Public Lecture PPT (6.6.2012)
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This document discusses Japan's promotion of foreign direct investment (FDI). It notes the risks of an aging population and industrial hollowing out, and how FDI can help address these issues through innovation. Specific measures to promote FDI discussed include tax incentives, improving the business environment, and establishing Asian headquarters in Japan. The importance of FDI to Japan's economy has increased over time from contributing little in the 1980s to now being key for survival given current challenges.
Public Lecture PPT (6.6.2012)
- 1. Ⅰ FDI in Japan; statistical survey (Chart 1-3) Ⅱ Risk of hollowing-out of Japanese economy (Table 1-2) Ⅲ Risk of Aging and Depopularigation (Chart 4-5, Table 3-4) Ⅳ FDI and Innovation (Chart 6-15) Ⅴ Measure to promote FDI (JETRO, promoting Asian head quarter offices in Japan, attracting foreign students to Japan－Chart 16-17) Naoyuki Haraoka Executive Managing Director, JEF Editor-in-chief of Japan SPOTLIGHT http://www.jef.or.jp/journal/index.html ID: JSFREE Password: thanks
- 3. Chart 3 Trend of sales-profits ratio (by nationality) (%) 10 9.1 9 7.8 7.9 8 7.6 7.5 7.4 7.2 7 6 5.5 5.6 American Firms 5 4.8 4.6 4.8 Asian Firms 4 3.4 3.5 3.4 3.2 European Firms 3.1 3 2.7 2.5 All Firms 2 2.4 2.3 1.0 1.1 1 0.9 0.9 0.5 0.3 0.2 0 2003 2004 2005 2006 2007 2008 2009 (Source) Ministry of Finance, Japan (Note) Sales-Profits Ratio = Current Profits/Sales×100.0
- 4. Table 1 The number of the firms (firms, %) with declining shareholding by foreign companies (excluding banking, insurance and real estate) World total American firms Asian firms European firms Rate of Rate of Rate of Rate of increase increase increase increase 2008 2009 2008 2009 2008 2009 2008 2009 over the over the over the over the FY FY previous FY FY previous FY FY previous FY FY previous year year year year All the industries 125 164 31.2 38 62 63.2 14 22 57.1 44 55 25.0 Manufacturing ▲ 28 30 7.1 10 10 0.0 4 3 11 13 18.2 25.0 Non- Manufacturing 97 125 28.9 28 52 85.7 10 19 90.0 33 42 27.3
- 6. Chart 4 Changes of percentage of the aged population to total (%) 35 older than 75 years old 30 65-74 years old 25 20 15 10 5 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2002 2003 2005 2010 2015 2020 2025 (prediction) (Sources) Chief Cabinet Office, Bureau of Statistics
- 7. Table 3 Comparison by nation of the percentage of the aged population Day/year percentage to the total population (%) Nation of the data Above 65 65-74 Above 75 Japan 2003. 9. 15 19.0 10.8 8.2 Italy 2001. 1. 1 18.2 10.8 8.0 Germany 2001. 12. 31 17.1 ……. ……. France 2003. 1. 1 16.1 8.5 7.6 U.K. 2001. 6. 30 15.9 8.4 7.5 Russia 2002. 1. 1 12.9 8.3 4.6 Canada 2002. 7. 1 12.7 6.9 5.8 U.S.A. 2002. 7. 1 12.3 6.3 6.0 (Sources) Home page of each country’s statistics Bureau
- 8. Chart 5 Changes of the percentage of the aged population to the total in the developed countries (％) 30 (2003) France UK 25 Germany Italy 20 Japan 15 14 10 5 7 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2025 (Year) (Sources) Japan National Research Institute of Social Welfare and Population Issues “World Population Prospects (2002)”
- 9. Table 4 Summary of forecast ofInstitute of population published in January 2012 by National Research Japanese Social Welfare and Population Issues 2010 128,060 (thousand) ↓ 2030 116,620 (thousand) Total Population ↓ 2055 91,930 (thousand) 2060 86,740 (thousand) 2010 16,840 (thousand) 13.1% ↓ 2030 12,040 (thousand) 10.3% Population (0-14 year old) ↓ 2055 8,610 (thousand) 9.4% ↓ 2060 7,910 (thousand) 9.1% 2010 81,730 (thousand) 63.8% ↓ 2030 67,730 (thousand) 58.1% Productive Population (15-64 years) ↓ 2055 47,060 (thousand) 51.2% ↓ 2060 44,180 (thousand) 50.9% 2010 29,480 (thousand) 23.0% ↓ 2030 36,850 (thousand) 31.6% Aged Population (above 65 years) ↓ 2055 36,260 (thousand) 39.4% ↓ 2060 24,640 (thousand) 39.9% (% : percentage of the total)
- 10. Chart 6 Factors of economic growth among the advanced nations 1980-95 1995-05 10.0 10.0 TFP TFP 8.0 capital input 8.0 capital input labour input labour input 6.0 6.0 real value-added real value-added growth rate growth rate 4.0 4.0 2.0 2.0 0.0 0.0 -2.0 -2.0
- 11. Chart 7 TFP rate in manufacturing as well as non-manufacturing industry 240 220 Manufacturing Non-manufacturing 200 180 160 140 120 100 1970 1975 1980 1985 1990 1995 2000 2005(year) (Source) JIP database 2008
- 17. Specific measures to promote setting up Asian headquarter in Japan Ⅰ New law for promotion of FDI in Japan 1) Preferential treatment of corporate tax and income tax 2) Simplification of legal procedure to set up offices in Japan Ⅱ Subsidy program for FDI with a greater impact upon the local economy. Ⅲ New Program for improving business environment for FDI in Japan 1) English translation of the administrative guidelines 2) Improving social inflastructure for a daily life of non-Japanese resident such as foundation of more international schools for non- Japanese children Examples to be covered by the measures abovementioned; IT service, medical products, solar fuel cell, helicopters, liquid crystal display, etc.
- 19. 1 Until the 1980’s, FDI had contributed very little to Japan’s economic growth. The strength of Japanese economy came from its homogeneity in the expanding global market. 2 From 1990’s until March 11,2011, FDI has been considered invaluable to Japan’s economic growth, since the growth pattern depending upon the homogeneity came to an end. It was agreed upon that a diversity would encourage innovation and compliment a population growth. 3 Now, FDI is considered to be a key for Japan to survive in the World under an increasing risk of industrial hollow-ing-out due to an energy crisis brought about by post-Fukushima nuclear crisis.