News
India is again the most promising country for Japanese manufacturers to develop business for periods of three year or so, according to a recent survey by the Japan Bank for International Cooperation (JBIC). Gaining more support from a variety of business fields, India came in a slamming first place and defended its title.
Vietnam finished in second place for the first time, as Japanese manufacturers interested in China and the U.S. decreased and chose Southeast Asian nations and Mexico instead. Expectations are running high for Vietnam among Japanese manufacturers intending to withdraw from China. China went down to third place. The country has lost popularity for two years in a row, as it has been in conflict with the U.S. for a long time now, and its economy is decelerating. The U.S. was still a highly rated market but lost votes owing to ongoing hikes in labor costs and other reasons.
In conducting the survey, the JBIC sent questionnaires to 987 Japanese manufacturers in July and had them back in September. The response rate was 54.1%, with responses made by 534 such companies.
The JBIC administered a similar survey last fiscal year, which indicated signs of recovery from the coronavirus pandemic. The latest survey also show signs of recovery with improvements in overseas production and sales from fiscal 2022. However, the JBIC projects that overseas production and sales will both stay flat this fiscal year due to Russia’s invasion of Ukraine, rises in geopolitical risks resulting from the abovementioned U.S.-China conflicts and slowdowns in the Chinese economy, which are also discussed above. The fiscal 2023 survey showed that Japanese manufacturers are taking more cautious stances than a year earlier in expanding business operations not only overseas but in Japan as well.
Some 90% of the respondents said they are impacted by global rises in energy, raw material, parts and other prices and that they are forced to control energy consumption, reduce costs and make other efforts. It was revealed in the survey that approximately 70% of the respondents are urged to resort to cost pass-through. On the other hand, there are some that cannot follow suit as they cannot obtain consent from customers, are in competition with others and so on.
