Japan Outlook

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Information about Japan Outlook
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Published on March 25, 2008

Author: Lindon

Source: authorstream.com

Japan Market Brief March–April 2007:  Japan Market Brief March–April 2007 John E. Peters Minister Counselor for Commercial Affairs U.S. Embassy, Tokyo What’s Different? :  What’s Different? Performance Then Now Net Margins 0.2% (FY01) 4.8% (FY06e) Free Cashflow Y8.2trn (FY01) Y25.1trn (FY06e) Non-Performing Loans Y86trn (FY01) Y4.2trn (FY06e) Valuations Price to Earnings 68 times(1990s avg) 17 times (FY06e) Price to Cashflow 15 times(1990s avg) 5.4 times (FY06e) Price to Book 2 times(1990s avg) 1.4 times (FY06e) Ownership Crossholdings Ratio 51% (FY90) 20% (FY06e) M&A Cases 470 (per year, 1990s) 1,700 (2002-2006 avg.) Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan Domestic Structural Up-Cycle: Capital Investment:  Domestic Structural Up-Cycle: Capital Investment Capital Stock Vintage in Years – All Sectors Source: Cabinet Office ; Merrill Lynch Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan No Lost Decade Here:  No Lost Decade Here Source: National Institute of Population and Social Security Research Relentless Focus on Research & Development Spending (total R&D spending by public and private sector as % of GDP) Source: NIPSSR Japan US Germany France Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan Japan: Highest Patent Filings by National/Regional Offices :  Japan: Highest Patent Filings by National/Regional Offices U.S. Commercial Service - Japan Source: World Intellectual Property Organization *These statistics are based on information provided by national and regional patent offices. International Patent Filings:  International Patent Filings Source: World Intellectual Property Organization U.S. Commercial Service - Japan Yes, A Trade Surplus with China:  Yes, A Trade Surplus with China Japan Trade Balance With China (Peoples’ Republic + Hong Kong) Source: Cabinet Office Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan Japan is Back on Global Scene :  Japan is Back on Global Scene Source: Thomson Financial, Merrill Lynch Strong Balance Sheets and Profits Trigger A New Global Investment Cycle: Outward M&A Accelerating Sharply Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan Toyota Expects to Build Plants:  Toyota Expects to Build Plants Toyota Motor Corp. is studying its projected 10-year growth in the U.S. to build plants. “All I know is compared to today it will be more,” said Jim Lentz, Executive Vice President of Toyota’s U.S. sales arms. Toyota could build as many as five new North American assembly plants in the next 10 years. Toyota’s U.S. Sales 12.5% increase to $2.54 million 5.5% increase to $2.68 million (projected) New Tundra and Hybrids will drive the growth Source: Detroit Free Press, January 17, 2007 U.S. Commercial Service - Japan One of the Largest ODA Contributors:  One of the Largest ODA Contributors Ranked as the world’s top ODA provider from 1991 ~ 2000 (net disbursement basis) Assisted 185 countries and regions Total amount disbursed until 2003: US$221 billion Source: Ministry of Foreign Affairs, Japan U.S. Commercial Service - Japan Cool Nippon:  Cool Nippon Do You Think This Country’s Products Are “Cool”? Response By Consumers In Different Cities Source: Nikkei Note: China=Beijin, Shanghai, Guangzhou Courtesy of: Jesper Koll – Merrill Lynch Japan Securities U.S. Commercial Service - Japan Declining Population :  Declining Population U.S. Commercial Service - Japan Population: 2006: 127.7 million (2006) 2030: 117.6 million (2030) Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan Ministry of Health, Labor and Welfare, Japan The Most Aged Society :  The Most Aged Society U.S. Commercial Service - Japan 65 yrs old and over 2005 26.82 million (21%) 2040 35.0 million (35%) Total Population 2005: 126 million 2040: 100 million Source: Japan Aging Research Center Consumer Confidence Index (excluding one-person households, original series):  Consumer Confidence Index (excluding one-person households, original series) Source: Economic and Social Research Institute, Cabinet Office, Japan U.S. Commercial Service - Japan U.S. Top Trading Partners:  U.S. Top Trading Partners CY2006 Exports (Goods) CY006 Imports (Goods) Total U.S. Exports: $1,037.3 billion U.S. Exports to: Canada: $230.6 billion (22.2%) Mexico: $134.2 billion (12.9%) Japan: $59.6 billion (5.8%) China: $55.2 billion (5.3%) UK: $45.4 billion (4.4%) Total U.S. Imports: $1,855.4 billion U.S. Imports from: Canada: $303.4 billion (16.4%) China: $287.8 billion (15.5%) Mexico: $198.3 billion (10.7%) Japan: $148.1 billion (8.0%) Germany: $89.1 billion (4.8%) U.S. Commercial Service - Japan Source: U.S. Census Bureau Japan’s Economy:  Japan’s Economy World’s 2nd largest economy 2006 GDP: $4,712 billion Longest boom in postwar period: - 60 months ~ (Feb. 2002 ~ current) - 57 months (Nov. 1965 ~ July 1970) U.S. Commercial Service - Japan Source: World Bank Source: Japanese Cabinet Office World GDP (CY2005) Real GDP Growth Rate Japan’s Top Trading Partners :  Japan’s Top Trading Partners (December 2006 Data - Provisional) Source: Japan External Trade Organization Total Japanese Exports: $647.4 billion Total Japanese Imports: $ 577.8 billion U.S. Commercial Service - Japan U.S. Trade in Goods with Japan :  U.S. Trade in Goods with Japan Number of U.S. exporters to Japan (2005): 26,933 Source: U.S. Census Bureau U.S. Commercial Service - Japan Top 10 U.S. Exports to Japan :  Top 10 U.S. Exports to Japan U.S. Commercial Service - Japan Source: U.S. Census Bureau CY2005 Service Exports Surplus $19.5 Billion:  CY2005 Service Exports Surplus $19.5 Billion U.S. Commercial Service - Japan Source: Bureau of Economic Analysis, U.S. Department of Commerce Imports Up 14.4% 2005: $22.3 billion 2004: $19.5 billion Exports Up 17.6% 2005: $41.8 billion 2004: $35.6 billion 2005 Surplus: $19.5 billion Major U.S. Service Exports to Japan:  Major U.S. Service Exports to Japan Source: Bureau of Economic Analysis, U.S. Department of Commerce U.S. Commercial Service - Japan U.S. Private Services Trade Balance with Japan:  U.S. Private Services Trade Balance with Japan U.S. Commercial Service - Japan Source: Bureau of Economic Analysis, U.S. Department of Commerce Japan's Inward FDI* Cumulative (from end of 1996 through end of 2005):  Japan's Inward FDI* Cumulative (from end of 1996 through end of 2005) Source: Japan External Trade Organization *net international investment position U.S. Commercial Service - Japan US leads at 251,676 million US$, followed by France and the Netherlands at 61,225 million US$ and 57,635 million US$, respectively. U.S. Firms in Japan:  U.S. Firms in Japan 1,554 U.S. affiliated firms in Japan U.S. Commercial Service - Japan 1,554 1,451 390 83 (As of December 2005) Source: “Foreign Affiliated Companies in Japan 2006” published in May 2006 by Toyo Keizai U.S. Firms in Japan by Industry :  U.S. Firms in Japan by Industry Source: “Foreign Affiliated Companies in Japan 2006” published in May 2006 by Toyo Keizai U.S. Commercial Service - Japan Manufacturing Total 381 U.S. firms Non-Manufacturing Total 1,173 firms 80 77 57 126 22 19 169 118 107 102 70 608 (As of December 2005) (As of December 2005) Regulatory Reform: Steady and On-track with Significant Progress:  Regulatory Reform: Steady and On-track with Significant Progress U.S.-Japan Regulatory Reform Initiative (RRI) established in 2001 as key component of U.S.-Japan Economic Partnership for Growth The 5th RRI report (June 2006) noted 85 points of significant Japanese progress in the ten areas under discussion: Telecom, IT, Med/Pharm, Financial Services, Competition Policy, Transparency, Privatization, Legal Systems Reform, Commercial Law, and Distribution But there are still some lingering bilateral issues The 5th RRI report underscores the need for continued efforts and progress in all areas Extreme concern about postal privatization, and triangular mergers U.S. beef imports: a major bilateral issue Some of Japan's acknowledged critical challenges are: - huge public debt - low birth rate; rapidly aging population; and projected labor shortages - income disparities; protracted lack of income growth and weak consumer spending - agricultural reform U.S. Commercial Service - Japan Major Obstacles Faced by Foreign Firms in Japan:  Major Obstacles Faced by Foreign Firms in Japan Source: Invest Japan Department, Japan External Trade Organization U.S. Commercial Service - Japan Insurance Market in Japan:  Insurance Market in Japan Changes in Japan’s Insurance Market Japan’s financial “Big Bang”: Removal of “convoy system” (maximum control, industry protection, administrative guidance, and before-the-fact adjustment); U.S.-Japan insurance agreements. 2. Establishment of Financial Service Agency: Rules-based regulatory approach, self-responsibility principle and ex-post checking. 3. Changes in consumer purchasing trend: Emerging focus on living-benefit products vs. death-coverage due to demographic changes in Japan. 4. Increasing sales of variable annuities and third-sector products, led by U.S. insurance companies. 5. Partial liberalization of bank sales - fueled variable annuity market. 6. Growth of the U.S. share through purchases of Japanese life insurance companies in the late 1990s. Japan is the second largest market for insurance in the world after the United States. $340 billion in JFY 2005 – direct net premiums U.S. insurance companies earned over $40 billion in life and $2 billion in non-life premium income – a major portion of revenues outside U.S. Major U.S. Players in Japan Aflac, AIG, Hartford, Prudential Sources: USTR National Trade Estimate, Life Insurance Association of Japan, Insurance Research Institute, industry sources U.S. Commercial Service - Japan Japan’s Environmental Market to Reach $560 billion by 2010 (METI forecast) :  Japan’s Environmental Market to Reach $560 billion by 2010 (METI forecast) Current Market: $500 billion Outstanding commercial opportunities in: - Asbestos abatement equipment and services: 40 million tons in older building; Japan plans removing a million tons/year - Soil remediation equipment and services - Industrial wastewater treatment technology - Renewable energy, including biomass technologies US passed the “Superfund Act” in 1980 Japan enacted a similar act: “Soil Contamination Countermeasures Law” in 2002 Source: Ministry of Economy Trade and Industry (METI), Japan Environment Information & Communication Network, Japan U.S. Commercial Service - Japan Major Projects in Japan :  Major Projects in Japan In a horizon that stretches from the spring of 2007 over the next ten years, U.S. companies will have an opportunity to bid on construction projects with an aggregate value approximating $5.4 billion and on the supply of goods, equipment, or services in response to non-construction procurements valued at an aggregate of $18.16 billion.  The following summary highlights this $23.56 billon in aggregate opportunities for U.S. firms. U.S. Commercial Service - Japan Major Projects – recent news:  Major Projects – recent news Employ competitive bidding for some 60% of its discretionary contracts, or about 2.1 trillion yen (approx. $18 billion) To raise the percentage of contested public contracts to about 80% in terms of value With plans to fully implement the change in fiscal 2007 For transparency of the process, the government is requiring ministries to disclose all contracts on their respective Web sites, as well as provide explanations for retaining discretionary contracts. Nikkei News January 27, 2007 U.S. Commercial Service - Japan Govt To Seek Competitive Bids On 60% Of Discretionary Contracts World’s 2nd Largest Medical Device Market:  World’s 2nd Largest Medical Device Market The most important export destination for American medical devices The sector has consistently enjoyed a sizable (approximately $4 billion) trade surplus with Japan Approximately $5 billion worth of U.S. medical devices and supplies are sold in this market American products have approximately 60% share of the total imports The market for medical equipment in Japan remains strong, but American companies will continue facing severe challenges in both pricing and regulatory matters Source: Country Commercial Guide Source: Ministry of Health, Labor and Welfare U.S. Commercial Service Japan World’s 2nd Largest Pharmaceutical Market:  World’s 2nd Largest Pharmaceutical Market The most important export destination for American pharmaceuticals The value of Japanese pharmaceutical market is approximately $60 billion The market share of American companies is estimated to be 15-20% Of the 99 leading global medicines, only 60 are available in Japan GOJ intends to accelerate the drug approval process and to offer incentives to develop innovative drugs Japanese market is increasingly promising for innovative pharmaceuticals, although American companies will continue facing severe challenges in both pricing and regulatory matters Source: IMH Health Source:PhRMA 31% still not available in Japan Average 5.2 years of delay U.S. Commercial Service - Japan U.S. Machine Tools Forge Ahead of Swiss Products, Reclaiming Lost Ground:  U.S. Machine Tools Forge Ahead of Swiss Products, Reclaiming Lost Ground Source: Ministry of Finance, Japan U.S. Commercial Service - Japan Strong Exports of U.S. Aircraft and Aerospace Components :  Strong Exports of U.S. Aircraft and Aerospace Components (in million $) 2003 2004 2005 2006 Total Imports 7,573 7,637 8,618 9,652 (% CHG) 1% 13% 12% USA: 6,629 6,696 7,416 8,226 (% CHG) 1% 11% 11% U.S. 88% 88% 86% 85% Market Share: Overwhelming U.S. presence attests to long-term partnerships Source: The Society of Japanese Aerospace Companies (SJAC), Ministry of Finance, Japan U.S. Commercial Service - Japan Boeing Country:  Boeing Country 80% civil aircraft orders for the past 10 years went to Boeing. ANA & JAL, first customers for Boeing 787s. 50 and 30 each beginning in 2008 (approx. $9.6 billion in total). Boeing forecasts Japanese demand at 1,176 aircraft (approx. $147 billion) for the next 20 years. Airframes ($3,459 mil): USA, 90%; EU, 3% Afrm Parts ($1,427 mil): USA, 82%, EU, 13% Engines ($1,201 mil): USA, 92%; EU, 5% Egn Parts ($1,964 mil): USA, 90%; EU, 9% Source: The Society of Japanese Aerospace Companies (SJAC), 2005 Source: Boeing Japan U.S. Commercial Service - Japan Biotechnology:  Biotechnology Key Market Segments in Japan Pharmaceuticals (antibody therapeutics) and Diagnostics Functional Food Agriculture Bio-informatics Equipment for Biotech Research (DNA chips; reagents, etc.) (Million US$) Source: Nikkei Bio Nenkan 2007 (+3.1%) (+3.0%) U.S. Commercial Service - Japan Opportunity in Japan :  Opportunity in Japan Event: USA Pavilion at BioJapan 2007 Dates: September 19-21, 2007 Venue: Pacifico Yokohama (Kanagawa) http://expo.nikkeibp.co.jp/biojapan/eng/ CS Contact: Tamami Honda, Commercial Specialist U.S. Embassy, Tokyo Phone: 81-3-3224-5876 Fax: 81-3-3589-4235 E-mail: tamami.honda@mail.doc.gov U.S. Commercial Service - Japan U.S. Chemical Business in Japan:  U.S. chemical exports to Japan recovering USD 5.3 billion in 2006 U.S. Commercial Service Japan Sales of Japan-based U.S. firms show underlying strength USD 1.5 billion in 2005 Source: Japan Tariff Association Source: Dow Chemical Japan, Dupont Japan U.S. Chemical Business in Japan Education: International Students in the United States :  U.S. University Fair (IIE Fair in Japan ) for regionally-accredited U.S. colleges and universities: 2006 Fairs Tokyo: Nagoya: 76 schools 32 schools 1,328 visitors 308 visitors 2007 Fairs October 21 October 20 For details and on-line registration: http://www.iiehongkong.org/fair/ufair/index.htm   Contribution of international students to US economy: $13.5 billion or $24K per student Education: International Students in the United States (Source: Institute of International Education http://opendoors.iienetwork.org) U.S. Commercial Service - Japan Education: Japanese Higher Education Abroad:  Education: Japanese Higher Education Abroad Source: Institute of International Education (http://opendoors.iienetwork.org) Note: US – F-visa, Australia-new enrollments on student visa, Canada-study permits for college/university/ESL (no permit required if duration is 6 mos or shorter) (Source: Diplomatic Missions in Japan) U.S. Commercial Service - Japan Education: American Students at Japanese Universities:  Education: American Students at Japanese Universities Source: Institute of International Education, Open Doors (http://opendoors.iienetwork.org) U.S. Commercial Service - Japan Japanese Outbound Travel:  Source: Office of Travel and Tourism Industries, U.S. Department of Commerce Japan National Tourist Organization Japanese Outbound Travel U.S. Commercial Service - Japan 17,535 (+0.8%) 3,672 (-5.4%) 5,368 17,819 Japanese Travel to the U.S.:  Japanese Travel to the U.S. 3,672 (-5.4%) 1,374 (-9%) Source: Office of Travel and Tourism Industries, U.S. Department of Commerce State of Hawaii U.S. Commercial Service - Japan 5,368 2,217 Japan & U.S. Outbound Travel:  Source: Office of Travel and Tourism Industries, U.S. Department of Commerce Japan & U.S. Outbound Travel 5,368 3,672 (-5.4%) 1,497 (+40%) 1,287 U.S. Commercial Service - Japan U.S. – Japan Telecommunications Equipment Mutual Recognition Agreement (MRA) Signed on Feb. 16, 2007:  U.S. – Japan Telecommunications Equipment Mutual Recognition Agreement (MRA) Signed on Feb. 16, 2007 Scope: Telecommunications terminal equipment and radio equipment subject to certification in Japan regardless of location of the supplier or country of origin of the equipment Telecom MRA will lower costs and speed up the marketing in Japan of innovative U.S. telecom products, which is the fifth largest export market for the U.S. U.S. Export U.S. Import Source: U.S. Department of Commerce, U.S. International Trade Commission U.S. Commercial Service - Japan Software Market in Japan:  Market Growth: Strong at 4% and projected to reach US$173 billion by 2010 The amount of imported software was US$3.2 billion in 2005. Within imported software, the share of U.S. products is 90.3% and the amount has reached US$2.9 billion Market Trends: Enactment of Japanese SOX (Sarbanes‐Oxley act) Growing corporate IT-related budgets *46% of Japanese firms will increase IT spending *34.5% will increase their spending by more than 20% Security Software Market: Rising awareness of the importance of IT security and related software Tremendous growth at 21.9% Current market size is $1.2 billion Projected to reach $2 billion by 2010 at 11.2% growth (Source: MIC Research Institute and Japan Information Technology Services Industry Association) Software Market in Japan (Billion US$) US$ 147 US$ 173 Includes customized software, packaged software, game software, data services, etc. 74% Packaged Software 8% Game Software Data Services Others 2% Customized Software 8% 8% Percentage of Software sales in Japan (Source: METI/ Ministry of Economy, Trade and Industry) 2005 2010 Software Market in Japan U.S. Commercial Service - Japan Electronic Devices Market in Japan:  Electronic Devices Market in Japan U.S. plays a leading role in the Japanese semiconductor industry. Market share of U.S. electronic devices in Japan has grown to 26% and reached US$ 5.4 billion in 2005, compared to 17% and $1.7 billion in 1995. Total amount of imported electronic devices is US$23 billion. Demand for electronic devices in wireless applications, such as  WiMAX, UWB/Wireless USB, WiFi and ZigBee is growing rapidly. WiMAX, in particular, is projected to reach US$827 million by 2010 from less than US$1 million in 2006. Source: JEITA/ Japan Electronics and Information,      Technology Industries Association (million US$) Total Local Production Total Import Total Export U.S. Commercial Service - Japan Japan Market – Safety & Security:  Current Status Future Prospect 2008 Projection for sub-markets by equipment type: Image/monitoring market US$ 1.2 billion (35% up from 2005) Sensor 1.36 billion (71%up) Home security (equip.& service) 755 million (17%up) Access control 920 million (11%up) Residential security service 464 million (19%up) Sub-sectors expected to grow and 2008 projections: Home Security Unit US$ 78.6 million (50% up from 2005) Home Security Service 418 million (20%up) School Commuting Service 25.6 million (160%up) Community Security Service 4.3 million (600%up) Biometrics by Vein 132 million (300%up) on-Vehicle DVR 38 million (200%up) Emerging new sub-sectors demonstrating drastic growth: *School security US$ 57 million (350% increase since 2005) *Town security 18 million (125% increase since 2005) **Regional safety 22 million (5% increase since 2005 ) (*Emergency alert system; ** Mass notification system) The market size of the Japanese security industry has been increasing over the years. The overall market (Chart 1) includes the sales and installation of security equipment and security services, such as guards. The total sales figures do not show a sharp increase as unit prices in general have decreased over the past few years due to stronger competition in the market. In security service contracts, there has been a tremendous increase (Chart 2). According to the National Police Agency the total sales of security service alone amounts to US $27 billion. According to a May 2006 Fuji Keizai survey, trends in the security industry are: A projected market size of US $ 4.8 billion for security equipment by 2008 - a 34% increase since 2005. Chart 1 Source: Japan Security Systems Association $1=110.11 (ex.rate as of 2005) U.S. Commercial Service - Japan Japan Market – Safety & Security Japan Market – Safety & Security:  Market Growth Chart 6 Source: Ministry of Land, Infrastructure and Transport Recent market growth is attributed to increased public concern for security: Crime related Sky-rocketing crime rate including burglaries, arson, and child murders (Chart 3). New types of crime such as credit card and e-mail scams, and identity theft. There is a direct relation between major crimes and the number of security cameras installed (Chart 4). Terror related Fear of terrorist attacks is pervasive (Chart 5) while Mass Transportation Authorities respond by installing more cameras (Chart 6). -Safety and security has become an important factor in selecting products or services; -Central and local governments are making full efforts towards a safer society in response to public concerns. U.S. Commercial Service - Japan Japan Market – Safety & Security Japan’s Food Service Market: Opportunities Remain for Innovative Themes and Superior Know-How:  Japan’s Food Service Market: Opportunities Remain for Innovative Themes and Superior Know-How Food service viewed as time-saving and a leisure activity Demand for value-added service and unique concepts Consolidation and diversification Orientation toward healthy and safe food Best Prospects Fast casual Alternate meal solutions (deli, takeout, etc) Source: Food Service Industry Research Center Market Trends U.S. Commercial Service - Japan Opportunities in Japan's Cosmetics Market:  Opportunities in Japan's Cosmetics Market Source: Shukan Shogyo Co., Ltd., Fuji Keizai Co., Ltd, Cosmetics Importers Association of Japan Notes: *1: Depilatories and other perfumery, cosmetic or toilet preparations (with a basis of oil, fat or wax) *2: Depilatories and other perfumery, cosmetic or toilet preparations, n.e.s. U.S. Commercial Service - Japan Growth of 2x4 Housing Starts in Japan Annual (1997 – 2006):  Growth of 2x4 Housing Starts in Japan Annual (1997 – 2006) Houses based on North American 2x4 construction methods were first introduced into Japan in 1974. Over the past 10 years, 2x4 housing starts have shown significant growth and exceeded 100,000 units for the first time in 2006. Exports of U.S. building construction materials to Japan have supported this growth, exceeding USD $1 billion in 2005. (105,390 units) U.S. Commercial Service - Japan Slide54:  Jewelry retail market was $11.3 billion in 2005. Japan is the 2nd largest overall jewelry retail market after the United States. 1/3 of retail sales are brand jewelry. Import brand Jewelry share: 1995 7.9% ($1.7 bill) 2004 21.4% ($2.4 bill) US is the top supplier of precious metal jewelry with a 24.3% share in 2006. 1995 12.5% ($137 mill) 2005 21.7% ($320 mill) 2006 24.3% ($385 mill) Jewelry Market (Source: Japan Tariff Association) Source: Retail market size – Yano Research Institute; Brand retail sales – Japan Precious magazine; US imports – Japan Tariff Association U.S. Commercial Service - Japan Six Commercial Offices in Japan -- well-positioned to assist American exporters :  Six Commercial Offices in Japan -- well-positioned to assist American exporters Over 40 professional staff and industry specialists in six locations From FY 2005 until present [30 months] the Commercial Service in Japan has: - logged 3,700 consulting sessions with 2,300 clients - provided successful regulatory, policy, and bid advocacy on behalf of U.S. trade and investment interests - and facilitated over 800 transactions worth $230 million for American firms from 42 states Naha Fukuoka Osaka Nagoya Tokyo Sapporo U.S. Commercial Service - Japan How the Commercial Service in Japan can help U.S. Companies :  How the Commercial Service in Japan can help U.S. Companies Market Research & Due Diligence Product Launches & Distribution Strategy Partner Match Making Trade Events Trade Policy Advice Web Postings Government Procurement Advocacy Industry Expertise/Business Counseling Intellectual Property Protection Advice Market Access Issues U.S. Commercial Service - Japan Osaka-Kansai, Shikoku and Surrounding Prefectures :  Osaka-Kansai, Shikoku and Surrounding Prefectures GDP $980 billion, larger than Brazil, Korea, India, Mexico, Russia, or Australia 9-prefecture Kansai region is Japan's 2nd largest industrial, financial, and commercial area Also the 2nd largest population center with over 24 million people Home to firms like Panasonic, Nintendo, Kyocera, and some of the world's largest banks U.S. exports to the region up about 15% over 2005 Much expansion and production abroad with over 5,600 firms having overseas subsidiaries   Commercial Service Osaka covers 14 prefectures: Osaka, Hyogo, Kyoto, Shiga, Nara, Wakayama, Tokushima, Kagawa, Ehime, Kochi, Hiroshima, Shimane, Tottori and Okayama. U.S. Commercial Service Japan Nagoya-Chubu :  Nagoya-Chubu At over 8.7 million people, Japan's third largest metropolis Nagoya (population 2.2 million) is Japan's fourth largest city GDP $770 billion, over 25% of Japan's GDP - about the size of Brazil, Korea, India, Mexico, Russia, or Australia 18% of GDP: has ranked number one in shipments from Japan for 28 consecutive years Manufacturing heartland; center for aerospace, automotive, ceramics, and machine tool industries Massive plant expansion and new investment MHI, FHI, KHI key players in Boeing 787 Dream-liner production Toyota recently moved 3000 international sales staff from Tokyo to Nagoya Projected to soon exceed Kansai in industrial production The Commercial Service Nagoya covers 9 prefectures: Aichi, Gifu, Mie, Shizuoka, Yamanashi, Nagano, Toyama, Ishikawa, and Fukui U.S. Commercial Service Japan Fukuoka-Kyushu and Yamaguchi :  Fukuoka-Kyushu and Yamaguchi Fukuoka City – population 1.3 million, economic, educational and cultural center of Kyushu Traditionally known as the "Gateway to Asia" $410 billion economy; 10% of Japan's GDP Japan's fourth largest economic center; greater GDP than Switzerland, Belgium, or Sweden "Silicon Island" with 30% of Japanese semiconductor production Japan's most advanced automotive production; 10% of national output "Solar Island" as focus of Japanese solar cell activity Numerous R&D facilities in biotech, nuclear fusion, robotics, ceramics, high-speed ocean transport Southern Kyushu hosts Japan's two space launch centers at Uchinoura and Tanegashima Two key U.S. military facilities: Sasebo Navy base in Nagasaki, and the Marine Corps Air Station in Iwakuni U.S. Commercial Service Japan The Commercial Service Fukuoka covers 7 Kyushu prefectures: Fukuoka, Oita, Saga, Nagasaki, Kumamoto, Miyazaki, Kagoshima, and Yamaguchi prefecture Sapporo-Hokkaido and Tohoku:  Sapporo-Hokkaido and Tohoku Population 5.7 million GDP $ 383 billion; about same size as Belgium, Switzerland, or Sweden Toyota and components firms expanding high-tech production in Hokkaido Booming domestic and international tourism; 5.5 million tourists in 1988: now about 19 million tourists Strong resort investment and tourism from Taiwan and Korea The 90-minute intercity flight between Tokyo and Sapporo is one of the world’s busiest domestic route in terms of capacity, with more than 9 million annual passengers. Sapporo has 123 fights daily to 18 cities outside of Hokkaido, and 48 flights to and from Tokyo Growing ties with the Russian Far East and Sakhalin Island Tohoku regional trade with China has increased 300% since 2001 Commercial Service Sapporo covers: Aomori, Miyagi, Iwate and Akita U.S. Commercial Service Japan Naha, Okinawa Prefecture:  Naha, Okinawa Prefecture GDP $31 billion; population 1.37 million Busy tourism destination with a record 5.64 million tourists in 2006 Active construction sector: opportunities for American know-how Okinawa Institute of Science & Technology Project A front-runner as a gaming industry destination? Software development and call centers growing: employ 9,000 at 37 centers, and 2,000 at 73 IT firms 25,000 American marines and airforce based on Okinawa; provide security to the region; U.S. bases are Okinawa's 2nd largest employer, contributing $3 billion annually to the economy U.S. Commercial Service Japan Top Ten Tips to Successfully Marketing in Japan To Maximize your potential in the market, adhere to these Top Ten Tips.:  Top Ten Tips to Successfully Marketing in Japan To Maximize your potential in the market, adhere to these Top Ten Tips. Recognize the strategic importance of Japan, and be willing to invest the necessary resources to capture some of the market Plan, prepare and execute an effective, long term strategy Investing in professionally translated marketing material is with every "yen." Visit Japan Often.....Personal contact remains key even in the age of Webinars Get "on the ground" advice from professionals already engaged in the market. Dedicate a "Japan Champion" in the home office. (Compassion more important that language ability.) Take time to structure the deal and remember due diligence, including IPR protection Networking is key. Use contacts, including CS/Japan to help you meet prospective partners/customers. Cut-throat competition is a way of life in Japan. Listen to you clients for greater success here and internationally Your Agent is only as good as you are to your Agent. It's a partnership. Help them help you. U.S. Commercial Service - Japan Useful Links :  Useful Links Web Japan (Information on Japan) http://web-japan.org U.S. Embassy Tokyo, Japan http://japan.usembassy.gov Japan External Trade Organization (JETRO) http://www.jetro.go.jp Japan Statistics Bureau & Statistics Center http://www.stat.go.jp/english American Chamber of Commerce in Japan (ACCJ) http://www.accj.or.jp American State Offices Association (ASOA) http://www.asoajapan.org Japan Federation of Economic Organizations (Keidanren) http://www.keidanren.or.jp Japanese Chamber of Commerce and Industry http://www.jcci.or.jp/home-e.html Trade Fair in Japan (by JETRO) http://www.jetro.go.jp/en/matching/j-messe The Japan Times http://www.japantimes.co.jp U.S. Commercial Service - Japan U.S. Commercial Service Japan :  U.S. Commercial Service Japan Website: http://www.buyusa.gov/japan/en Email: Tokyo.Office.Box@mail.doc.gov U.S. Commercial Service - Japan

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