Client LOGO JAPAN Current Economic Situation and Export Opportunities For British Businesses Kaoru Ohsumi UKTI British Consulate-General Osaka 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? JAPAN Overview of Japanese Economy • 3rd largest economy in the world • GDP per capita is still 10 times of China • High quality business environment 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 JAPAN Overview of UK/Japan Trade (2009) • Lehman crisis hit UK/Japan trade • UK still maintains its 1% market share of imports into Japan Source: Bank of Japan, Ministry of Finance JAPAN Major UK Exports to Japan (2009) Of UK ₤ Million Share 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% Source: BIS analysis of HM Revenue & Customs data JAPAN Japan in Technical Recession ⇒ Expected to Recover • Earthquake dragged down Q1 (January- March) GDP – Production and Earthquake consumption both ↓ Lehman Crisis – Imports ↑ to fill up the shortages • Recovery expected from Q3 – Firms to resume normal Source: Cabinet Office, Economic Planning Association operation in Autumn JAPAN Two Big Impacts For Industries Supply chain disruption Power shortage • Auto/Semiconductor • Fukushima nuclear most affected accident (150miles northeast Tokyo) – 20% of the industry in the affected area – Reduced/delayed business investment and – Shortages of parts supply halted production worldwide – 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 units 2009 - Imported vehicle sales in Japan: 179,000 unites 2009 - 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 billion Fastest ageing society with 127m population 65yrs: 23.1% (2010) => 30.5% (2025) Pharma: £65 billion, 24.2% imported UK - Top overseas supplier, except 2009 Devices: £16 billion, 49.4% imported UK - 8th Overseas supplier • Opportunities Pharma: Drug seeds, DDS, Biomarker, R&D collaboration Devices: Innovative products, FDA approved Earthquake: 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 firstname.lastname@example.org Advanced Engineering email@example.com Creative Industries Design firstname.lastname@example.org Designer Fashion email@example.com Music firstname.lastname@example.org Financial Services email@example.com Healthcare firstname.lastname@example.org ICT email@example.com Retail Market / Consumer Goods Fashion firstname.lastname@example.org F&D email@example.com Gift/Houseware firstname.lastname@example.org Sports and Leisure email@example.com Others including Reconstruction Opportunities firstname.lastname@example.org JAPAN Client LOGO Japan is 元気！ GENKI Stay in Touch ! email@example.com 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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