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FY 2017 Overseas Investment Seminar

Shin Oya, Senior Advisor for Policy and Strategy Office for Financial Operations and Director of the Research Division, JBIC
Dr. Ayumu Tanaka, Associate Professor at the Faculty of Commerce, Chuo University
A scene from the seminar

The Japan Bank for International Cooperation (JBIC) hosted its "Overseas Investment Seminar: Overseas Business Operations by Japanese Manufacturing Companies" on November 27, 2017. Shin Oya, Senior Advisor for Policy and Strategy Office for Financial Operations and Director of the Research Division at JBIC, presented the results of the FY2017 JBIC Survey on Overseas Business Operations by Japanese Manufacturing Companies (the "FY 2017 JBIC Survey"), which marked the 29th year since it was first conducted in 1989. Another presentation was given by Dr. Ayumu Tanaka, Associate Professor at the Faculty of Commerce, Chuo University, on "Foreign Direct Investment in Manufacturing and Service Sectors". The seminar was a great success, attracting over 90 participants.

Oya started the seminar by explaining the results of the FY2017 JBIC Survey, which examined "Services provided and received by Japanese manufacturing company outside Japan" and "Business management of overseas affiliates", in addition to the regularly covered topics such as "Evaluations of overseas business performance", "Overseas business prospects" and "Promising countries or regions for overseas business operations".

His presentation showed that overseas investments by Japanese manufacturers appear to be slowing down, and that China and India remain in the top two places in the rankings of promising countries or regions for medium-term overseas operations. He also added that Mexico's ranking among promising countries or regions was overtaken by that of the U.S. due to factors such as the start of the Trump administration. He continued his presentation by discussing the reasons of servitization by Japanese manufacturers and the challenges that they face in delivering those services abroad, and describing how Japanese manufacturers doing business abroad use and evaluate legal, accounting and logistics services provided by local companies. Lastly, he explained the challenges that Japanese manufacturers encounter in transferring their headquarters functions abroad and using local human resources, as well as their efforts to address those challenges.

Dr. Tanaka followed with his presentation on foreign direct investment in the manufacturing and service sectors, giving examples from the cases of Japanese companies, along with the theory of foreign direct investment. He also pointed out the importance of enhancing productivity in both the manufacturing and non-manufacturing industries in order to expand Japan's foreign direct investment.

He stated that the field of foreign direct investment has been an active area of research as a part of the international trade theory and in recent years, research on foreign direct investment focusing on corporate productivity is increasingly drawing attention. He also elaborated on the results of the research which shows that companies with higher productivity engage in exports and make foreign direct investment. He pointed out that, while these research results show that high productivity is a key factor in expanding overseas business in the future, Japanese companies' productivity is low, particularly in the service sector where productivity is less than half of that in the U.S. He finished his presentation by discussing the problem of the Japanese companies that are yet to gain sufficient profits by providing services amid the increase in the size of the service sector as a proportion of GDP and the increase in opportunities to provide services by Japanese manufacturers, in addition to other future challenges they might face.

JBIC will continue to provide a broad range of information to assist Japanese companies in expanding their overseas business operations.

Fiscal Years