JAPAN
Japan
.
Market overview
Opportunities and challenges
Japan became Australia’s closest economic partner in Asia
in the 1960s and the relationship remains central to Australia’s
trade policy priorities. Japan is currently Australia’s second
largest trading partner and third largest foreign direct investor.
Japan faces falling demand for exports in key markets such
as the Eurozone and China – as a result of the debt crisis in
the former and a territorial dispute with the latter. The strong
yen, combined with sluggish domestic demand, are further
challenges.
Trade, investment and economic relationships continue to
flourish and grow, even in the face of a mature market in
Japan and difficult global economic conditions.
Japan’s structural, social and political issues such as the
increasing proportion of the aged in Japanese society, global
competition for key resources and, a lack of people skilled to
operate on today’s international stage, are ongoing issues.
As international competition for food, energy and resources
grow and increase pressure to diversify supply chains,
Australia’s importance as a reliable and stable long-term
supplier to Japan will continue.
Despite low growth rates, Japan remains the world’s third
largest economy. Australia’s trade with, and investment from,
Japan has grown over the last three years, notwithstanding
the strong Australian dollar.
Expansion by Japanese corporations into third-country markets
is pronounced, and creates significant trade, investment and
education opportunities for Australia as it pursues its
‘Australia in the Asian Century’ strategy.
Austrade’s network in Japan
Sapporo
Tokyo
Osaka
Fukuoka
>3 Trade outlook
Education outlook
Japan is Australia’s second largest export destination. Exports
of both services and merchandise increased in the 2010-2011
over the previous period.
Opportunities in Japan’s education sector are driven by the
need for Japanese universities to internationalise; corporate
demand for a more internationally skilled workforce; specialist
courses in the vocational education and training (VET) sector;
and delivering an integrated path for Japanese students from
the high-school exchange experience to English language
training, tertiary and post-graduate study.
Japan’s long-term economic challenges represent large-scale
opportunities for renewed and expanded engagement with
Australia. They are driven by Japan’s need for minerals and
energy security, food safety and security, development of new
markets in growing economies and responses to its ageing
population and declining productivity challenges.
Japan’s desire for new technologies, particularly in the software
and pharmacy sectors, also present opportunities for Australia,
based on our demonstrable competitive advantages.
Japan’s corporate footprint in South-East Asia may also offer
English language and vocational education and training
opportunities for Australian providers with capability and a
presence in South-East Asia.
When concluded, the Free Trade Agreement under
discussion with Japan is expected to generate significant
new opportunities.
Japan’s corporate footprint in third markets creates
opportunities for Australian exporters in strategic partnering
and participating in supply chain opportunities, particularly
for those with existing onshore supply arrangements and
relationships.
Investment outlook
Australia, once perceived in Japan as a small, distant and
isolated market, is now appreciated as a growing, affluent and
stable destination for Japanese foreign direct investment (FDI).
Japanese FDI stock in Australia has doubled over the last five
years and overall Japanese FDI flow into Australia over the last
three years totalled A$149 billion.
Japan is the third largest investor in Australia and the source
of approximately 14.4 per cent of total foreign investment into
Australia. Total Japanese investment in Australia is worth more
than A$123 billion, with Japanese FDI stock totalling close to
A$52 billion in 2011, a 42 per cent increase since 2008.
Austrade’s approach for attracting investment from Japan
focuses on food, agricultural and energy security, market
expansion, technology innovation and the development
of global human capital. In all of these areas, Australia
demonstrates competitive advantage.
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Austrade Austrade services
Assisting Australian business in international markets
Austrade is the Australian Government’s trade, investment and education promotion agency. One of our key roles
is to provide a range of services to assist Australian companies seeking to grow their business internationally.
How Austrade helps Australian
business in Japan
Austrade’s network in Japan consists of four offices;
Tokyo, Osaka, Fukuoka and Sapporo, with 43 staff
including 29 business development managers.
Austrade assists Australian business and attracts
productive FDI through support by providing market
assistance which may otherwise be difficult due to
language and other issues.
Japan has a mature and well-developed legal
environment with minimal risk of default by business
partners, however there are significant cultural, linguistic
and opaque regulatory barriers and requirements that
need to be negotiated by new market entrants.
Close to a third of Australian exporters active in the
Japanese market use Austrade to address the range of
cultural, regulatory and linguistic difficulties.
The Australian Government crest is highly valued in
Japan, allowing Austrade to offer clients high-level
access to government and business decision makers.
This is even more pronounced in regional Japan where
Austrade has responsibility for running the two Consulate
General offices in Osaka and Fukuoka and the Consulate
in Sapporo, affording high-level access to local decisionmakers and potential investors.
Austrade’s long-term contact and relationships with
Japanese business and government helps Australian
exporters and investors better calibrate opportunities
and strategic directions.
To support FDI into Australia, Austrade’s regional post
network has been particularly effective in tapping into
second and third-tier Japanese companies based in
regional areas – many of whom are frustrated by the
reduction in domestic opportunities and market shrinkage
at home, and are considering overseas expansion.
The global scale of Japanese corporate activity also
provides a strategic platform for Austrade to assist
Australian businesses to leverage their partnerships
with Japanese companies across major markets in Asia,
generating new trade opportunities and underpinning
Australia’s ‘Asian Century’ strategy.
Start the conversation
Visit our website at www.austrade.gov.au
Email us on [email protected]
Call us on 13 28 78
As a reflection of the importance of long-term
relationships in Japan and the need for trusted partners,
Austrade Japan has traditionally operated with a strong
focus on forging relationships with local companies, and
delivering opportunities and access to Australian clients
through these relationships. Austrade’s work in facilitating
the right introductions at the early stage is critical for
clients when establishing their credentials.
>5 Case study
Auto supply chains in Asia
Austrade is working with Australian parts
manufacturers to assist them to access
Japanese auto supply chains in Asia. Austrade
facilitated meetings for Australian supplier
group missions in 2012, led by Automotive
Envoy Mr John Conomos AO, to promote their
components and technologies to Japanese
auto manufacturers operating in Thailand and
Indonesia for export to global markets.
Austrade has supported lobbying for the
inclusion of Australian parts manufacturers in
Thai-based auto supply chains for export to
Asian markets. Follow-up work by Austrade
and representation on behalf of two capable
Australian companies has been successfully
completed.
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Austrade