Snapshot:
Population: 27.9 millionNominal GDP: US$5.8 trillion
Nominal GDP p/c: US$45,920 (2011)
GDP Growth: -0.6% (2011); 2% (2012)
Exchange rate: AU $1 = 90.79 Yen (June 2013)
Major industries: Automobiles, consumer electronics, computers, refined petroleum and civil engineering equipment and parts
Exports to Japan: AU $ 53.1 billion (2011-2012)
Imports from Japan: AU $22.5 billion (2011-2012)
Bilateral Trade Relationship
Australia and Japan share a strong bilateral relationship which is built on mutual interests, especially in the area of trade. Japan is Australia’s second largest export market. In 2011-2012 exports to Japan were valued at $53.1 billion or 16.8 per cent of Australia’s total exports. Japan sits behind the USA and the UK as Australia’s third largest foreign investor, with investments in 2011 totaling roughly $123.4 billion, of which over 40% was foreign direct investment.
In terms of merchandise trade, Australia’s key exports to Japan are coal, iron ore and concentrates, beef and copper ores and concentrates. In services, personal travel (excluding education) and transport contribute the largest amount in export value. Japan’s key imports into Australia are passenger and goods vehicles, refined petroleum and civil engineering equipment and parts.
Trade Agreements
Two key benefits of the FTA would be reduced tariff and non-tariff barriers to trade and expanded export opportunities for trade in the agricultural sector which is currently quite regulated.
In April 2013 the members of the Trans-Pacific Partnership (TPP) formally invited Japan to join negotiations. Japan will join Australia and 10 other nations already in talks on the TPP: the United States, Canada, Mexico, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei and New Zealand. A deal is hoped to be reached by the end of 2013.
Japan and Australia also sit on a number of regional forums including APEC and ASEAN.
Economic Outlook
- The impact of the 2011 earthquake and tsunami which severely affected Japan’s global supply chains and has left the country with power shortages. Nuclear power constituted 30% of the total energy supply.
- Japan has an ageing population. By 2050, the population is expected to fall by 20 million from where it stands currently at 127 million. With fewer tax payers to fund the increase in expenses associated with an aging population, the government will be forced to increase taxes.
- The weak global economy is hampering the recovery of the Japanese economy following the devastating 2011 natural disasters.
The Government is expected to continue with monetary easing in an attempt to stimulate the economy, and have increased their target inflation rate to 2 per cent. On a positive note, the weakening Yen is increasing competitiveness and analysts expect the strengthening of global markets, coupled with resilient domestic demand, will enable Japan to emerge from recession by mid-2013. Nevertheless, the future remains uncertain as the country faces an ongoing battle with deflation.
Doing business in Japan
- Business cards should be printed with English on one side and Japanese on the other. It is not so important to have you address translated, more so you name and company name. Carry at least 100 cards for a one week business trip. Present your business cards with two hands and with the Japanese side facing upwards to the most senior member of the Japanese party first, bowing slightly as you do so. NEVER write notes on a Japanese business card, treat them with respect and store them away only after the meeting closes.
- English is not widely spoken in the business world so an interpreter is normally required
- Japanese business attire is formal. Men should wear blue or black suits, a white shirt and subdued tie. Women should be conservatively well dressed, wearing either trousers or a longer skirt suit.
- When it comes to attending business meetings, be sure to arrive at least 5 minutes early and call ahead if you are running late. Wait to be seated. It looks good to take a lot of notes during the meeting at it shows your interest in the matter.
- Do not shake your hosts hand when first meeting as the Japanese seldom shake hands. Be pleasant and do not speak derogatorily about anyone, even competitors, be willing to learn and ask lots of questions (just not about their personal life).
Opportunities for Australian Exporters
- Opportunities in niche markets for exporters also exist in the following areas:
- biotechnology and nanotechnology
- building materials and products
- bloodstock and equine industry
- creative industries including architectural design and arts
- clean technology and renewable energy
- education and training
- food and agribusiness
- health and lifestyle products and services
- mining
- energy infrastructure
- finance and investment.
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