Expanding economic exchanges with Singapore and ASEAN
KEIDANREN (Japan Business Federation) is a comprehensive economic organization with a membership comprised of 1,350 representative companies of Japan, 109 nationwide industrial associations and 47 regional economic organizations (as of April 1, 2017).
Synergy Media Specialists asked Mr. Masakazu Kubota, Director General, about Japan’s role and partnership with the ASEAN.
How important is ASEAN to Japanese companies and investors?
Japan and ASEAN, which celebrate 45 years of friendship and cooperation this year, have built up an excellent relationship over many years. Our economic ties have developed into a very close, mutually beneficial relationship, with more than 10,000 Japanese companies actively engaged in business in many different areas in the ASEAN region.
In terms of trade, Japan’s trade with ASEAN is worth $187.8 billion, accounting for approximately 15% of Japan’s total global trade of $1,251.6 billion. This makes ASEAN Japan’s third largest trading partner after China, with $270.3 billion, and the United States, with $197.4 billion. In investment, Japan’s foreign direct investment position in ASEAN, at $167.3 billion, accounts for approximately 12% of Japan’s total foreign direct investment position globally of $1,359.4 billion.
This is also third after the United States, at $454.1 billion, and the EU, at $324.2 billion. In particular, Japanese investment in ASEAN has more than tripled in the past 10 years and ASEAN is increasingly becoming an invaluable partner for Japanese companies.
Mr. Masakazu KubotaDirector General
How has the growth of the region (Southeast Asia) affected Japanese investment in the 10 nation association over the last decade?
Since the 2000s, ASEAN has achieved stable growth and has increased its presence as a growth engine of the world. For Japan, in particular, with the entry into force of the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) in 2008 and the progress in regional economic integration such asthe establishment of the ASEAN Economic Community in 2015, ASEAN has been transformed from a collection of individual national markets into a giant economic zone worth some $2.6 trillion (the world’s seventh largest, accounting for 3.4% of the global economy), with a population of more than 600 million. With this transformation, Japanese companies, taking advantage of the respective characteristics of the ASEAN member nations, have built up networks of diverse business locations and strong, effective supply chains in the region. This is contributing to the strengthening of the international competitiveness of Japanese companies.
With Singapore as the chairman of the ASEAN in 2018, how important does Singapore remain for Japanese investment in the region?
Many Japanese companies have moved into Singapore (The Japanese Chamber of Commerce and Industry, Singapore, has 821 member companies [as of September 2017]), many of which have established their regional headquarters there. Singapore is expected to continue to have an important function as a core center of ASEAN and the Asia-Pacific region. We look forward to Singapore, in its role as the 2018 chair of ASEAN, displaying strong leadership in the further growth and prosperity of ASEAN and the development of free and open business environment.
Message to our readers about Japanese commitment to ASEAN
Japan hopes to further expand and deepen its economic exchanges with Singapore and ASEAN and to make our close and mutually beneficial relationship a firm and unwavering one. In particular, amid concerns about the rise in protectionism around the world, the maintenance and strengthening of a free and open international economic order is of extreme importance. Under these circumstances, we hope to join hands with ASEAN to push for the early realization of a comprehensive, high-level Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or TPP11, to contribute actively to the stability and prosperity not just of the region but of the world.