ASIA BUSINESS WEEK DUBLINAsia Ireland Trade and Investment Summit

5 June 2014

Maximizing Business Opportunities in JapanJun Arima

Director General, JETRO London

Maximizing Business Opportunities in Japan

June 2014Jun ARIMA

Director General, JETRO London 2

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Abenomics: “3 Arrows” for the Economic Rebirth

Bold Monetary Policy

Exit from Deflation, Expanded Employment, Economic Boost

Flexible Fiscal Policy

Growth Strategy Boosting Private Investment

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Depreciating Yen and Rebounding Stock Prices

Annual Hike 57%Highest in 41 Years

Annual Drop 18%Biggest in 34 Years

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Robust Economic Recovery

Annual Hike 57%Highest in 41 Years

Real GDP Growth -3.0% (3Q12) +4.5%(1Q13) +3.5%(2Q13) +1.3%(3Q13) +0.3%(4Q13) 　 +4.9% (1Q14)

Private Consumption -1.9% (3Q12) +1.5% (4Q13) + 8.5%

Gross Fixed Capital Formation -5.3%(3Q12) +7.3%(4Q13) +12.1%(1Q14)

Corporate Performance +12% in Sales +50% in Profit (2013/2012)

Year-on-Year Bonus -3.5% (2012) +3.5% (2013)

Unemployment 4.9% (Dec12) 3.6% (Mar14)

9th/144 in Overall Competitiveness (WEF GCI 2013-2014) 1st /144 in Business Sophistication (WEF GCI 2013-2014) Quantity/quality of local suppliers, broad value chain etc

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4th/144 in Market Size (WEF GCI 2013-2014)

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GDP Comparison Between Japan’s Region and Foreign Countries

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Strong R&D Basis

Source: 2012FY Survey by Ministry of Internal Affairs & Communication, OECD

R&D Expenses and their shares to GDP (%) R&D Expenses

($100 million)

Share to GDP (%)

Japan US Germany France UK Canada Italy Russia

Japan UK US Germany0

50

100

150

200

250

300

PCT patents, application/million pop-

ulation

5th/144 in Innovation (WEF GCI 2013-2014)

1964 　→　2014

ＺＥＲ

ＯTokaido Shinkansen opened (1964)

50Years

SafetyPassenger fatalities

SHINKANSEN TGV ICE

5 trains/h 5 trains/h

15trains/h×3times Trains / h15

Operating frequency(at peak time ）

Wider body than any other high speed rail train.

Withinminute1

Average delay time per trip Efficiency and ComfortReliability

Frequency

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Excellent Infrastructure - Shinkansen -

1st in OECD Countries in Adult Competency on Literacy, Numeracy, Problem Solving with IT Use

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Literacy Numeracy Problem Solving with IT

1 Japan Japan Japan

2 Estonia Estonia Estonia

3 Netherlands Belgium Australia

4 Australia Netherlands Sweden

5 Sweden Sweden Norway

6 Norway Norway Netherlands

7 Denmark Czech Republic Austria

8 Belgium Slovakia Czech Republic

9 Canada Canada Canada

10 Slovakia Austria Korea

Source: OECD Programme for the International Assessment of Adult Competencies (2012)

3rd Lowest Political/Economic Risk among 16 Asia Pacific Countries2nd IPR Protecting Country in the World6th in Global Peace Index (Only Asian country in top 10)

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Stable Business Environment

1 Iceland

2 Denmark

3 NZ

4 Austria

5 Switzerland

6 Japan

7 Finland

8 Canada

9 Sweden

10 Belgium

Political/Economic Risk in Asia Pacific Countries Global IPR Protection Ranking 2013 Global Peace Index

Political & Economic Risk Consultancy’s Annual Report 2012

Expanding Business Opportunity: Energy Renewable Energy is booming with Feed In Tariff Scheme Full Liberalization of Electricity Market by 2020 in 3 Steps 63 F/S of Smart Communities in the world by Japanese Consortiums

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Expanding Business Opportunity: Health

132008 2009 2010 2011 2012

0

10

20

3029 months to 9 months

Expedited Certification of Innovative Medical Devices (Device Lag Behind US)

Medical Device Using SME Technologies

High Productivity Nursing Care Business

Application of Tanker Propeller Manufacturing Technologies for More Durable Joint Prosthesis

- Nakashima Medical Co. -

Application of Nursing Care Robot Technologies for Improving Productivity

- SMART SUPPORT Co.-

2nd largest pharmaceutical market, 3rd largest medical device market in the world and further expanding.

Deregulation Progressing (Amended Pharmaceutical Affairs Law)

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4th Arrow: Tokyo Olympic 2020

Stadium Olympic VillageMedia Centre

Economic Impact Demand Creation +8.6 - +14.9 trillion JPYInducing Production + 19.4 - +55 (infrastructure) +95 (tourism)

trillion JPY Synergy with Growth Strategy

Increase Foreign Visitors Accelerate Infrastructure Investment Enhance Competitiveness of Tokyo Increase Inward FDI

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Gateway to Asia Pacific Market through Mega-FTAs

Source: METI 15

Increase FTA Share from 19% to 70% by 2018

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Subsidy Program for FDI to Japan

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Tax and Regulatory Incentives Combining corporate tax breaks with regional tax reduction measures

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National Strategic Economic Growth Area

Tokyo Area Ratio of total floor space, employment rules, international medical faculty

Kansai Area Medical innovation hub, expansion of mixed medical treatment

Niigata Credit guarantee for facilitate large scale agriculture

Yabu Shifting the role of agricultural committee for liquidation of farmlands

Fukuoka Labor support centre to facilitate ventures and business start-up

Okinawa Loosening visa requirement, medical practices by foreign doctors

“Groundwork for drilling into hard-rock regulations” (PM Abe 28 March 2014)

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Reviewing Corporate Tax Abolish Reconstruction Tax 1 year earlier (end 2013 FY) “This year, we will set about further reform on corporate tax” PM

Abe at Davos

Japan (now）

Japan (end 2013FY)

US (Califo

rnia)

France

Germany (a

verage)China

Korea (S

eoul) UK

Singapore05

1015202530354045

Reconstruction Tax Local Tax National Tax

Source: Ministry of Finance

International Comparison of Corporate Tax

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How to Succeed in Japanese Market ? Understand the business ecosystem

(customers, regulatory environment etc)

Utilize the support network (JETRO, METI, Local Gov, Embassy,

UKTI…)

Establish long-lasting local partners

Quick response

Regular presence and commitments

Patience

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Talk to JETRO First !!

Consulting Legal system Cost estimation Taxation Labor law Market regulation Business practice Human resources Location

Facilities 50 days free 9 am – 10 pm 6 major cities Fully equipped Shared receptionPC room with

printer/scannerConference rooms

available Event hall available

Information Business library Market reports Business advisor Online databasePlatform of professional

service providerConnection to ministers

& regulatory authority

JETRO IBSC: one-stop centre for establishing a business base in JapanInvest Japan Hotline: Consultation service on administrative procedures.

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Buy Abenomics, Invest Japan

JETRO LondonMidCity Place, 71 High Holborn, London WC1V 6AL, UKTel:+44-20-7421-8300 Email: Ldn_invest@jetro.go.jp http://www.jetro.go.jp/