#1The Investment Climate in Japan and Business Opportunities for Canadian Companies Yasushi Akahoshi President Japan External Trade Organization JETRO Japan External Trade Organization (JETRO) INVEST 1APAN JAPAN 1#2JETRO Japan External Trade Organization Many things to share: Canada to Japan wwww 31 BlackBerry 12:21PM Wednesday, May 21 (3) Messages כ 3GFz Tall எA R T U O del r K L D F G alt ! X C V B N M $ space sym Copyright (C) 2016 JETRO. All rights reserved. ZED CIRQUE DU SOLEIL DAIHATSU TOTEM トーテム CIRQUE DU SOLEIL. INVEST JAPAN 2#3JETRO Japan External Trade Organization Many things to share: Japan to Canada © 2016 Honda Canada Inc. Honda of Canada Mfg. (HCM) Plant in Brampton • • Began production in 1986 as the 1st Japanese automobile manufacturer in Canada Annual capacity of 390,000 units Employs approx. 4,000 associates Toyota Motor Manufacturing Canada West Plant in Woodstock • Began production in 2008 Annual capacity of 220,000 units (RAV4) Employs approx. 8,000 associates © 2016 TMMC Inc. Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 3#4JETRO Japan External Trade Organization 1. Investment Imbalance between Japan & Canada 2. Japan's Re-emergence 3. Why Japan? 4 Reasons to Invest in Japan 4. Making Japan the most business friendly country in the world 5. Talk to JETRO First Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 4#5JETRO Japan External Trade Organization 1. Investment Imbalance between Japan and Canada Japan - Canada FDI (2014 Stock) 1,484 million USD Source: The Ministry of Finance "Japan's Balance of Payments (Direct Investment Assets/Liabilities)" Copyright (C) 2016 JETRO. All rights reserved. 16,987 million USD INVEST JAPAN ST JAPAN 5#6JETRO Japan External Trade Organization 18,000 16,000 1. Investment Imbalance between Japan and Canada Japan's FDI (Stock) to Canada is growing 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2008 2009 2010 2011 2012 2013 2014 Copyright (C) 2016 JETRO. All rights reserved. Japan -> Canada Canada -> Japan Japan ranks 8th an investor to Canada as Canada ranks 19th as an investor to Japan INVEST JAPAN#7JETRO Japan External Trade Organization 1. Investment Imbalance between Japan & Canada 2. Japan's Re-emergence 3. Why Japan? 4 Reasons to Invest in Japan 4. Making Japan the most business friendly country in the world 5. Talk to JETRO First Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 7#8JETRO Japan External Trade Organization 2. Japan's Re-emergence Improving Economic Indexes Under Abenomics GDP (Real GDP (seasonally adjusted)) Operating profit of companies Business conditions (Tankan current situation, manufactures) Before the launch of Abe administration 517 Trillion Yen (2012 Oct-Dec) 12.6 Trillion yen Current 2.3% 528 Trillion Yen Increase (2015 Oct-Dec) 17.8 Trillion Yen (2015 Oct-Dec) Increase (2012 Apr-June) Large firms -3 Large firms Medium-sized firms -5 Greatly Improved SMES -12 Increase Employment Copyright (C) 2016 JETRO. All rights reserved. (2012 Dec) 62.2 Million (2012 Dec) 12 0 Medium-sized firms 5 SMES (2015 Dec) 63.9 Million (2016 Jan) INVEST JAPAN 8#9JETRO Japan External Trade Organization Positive Growth Cycle Corporate Earning improvement 2. Japan's Re-emergence Expansion of Consumption Copyright (C) 2016 JETRO. All rights reserved. Salary Improvement Expansion of Investment INVEST JAPAN 9#10JETRO Japan External Trade Organization Structural Reform 2. Japan's Re-emergence Improving the approval process of medicine and medical appliances Opening up the electricity market Copyright (C) 2016 JETRO. All rights reserved. Joining the TPP negotiations INVEST JAPAN 10#11JETRO Japan External Trade Organization 2003 5.2 million people 2. Japan's Re-emergence Rapidly expanding Japanese tourism market 2014 13.41 million people 2020 (Aim) 20 million people In 2015, the number of foreign visitors in Japan reached 19,737 thousand. This is the highest number in history and a 47% increase year-on-year. [Source] Japan National Tourist Organization (JNTO) The 20million target is looking to be achieved early on! (c)2015 The Sankei Shimbun & SANKEI DIGITAL All rights reserved. 250,000 200,000 Number of tourists from Canada 231,400 150,000 100,000 50,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Copyright (C) 2016 JETRO. All rights reserved. 2015 INVEST JAPAN 11#12JETRO Japan External Trade Organization 1. Investment Imbalance between Japan & Canada 2. Japan's Re-emergence 3. Why Japan? 4 Reasons to Invest in Japan 4. Making Japan the most business friendly country in the world 5. Talk to JETRO First Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN#13JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Sophisticated Market International comparison of Japanese regional gross production (nominal, FY2012) (Unit $1 billion) 1 Why Japan Hokkaido/Tohoku region 698.4- Switzerland Chubu region 917.5 631.2 Turkey 788.9 Kinki region 936.5 Indonesia 919.0 Chugoku region 333.4 Denmark 315.2 Copyright (C) 2016 JETRO. All rights reserved. Kanto region 2,400.8 UK 2,461.8 Shikoku region 162.2 Vietnam 155.6 Kyushu region 571.5 Sweden 523.9 [Source] "Report on Prefectural Accounts 2012" (FY2015)(Cabinet Office) .) INVEST JAPAN 13#14JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Reputation among Foreign-affiliated Companies in Japan 1 Why Japan High Income level Attractiveness of Business Expansion in Japan? Extensive infrastructure Soft Power (trend setter in Asia) Test Market before Entering Asian markets MADE IN JAPAN Source: Ministry of Economy, Trade and Industry, "FY 2014 Survey Report on Foreign-affiliated Companies' Attitudes toward Foreign Direct Investment in Japan" Copyright (C) 2015 JETRO. All rights reserved. INVEST JAPAN 14#15JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Innovation Hub Research funding by country and percentage of GDP (G8 comparison) Rank Country Number of researchers 2 Why Japan per 10,000 people (G8 comparison) Number of researchers (unit: 10,000) Number of researchers per 10,000 people Research funding ($100 million) Percentage of GDP (%) Rank Country 1 Japan 1,802 3.87 1 Japan 68.3 53.8 2 Germany 1,010 2.85 2 Canada 15.7 45.0 3 U.S. 4,570 2.73 3 Germany 36.0 43.9 + France 552 2.23 4 U.K. 25.9 40.5 5 U.K. 399 1.63 6 Canada 246 1.62 ம 60 U.S. 126.5 40.3 France 26.5 40.2 7 Italy 265 1.26 7 Russia 44.1 30.8 8 Russia 407 1.12 Italy 11.8 19.5 Source: Created from Ministry of Internal Affairs and Communication, "Survey Result on Science and Technology Research 2015" (Ministry of Internal Affairs and Communication) Data Source: OECD "Main Science and Technology Indicators", (OECD) etc. Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 15#16JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Business Friendly Infrastructure Easy environment for business Business sophistication RANK 1st in the world (144 countries) 3 Why Japan Source: World Economic Forum, "The Global Competitiveness Report 2014-2015" Foreign companies validate Japan's infrastructure Nearly 61% of foreign companies see the well-maintained infrastructure as an attractiveness of Japan. Source: Ministry of Economy, Trade, and Industry (METI), "Survey on Attitudes of Foreign Companies toward Direct Investment in Japan Report 2014" Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 16#17JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Business Friendly Infrastructure Nationwide transportation infrastructure Wakkanal 3 Why Japan Asahikawa Shin Chitose Kushiro Tohoku Shinkansen Akita Shinkansen Yamagata Shinkansen Joetsu Shinkansen Hokuriku (Nagano) Shinkansen Tokaido Shinkansen Sanyo Shinkansen - Kyushu Shinkansen Major expressways Hub airport Obihiro Hakodate Shin-aomori Hachinohe Akita Akita Mortoka Sea of Japan Shinjo Yamagata Yamagata Sendal -Sendal Niigata Niigata Fukushima Osaka International- Hiroshima Nagano Pacific Ocean Takaakl Yamaguchi Ube- domya -Narita International Kitakyushu Okayama Kyoto Nagoya Tokyo Shin-Yokohama Tokyo International Kokura Shin-Osaka Hakata Fukuoka Hiroshima -Chubu International Kumamoto Nagasaki Kumamoto Kansal Intemational - Takamatsu Kagoshima-Chud -Kohchi Naha Kagoshima Miyazaki Matsuyama Oita "Hub airport: Airport that serves as a hub for the domestic air transportation network or International air transportation network. Source: Created by JETRO based on the websites of the Ministry of Land, Infrastructure, Transport, and Tourism, and railway companies. INVEST JAPAN 17 Copyright (C) 2016 JETRO. All rights reserved.#18JETRO Japan External Trade Organization 3. Why Japan? 4 Reasons to Invest in Japan Safely and Pleasantly Most livable Japanese cities as chosen by the world RANK 1. Tokyo 2. Vienna 3. Berlin 4. Melbourne 5. Sydney 6. Stockholm 7. Vancouver 8. Helsinki 4 Why Japan : Copyright (C) 2016 JETRO. All rights reserved. Source: MONOCLE, UK INVEST JAPAN 18#19JETRO Japan External Trade Organization 1. Investment Imbalance between Japan & Canada 2. Japan's Re-emergence 3. Why Japan? 4 Reasons to Invest in Japan 4. Making Japan the most business friendly country in the world 5. Talk to JETRO First Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 19#20JETRO Japan External Trade Organization 4. Making Japan the most business friendly country in the world Japan's Business Cost Office Rent (Monthly) (per sq.m) (USD) Hong Kong Singaore New York San Francisco ¦ Housing rent for expatriates (Monthly) Toronto (USD) San Francisco New York Singapore Hong Kong Shanghai Seoul Toronto Seoul Tokyo Shanghai Tokyo 0 50 100 150 200 0 1,000 2,000 3,000 4,000 5,000 Source JETRO Source: JETRO Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 20#21JETRO Japan External Trade Organization 4. Making Japan the most business friendly country in the world Opportunities in regions Case from Canada: SON SOLAR POWER NETWORK Rooftop solar power generation company. Constructed photovoltaic stations in 4 local Prefectures. Photo Provided by Solar Power Network Copyright (C) 2016 JETRO. All rights reserved. Niigata Gunma Fukuoka Shizuoka INVEST JAPAN 21#22JETRO Japan External Trade Organization 1. Investment Imbalance between Japan & Canada 2. Japan's Re-emergence 3. Why Japan? 4 Reasons to Invest in Japan 4. Making Japan the most business friendly country in the world 5. Talk to JETRO First Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN#23JETRO Japan External Trade Organization 5. Talk to JETRO First! JETRO's Overseas and Domestic Network 43 Domestic Offices Berlin- Dusseldorf- Amsterdam- Brussels London Paris- -Copenhagen -Stockholm -Helsinki Prague Warsaw -St. Petersburg -Moscow -Vienna -Budapest Toronto Chicago Hokkaido- Akita Aomori -Morioka Hiroshima Ehime Yamaguchi Kitakyushu Fukuoka Saga Nagasaki Toyama- Kanazawa- Fukui- Matsue Tottori Kyoto Yamagata- Niigata- Mie Nagano Sendai (- Suwa) -Fukushima -Tochigi Ibaraki Okayama Kobe Gifu Yamanashi Hamamatsu Headquarters -Institute of Developing Economies (IDE) - Chiba Kagawa Nagoya Shizuoka Kanto Yokohama Tokushima Osaka Kochi Kumamoto Oita Kagoshima Copyright (C) 2016 JETRO. All rights reserved. Geneva- Bucharest ⚫İstanbul Tashkent Chengdu Beijing Vancouver Dalian Madrid- Tehran Qingdao Seoul San Francisco- Tel-Aviv New Delhi Tokyo -New York Houston Atlanta Rabat Cairo Karachi Milan Riyadh Duba Lagos DhakaGuangzhou Hong Kong Mumbai-Yangon Bangkok Wuhan Shanghai Los Angeles- Hangi. Bangalore Abidjan Nairobi Chennai- Vientiane Manila EPhnom Penh Ho Chi Minh Mexico San Jose -Panama -Caracas Bogota Colombo Kuala Lumpur Singapore Jakarta Johannesburg Lima Sao Paulo Sydney \Auckland Santiago- -Buenos Aires 73 Overseas Offices INVEST JAPAN 23#24JETRO Japan External Trade Organization 5. Talk to JETRO First! Investment projects supported by JETRO Supported over 14,000 1,400 (2003-2015) - projects Central & South America 1% Pacific 4%. Middle East & Africa 1% Foreign companies' startups Canada: 33 companies Asia US 29% 32% Europe 31% Canada 2% Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 24#255. Talk to JETRO First! JETRO Japan External Trade Organization Invest Japan Business Support Center (IBSC) IBSC Osaka IBSC Kobe PUNKY IBSC Fukuoka Copyright (C) 2016 JETRO. All rights reserved. IBSC Nagoya IBSC Tokyo IBSC Yokohama INVEST JAPAN JAPAN 25#26JETRO Japan External Trade Organization 5. Talk to JETRO First! Invest Japan Business Support Center (IBSC) Temporary offices Temporary offices in 6 major Japanese cities are available for free of charge for 50 business days Consultation service Specialists give advises about how to start up business in Japan Private office space Consultation "Legal advise Business cost ☐ ■ Business culture ☐ ▪ Human resources •Market regulations "Real estate Copyright (C) 2016 JETRO. All rights reserved. Conference room INVEST JAPAN 26#27JETRO Japan External Trade Organization 5. Talk to JETRO First! Recent Examples of FDI from Canada to Japan supported by JETRO RED<NEE Looking Beyond StarTech com Hard-to-find made easy® ACCEDIAN NETWORKS Telecom Test and EXFO Service Assurance Copyright (C) 2016 JETRO. All rights reserved. CAE SON SOLAR POWER NETWORK UNIFILLER audiokinetic ✰ Averna ® INVEST 1APAN JAPA 27#28JETRO Japan External Trade Organization EBC Golden Opportunity "Golden Opportunity" The EBC Report on the Japanese Business Environment 2015 The European Business Council in Japan. The European (EU) Chamber of Commerce in Japan 5. Talk to JETRO First! "This year has seen developments in Government policy, regulation and international trade that could at last pave the way for a more open and competitive business environment in Japan. We are cautiously optimistic that, finally, some of the many barriers stifling growth and investment here might fall, benefitting not only individual companies but also the economy as a whole". Danny Risberg Chairman, European Business Council in Japan Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN JAPA 28#29JETRO Japan External Trade Organization Talk to JETRO First! Copyright (C) 2016 JETRO. All rights reserved. INVEST JAPAN 29