Participants listening to the presentation

JBIC co-organized the JBIC Overseas Investment Seminar with Around Japan Sea Economic Exchange Conference in Hokuriku (Hokuriku AJEC) on November 18, 2009.

JBIC has conducted an annual survey on Japanese manufacturers' overseas business operations for more than two decades. In fiscal 2009, JBIC released its 21st Survey Report on Overseas Business Operations by Japanese Manufacturing Companies. The report tabulated and studied responses received from around 600 companies about important issues in overseas business operations, especially “medium-term business prospects,” “evaluations of overseas business performance,” “promising countries or regions for overseas business operations” and “important domestic and overseas efforts to maintain/improve international competitiveness.” In this Seminar, held in Fukui, JBIC staff made presentations on the results of this survey as well as the prospects and future agenda of Japanese manufacturing companies.

Consultant and General Manager Hisao Nakajima of Business Strategy Consulting Department I, Nomura Research Institute, Ltd. (former President of Nomura Research Institute Shanghai Limited) also made a presentation, focusing particularly on China in the region around the Japan Sea.  Citing pioneering examples of Japanese companies targeting increasing middle-class consumers in the internal region, he talked about Japanese firms' business strategy and agenda in China.  His presentation was followed by the question and answer session. Many companies participated in the Seminar from across the Hokuriku region, reflecting a high level of interest in overseas business opportunities.

Increasing Interest in Emerging Markets

At the outset, Masaaki Amma, Head of International Finance Department, West Japan, JBIC, talked about the lessons from the global economic crisis and considered their implications for the future financial and economic situation.  He then assessed U.S. economic trend and gave an overview of emerging Asian economies, stressing the importance of doing business in their markets.

Senior Economist Susumu Ushida of International Research Office, JBIC, made a presentation entitled “Current Trend and Agenda of Japanese Companies' Overseas Business Operations: Survey Report on Overseas Business Operations by Japanese Manufacturing Companies in FY2009.”  After explaining that since the survey was conducted from July to September, it gave the first findings reflecting the impacts of the financial crisis that erupted in the fall of 2008, he pointed out: “as many as 66% of the companies responded expressed they would strengthen or expand overseas business, indicating a majority of companies still have positive stance toward overseas businesses.”

With regard to promising investment destinations, he pointed out that China, which had ranked first, but with decreasing votes in recent years, increased popularity this fiscal year, along with such emerging markets as India and Brazil.  He interpreted this trend as an ongoing shift in the Japanese manufacturers' strategy in overseas business operations from a simply pursuit of cheap labor, to overseas operations being aware of markets in emerging countries.  

  Mr. Nakajima

Mr. Hisao Nakajima of Nomura Research Institute delivered a lecture entitled “Business Strategy in China: Increasing Middle-Class in China's Inland Region: Pioneering Cases of Japanese Firms Targeting Middle-Income Class and Their Agenda”.  Referring to the projection of 8.5% GDP growth in 2009, he pointed out that China's one-year growth would create an economy comparable to Thailand's national economy, and that the country's center of growth has been shifting from the coastal to inland region.

Mr. Nakajima emphasized the importance of developing the middle-class market by showing the data that the middle-income households who earn at least 50,000 yuan annually are rapidly increasing.  He cited again a projection that China will have a larger middle-income population relative to India and gave his view that with a market structure similar to that of Japan, Japanese firms may have an advantage. 

Citing successful cases of Japanese firms in China, Mr. Nakajima stressed the importance of building up a sales channel as the key to developing the middle-class market.  Finally he touched on the latest concern about Japan becoming like “Galapagos Islands” in terms of technology due to product development with a focus placed only on the Japanese market and concluded his lecture by pointing out that it is time for Japanese firms to shift the management focus from the domestic market, which is expected to shrink over the coming years, to overseas markets.

High-Level Interest in Overseas Business Operations including in China

During the question and answer session, the participants asked questions one after another, attesting to strong interest in business development in China and other foreign countries.  Among their questions were: “Amid increasing labor cost in China, are there companies moving to manufacture goods in a country where labor cost is cheaper than in China and export them to China?  If that is not the case, why?” and “I hear that internet sales are increasing in China.  Do you think it is possible to develop internet business without physically having shops in China?”

JBIC will continue to disseminate a variety of information on Japanese manufacturing companies' overseas business development through similar events.