Austrade Briefing on Japan and JAEPA Opportunities

Transcription

1 Austrade Briefing on Japan and JAEPA Opportunities Leonie Muldoon Senior Trade Commissioner Tokyo and Country Manager Japan October 2014

2 GDP Comparison of Japan s regions with some countries US$ Billions 2009 Source:IMF World Economic Outlook Database (April 2012) Prefectural Economic Almanac (Feb 2012) Economic and Social Research Institute, Cabinet Office

3 Asia s growing middleclass is walking through a Japanese shop door No of UniQlo Stores in Japan-841 China-355

4 The opportunity Number of middle class consumers in 2009, and forecast in 2030 Source: Kharas and Ghertz, 2010

5 Japanese Asian Outbound Foreign Direct Investment

6 Overseas Profits Increasingly Important for Major Japanese Companies As of April-June each year Source: Nikkei Asian Review, 13 September 2014

7 Asia s Growing Middle-Class is walking through Japanese Shop doors Source: Nikkei Asian Review, July 24-30, 2014 (P9)

8 Abenomics Scorecard Approval Rating March % Approval Rating October %

9 Abenomics Scorecard -June 2014 Performance Results Nov Mar Jun Sept Dec Mar June Nikkei Stock Average (Yen) 9,466 12,398 13,677 14,456 16,291 14,828 15,162 Expected Inflation Rate 0.7% 1.3% 1.1% 1.6% 1.7% 2.4% 2.3% Exchange Rate (US$1 = Yen) Long-term Yield (new 10 yr JGB) 0.72% 0.55% 0.85% 0.69% 0.74% 0.64% 0.57% CPI (excl. fresh food; yearon-year% change) -0.1% -0.5% 0.4% 0.7% 1.3% 1.3% 3.3% Household Income (real; year-on-year % change) 2.1% 1.8% 2.0% 0.9% -1.7% -3.3% Source: Bloomberg - Nikkei Stock Average, Exchange Rate, Long-term Yield ; Statistics Bureau - CPI, Household Income -6.6%

10 Abenomics Growth Strategy Opportunities Enhancement of Corporate Governance and introduction of Independent Directors Reforming Management of Public and Quasi-Public funds Abeducation Reinforcing the Workforce

11 Education Japanese Study Abroad Trend ,000 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Source Department of Education and ABS Higher Education VET ELICOS Schools Non-award Grand Total

12 AbEducation Specific policy targets: Double the number of Japanese students (university and high school) studying overseas: 60,000 (2010)- 120, Double the number of international students in Japan 135,000 (2013)- 300,000 (2020) 1,300 scholarships for short term school children Increase short-term University scholarships by 100% to 20,000 Increase funding for Study Abroad-US$90million

13 AbEducation Top Global Universities ( ) US$105 million program funding 13 top universities in world top 100 (research intensive) 24 others funded to lead internationalisation (increase international students, joint degrees)

14 Abenomics Growth Strategy Opportunities Developing New Growth Engine Industries Agriculture Sector Reform Promoting Innovation and Robot Revolution PPP/PFIs

15 A Tale of Three Cities First Year in which Adult Dippers outsold Baby Dippers in Japan- 2012

16 Japan Demographics

17 Estimated change in concentration of population Note: 1km-mesh population is estimated by MLIT National and Regional Policy Bureau Changes in Population from 2010 to 2050 Increase Decline by 0-50% Decline by % Uninhabited Areas Source: Ministry of Land, Infrastructure, Transport and Tourism Grand Design 2050 paper

18 Population Demographics required to support social infrastructure 0-5,000-10,000-20,000-50, , , ,000- Retail Stores Hotels/Food and Beverage Services Life Style related Services 500 2,500 7,500 Restaurant Coffee Shop 77,500-92, ,000 Department Store 175, ,000 Large Scale Shopping Center Starbucks Cinema 87, ,000 Academic Research, Education/Study Aid Medical/Welfare Financial Institutions Services for Corporates Museum General Hospital Medical Clinic 5,500 27, ,500 27,500 Home Nursing Care Business 500 6,500 9,500 Post Office Bank 57,500 87,500 University 125, , , ,000 Private Nursing Home 42, ,000 Emergency Medical Care Center 57,500 77,500 Law Firm City Examples Utshinai in Hokkaido Sekigahara in Gifu Kumano in Mie Nagasaki Hagi in Okayama Source: Ministry of Land, Infrastructure, Transport and Tourism Grand Design 2050 paper; Population of Cities, Statistics Bureau 2010 Kamakura Nara Tokyo Osaka Nagoya

19 Demographic Driven Opportunities Rising affluent populations in Osaka and Tokyo demanding premium, unique products Market concentration provides a financially viable base for niche products Reverse Mortgage market Regionally focused businesses look to foreign investment as a road to survival (eg Residential construction companies)

20 Demographic Driven Opportunities The online and call-centre channels become more important (Est. 75% growth in next 5 years due to the decreased mobility of the ageing population. Reverse Mortgage Market Remote solutions for delivery of social services (health/education/cultural/elderly care) Remote Communication Solutions

21 Japan Public Debt per person- US$97,878 Greece Public Debt per person-us$26,738

22 Japanese Debt to GDP Ratio

23 Debt

24 Japanese Debt-Financial stability turns on domestic capital remaining in Japan and continuing to circulate

25 JAEPA Maximising the Opportunities Percentage of Australian Companies taking advantage of Bilateral FTAs- 19%

26 TOP 10 JAEPA TARGET COMMODITIES AGRICULTURIAL Beef/Beef Offal & Prepared Meat Dairy Products Wheat Barley INDUSTRIAL Non-Crude Petroleum Oils Coke and Semi-Coke Aluminium Unwrought Nickel Wine Nuts

27 Wine Source: WANDS Publishing Ltd, April Original source: Ministry of Finance Japan, Customs and Tariff Bureau Commodity Bulk Wine Bottled Wine Tariff 0% implementation 15%-0% over 7 Years

28 JAEPA Service Sector Opportunities (I) Service Sector JAEPA Impact Financial Services Cross-border access for Australian funds managers providing investment advice & portfolio management services. Right to participate in wholesale securities transactions Off-shore processing of financial data Legal Services Expedited registration procedures in Japan Opportunity to form Legal Professional Corporations Ongoing legal services cooperation agenda: -greater recognition of each other s lawyers -strengthening cooperation on provision of trans-national legal services in third countries

29 JAEPA Service Sector Opportunities (II) Service Sector JAEPA Impact Education Professional Services Japan Student Services Organization s (JASSO) overseas low-interest loans available to broader range of Australian education and training providers guaranteed visa access arrangements, including for spouses and dependents, to enter and stay in Japan. Telecommunications Greater certainty regarding: - allocation of spectrum - access to facilities, interconnection, submarine cable systems, leased circuit services, resale services - number portability and dialling parity

30 FTA Usage Source: FTAs: fantastic, fine or futile? The Economist Intelligence Unit Limited 2014 Based on a survey conducted in the 1Q of 2014 of senior executives from 800 companies in Australia and Asia.

31 Enemies of Success Complexity of the Terms Low understanding of benefits Supply challenges in prospective areas Lack of focus on the Market EPA boosted opportunities in other markets

32 % of Japanese FDI represented by Switzerland- 6.6% Australia- 0.6%

33 Overseas Corporate Representation in Japan USA Germany England France China Holland Italy Hong Kong Sweeden Denmark Australia Finland

34 Overalls

35 Cashing in on the Japan Opportunity Deepen understanding of and engagement in the market Exploit our Niche Develop Japan capable leaders Strengthen Commitment to in-market presence Build Brand Australia Awareness