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Business Profile
Economy: After suffering massive destruction during World War II, Japan was the economic phenomenon of the late 20th century. The country’s GDP now ranks second in the world after the USA. This has been achieved through judicious application of import controls and consistently high domestic investment, coupled with an aggressive export drive orchestrated by the powerful Ministry of International Trade and Industry (MITI). The structure of the Japanese domestic economy revolves around a series of large multi-product corporations (which have since become household names in the world economy), linked in loose alliances (known as keiretsu) with banks and finance houses. The corporations are serviced with components and raw materials by a plethora of small firms with low overheads and labour costs, and a well honed distribution system (many of these lower-level processes are now carried out in the ‘tiger economies’ of the Pacific Basin).
The economic boom came to an end in the early 1990s, when competition from abroad and excessive loans by the banks began to put the Japanese economy under a set of pressures to which it has proved unable to respond. The bulk of the bad loans became apparent in the wake of the 1991 property crash, which had followed an orgy of buying in areas such as Metropolitan Tokyo and the eastern ‘Gold Coast’ of Australia. Since then, especially in the wake of the 1997 Asian financial crisis, the economy has stagnated, averaging just one per cent growth annually. In 2002, the GDP was expected to contract (estimates vary, but perhaps by up to four per cent). Political indecision and the incestuous nature of the keiretsu have prevented the Government from making anything more than token and piecemeal efforts at structural reform.
Agriculture is the only sector of the economy that does not measure up to Western standards in terms of technology and management, and remains relatively inefficient and heavily protected by the Government. The main reason for this is the nature of the Japanese electoral system, which affords a disproportionate number of parliamentary seats to rural areas. Rice, potatoes, sugar and citrus fruits are the main crops. The manufacturing industry is still important, particularly vehicles and electronic goods, although traditional industries such as coal mining, shipbuilding and steel are also sizeable and, unlike many of their Western counterparts, profitable. Overall, industry contributes 35 per cent of economic output – a larger proportion than the world’s other leading economies. The USA has a 20 per cent share of Japan’s import market, followed by South Korea and Indonesia (5.5 per cent), Australia, China, Taiwan and Saudi Arabia (5 per cent). The service sector grew rapidly in the 1980s as the economy matured and Japan became a major force in the international economy. The emphasis in Japanese trade thus switched from manufactured goods to export of services and ‘invisibles’, such as finance and insurance. In the international arena, Japan is a leading member of the Organisation of Economic Co-operation and Development (OECD) and the Asia-Pacific Economic Co-operation (APEC) forum.
Business: A large supply of visiting cards printed in English and Japanese is essential. Cards can be quickly printed on arrival with Japanese translation on the reverse side. Appointments should be made in advance and, because of the formality, visits should consist of more than a few days. Punctuality is important. Business discussions are often preceded by tea and are usually very formal. Office hours: Mon-Fri 0900-1700. Some offices are open Sat 0900-1200.
Commercial Information: The following organisations can offer advice: Japanese Chamber of Commerce, Second Floor, Salisbury House, 29 Finsbury Circus, London EC2M 5QQ, UK (tel: (020) 7628 0069; fax: (020) 7628 0248); or Nippon Shoko Kaigi-sho (Japan Chamber of Commerce and Industry), 2-2 Marunouchi 3 Chome, Chiyoda-ku, Tokyo 100-0005 (tel: (3) 3283 7824; fax: (3) 3211 4859; e-mail: info@jcci.or.jp; website: www.jcci.or.jp); or JETRO (Japan External Trade Organisation), Internationalisation Centre, 2-2-5 Toranomon, Minato-ku, Tokyo 105-8466 (tel: (3) 3582 5511; fax: (3) 3587 0219; website: www.jetro.go.jp).
Conferences/Conventions: The Japan Convention Bureau is a division of the Japan National Tourist Organisation (see Contact Addresses section); its Convention Planner’s Guide to Japan lists 35 cities with conference facilities including Tokyo, Kyoto, Osaka, Yokohama, Hiroshima and Nagasaki. Kyoto has proved to be one of the most popular locations for international meetings over the last few years. For further information, contact the Japan Convention Bureau, 2-10-1 Yuraku-cho, Chiyoda-ku, Tokyo 100-0006 (tel: (3) 3216 2905; fax: (3) 3216 1978; e-mail: convention@jnto.go.jp; website: www.jnto.go.jp).
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