News
A survey has revealed that Japanese firms' motivation to expand exports remains high, though showing signs of levels off.
The survey on the International Operations of Japanese Firms was conducted by the Japan External Trade Organization (JETRO) from November 2017 through January 2018, receiving valid replies from 3,195 firms out of 9,981 (a 32% response rate), of which 2,591 were small and medium-sized enterprises (SMEs). It covers such topics as trade and overseas investment activities, utilization of free trade agreements (FTAs) and utilization of digital technologies.
The percentage of firms ''planning to further expand exports'' has slightly decreased to 67.8%. While remaining at a high level, this is the second consecutive year it has decreased, indicating it is in a lull. The ratio of firms ''planning to expand overseas business,'' while remaining over half, has slightly decreased to 57.1% from 61.4% the previous year. Meanwhile, the percentage of firms ''planning to expand domestic business'' increased to 61.4%. This is the first time the ratio has passed 60% since FY2011,
Among firms answering that they ''currently have an overseas base and are planning to expand, ''the ratio choosing Vietnam as the target country or region for their overseas business expansion increased for the third consecutive year (37.5%, compared to 34.1% in the previous year), coming in second place. China continues to be the top answer (49.4%, compared to 52.3% in the previous year). The countries of ASEAN-6 as a whole (69.2%) exceeded China for the sixth consecutive year.
''Brexit-related risk'' is regarded as the biggest problem in the UK and Europe, but it is rarely recognized as a problem in other areas. Meanwhile, the ''policies of the new US administration'' are recognized as the biggest issue with a response rate of more than 50% in the U.S., Mexico and Russia, and exceeding 20% in the United Arab Emirates (UAE), Canada, Korea, the Middle East and Latin America.
Of the firms exporting to Japan's FTA partners, 44.9% are using FTAs. This remains about the same level as the previous year at 45.1%. If limited to large-scale firms, the percentage increases to 63.5%, rising 6.4 points compared to the previous year. Looking at individual agreements, the percentage of firms answering that they were considering using the Japan-EU Economic Partnership Agreement (EPA), the negotiation of which was finalized in December 2017, was over half, at 52.1%. Among firms utilizing FTAs, 49.1% said that they were aware of the self-certification of origin system adopted within the Japan-EU EPA.
