Invest KOREA

According to Yonhap News,

(SEOUL=Yonhap News) A survey conducted by the Japan External Trade Organization (JETRO) on 231 Japanese companies in Asia and Oceania at the end of last year showed that 52.8 percent of the respondents plan to expand their businesses within one or two years, according to KOTRA on January 6. 42.9 percent of the respondents said they would maintain the status quo while 3.0 percent said they would reduce their businesses. 1.3 percent said they would move to third-world countries.

The percentage of respondents who plan to expand their business dropped 7.6 percentage points from 2013 while the percentage of those who plan to maintain the status quo rose 5.6 percentage points.

When asked about their reasons for expanding business, 88.3 percent of the respondents cited an increase in sales, followed by high receptiveness for high value-added products (33.3 percent) and relationships with counterparts (20.8 percent). Respondents answered questions in multiple-choice form and with the option to choose multiple answers.

Asked about business expansion sectors, 70.8 percent of the respondents cited sales-related functions, followed by production of high value-added products (38.3 percent) and research and development (R&D, 20.8 percent).

When asked about their operating profit outlook for 2014, 76.2 percent of the respondents said they would be in the black while 11.7 percent said they would be in the red.

Among the 19 countries where the survey was taken, Pakistan and Taiwan were the most positive about their outlook, followed by Korea. 64.1 percent of the Japanese companies in China said they would be in the black.

However, the outlook for 2015 is not so bright, as only 40.6 percent of the respondents said their operating profits for this year will be better than that of 2014.

When asked about management issues, 67.4 percent of the respondents cited an increase in wages, followed by the emergence of competitors (56.8 percent), request by counterparts to lower prices (48.9 percent), changes in the yen-local currency unit (47.8 percent) and difficulties attracting new customers (43.2 percent). Again, respondents answered questions in multiple-choice form and with the option to choose multiple answers.

Among the major Korea-related items to be reviewed for the Regional Comprehensive Economic Partnership, 43.3 percent of the respondents named the simplification of the customs system and process, followed by the mitigation and abolition of non-tariff barriers (32.8 percent) and the creation of a large market between ASEAN and Korea, China and Japan (32.2 percent).

Japanese companies saw their best overseas performance in 2013, with business totaling a record USD 135 billion, a number that is still on the rise.

In Korea, however, Japanese companies performed best on the whole in 2012, with business totaling USD 3.99 billion. This figure fell to USD 3.29 billion in 2013 and USD 2.46 billion in the January-September period of 2014.

KOTRA said Japanese companies will continue to enter overseas markets, as the Japanese government encourages them to find growth engines in overseas markets to respond to Japan’s low birth rate and aging society. Therefore, Korea should strive to attract investment from Japanese companies.

hoonkim@yna.co.kr

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