1 Invest in Japan 29 September, 2005 29 September, 2005 Hiroshi Yoshikawa (University of Tokyo) (University of Tokyo) 29 September, 2005 29 September,

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  • Slide 1
  • 1 Invest in Japan 29 September, 2005 29 September, 2005 Hiroshi Yoshikawa (University of Tokyo) (University of Tokyo) 29 September, 2005 29 September, 2005 Hiroshi Yoshikawa (University of Tokyo) (University of Tokyo)
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  • 2 INDEX Current FDI into Japan Goal of Doubling the Stock of Inward FDI Japan Investment Council (JIC) The Program for the Promotion of FDI into Japan Why Japan? Examples of Active Companies in Japan Local governments Efforts
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  • 3 Current FDI into Japan Stock of FDI into Japan: 9.6 trillion yen (2003) Ratio of FDI stock to nominal GDP: 2.0% (2002) Japans ratio of inward Foreign Direct Investment (FDI) stock to nominal GDP is by far at a lower level than those of US and European countries. According to IMF statistics, the ratio in 2002 was only 2.0% in Japan, while it was 19.2% in the US, 40.9% in the UK, and 25.7% in Germany. Stock of FDI into Japan: 9.6 trillion yen (2003) Ratio of FDI stock to nominal GDP: 2.0% (2002) Japans ratio of inward Foreign Direct Investment (FDI) stock to nominal GDP is by far at a lower level than those of US and European countries. According to IMF statistics, the ratio in 2002 was only 2.0% in Japan, while it was 19.2% in the US, 40.9% in the UK, and 25.7% in Germany.
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  • 4 (1)Stock of FDI into Japan (by regions, trillion yen)
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  • 5 by far the lowest level among industrialized countries. (2)Inward FDI in Major Countries (stock / nominal GDP) Source: IMF "International Financial Statistics" (2003) Note: U.S., France and Australia: Current Price Source: IMF "International Financial Statistics" (2003) Note: U.S., France and Australia: Current Price
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  • 6 (3)The number of Foreign-capital companies in Japan, sales, profit and employees (2001) Companies 1.94% 1.97% 546 261 Foreign-capital companies Share Manufacturing Share Employees 4.71% 5.78% 514,124 291,268 Sales (billion yen) Sales (billion yen) 5.95% 10.28% 35,079 25,240 profit (billion yen) profit (billion yen) 11.92% 18,59% 1,886 1,426 Source: Trial calculation of the Cabinet Office based on a report Results of the basic survey of business structure and activity Note; An object is companies, which are 50 or more employees and capital of 30 million yen or more, with business establishment of Manufacturing, Mining and Commerce.
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  • 7 (4)Increasing Foreign Shareholders Foreign Shareholdership is rapidly getting to a higher level, where Japanese business corporations reduce their shares. Distribution of Shareholders (Market Value) Source:2003 Shareownership Survey (All domestic stock exchanges Tokyo, Osaka, Nagoya, Fukuoka and Sapporo in Japan) Notes: 1. Survey has been conducted on a "Unit-of-Share" basis since 1985 Survey. 2.The market value of Financial Institutions excludes that of Investment Trusts and Annuity Trusts. Source:2003 Shareownership Survey (All domestic stock exchanges Tokyo, Osaka, Nagoya, Fukuoka and Sapporo in Japan) Notes: 1. Survey has been conducted on a "Unit-of-Share" basis since 1985 Survey. 2.The market value of Financial Institutions excludes that of Investment Trusts and Annuity Trusts. TOYOTA HONDA NISSAN Renault S.A. NISSAN Renault S.A. MITSUBISHI DaimlerChrysler AG MITSUBISHI DaimlerChrysler AG MAZDA Ford Motor Co. MAZDA Ford Motor Co. SUZUKI General Motors Corp. SUZUKI General Motors Corp. Fuji (SUBARU) General Motors Corp. Fuji (SUBARU) General Motors Corp. ISUZU General Motors Corp. ISUZU General Motors Corp. 18.2% 32.2% 63.9% 42.3% 39.5% 43.7% 37.6% 17.6% Foreign owned shares ratio (Market Value; Sep. 2003) Foreign owned shares ratio (Market Value; Sep. 2003)
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  • 8 Goal of Doubling the Stock of Inward FDI (Prime Ministers initiative) General Policy Speech by Prime Minister Junichiro Koizumi to the 156th Session of the Diet (January 31, 2003) Foreign direct investment in Japan will bring new technology and renovative management methods, and will also lead to greater employment opportunities. Rather than seeing foreign investment as a threat, we will take measures to present Japan as an attractive destination for foreign firms in the aim of doubling the cumulative amount of investment in five years. 6.6 trillion yen 13.2 trillion yen (by the end of 2006) General Policy Speech by Prime Minister Junichiro Koizumi to the 156th Session of the Diet (January 31, 2003) Foreign direct investment in Japan will bring new technology and renovative management methods, and will also lead to greater employment opportunities. Rather than seeing foreign investment as a threat, we will take measures to present Japan as an attractive destination for foreign firms in the aim of doubling the cumulative amount of investment in five years. 6.6 trillion yen 13.2 trillion yen (by the end of 2006)
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  • 9 Japan Investment Council (JIC) On July 1994, the JIC was established as a ministerial- level council, chaired by Prime Minister. View-point of promoting foreign direct investment into Japan. The Expert Committee operates under the JIC. On March 27, 2003, the JIC decided The Program for the Promotion of Foreign Direct Investment into Japan. The Program asks for the implementation of 74 measures under the five categories. On July 1994, the JIC was established as a ministerial- level council, chaired by Prime Minister. View-point of promoting foreign direct investment into Japan. The Expert Committee operates under the JIC. On March 27, 2003, the JIC decided The Program for the Promotion of Foreign Direct Investment into Japan. The Program asks for the implementation of 74 measures under the five categories.
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  • 10 The Program for the Promotion of FDI into Japan (1) Provide Information in Japan and Abroad Communicating Japan's Appeal and Welcoming Stance to abroad Enhancing recognition of FDIs importance inside of Japan (2) Improve Corporate Business Environment Environment to Facilitate Participation and Business Activity (3) Review Administrative Procedures Make Them Clearer, Simpler, Faster (4) Create Favorable Employment and Living Environment Ease Entry of Personnel and Provide More Comfortable Living Conditions for Foreigners (5) Improve Local and National Structures and Systems Facilitate Ingenious Approaches at Regional Levels (1) Provide Information in Japan and Abroad Communicating Japan's Appeal and Welcoming Stance to abroad Enhancing recognition of FDIs importance inside of Japan (2) Improve Corporate Business Environment Environment to Facilitate Participation and Business Activity (3) Review Administrative Procedures Make Them Clearer, Simpler, Faster (4) Create Favorable Employment and Living Environment Ease Entry of Personnel and Provide More Comfortable Living Conditions for Foreigners (5) Improve Local and National Structures and Systems Facilitate Ingenious Approaches at Regional Levels
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  • 11 (1)Provide Information in Japan and Abroad Overseas symposia and seminars are showing Japan's market environment, success cases, etc. Through Domestic seminars, regional people come to understand that FDI is beneficial for both Japan and investing countries. Overseas symposia and seminars are showing Japan's market environment, success cases, etc. Through Domestic seminars, regional people come to understand that FDI is beneficial for both Japan and investing countries. The Prime Minister welcomed inward FDI in a television spot commercial, broadcasted throughout America and Europe. DVD version in five languages produced and distributed.
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  • 12 (2)Improve in the Corporate Business Environment Conclusion of the Japan-US Tax Treaty reduces tax burdens on Japanese and US companies. Improve transparency through corporate information disclosure, and promote internationalization of accounting standards. Expand opportunities for private-sector participation in public services and other such sectors by measures including amendment of the Local Autonomy Law (September 2003). Conclusion of the Japan-US Tax Treaty reduces tax burdens on Japanese and US companies. Improve transparency through corporate information disclosure, and promote internationalization of accounting standards. Expand opportunities for private-sector participation in public services and other such sectors by measures including amendment of the Local Autonomy Law (September 2003).
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  • 13 (3)Review Administrative Procedures Service became significantly faster, and most investment-related inquiries are responded within three days. More than 1,000 potential investor companies were uncovered in FY2003, largely by JETRO, and approximately 100 of them made a decision to invest (twice of the previous fiscal year). Service became significantly faster, and most investment-related inquiries are responded within three days. More than 1,000 potential investor companies were uncovered in FY2003, largely by JETRO, and approximately 100 of them made a decision to invest (twice of the previous fiscal year). Invest Japan established as unified contact point to provide foreign investors with comprehensive information and consultation on direct investment in Japan.
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  • 14 (4)Create Favorable Employment and Living Environment Extend the upper limit on period of stay from three to five years for qualified foreign researchers and other personnel by utilizing special zones for structural reform. Japanese universities accept international school graduates under certain conditions. Foreign students are allowed to extend their stay for a maximum 180 days following graduation in order to seek employment in Japan. The Japan-US and Japan-Korean agreements on social security were signed. They will resolve the double payment of pension contributions. Extend the upper limit on period of stay from three to five years for qualified foreign researchers and other personnel by utilizing special zones for structural reform. Japanese universities accept international school graduates under certain conditions. Foreign students are allowed to extend their stay for a maximum 180 days following graduation in order to seek employment in Japan. The Japan-US and Japan-Korean agreements on social security were signed. They will resolve the double payment of pension contributions.
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  • 15 (5)Improve Local and National Structures and Systems National government supports actively providing support to leading regions that enthusiastically promote inward FDI. Investment environment is improved by using special zones for structural reform. As on June 2004, 386 projects were authorized. Study on nation-wide application of special deregulative measures in the zones. National government supports actively providing support to leading regions that enthusiastically promote inward FDI. Investment environment is improved by using special zones for structural reform. As on June 2004, 386 projects were authorized. Study on nation-wide application of special deregulative measures in the zones.
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  • 16 Why Japan? 1.The world's second-largest market 2.Key market to succeed in Asia 3.Abundant highly skilled human resources 4.Innovative technologies 5.Efficient infrastructure 6.Reformed legal framework for investment 7.High performance of Foreign Companies in Japan 8.Lowered business costs 9.Abundant market opportunities 10.Living environment 1.The world's second-largest market 2.Key market to succeed in Asia 3.Abundant highly skilled human resources 4.Innovative technologies 5.Efficient infrastructure 6.Reformed legal framework for investment 7.High performance of Foreign Companies in Japan 8.Lowered business costs 9.Abundant market opportunities 10.Living environment
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  • 17 (1)The world's second-largest market Japanese GDP (value base) accounts for about one eighth (1/8) of the World GDP, and Japan positioned as the 2nd biggest GDP country after the United States. Nominal GDP Ratio (%) by regions (2002) Source: Cabinet Office Nominal GDP (million $) Country Per Capital ($) United States 10,383.1 36,121 Japan 3,983.5 31,277 Germany 1,986.1 24,079 United Kingdom 1,563.1 26,401 France 1,431.2 23,374 China 1,236.7 955 1,186.1 20,441 Italy
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  • 18 -The adjoining major economic regions Almost all the million cities are located within one-hour train ride (300km) from their neighboring major city. It is almost the same as the distance from New York and Boston. It is only 1 hour and a half by the superexpress Shinkansen. Almost all the million cities are located within one-hour train ride (300km) from their neighboring major city. It is almost the same as the distance from New York and Boston. It is only 1 hour and a half by the superexpress Shinkansen. Comparison of GDPs of major regions in Japan with those of selected Asian nations (2001) Japanese figures; Prefectural Citizens' Economic Accounts, 2001 (Cabinet Office) Asian nations figures; Foreign Economic Data (Cabinet Office) Comparison of GDPs of major regions in Japan with those of selected Asian nations (2001) Japanese figures; Prefectural Citizens' Economic Accounts, 2001 (Cabinet Office) Asian nations figures; Foreign Economic Data (Cabinet Office) Sapporo (Hokkaido) Sapporo (Hokkaido) Sendai (Miyagi Pref.) Sendai (Miyagi Pref.) Tokyo, Saitama, Kawasaki, Yokohama (Metropolis; Tokyo, Saitama Pref., Chiba Pref. and Kanagawa Pref.) Tokyo, Saitama, Kawasaki, Yokohama (Metropolis; Tokyo, Saitama Pref., Chiba Pref. and Kanagawa Pref.) Nagoya (Nagoya region; Aichi Pref. and Shizuoka Pref.) Nagoya (Nagoya region; Aichi Pref. and Shizuoka Pref.) Osaka, Kyoto, Kobe (Kansai region; Osaka Pref., Kyoto Pref. and Hyogo Pref.) Osaka, Kyoto, Kobe (Kansai region; Osaka Pref., Kyoto Pref. and Hyogo Pref.) Hiroshima (Hiroshima Pref.) Hiroshima (Hiroshima Pref.) Fukuoka, Kitakyusyu (Fukuoka Pref. and Yamaguchi Pref) Fukuoka, Kitakyusyu (Fukuoka Pref. and Yamaguchi Pref) China 1,191 billion Metropolis 1,271 billion Rep. of Korea 427 billion Kansai 553 billion Nagoya 404 billion 600km 300km 900km 600km 900km
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  • 19 (2)Key market to succeed in Asia Japans economic power makes itself a hub for Asia, a center of trade, transport and markets. It is an ideal site for investment oriented to the entire Asian market. Number of direct flights between Narita and major cities in Asia roundtrips per week, as of March 2003, shortest required flight time in hours denoted by h Source: Prepared from information on airport and airline websites. Number of direct flights between Narita and major cities in Asia roundtrips per week, as of March 2003, shortest required flight time in hours denoted by h Source: Prepared from information on airport and airline websites.
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  • 20 (3)Abundant highly...

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