CASA ASIA Economic Congress 2004

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CASA ASIA Economic Congress 2004 The Recovery
of the Japanese Economy and Its Influence in
Asia November , 2004 Takashi FUKAYA
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1. The Economic Relationship between Cataluña and
Japan

• Economic relationship between Spain and Japan is
  good.
• Japanese enterprises energetic investment in
  Cataluña state.
• (centering around manufacturing industry,142
  Japanese
• enterprises have entered into the Cataluña
  market).

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2. Issues for Discussion

• Japanese and Asian economic trends.
• Focus on India and China.
• - Big markets holding opportunity and risk.
• Differences between Asia and Western society.
• - Closer relationship overcomes differences.
• Vision of Asia and Japan.
• - The recovery of the Japanese economy and
• its influence in Asia.

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3. Recovery of the Japanese Economy

• Japanese economy escapes from long term
  recession,
• future strong recovery.
• - FY03, GDP 3.2 Forecast by IMF, etc, 34
• Government progress on regulatory reform,
• and structural reform.
• - Push restructuring of enterprise and market
  renewal.
• Support for R/D and promote corporate
  innovation.
• - Tax reduction for R/D,
• - Concentrate investment on specific
  projects.

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4-(1). East Asia and Japan

• East Asian economic rapid growth.
• - Strengthening export drive to practically use
  good and
• cheep labor force.
• - Formation of regional supply chain network.
• (Regional Trade Dependence 1985 36.2. 2002
  51.8)
• - Appearance of middle class with purchasing
  power.
• China is growth especially remarkable.
• - Market-oriented economic reform,
  liberalization
• spring from WTO participation.
• Therefore, created global triangular trade
  system.
• - Japanadvanced parts. ASEANinterim goods.
• Chinaassembly.

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4-(2) Influence on Japanese recovery and way to
expand cooperation

• Japanese economy is affected by East Asian
  supply chain
• network.
• - For rapid spread of the trade relationship
  with
• East Asian economies.
• (1992 180bil, ? 2002 304bil,)
• - For FDI into East Asia.
• Japanese recovery is also important to East
  Asia.
• Therefore, East Asian countries and Japan
  promote
• FTA/EPA possibility.
• - 2002 Conclusion with Singapore.
• 2003 Start negotiation with South
  Korea.
• 2004 Start with Thailand,
  Philippines and Malaysia.
• 2005 Will start with ASEAN.

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4-(3). Risk and Potential of East Asia

• The growth of East Asia is an inherent
  systematic risk.
• - Increase energy consumption due to careless
  consumption.
• - Exchange rate risk due to dollar devaluation
  pressure.
• Japan is need to overcome systemic risk and play
  a role in Asia.
• - Supply capital, advanced technology
• and key industrial parts.
• - Policy and regulatory cooperation based on
• the Japanese experience.

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5. India The Great Elephant

• Increased Indian presence.
• - Interest due the base of IT business
  outsourcing.
• - Big territory and large educated population.
• Structural change an Indian economy/industry.(198
  0?2000)
• - Share of agriculture in GDP 38.6 ?
  24.9
• Share of service sector in GDP 37.2 ?
  48.2
• - Formation of IT cluster.
• (Bangalore region so called Indian Silicon
  Valley)

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6. Other Regions of Asia

• History of Asian economic development.
• - Flying Geese Pattern Model.
• (JapangtNIEsgtASEANgtChinagtWhere?)
• - Open and reformable policy of China.
• ? Market-oriented economic reform.
• Reasons for Asian success.
• - Division of production process leading
  manufacturing
• industry, and leveling welfare
  distribution.
• - Increase FDI ? export oriented industry
  creation.
• But environment of other areas of Asia (ex.
  Middle East)
• is different.
• - Continuation of political opposition.
• - Dependence on natural resources.
• - Concentration of wealth.

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7. Toward Development of Asia

• Handling Asias potential and risks.
• - Maintain and spread the good growth cycle.
• (Agree to the economic growth policy.
• ? Provide an environment for FDI.
• ? Accumulation of industry.
• ? Improvement of labor productivity
  through the welfare
• distribution.
• ? Creation consumer market.)
• - Provision of the institutions for industrial
  structure reform
• and evasion of systemic risk.
• Japan will contribute with Asian countries
  toward prosperity
• and stable growth of Asia.

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Muchas Gracias!