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Last updated : Nov 2009
Japan Business
Japan Business Overview - TravelPuppy.com
Japan Economy

After suffering widespread destruction from World War II, Japan became the economic phenomenon of the late 20th century. At $4,000 billion, the country’s GDP ranks number two in the world after the USA. This was achieved through many decades of steady growth (however this period has now ended – see below) motivated by judicious application of import controls and consistently high domestic investment, together with an aggressive export drive orchestrated by the strong Ministry of International Trade and Industry (MITI).

The structure of the domestic economy in Japan revolves around a group of big multi-product corporations (many have since become global household names), connected in loose alliances (known as keiretsu) with finance houses and banks. The corporations are serviced with components and raw materials by a myriad of small companies with low overheads and labour costs, and a top-notch distribution system (many of these lower-level processes are now also carried out in the ‘tiger economies’ of the Pacific Basin).

The model functioned exquisitely until the early-1990s, when competition from overseas and excessive lending by the banks started to put the Japanese economy under a set of pressures to which it has been unable to respond. The extent of the situation became known initially with the 1991 property crash and, more spectacularly, with the 1997 Asian financial crisis. Since that time, the economy stagnated, often struggling to achieve 1 per cent annual growth. Unemployment, a comparative novelty in a country where jobs were usually guaranteed for life, has now climbed to six per cent. Successive governments have not made much more than token and piecemeal efforts at structural reform. The financial sector continues to function much as before.

The Koizumi government has initiated a set of proposals, which include deregulation and much-needed reform as well as a package constructed to jump-start the economy and create 5 million jobs. However, its plans are being weakened by the government’s poor fiscal position (government debt is 150% of GDP – in comparison, conditions for Eurozone countries require that the figure not be higher than 60 per cent).

Agriculture is the only sector of the economy that doesn't meet Western standards in terms of management and technology , and remains relatively inefficient and heavily protected by the government. (This is a peculiarity of the Japanese electoral system, which allows a disproportionate number of parliamentary seats to rural areas.)Rice, potatoes, citrus fruits, and sugar are the main crops.

The manufacturing industry is still important, especially vehicles and electronic goods, although traditional industries such as shipbuilding, coal mining, and steel are also sizeable and, unlike some of their Western counterparts, profitable. Overall, industry contributes 35 % of economic output – more than the world’s other leading economies.

The service sector increased rapidly in the 1980s as the economy matured and Japan became a leading force in the international economy. The emphasis in Japanese trade thus changed from manufactured goods to export of services and ‘invisibles’, such as finance and insurance.

Japan’s chief trading partner is still the US but China (PR) has overtaken Korea (Rep), Taiwan, Indonesia and several Middle Eastern oil producers in importance. 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.

Japan Business

An ample supply of visiting cards printed in English and Japanese is essential. Cards can be easily printed on arrival with Japanese translation on the reverse side. Appointments should be booked in advance and, because of the formality, visits should last more than a few days. Punctuality is expected. Business discussions are usually preceded by tea and are normally very formal.

Office hours: Monday-Friday 09:00-17:00. Some offices are open Sat 09:00-12:00.

Commercial Information

The following organisations can provide advice:

Japanese Chamber of Commerce, 2nd Floor, Salisbury House, 29 Finsbury Circus, London EC2M 5QQ, UK (tel: (020) 7628 0069; fax: (020) 7628 0248).

Nippon Shoko Kaigi-sho (The 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).

JETRO (Japan External Trade Organisation), 2-2-5 Toranomon, Minato-ku, Tokyo 105-8466 (tel: (3) 3582 5511; fax: (3) 3587 0219).

Conferences/Conventions

The Japan Convention Bureau is a division of the Japan National Tourist Organisation (see Contact Addresses section); its Convention Planner’s brochure to Japan lists thirty-five cities that offer conference facilities including Hiroshima, Kyoto, Osaka, Nagasaki, , Tokyo and Yokohama. Kyoto has been one of the most popular locations for international meetings over the last few years.

For additional 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).