Why Japan? Masashi Nakazono JETRO Genève. Prepared for Handelskammer beider Basel & JETRO seminar on 4 Nov 2016

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2 Who are we? Japan External Trade Organization (JETRO) Governmental organization to promote mutual trade and investment between Japan and the rest of the world Established in 1958 Overseas offices: 74 (in 55 countries)* Japan offices: Tokyo Headquarters, JETRO Osaka, 46 regional offices, the Institute of Developing Economies (IDE-JETRO) * Employees: 1,735 (998 in Japan and 737 overseas)** *As of April 2016 **As of January Copyright (C) 2016 JETRO. All rights reserved. 2

5 1. Trade & Investment between Japan and Switzerland Investment between Japan and Switzerland 9.3 billion USD (2015 stock) 6.4 billion USD (2015 stock) Sources Prepared by JETRO Japan's Outward and Inward Foreign Direct Investment From The Ministry of Finance Balance of Payment Statistics and Bank of Japan foreign exchange rates. Copyright (C) 2016 JETRO. All rights reserved. 5

6 1. Trade & Investment between Japan and Switzerland Trade between Japan and Switzerland 6.4 billion CHF(2015) 3.0 billion USD(2015) From Federal Custom Administration (FCA). Copyright (C) 2016 JETRO. All rights reserved. 6

1. Trade&Investment between Japan and Switerland Inward FDI

23.3 Inward FDI into Japan by region 20 15 19.

1 North America 29% Europe 47% 0 2000 2001 2002 2003 2004

Source: Ministry of Finance Japan International Investment

7 1. Trade&Investment between Japan and Switerland Inward FDI stock in Japan (Trillion yen) 25 Approximately $230 billion 23.3 Inward FDI into Japan by region Central and South America 6% Asia 16% Oceania 2% North America 29% Europe 47% Data Source: Ministry of Finance Japan International Investment Position of Japan (historical data) Copyright (C) 2016 JETRO. All rights reserved. 7 7

60.0% 1. Trade & Investment between Japan and Switzerland Inward FDI into Japan Foreign Direct Investment Portion by GDP (%) 56.5% 50.0% 40.0% 31.1% 30.0% 25.6% 20.0% 10.5% 12.8% 19.3% 10.0% 4.8% 0.

8 60.0% 1. Trade & Investment between Japan and Switzerland Inward FDI into Japan Foreign Direct Investment Portion by GDP (%) 56.5% 50.0% 40.0% 31.1% 30.0% 25.6% 20.0% 10.5% 12.8% 19.3% 10.0% 4.8% 0.0% Japan China Korea Germany France USA UK Japan:BOJ: Balance of Payments (Data Based on the BPM6), Cabinet Office SNA (National Accounts of Japan) Other Countries :UNCTAD World Investment Report 2015, FDI database Japanese Government commits inward FDI to expand to 350 B USD by 2020 from 230 B USD in 2014 Copyright (C) 2016 JETRO. All rights reserved. 8

1. Trade & Investment between Japan and Switzerland 2. Why Japan? 3.

Improving Economic Indexes Under Abenomics Before

seasonally adjusted) 519 Trillion yen (2012) 1.

8 Trillion yen (Apr-June 2016) Stock Price (Nikkei

41 yen (26 Dec 2012) Launch of Abe administration (28

Index of Bank of Japan, manufactures) Large firms -3

Improved Large firms 6 Medium-sized firms 3 SMEs -3

12 Improving Economic Indexes Under Abenomics Before launch of Abe administration Now GDP (Real GDP seasonally adjusted) 519 Trillion yen (2012) 1.9% Increase Trillion yen (Apr-June 2016) Stock Price (Nikkei Stock Average) yen Increase yen (26 Dec 2012) Launch of Abe administration (28 Oct, 2016 Closing price) Business confidence (Tankan Index of Bank of Japan, manufactures) Large firms -3 Medium-sized firms -5 SMEs -12 (Dec 2012) Greatly Improved Large firms 6 Medium-sized firms 3 SMEs -3 (Sep 2016) Unemployment rate 4.3% Improved 3.0% (2012 Average) (Sep 2016) Copyright (C) 2016 JETRO. All rights reserved. 12

14 Foreign Visitor Arrivals and their Consumption Amount The number of foreign visitors to Japan in 2015: 20 million Their Consumption in 2015: 3.4 trillion JPY (34 B USD) 25'000 20'000 Foreign Visitor Arrivals Consuimption amount (B. yen) 3'477 19'737 (billion yen) 4'000 3'500 3'000 15'000 13'413 2'500 10'364 2'028 2'000 10'000 5'000 6' '358 1'085 1'417 1'500 1' Source:Japan National Tourism Organization, Press release, Jan. 19, 2016 Japan Tourism Agency, Consumption Trend Survey for Foreigners Visiting Japan, Press release, Jan. 19, Copyright (C) 2016 JETRO. All rights reserved. 14

World Ranking of GDP United States 17'419 China Japan Germany UK France Brazil Italy India 3'852 2'941 2'829 2'346 2'144 2'066 4'601 10'360 Russia Canada Australia 1'860 1'786 1'453 0 5'000 10'000

16 World Ranking of GDP United States 17'419 China Japan Germany UK France Brazil Italy India 3'852 2'941 2'829 2'346 2'144 2'066 4'601 10'360 Russia Canada Australia 1'860 1'786 1' '000 10'000 15'000 20'000 Gross domestic product 2013 (US dollars, Billions) World Development Indicators database, World Bank, 18 Sep Japan s GDP is Over 500 trillion yen. A leading world economy that boasts large-scale economic power. (source: Statistics Bureau, Ministry of internal Affaires and Communications World Statistics 2014, Cabinet Office) 16 Copyright (C) 2016 JETRO. All rights reserved. 16

18 Sophisticated Market 2. Why Japan? The reason why P&G tests its new disposable diapers in Japan is because Japanese housewives are the strictest consumers Prof. Michael E. Porter Copyright (C) 2016 JETRO. All rights reserved. 18

21 Innovation Hub 2. Why Japan? Science and technology related research is conducted spiritedly in Japan. Research funding as a percentage of GDP and Number of researchers per 10,000 people are among the largest in the world. Research funding percentage of GDP (G7 comparison) Number of researchers per 10,000 people (G7 comparison) Rank Country Percentage of GDP (%) Rank Country Number of researchers per 10,000 people 1 Japan German U.S Japan Canada German th - France (2.29%), 5 th - UK (1.73%), 6 th - Canada(1.69%), 7 th - Italy (1.27%), 8 th - Russia (1.12%) 4 th - US (40.2), 5 th - UK (39.7), 6 th - France(38.3), 7 th - Russia (31.0), 8 th - Italy (12.7) Source: Created from Ministry of Internal Affairs and Communication, Survey Result on Science and Technology Indicators 2014 Date source: OECD Main Science and Technology Indicators, etc. Copyright (C) 2016 JETRO. All rights reserved

22 Yoshinori OHSUMI: 2016 in Physiology or Medicne on the discoveries of mechanisms for autophagy Satoshi OMURA: 2015 in Physiology or Medicne on the therapy against infections caused by roundworm parasites 22 Copyright (C) 2016 JETRO. All rights reserved. 22

2016-2017 Foreign companies validate Japan s infrastructure Copyright (C) 2016 JETRO.

24 Business-Friendly Infrastructure 2. Why Japan? Easy environment for business 2 nd Source: World Economic Forum, The Global Competitiveness Report Foreign companies validate Japan s infrastructure Copyright (C) 2016 JETRO. All rights reserved. Source: Ministry of Economy, Trade, and Industry(METI), Survey on Attitudes of Foreign Companies toward Direct Investment in Japan Report

27 Japan s Business Cost 2. Why Japan? Source : JETRO Brussels Hong Kong (USD) London Singapore Paris Seoul Mumbai Tokyo Office rent (monthly/per sq.m) Housing rent for expatriates (monthly) Brussels Copyright (C) 2016 JETRO. All rights reserved. Singapore London Mumbai Hong Kong Paris Seoul Tokyo (USD) Source : JETRO 27

Excellent Japanese transport infrastructure spreading throughout Japan Nearly

31 Comfortable Living 2. Why Japan? Most livable Japanese cities as chosen by the world RANK 1. Tokyo 2. Vienna 3. Berlin 4. Melbourne 5. Sydney 6. Stockholm 7. Vancouver 8. Helsinki : 12.Fukuoka 14.Kyoto Source: MONOCLE, UK Copyright (C) 2016 JETRO. All rights reserved. 31

34 3. Making Japan the most business-friendly country in the world Challenges in doing business in Japan Rank 2013 Survey 2015 Survey 1 High business costs Complicated business systems and structures 2 Particularities of Japanese market 3 Difficulty in communicating in non-japanese languages 4 Complicated business systems and structures 5 Difficulty in finding human resources Difficulty in finding human resources Difficulty in communicating in non-japanese languages (in business) Particularities of Japanese market High business costs Copyright (C) 2016 JETRO. All rights reserved

35 3. Making Japan the most business-friendly country in the world Structural Reform Opening up the electricity market Regulatory reforms of Medicine and medical equipment Corporate Tax Reform Copyright (C) 2016 JETRO. All rights reserved. 35

37 JETRO Genève 80 Rue de Lausanne, 1202 Genève Tel This document is owned by JETRO. All of the content in this document, including, but not limited to, still images, text, pictorial works, designs and logos, is owned or licensed by JETRO. This document shall not be reproduced or reprinted on any medium or registered on any search system in whole or part by any means, without prior permission of JETRO. Although JETRO makes its best efforts to ensure the accuracy of the information contained in this document, JETRO does not take any responsibility regarding losses derived from the information contained in this document. Copyright (C) 2016 JETRO. All rights reserved. 37

Investment Opportunities in Japan. June 1, 2016 Kazuya Nakajo Director General Invest Japan Department Japan External Trade Organization (JETRO)

Investment Opportunities in Japan June 1, 2016 Kazuya Nakajo Director General Invest Japan Department Japan External Trade Organization (JETRO) 2 1. Why invest in Japan now? 1. Why invest in Japan now?