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Q: japans economy ( Answered 5 out of 5 stars,   3 Comments )
Subject: japans economy
Category: Business and Money > Economics
Asked by: batmans-ga
List Price: $101.25
Posted: 18 Apr 2006 18:48 PDT
Expires: 18 May 2006 18:48 PDT
Question ID: 720396
I need the following questions answered before Thursday april 20th at
2:00 pm. it is
quite direct and it is needed to justify me going into the country for
a business venture. The questions are as follows
?	Japans state of economic development ( how has it changed and where
is it now as well as is it volatile to future economic fluctuations)
?	Japans social and cultural environments (what aspects of Japanese
culture should I be aware of before venturing in)
?	Japans political, legal, and regulatory environments (what can slow
my business operations down)
?	Japans monetary policies and exchange rates (who regulates it and is it working)
?	Technological developments ( what are they known for and where they
rank in the world)
?	Japans natural resources 
?	Japans trade environment (tariffs, quotas etc.)
?	Japans main imports and exports

Request for Question Clarification by boquinha-ga on 18 Apr 2006 19:06 PDT
Hello batmans-ga!

Your question has many parts! Most of these questions can be answered
anyway, but it would help to know what kind of business you do to
better answer the question. My husband lived in Japan for 2 years and
majored in it in college--he speaks, reads, and writes Japanese and is
well versed in the culture. Talking to him and doing some research, I
believe that I'm sure to answer your questions without a problem.


Clarification of Question by batmans-ga on 19 Apr 2006 08:08 PDT
Hi and thanks for responding to my question.

basically i am looking to introduce a product into the japanese market
as well as some marketing,i want to make sure that the country wont
restrict me in any way in terms of my business operations, in fact i
would like to know what hurdles i will encounter there so i can decide
if it is worth the hassle. that is why there are many parts to the
question, the more detailed your answer the better i can decide. i
havent yet decided on a particular product yet but it wont be anything
crazy, import and export is important to me as well as the
demographics of the country.
i hope this clarified your question.

Request for Question Clarification by boquinha-ga on 19 Apr 2006 17:21 PDT
Thanks for getting back to me. That helps somewhat. As you know--we're
discussing so many broad issues that any information is helpful. I'm
still working on your answer. I've found quite a bit of information
and I'm putting it together for you complete with links and resources.

Subject: Re: japans economy
Answered By: boquinha-ga on 19 Apr 2006 21:48 PDT
Rated:5 out of 5 stars
Hello batmans-ga!

I saw this question, and I thought with my husband?s experience in
Japan this would be a great one to answer. Early into my research I
realized that this topic is a very broad one, and that extensive
research would be challenging within the time constraints listed in
the question. For that reason I have divided my answer according to
your various inquiries, and have tried to provide enough of the
information that you are seeking.

One of the most valuable resources I found was the Japan External
Trade Organization (JETRO). This is an organization dedicated to
helping people establish and maintain business relationships in Japan.
They offer consultations and a number of other services. Check out
their website at

JETRO also has a great set of Fact Sheets located at

The CIA has a series of Fact Books about the nations of the world with
a wide range of information, including economic and trade data. The
Japanese Fact Book is at It was
another indispensable source in my research

- - - - - - - - - - - - - - - - - - - -

(Summarized from the CIA World Fact Book)

After World War II, Japan was coerced to utilize its resources for the
restructuring of its domestic infrastructure rather than the
maintenance of a military force. This helped to turn its efforts
toward building a stronger economic base, while still adhering to
strong social and cultural principles. Some of the factors
contributing to Japan?s rapid advancement were a strong work ethic,
mastery of high technology, and considerable government-industry

The economy is also characterized by tightly organized groups
consisting of manufacturers, suppliers, and distributors. This
improves the efficiency with which a business can operate at times.
The system of guaranteed lifetime employment for a substantial number
of the population has historically strengthened company loyalty and,
in turn, has improved productivity as well. Both of these systems are
beginning to disappear with the increase in foreign business interests
in Japan.

Economic growth has declined since the 1960s, largely due to
overinvestment during the late 1980s. Between 2000 and 2003, efforts
by the government to stimulate economic growth were hampered by the
slowing of the global economy. Growth improved after that point, with
fears of deflation in prices and economic activity lessening. At this
point, two major problems facing the Japanese economy are a huge
government debt (around 170% of GDP), and an aging population. Recent
tax increases have been the cause for some fear regarding economic
recovery. On the horizon is the privatization of Japan?s banking,
insurance, and delivery services between 2007 and 2017.

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Besides the obvious challenges from a language standpoint, there are
many subtleties of Japanese culture that permeate their business
style. At a January 2006 EDA Consortium there was a nice presentation
given regarding launching and growing a business in Japan. Included
was a brief list of ?dos and don?ts? when conducting business. The
complete presentation slides are found at

* Bow slightly when introduced or leaving a meeting.
* Study a person?s name card/business card carefully, and ask a
gentle, thoughtful question.
* Follow up with a thank you fax, email, or letter.
* Be introduced through a trusted customer, client, employer, etc.
* Provide a dinner meeting at some point.

* Be late.
* Toss business cards across a table or write on them.
* Press too hard for a commitment or be too aggressive when closing a deal.
* Chew gum during a meeting (probably a no-no here, too!).

Business differences in Japan are also addressed in the subsequent
lecture slide. Some of the highlights are:

* Decisions tend to take longer, along a prescribed step-by-step process. 
* More consensus is typically sought in Japan because of the high
number of people and business entities involved in transactions.
* Patience is very important.
* There is stronger loyalty, so companies do not change business
partners or vendors/suppliers very often.
* Business in Japan is often organized in large conglomerates with
many ?family companies,? so it can be difficult to become a ?qualified
vendor.? The process can take one year or more.
* If you do not have an established presence in Japan it is easy to be
passed over as a new business partner.
* Contracts can take up to a year to be negotiated.
* Payment terms tend to be longer.

I also found an article on general cultural differences in Japan that
will definitely enter into business transactions. Here are some of the

* Japan is group-oriented with emphasis on harmony (?Wa?).
* Consensus matters a lot.
* According to a Japanese proverb: "The nail that sticks up gets
pounded down". Don?t stick out.
* "Honne and Tate Mae." The former is one?s true feelings and the
latter refers to a fašade. In other words, people often hide their
true emotions in order to save face.

The list was submitted by a missionary couple and it goes on to
describe various religious nuances as well.

Here is another interesting list of Japanese business etiquette.

Fact sheets from JETRO, including information on business culture and
establishing a business in Japan, are found here:

- - - - - - - - - - - - - - - - - - - -


As in the United States, there are various forms of business you may
set up. The three most applicable to foreign interests are:

* Representative Office: not legally separate from a foreign, parent
company; exempt from Japanese taxation provided there is no permanent
establishment in Japan; some limitations on allowable business
* Branch Office: permanent establishment, but parent company still in
the U.S.; some Japanese tax liability; generally no restrictions on
business activities
* Kabushiki Kaisha: formal establishment in Japan; subject to more
local regulations; no restriction on activities.

Of course, there are a lot more specifics regarding these business
types, but the fact sheet gives a great overview.

Understanding the specifics regarding business tax code can be tricky
for a domestic business, much less for an international one. JETRO has
a great tax fact sheet outlining the basic taxes of which you should
be aware. Some of them are:

* National Corporation Tax?taxes on worldwide income for resident businesses
* Local Enterprise Tax?based on taxable profits
* Local Inhabitant Tax?payable to the prefecture in which the business is located
* Consumption Tax?includes taxation on imports
* Stamp Tax?payable on documents requiring legal stamping to take effect

There are others described in the fact sheet.

JETRO also offers consultations to help entrepreneurs enter the
Japanese business place. One particular service that they provide is a
?hotline? approach to meeting appropriate government officials to
speed up establishing a business.

- - - - - - - - - - - - - - - - - - - -


Simply stated, the Bank of Japan (or Nippon Ginko) is Japan?s central
bank. It is responsible for setting and implementing national monetary
policies. There is a policy board that meets regularly at Monetary
Policy Meetings (MPM) where they have ongoing discussion regarding
successes and failures of current policies. You can see a detailed
description of current policies, minutes from MPMs, and financial
outlooks at the Bank of Japan?s website.

Determinants of the exchange rate are not so cut and dry, however.
?The relative value of the yen is determined in foreign exchange
markets by the forces of supply and demand.?
( And just what are these markets?

?[They exist] wherever one currency is traded for another. It is by
far the largest market in the world, in terms of cash value traded,
and includes trading between large banks, central banks, currency
speculators, multinational corporations, governments, and other
financial markets and institutions. Retail traders (small speculators)
are a small part of this market, and may only participate indirectly
through brokers or banks.?

Whether or not these policies are working is an extremely subjective
opinion and there are a number of articles expressing these differing
opinions. Ben Bernaske of the Federal Reserve Board made a speech in
2003 to the Japan Society of Monetary Economics in Tokyo. He concluded
that because the Bank of Japan is essentially an independently
functioning entity, that greater cooperation between it and the
national government?s fiscal planners was necessary to better handle
the pressures of Japan?s deflationary economy at that time. You can
see his full speech here:

Another opinion reflecting concern about Japan?s economy comes from
the Organisation for Economic Co-operation and Development (OECD) in a
policy brief entitled ?Economic Survey of Japan, 2005.? In their
summary they state that:

?Japan still faces a number of serious headwinds to sustained growth,
notably entrenched deflation and continued declines in bank lending
and land prices. Meanwhile, the government?s financial position
continues to deteriorate, raising concerns about fiscal sustainability
at the same time that population ageing is increasing demands for
public spending.?

The OECD also refers to the need for the Bank of Japan to take a
central role in ending deflation and improving monetary policies aimed
at sustained growth and development.

In the Bank of Japan?s recent Financial Status Report published in
2005, they express a very positive outlook on the financial systems in
place in Japan. They believe that ?the positive developments in the
Japanese banking sector will contribute to further strengthening the
stability and functioning of the financial system as a whole.?

Their 38-page report outlines the various strategies that the Bank has
recently employed to improve the country?s financial system, focusing
primarily on the banking system specifically. You can read the
complete report at:

To summarize, Japan?s economy has been plagued recently with many of
the same challenges as other developing nations and its central bank
has plans in place to reverse these problems. As to whether or not
current policies are ?working,? that is open to debate.

- - - - - - - - - - - - - - - - - - - - 


Japan has a long been thought of as a hotbed of technological
development, but it is difficult to find a definitive listing of the
?most important? or ?most significant? developments to come out of
Japan. In the past, brands such as Sony, Honda, and Toyota have set
Japan apart as a giant in the world of automotive technology and
electronics development, but there are so many variables involved in
determining that for which a country is truly known.

According to the ?Statistical Handbook of Japan,? published by the
Japanese Bureau and Statistical Research and Training Institute, Japan
ranks second among industrialized nations (the U.S. is first) in
expenditures for science and technology. Most research expenditures,
and the greatest number of researchers, are involved in 7 areas:
information and electronics communication equipment; electrical
machinery, equipment, and supplies; motor vehicles; general machinery;
chemical products; electronic parts and devices; and drugs and

- - - - - - - - - - - - - - - - - - - -


The CIA lists Japan?s resources as ?negligible mineral resources [and]
fish.? According to Japan?s Agency for Natural Resources and Energy,
?Japan is a country lacking in mineral resources and depends on
imports from overseas for the majority of these resources.? Native
resources mentioned were lead, copper, gold, lime, silica, clay, and
rough stone. Many of the Japanese mines have been depleted of their
metal ore content, however. The Agency also underscores Japan?s 100%
dependence on foreign oil.

- - - - - - - - - - - - - - - - - - - -


While looking into your questions regarding trade policies in Japan, I
discovered that the information is so voluminous that detailed
research would be difficult to accomplish within the specific time
constraints allowed. However, I have compiled a list of links to
various organizations with ties to U.S.-Japanese trade relations, each
with its own list of press releases, fact sheets, handbooks, and other
informational sources that should prove to be useful.

Office of the United States Trade Representative
Information regarding the Regulatory Reform and Competition Policy
Initiative is prominently displayed, outlining annual recommendations
regarding policy changes aimed at promoting mutual growth in both the
U.S. and Japan.

Japan Tariff Association
There are a number of resources available for purchase regarding
current tariff rates, as well as statistical information regarding the
value of imports and exports.

Trade Compliance Center
This site lists worldwide trade agreements, import/export
restrictions, protocols for reporting trade violations, and other
pertinent information regarding international trade.

Asia Pacific Economic Cooperation (APEC) Tariff Database
Registration is required for this site. Information on member country
tariff schedules, concessions, and prohibitions are available here.

- - - - - - - - - - - - - - - - - - - -


According to the CIA?s World Fact Book,, Japan?s
chief exports are, in order: transport equipment, motor vehicles,
semiconductors, electrical machinery, and chemicals. Total exports
were valued at approximately $550 billion in 2005. The chief
recipients of these exports were, in order: the US, China, South
Korea, Taiwan, and Hong Kong.

From the same CIA World Fact Book, chief imports are, in order:
machinery and equipment, fuels, foodstuffs, chemicals, textiles, and
raw materials. Approximate 2005 totals for imports are $451 billion,
received mostly from (again, in order): China, the US, South Korea,
Australia, Indonesia, Saudi Arabia, and UAE.

- - - - - - - - - - - - - - - - - - - -


Economic and Financial Data for Japan, from the Director-General for
Policy Planning

Statistical Handbook for Japan, 2005

Collection of financial resources about Japan, from Mizuho Securities

Japanese Ministry of Foreign Affairs (MOFA) resources on U.S.-Japan relations

U.S. Commercial Service in Japan. This site has lots of links to
valuable resources for business in Japan.

Ministry of Finance, with links to economic forecasts, recent tax
changes, and other useful financial information

J-List side blog is maintained by an American living and working in
Japan. He has lots of interesting tidbits about life there as a
?gaijin? (foreigner).
(Thank you to my friend and colleague Byrd-ga for alerting me to this webpage.)

- - - - - - - - - - - - - - - - - - -

As you can see, a comprehensive discussion regarding establishing a
business in Japan is a large undertaking. Especially when you
consider, as you have, the various cultural and social implications
that can complicate matters. I hope that I have provided enough
information to get you started in making your decisions. I wish you
luck as you do so. If you have need of any further clarification
please let me know how I can help.


Search terms:

japan economic data
japan natural resources
monetary policy japan regulation
cultural challenges japan business
cultural differences japan
who sets exchange rate japan
important technology japan list
technological developments japan
leading technological developments japan

Request for Answer Clarification by batmans-ga on 19 Apr 2006 22:18 PDT
hi your answer to my question is better than i anticipated,the one
last thing that needs to be clarified is japans main or top five
exports and imports and how technologically advanced is the country in
terms of western standards the last point i need to make is if you can
find any figures on japans natural resources from what i gathered
fishing is a major industry for them but im curious to see what other
resources they produce and if they export or keep it for themselves.
thanks again for the quick response

Clarification of Answer by boquinha-ga on 20 Apr 2006 06:23 PDT
Hello batmans-ga!

I?m glad that you?re pleased with what I?ve put together for you. It
is a lot of information, isn?t it! It?s really several questions
covering some broad topics, so combing through information and putting
it together is what takes a while. I?m glad to be able to help you
out, especially with the time constraints. Let me get right on this
clarification so you can have the information you need in time You?ve
said by 2pm today and I?m not sure what time zone you?re in, so I want
to post this for you as soon as possible. I?ve researched further on
your clarification and here is what I?ve found.

In a publication by the National Science Foundation entitled ?The
Science and Technology Resources of Japan: A Comparison with the
United States,? it states in its summary:

?The trends presented in this report show that Japan has caught up
with, or surpassed, the United States in some leading indicators of
scientific and technological strength, and lags behind in others.
Japan leads the United States in the percent of GDP invested in total
and non-defense R&D, as well as government investments in civilian R&D
as a percent of GDP. Japan is particularly strong in technology and
trade indicators, and has a higher proportion of engineers in its
labor force than the United States.?

Areas where Japan appears to lag behind the U.S. include expenditures
in higher education, university research funding, and scientific
article publication. It would appear that Japan is up to the worldwide
standard regarding western technologies.

According to the U.S. Government Export Panel, the top 5 Japanese
exports to the world are: automobiles, electronic components,
automobile parts, steel, and optical instruments. The top 5 Japanese
exports to the U.S. in particular are: transportation equipment,
computer and electronic products, machinery, chemicals, and electrical
equipment and components. The top 5 Japanese imports from the world
are: crude oil, textile articles, electronic components, computers,
and LNG (liquefied natural gas).

The U.S. Department of State website confirms what so many others have
said about Japan?s natural resources. ?Japan has few natural
resources, and trade helps it earn the foreign exchange needed to
purchase raw materials for its economy.? It lists the ubiquitous ?fish
and negligible mineral resources.? Japan has an enormous fishing
fleet, accounting for about 15% of the total fishing market worldwide.
Although usable farmland is limited, ?Japan normally produces a slight
surplus of rice,? which it then exports.

I hope that this additional information suits your needs. Best of luck
to you in your ventures! Thank you for your clarification--I?m happy
to be of help.


Additional search terms:

Japan top exports
level technology Japan

Clarification of Answer by boquinha-ga on 20 Apr 2006 09:30 PDT
Hello batmans-ga!

I know it's coming up on deadline time for you. Has this answer met
your needs? Do you need anything further? Please advise, and again,
best of luck to you!


Request for Answer Clarification by batmans-ga on 20 Apr 2006 14:51 PDT
is there a way of removing this question from the database?

Clarification of Answer by boquinha-ga on 20 Apr 2006 19:04 PDT
Hmmmmm, I can check with the editors. For now, you can close the
question by rating it and following the instructions there and then I
can check with the editors about how to proceed. Again, I hope our
information has been helpful to you! I'm glad to hear that you're
pleased with it!


Request for Answer Clarification by batmans-ga on 21 Apr 2006 11:30 PDT
thanks again for everything your help was very much appreciated
considering the time restrictions. Good luck in the future

Clarification of Answer by boquinha-ga on 23 Apr 2006 20:44 PDT
Hi batmans-ga!

Thank you for the 5-star rating and nice words! As for hiding the
information, my colleague Byrd-ga has explained well how Google
Answers works, so if you have some sort of special request, I'm
assuming you probably wouldn't want that to be public either, so I
suggest you contact the editors (via e-mail) and explain your
situation to them. It's really up to them. Again, good luck!

batmans-ga rated this answer:5 out of 5 stars
Very nice and very helpful with my question, next time i have a
question i know where to go.

Subject: Re: japans economy
From: czh-ga on 20 Apr 2006 19:12 PDT
Was this a school assignment?
Subject: Re: japans economy
From: batmans-ga on 21 Apr 2006 11:39 PDT
Far from it, im actually evaluating potential countries to invest in
with my business partner.The reason i asked to remove it is because it
cost me the money to get it answered and i dont like the idea of
someone else profiting from it for free. that being said anyone who
has plans on investing in any country better know the country's makeup
and composition inside out whether it is the culture, monetary
policies, trade environment and so on. As a result of the answer i am
more aware and have a better understanding of what i would be getting

thank you
Subject: Re: japans economy
From: byrd-ga on 21 Apr 2006 13:52 PDT
Dear batmans-ga,

So glad you see you are appreciative of the fine work of my colleague,
boquinha-ga, and the exemplary answer provided to you. Just thought
I'd point out for your benefit in future, and that of any other
customers, the Google Answers FAQ clearly states,

"Will my question and answer be publicly viewable?
Yes. Your question and the corresponding answer will be posted on the
web and viewable by the public. However, your personal information
will never be posted with your question, so your privacy is protected.
We are not answering questions privately at this time."

So even though you spent money for the information, you might have
spent considerably more for a private consultant to conduct research
on the same level. There's always a tradeoff, no?


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