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JAPANCurrent Economic Situation
andExport Opportunities For British Businesses
Kaoru OhsumiUKTI
British Consulate-General Osaka
JAPAN
MARCH 11 AND TODAY
• Tohoku Region Pacific Coast Earthquake (M9.0)– Tohoku Region: 250miles northeast of Tokyo – 4th largest earthquake on record & tsunamis– Nuclear issues – Most expensive natural disaster in history
- Initial estimate of damage 3-5% of GDP (up to £190bn)
• Today– Safe to visit and conduct business in Japan– Business getting back to normal– Impacts and opportunities?
Overview of Japanese Economy
• 3rd largest economy in the world• GDP per capita is still 10 times of China• High quality business environment
JAPAN
UK Japan China
Population (2010) 62 million 127 million 1,354 million
Land Mass 295,000km2 378,000km2 9,600,000km2
Real GDP (estimated 2010) $2.2trillion $5.5trillion $5.9trillion
Real GDP Growth (estimated 2010) 1.3% 3.9% 10.3%
GDP Per Capita (estimated 2010) $36,000 $43,000 $4,400
Ease of Doing Business Index 4th 18th 79th
Source: IMF, UN, World Bank
JAPAN
Source: The Economist
Overview of UK/Japan Trade (2009)
• Lehman crisis hit UK/Japan trade• UK still maintains its 1% market share of
imports into Japan
JAPANSource: Bank of Japan, Ministry of Finance
JAPAN
Major UK Exports to Japan (2009)
Source: BIS analysis of HM Revenue & Customs data
₤ Million ShareOf UK
Total Share
Financial & Insurance 2,878 34% 5%
Other Business Services 862 10% 2%
Medicinal & Pharmaceutical Products 609 7% 3%
Transportation 569 7% 3%
Power Generating Machinery & Equipment 394 5% 3%
Royalties and licence fees 375 4% 5%
Road Vehicles (Including Air Cushion Vehicles) 279 3% 2%
Miscellaneous Manufactured Articles N.E.S. 260 3% 2%
Travel 205 2% 1%
Non-Ferrous Metals 172 2% 4%
Total 8,398 100% 2%
-6%
-4%
-2%
0%
2%
4%
Domestic contribution Foreign contribution
Real GDP Growth (Q/Q) GDP Forecast
JAPAN
Japan in Technical Recession ⇒ Expected to Recover
• Earthquake dragged down Q1 (January-March) GDP – Production and
consumption both ↓– Imports ↑ to fill up the
shortages
• Recovery expected from Q3– Firms to resume normal
operation in AutumnSource: Cabinet Office, Economic Planning Association
Lehman Crisis
Earthquake
• Auto/Semiconductor most affected
– 20% of the industry in the affected area
– Shortages of parts halted production worldwide
JAPAN
Two Big Impacts For Industries
Supply chain disruption Power shortage
• Fukushima nuclear accident (150miles northeast Tokyo)
– Reduced/delayed business investment and supply
– 15% power cut in the summer
JAPAN
Reconstruction Opportunities
• Town-planning
• Risk assessment, disaster preparedness and business continuity planning
• Renewable energy and low carbon including “Smart Cities”- Renewable Energy And Green Building Seminar On Opportunities (London, 24 June 2011)
• Nuclear clean-up and decommissioning- British Decontamination Technologies seminar/showcase/ 1-2-1 meetings (Japan, Autumn 2011)
• Tele-medicine
• Hospital reform consultancy
• Cloud computing
• Aid-Funded Sustainable Infrastructure Seminar (London, 1 July 2011)
JAPAN
Key Sectors For British Exports
• Financial Services
• Automotive / Advanced Engineering
• ICT
• Life Sciences
• Creative Industries
• Retail Market / Consumer Goods
JAPAN
FINANCIAL SERVICES
• Huge personal wealth – Aggregate financial assets in excess of JPY1,400 trillion – Asset management services
• Domestic loans market plateauing – Japanese financial institutions expanding overseas business
• Earthquake impact limited to Tohoku
– TEPCO(Tokyo Electric Power Company)’s rehabilitation could impact major FS institutions
• Funding required for reconstruction – PFI financing???
JAPAN
ADVANCED ENGINEERING
▪ Automotive ▪ Energy ▪ Aerospace▪ Marine ▪ Railway ▪ Environment▪ Industrial components ▪ Defence ▪ Security
Automotive• Japan is still one of the world’s leading automotive countries• 2009 (Quantity) - Exports ↓ 33% / Imports ↓ 35% from 2008
2009 (Value) - Exports ↓ 36% to 9.4 trillion yen- Imports ↓ 42% year-on-year to 0.8 trillion yen
2009 - Motor vehicle production ↓ 32% to 7.9 million units2009 - Imported vehicle sales in Japan: 179,000 unites2009 - Exports of motor vehicles ↓ 46% to 3.6 million units from 2008
• Global need to reduce carbon emission from transport. • Japan’s Energy Conservation Law:
Recommended vehicle fuel efficiency targets for FY2010
JAPAN
ICT
• New opportunities/interests- Smart meters- Cloud based systems
• Opportunities- Software (including IPR – Intellectual Properties)- Devices/services to improve energy mgt quality/efficiency - Sensing technologies- Communications- Display technologies, etc
• Case studies (successful business in Japan)ARM, Imagination Technologies, Cambridge Silicon Radio, Novauris (speech recognition software), video games companies (Climax, Hello Games etc)
• Technology World (November 2011)Mobile World Congress, Barcelona (February 2012)
JAPAN
LIFE SCIENCES
• World 2nd largest market (2009)
Government’s Healthcare expenditure: £38.7 billionFastest ageing society with 127m population
65yrs: 23.1% (2010) => 30.5% (2025)
Pharma: £65 billion, 24.2% importedUK - Top overseas supplier, except 2009
Devices: £16 billion, 49.4% importedUK - 8th Overseas supplier
• Opportunities
Pharma: Drug seeds, DDS, Biomarker, R&D collaborationDevices: Innovative products, FDA approvedEarthquake: No negative impact. Demand increased.February 2012: “Ageing Mission” Trade Mission to Japan
JAPAN
CREATIVE INDUSTRIES
• Design Services- Main areas: Product/graphic/interface designs,
new materials, research work- Increasing collaboration in:
Consumer electronics, medical equipment, furniture, kitchen/household goods, etc- UKTI Design Service Mission (24-28 October 2011)
• Music- 2nd largest market in the world- UKTI Music Mission (3-5 October 2011)
• Designer Fashion- UKTI Fashion Mission (7-11 November 2011)
JAPAN
RETAIL MARKET / CONSUMER GOODS(I)
• Retail Overall– Emerging signs of recovery and expansion/development– Fierce competition– Must: ▪ Quality ▪ Delivery on time ▪ Price
▪ USP ▪ Flexibility ▪ Communication/Relationship
– Trend: “Petite Luxury ”
• Food & Drink – Many British products in Japan:
Tea, jam, confectionery, cheese, soft drink , alcohol drinks, smoked salmon, etc, etc
– “Safe” “Natural” “Healthy”– Regulatory barriers: BSE/F&M, Tariff, Organic, Additives– FOODEX2012, Tokyo (6-9 March 2012) – UK Pavilion?
JAPAN
RETAIL MARKET / CONSUMER GOODS(II)
• Gift / Houseware– Quality & Design– “Cute” “Feminine”– Functionality – Kitchenware
• Fashion- Largest market after Europe and US- UKTI Fashion Mission (7-11 November 2011)
• Sports and Leisure – A wide variety of products:
Brompton bicyles, Berghaus outdoor wear, etc etc – Outdoor/running boom:
Innovative products “yama-ska” (mountain skirts)
JAPAN
Enquiries to:
Economic Section [email protected]
Advanced Engineering [email protected] Creative Industries Design [email protected]
Designer Fashion [email protected] [email protected]
Financial Services [email protected] [email protected] ICT [email protected] Market / Consumer Goods
Fashion [email protected]&D [email protected]/Houseware [email protected] and Leisure [email protected]
Others including Reconstruction Opportunities
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This presentation is based upon materials either compiled by us through independent research, or supplied to us by third parties. Property particulars are for information only, and to give a general idea of the property. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Enterprise & Regulatory Reform, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned.
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