Japan: Imports welcome - Official.

Japan: Imports welcome - Official. - Malcolm Wheatley sees a new openness in Japan.

Last Updated: 31 Aug 2010

Malcolm Wheatley sees a new openness in Japan.

The world has become accustomed to the ubiquitous Japanese, even if it welcomes them with varying degrees of warmth. There is a high degree of apprehension about Japanese competition in both America and France, for instance, but the British, while, to put it mildly, not totally happy about reciprocal trade, have recognised the advantages to be gained from Japanese investment and, on the whole, given them a warm welcome.

It has paid off. Sony, Nissan and Mitsubishi already have factories in the UK and a huge Toyota car plant rises in Derbyshire, ready to take advantage of the integrated European market of 1992. It seems certain that, at last, the traffic is to become less one-way, as Japan signals that it has become sensitive to western reservations about the imbalance in trade.

"The Japanese Government has taken wide-ranging measures to stimulate interest in the Japanese market by exporters from abroad," affirms John Whiffen, who heads the Import Expansion Programme at JETRO's London office. JETRO, the Japan External Trade Organisation, was established in 1958 with the intention, as can be seen from its title, of promoting exports. Its 35 offices worldwide have now gone into reverse, encouraging imports.

Tariffs have been completely eliminated on over a thousand manufactured items, and substantially reduced on others. As a result, almost all of the machinery imported into Japan now enters duty-free, Whiffen says. Japanese companies which increase their purchases of imported machinery by 10% or more can receive a tax credit equal to 5% of the increase, or can opt instead for accelerated depreciation. JETRO anticipates that this measure alone will cost $1 billion a year.

Efforts are also being made, explains Whiffen, to increase the Japanese consumer's knowledge of foreign goods. The organisation is staging import promotion exhibitions in Japanese cities, and has set up a network of "internationalisation centres" to disseminate information on foreign companies and their products.

Nor is the promotion programme solely passive. "JETRO has also sent specialist buyers abroad," says Whiffen, "to bring back samples of products to put in exhibitions to bring them to people's attention." To counter allegations of distribution difficulties, distribution centres are being set up in Osaka and nine other major cities. There is also a plan to put forward goods in mail order catalogues, and a $1.5 billion low-interest loan programme to help both Japanese and foreign companies.

Despite the budget for this sort of promotional activity being more than $100 million a year, the extent to which British companies are taking advantage of it is difficult to determine. Whiffen himself declines to name any companies using the programme successfully. But nothing ventured, nothing gained, and given the formerly restricted nature of the Japanese market, the latent potential should be at least worth investigating.

Despite the summer's financial scandals, the fundamentals of the Japanese economy remain strong - although under pressure. The visible trade surplus rose again in June for the 10th successive month, and now stands at just under $79 billion. Industrial production is still up on the figure of a year ago, and GNP growth - yes, growth - is running at over 10% per annum. The blood flowing so freely in UK high streets has yet to be seen in Tokyo's Ginza. Margins might be squeezed, but Japanese consumers are spending more than they did last year. And whereas British unemployment shot from 5.7% to 8.1% in the 12 months to June, the Japanese rate improved from 2.2% to 2.1%.

For prospective exporters to Japan, this continuing relative strength has to be good news. Going there to investigate the opportunities remains something of a slog, however, though less of one than it used to be. The old 20-hour route via Anchorage is still, on balance, perhaps the least painful flight to Japan's business capital of Osaka. It is also likely to prove the easiest way to get to southern cities like Kobe, as Tokyo's domestic and international airports are quite separate. Haneda airport handles the domestic traffic, while international flights land at Narita: after arriving, wise travellers allow two hours for a transfer.

For years the choice of airline to arrive on was restricted to British Airways or Japan Airlines, though Aeroflot joined them in the mid-1980s as a Soviet condition for granting an over-the-pole route through Russian airspace. Increasing deregulation in air travel has brought in two more carriers: Britain's Virgin and Japan's All Nippon Airlines. ANA remains very much a new name to the British business traveller, though in terms of number of passengers carried it is, according to US trade periodical Air Transport World, the eighth largest carrier in the world - ahead of British Airways in 10th place. Until four years ago solely a domestic airline, it has been operating into the UK since 1989, and over the summer transferred its Gatwick operations to Heathrow.

ANA's marketing has been aggressive, but - like that of its competitors - is very much aimed at the business market. Japan is still far from being recognised as a tourist destination - partly because the expense of the flight is exacerbated by the cost of accommodation - but if someone else is paying then it is a different story.

According to Simon Halewood of the Japan National Tourist Organisation, the country has become very popular as a conference location. "Japan hosted 1,053 international meetings last year," he says, "compared to 371 in 1981." A glance at the latest issue of the Japan International Congress Calendar confirms the bewildering variety of organisations choosing Japan for their particular gabfest. This month alone there are 16 such events, ranging from the 75th Annual Session of the International Dairy Federation to the 14th International Congress on Allergology and Clinical Immunology; the latter apparently commencing (believe it or not) on October 13.

Halewood concedes, however, that distance and cost make the country "a less obvious choice" in the general offshore meetings business, and it has yet to succeed as a corporate meetings venue. But trade fair traffic is growing, and the incentive travel business is also picking up, albeit usually combining Japan with other Asian destinations. The years ahead will inevitably see many more foreigners on Tokyo streets and, hopefully, many of them will be doing business.

(Malcolm Wheatley is a freelance writer.)

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