%)

Overseas expansion with“customer first” in mind andbuilding a model factory conforming80
to local environmental regulations

Promising Countries
JAPANESE COMPANIES GO GLOBALThe Japan Bank for International Cooperation (JBIC)
conducts and releases a Survey Reporton Overseas Business Operations
by Japanese Manufacturing Companies every year.
The results of the survey reveal the latest trends
among Japanese companies
that make foreign direct investments,
including how they respond to challenges such as
supply chain resilience and prices hikes,
and the countries they view as promisingfor overseas business development.
In this issue’s special feature,staff in charge of the survey and JBIC representatives
from offices in India and Vietnam,
which were selected as promising countries,
explain the reality of Japanese companies’
overseas business operations.

President
FUJIX CO., LTD.

NAKAGOME
Masaharu
After graduating from Seikei
University and working at
an automotive parts wholesaler, he joined Fuji Horn
Manufacturing (the predecessor of FUJIX), which was
founded by his father, andbecame president in 1985.
He makes a point of visiting
his overseas subsidiaries
regularly to maintain close
communication with thelocal staff.

FUJIX CO., LTD.

A
manufacturer
wiretrends
harnesses
crucialbusinessfor electronic
products
Data
reveals theof
latestin overseas
development
diversifies
by Japaneseproduction
companiesbases for supply chain resilience

FUJIX has been able to diversify the items it produces in-house
response
to heightening
geopoliticalrisks, the research
trend to review
supply chains is acceleratingby Inboldlytackling
customer requests
and constantand development.
andwill
impactallindustries.
In addition to the U.S. and China, it has expanded operations to Vietnam. By building a labor-intensive,
Despiterising concerns
over
its future,China
a strong
presence,
mass
production
system, thecompanyseeks
to maintains
establish stableglobalsupply and expand production.
with more than one-third of companies saying it is a difficult-to-replace supplier.
While nearly 50 percent of companies are engaging in independent efforts to address price hikes, such as automating
the manufacturing process, about 70 percent of companies are passing on the higher costs to customers.

Shifting from just motorcycle horns tohandlingas trends
many as“We
analyze
not60,000
as dots,products
but lines
and,at times,planes,”ITAGAKIAll electrical
products,
fromsaysautomobiles,
Shinichiof the andStrategic
Research
industrial robots,home appliances,
Department,
Corporate
Planning
Group,
to the equipmentusedto manufacwho
leads thefor the Survey
ture them,
use team
wire harnesses
madeReportOverseas
Business
up of onelectricalcablesand Operations
connectors
byCompanies
thatJapanesetransmit Manufacturing
power or signals
to theconducted
by inside.
the Japan
Bank forvarious parts
These importantInternational
Cooperation(JBIC).
components canbe comparedto the blood
The andsurvey,which
started
1989,
vessels
nervesof thehumaninbody.
is basedon quantifying
the resultsof
Manufacturingand marketingthesequestionnaires
sent
to companies,
butwire harnesses is
FUJIX’score business.
that alone will not provide a full picture. Of the more than 500 companies
that responded to the questionnaire,the team visited some 30 of them toconduct detailed interviews. If the companies contacted by e-mail or phone
are included, it comes to an even larger
Survey overview: This is a survey by questionnaire ofcompanies regarding foreign direct investment, which was
conducted
and collected
by JBIC
from Julyproduction in
The company
has also
expandedthrough
SeptemberFUHAI
2023. The
number of ELECTRONIC
China. (photo:
PRECISION
surveyed companies was 987, with valid
INDUSTRY (Nantong) CO., LTD., the Chinese subresponses obtained from 534, for a valid
sidiary established in 2017)
response rate of 54.1 percent. The full reportis available online.

10
2

JBIC TODAY

MAY 2024

Trends in votes for promising countries (1992-2023)

100

The company was founded in 1951 todevelop and sell motorcycle horns.
number.
Settingtime toperiod
do suchRight aroundthe asidetime Japan’sofinterviews
gives growth
additional
to therapid economic
wasdepthdrawingtosurveyAs this is aindustry
tremendous
a close analysis.
and the motorcycle
wasundertaking
somemonthsbeginning torequiringshow signsof a six
slowdown,
fromthe formulationof the survey
items
a customerthat manufactured
semiconto
the compilationof concerning
the final report,
ductorssought advice
theirrequestsfor explanationfromharness-related
productscome
for inmotormany
after thethe
releaseof thecycles.companies
This prompted
company
report,keeping
ITAGAKIbusy travelingto beginin-house
productionof wirewithinand outside Japan.
harnesses.
Thisfiscalbeen
year,handlingin addition
to the“We hadharness-related partsin the productionofregularquestions,
including process“overseashorns, so performance,
using that expertise,andproswith
business” “businesspects
and “promising
an eyefor
to medium-term,
the future, my”father
decided tocountries/regions,” additional
weremove into the businessof wiretopics
harnesses,
added“shapeof supply
chainswhich such
haveasathe
wide
range
of applicaunderglobal economy”
tions,”fragmented
says NAKAGOME
Masaharu, andthethe“impactsecondof global
price hikes
onas
busicompany’s
president.
Just
the
ness
development.
” ITAGAKI
explains
business
was expanding,
NAKAGOME’s
some
the notable
father ofpassedaway, points
leavinghere.
him to takeover the company when he was still in
What have Japanese companies
his 30s. Carrying on his father’s forbeen doing to make their supply
ward-looking attitude, and focusing on
chains more resilient against
business continuity, he pushed ahead
geopolitical risks?
with research and development in areas
Recognizing that they need toAsuch as rubber production and heat dissipation for industrial equipment, paving
respond,more
half ofofthe
theway forthe thanproduction
not comonly
panieshave butalready
implemented
wire
harnesses,
items suchas rubbermeasures.andIn fact,even before
theparts.
outproducts
aluminum
die-cast
breakcompanyof the COVID-19
pandemic2020,
The
now deals
in asin many
againstthe backdrop
issuessuch asas60,000products. ofTheircustomers
the U.S.-China
economicsecusay:“In terms conflict,of the numberof items
rity aroundsupply chains
was already
FUJIX
manufactures,
its organizational
being discussed.
Though
hadsmallbeen
structureis on thescale thisof five
recognizedfor overcompanies
five years grouped
now astomedium-sized
a common challenge facing companies
together.”
expandingoverseas,“We makeoperations
it a point to
respond its
toimportancehas needs
been underlined
bynew
the
our
customers’
and propose
Russianinvasionof thinking
Ukraine,about
along what
with
ideas
while
alwaysthe ongoing
U.S.-China
only
our company
canconflict.
deliver,” says
However, forming
dual istrack
supplyNAKAGOME,
whose mottoto aggressively
challenges
producechains takeis nooneasy
matter forandcompanies.
results
live upto customer
expectaMakingthatchanges
to contracts
is notsometions.
a newproduct is notthing Manufacturingthat can be done
immediately,assomething
can takebe doneovernight,
negotiationsthat
usually
six months
to abutwill nevertell thethe
customeryear.they
Nevertheless,following
impacts
something
is notpossible.
of the Ukraine
invasion,
40 Everything
percent of
will
be doneparticularly
to meet customer
requests.
companies,
large enterprises,The
company
has built its sources
impressive
reviewed
their procurement
for
track
record indicating
through such
raw materials,
a shiftongoing
beyondresearchanddevelopment
efforts.
addressing
short-term
impacts.
Through history, there have always

with close support such as employee
benefits. Today, local employees who
have been with the company since its
establishment have become senior management, and smooth communication
is now possible through their masteryof Japanese. Consistent technical guidance provided within the company has
brought their production technology to alevel surpassing that of Japan.
In order to comply with China’s
environmental regulations, in 2017 a
new production site was established in
Nantong, also in Jiangsu Province. Whileadvancing factory automation with thesupport of a loan from JBIC, the facility
also received “model green factory”
certification.

has a friendly stance toward Japan. The
Vietnam factory is slated to begin operations in October 2024. Similarly, a JBIC
loan will be used to increase production
capacity. Over the next three years, thisfactory will aim to achieve the same levelof quality and supply as its counterparts
in China.
“In Japan, we will explore further
customer needs and specialize in highmix, low volume production. In China
and Vietnam, we will build a labor-intensive, mass production system for stablesupply to our Japanese customers doing
business on a global scale. This balanceis important,” stresses NAKAGOME. To
this end, FUJIX is now moving full steam
ahead to launch its production base in
Vietnam.

FUJIX’s “customer-first” policy of
responding promptly and precisely toclient needs is also at the foundation of60
its overseas expansion. In order to keep
up with the latest trends in automotive
parts, and because a client had set up
a production base in Chicago, Illinois,40
the company established its U.S. subsidiary there in 2002. Around that sametime, FUJIX’s production base in Japanwas becoming unable to keep up with20
the growing volume of orders. “For acompany such as ours, which is labor-intensive, we cannot expect to grow if we
The bitter experience of the pandemic
continue to manufacture only in Japan.”
prompted diversificationThis
0 assessment led to the establishmentof 03
geopolitical
92
93
94
95
96
97
98
99
00
01
02
04 05 06risk
07 08 09 10 11 12 13 14 15
in that same year of a wholly owned production base in Jiangsu Province, China,“We faced a three-month lockdown in1951
near Shanghai.
Shanghai due to the COVID-19 pandemic.
Quality cannot be compromised
The situation was such that we couldn’t
even while pursuing mass production
even go to our materials manufacturer
2002
Respondent companies listed up to five countries they considered promising for business development
andreduction.
“Inthree
China,
lan- were ranked
just 100
meterscompanies.
away, making us unable
in the cost
mediumterm (the next
years),theand theseas promising
guage barrier presented communication
to satisfy our customers’ demands.”
challenges at first, so we transferredThatbitterexperiencemadebeen know-how
countries andafflicted
byourby regions
drawingdetailed
him keenly aware of the risks of a2011
political instability,
such as therecounts
Middledepictionsof the products,”
business model that depends on a
East. Geopoliticalonce
limited,NAKAGOMEof the risks,variousapproaches
production base in China to provide
are nowtaken
at impactingthat time. global
While supply
keenly chains,
aware
products to customers around the world.
2017
andthecanno longer
ignored by any
ofchallenges
of becommunication,he
In order to diversify geopolitical risks
industry. The
possibilityof theIsraelpersisted
in hisefforts while
endeavorand strengthen their supply chains, theingunderstandlocalout
culture.
He
Gazatoconflict,whichthebrokelast year,
company took action to establish a pro2023
duction base in Vietnam, a country wherealso
built relationshipsof trust withlocal
spreadingto neighboring
countries
the population is set to grow and which
stafffrom rural
areas As
by providing
themdemands
vigilance.
for upcoming
impacts, 2024 is an “election year,”with national elections taking place inmore than 40 countries. These include
nations ranking high in the survey as“promising countries for business development in the medium-term (the next
three years)”: India (1st), the U.S. (4th),
Indonesia (5th), and Mexico (7th). In thissense, geopolitical risks are increasing inmany countries and regions.

16

17

18

19

20

FUJIX CO., LTD.

21

22

23 (year)

Company establishedEstablished FUJIX USA, INC. in
Chicago, Illinois, the U.S.
Established KUNSHAN FUJIX
ELECTRONIC CO., LTD. in Kunshan,
Jiangsu, China
Established SHENYAN FUJIX
ELECTRONIC CO., LTD. in
Shenyang, Liaoning, China
Established FUHAI PRECISIONELECTRONIC INDUSTRY (Nantong)CO., LTD. in Nantong, Jiangsu,
China
Established FUJIX ELECTRONICVIETNAM COMPANY LIMITED in
VietnamChina, which used to regularly top
the list of promising countries,
has dropped to No. 3 this time.
Is its presence declining for
Wire harnesses (left) are FUJIX’s key products, offering concompanies
expandingoverseas?
figurations
optimized
for automobiles,
industrial equipment,

A In addition to the ongoing U.S.-China

and various other fields. The company is expanding its production to include a variety of products such as rubber andconflict,theslowdownof theinsulation
paper(right), molded
resineconomy
products (top middle),
and aluminum(bottom middle).
itself,and theparts
tighteningof domestic

regulations, exemplified by China’s
anti-espionage law that was amended
and enforced in July 2023, are casting a
In December
large shadow over the situation.
In this 2023, a loan agreement was signed with FUJIX for a loan of USD5.7 million (JBIC portion), co-financed with
MUFG Bank. By supporting the establishment of a manufacturing and sales base for electrical components by FUJIX
survey,morethan half of companies
with
Loan
Summary
ELECTRONIC VIETNAM COMPANY LIMITED, a FUJIX subsidiary in Vietnam, this loan contributes toward maintaining andoperation bases in China responded
that the international competitiveness of Japanese industry.
improving
they are concerned. While only about 1
percent reported feeling direct impacts,
MAY 2024

JBIC TODAY

113

JBIC History

1999

vol.6

JBIC launched just before the dawn of the new century
to address globalization and other global-scale challenges

As the 20th century drew to a close, Japanese government reforms necessitated the centralization of foreign economic
policy and economic cooperation. This moment saw the establishment of the Japan Bank for International Cooperation (JBIC).

JBIC’sfirstgovernor
YASUDA Hiroshi. Under his
leadership — as a policybased financial institution
and the successor to
the Export-Import Bankof Japan (JEXIM) andthe Overseas Economic
Cooperation Fund (OECF)— JBIC provided comprehensive
supportinaddressing the challenges
created by globalizationand economic growth.

An agile and efficient financial
institution was born
In October 1999, as countries began
to show signs of economic recovery
from the Asian currency crisis, a newpolicy-based financial institution thatwould be single-handedly responsible
for Japan’s foreign economic policy
and economic cooperation, took its
first steps. JBIC was born through themerger of JEXIM and OECF, the latterof which had contributed to the economic growth of developing countries.
Led by YASUDA Hiroshi, who had been
JEXIM’s governor, JBIC began providing
support for the sound development of
the international economic community,
including Japan.
Drastic government reforms, including
the reorganization of central ministries
and agencies, formed the backdrop to
this merger, with expectations that centralizing the information and expertise of
two institutions involved in foreign economic relations would result in agile andefficient alignment with policy objectives.
Building on the JEXIM Act and the
OECF Act, the JBIC Act was enacted
prior to the establishment of JBIC. It
stipulated operational goals based on
the prevailing economic conditions. In
response to lessons learned from the
Asian currency crisis and globalization,
the objective of contributing to the“stability of the international financial
order” was added to its goals. At thesame time, adjustments were made to
the scope of financial support, such asexport loans.
JBIC went on to actively bolster its
support services. For example, a guarantee facility for imports of aircraft andother crucial products was establishedin FY2002, replacing conventional credit
facilities by guaranteeing loans extended
by private financial institutions. In
the same fiscal year, JBIC introduced
performance bond guarantees to give
Japanese companies additional creditworthiness by guaranteeing their obligations to foreign counterparties. In
addition, to restore the international
competitiveness of Japan’s plant facility
industry, JBIC also diversified its support
methods by establishing a program offeasibility studies and other researchthat would lead to identifying projects
with high potentiality.

Various initiatives toreduce GHG emissions
By the 21st century, heightening awareness within the international economic
community of the need for global warming measures led to the enactment of
the Kyoto Protocol. To achieve Japan’s
greenhouse gas emission reduction
targets, the government set a policyof leveraging the Kyoto Mechanisms,
facilitating joint emission reduction
projects with other countries and international trading of emission credits.
In June 2003, JBIC established the

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Published by Press and External Affairs Division, Corporate Planning Department,
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position of the Special Advisor for Kyoto
Mechanisms to strengthen efforts to
help Japan achieve its reduction targets
and curb global warming. New unified
environmental guidelines came into
force in October of that year.
By also signing a cooperation agreement with the International Emissions
Trading Association (IETA), an international non-profit organization, JBIC
sought to contribute to global warming
measures by obtaining the latest information and supporting specific emission
reduction projects.

Launch of JBIC andthe global challenges it faced
1996 January

HASHIMOTO Ryutaro Cabinet
formed. Government reform
becomes a policy objective.

1997 December Kyoto Protocol adopted at thethird session of the Conferenceof the Parties to the 1992 United
Nations Framework Convention
on Climate Change (COP3).
1999 April
October

JBIC Act promulgated
JBIC established2001 September 9/11 terrorist attacks in the U.S.
2003 June

Position of the Special Advisor
for Kyoto Mechanisms
established2005 February

Kyoto Protocol enters into force.
Emission reduction targets
become legally binding.

2008 September Collapse of Lehman Brothers,
triggering a global financial crisis

InstagramThis printed material uses
vegetable oil ink, which
includes soybean oil ink.