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Speeches by the Chairman

Speech at Japan-US Economic Forum in Los Angeles

May 1, 2015

I.  “Changing Japan” through Abenomics

Distinguished guests, Ladies and gentlemen, thank you for coming to today’s seminar.
I am Hiroyuki Ishige from JETRO.

It’s been one month since this year’s Major League Baseball season started, and the Dodgers are off to a good start, as usual.
Hideo Nomo, who played for the Dodgers in 1995 and after, largely opened the door for other Japanese players, including Ichiro, Matsui, Kuroda, Darvish and Tanaka.

Mr. Nobuyuki Matsuhisa, who opened his first restaurant in Beverly Hills in 1987, is now the owner of the world-famous Nobu restaurant chain.
Mr. Mogi from Kikkoman, one of today`s panelists, is a pathfinder for Japanese food in the U.S., and the Japanese Gourmet food boom triggered by Chef Matsuhisa started in LA.

Yesterday, I had a meeting with Masi Oka, a Japanese actor famous as “Hiro Nakamura” in “Heroes” and “Heroes Reborn”. He is also a key supporter of the “Cool Japan” promotion that began in LA, the entertainment capital of the world.

Los Angeles, which has the largest Japan-town, or Little Tokyo, in the nation, is the Japanese gateway to the U.S.

I am honored to hold this business seminar for American and Japanese business leaders here in Los Angeles.

Abenomics has changed Japan.

It is not difficult to come up with favorable numbers such as GDP growth, operating income of companies, business sentiment, and stock price shown on the slide.
An improvement in corporate earnings leads to expanded investment and an increase in salaries.
As a result, consumption grows, and that further boosts corporate earnings.
In this way, Japan has entered a positive growth cycle.
Many people, especially business people, realize this.

The key to transforming this positive cycle into sustainable economic growth is the third arrow of the “Growth Strategy.”
The Abe Administration’s reform of the so-called “bedrock regulations” as part of the “Growth Strategy” will create new markets.
Who could have imagined that the regional monopoly of electricity production and distribution would be destroyed? Actually, next year the electricity retail market will be liberalized.

Who could have imagined that the agricultural cooperative regime would be fundamentally reformed?

Who could have imagined that the regulations for medical equipment would be substantially relaxed?  Edwards Lifescience, a global leader in the science of heart valves that I visited yesterday, appreciated the improvement of business conditions in Japan.

Who could have imagined that corporate governance in Japan would be in line with global standards so speedily?

Who could have imagined two years ago that Japan would join TPP, but it looks like that will happen very soon.

I hear the criticism that the effects of the structural reform are yet to be seen.
Yes, it takes time, but the full effects are coming.
In addition to those, the government has lowered the corporate tax, and is moving towards further reducing the rate down to the 20’s.
I would like to reemphasize that Abenomics has changed Japan.

II. The imbalance in investment between the U.S. and Japan

Now I would like to touch on the investment between the U.S. and Japan, which is the theme of the panel discussion later in the seminar.

The U.S. is the largest investment destination for Japanese companies, making up 30% of the total outward FDI stock of Japan.

This investment is creating more than seven hundred thousand jobs in the U.S., more employment than any other nation but one, coming second only to the U.K.

For Southern California, with LA at the center, Japan is the largest source of inward FDI, with over 1,000 Japanese companies located in the area.

In terms of inward FDI in Japan, the U.S. is the largest source, accounting for around 30% of Japan’s total inward FDI.

However, while the stock of inward FDI from Japan in the U.S. is 350 billion US$, FDI from the U.S. in Japan is less than one-sixth of that at 55 billion US$.

Less than 3% of all FDI from the U.S. worldwide goes to Japan, and Japan is ranked 10th among destination countries for U.S. investment.
This reflects a large imbalance in investment between our two countries.

In order to further strengthen and develop the relationship between the U.S. and Japan, which is the theme of this seminar, bilateral business interaction is required, and the expansion of FDI from the U.S. to Japan is highly desired.

III. Abenomics is a business opportunity for the U.S.

I understand that President Obama is committed to the “Select USA” scheme, and promoting inward FDI in the U.S.

I had the honor of discussing FDI policy directly with the President during his visit to Tokyo last year on the occasion of the state dinner hosted by the Emperor at his palace.

Prime Minister Abe is also committed to the “Invest Japan” promotion program.
He has proclaimed that he will change Japan into the most business-friendly country in the world.

In the “Growth Strategy”, he set a new goal of doubling the stock of inward FDI by 2020.
This is a very ambitious target. Ambitious sometimes means impossible. But, this is not a joke. Prime Minister Abe is serious. Japan is serious.

He has recently introduced new measures, called the “Five Promises”, for improving the business and living environment for foreign people.
This will be touched upon by the Prime Minister later in this seminar.

Now let me briefly talk about my organization, JETRO in this respect.
The Japanese government has given JETRO the role as the core organization to promote inward FDI in Japan.
In the past 12 years, JETRO has supported over 12 thousand companies that showed interest in investing in Japan, and over 12 hundred of those companies have successfully made their investments in Japan.
Of those, 369 are U.S. companies.
Amazon, Salesforce.com, Tesla Motors, Abercrombie & Fitch, Vera Bradley, Tommy Bahama, L.A. based Forever 21, and IKEA are just a few.
Did you know that IKEA is not a US company but Swedish?

Anyway, many of them used JETRO’s free temporary offices and one-stop support services upon starting their businesses in Japan.

The world economic growth is and will be dependent on the emerging Asia.
The brand “Made in Japan” is a force behind developing the Asian market.

The research and development capabilities of Japan offer you a new base of innovation.
Actually, many multinational companies have established their R&D centers in Japan. Johnson & Johnson CEO Mr. Alex Gorsky, who will participate in today`s panel discussion, also established an R&D center near Tokyo last August.
In the same way, the Japanese market serves as a test market for high-quality and innovative products.
Japan is the gateway to the emerging Asia.

Abenomics has changed Japan. Abenomics has reenergized Japan.

Tokyo Olympic and Paralympic game will be held in 2020.
Please do come and see the new Japan.
This is the time to expand your business with Japan. Please don’t miss out.

When you expand your business with Japan, please “Talk to JETRO first!

Thank you for your kind attention and I hope that today’s seminar would be of benefit to all of you here