Business in Japan

Japan lies in East Asia and is made up of several islands which lie between the northern Pacific Ocean and the Sea of Japan, east of the Korean peninsula. Japan has roughly a population of 125 million people who are packed compactly into a rather small geographic area. The official language in the country is Japanese. Japanese is spoken only in Japan. The literacy level in Japan is almost 100 percent with 95 percent of the population having attained high school education. Japan is governed by a parliamentarian democracy guided by the rule of a constitutional monarch. According to the Ministry of Foreign Affairs the Prime Minister is the chief government officer. The dominant religion is Shinto, which is unique to Japan. However, the Japanese have no official religion. When it comes to culture, the Japanese are in their ways. When a country or a state is interested in starting a business organization in Japan; it must solely be assured of success (Japan).

Brief history of Japan

In 1603 Shogun Tokugawa (in order to protect his power) imposed isolation from foreign influences. The policy has ensured 250 years of stability in Japan and encourages the rise of local civilization. Kanagawa agreement with the US in 1854, made Japan to open its ports and to begin industrialisation and modernisation. During the 19^th and 20^th centuries, Japan became a local power and managed to defeat the military powers of Russia and China, occupying Korea, Taiwan and the southern part of the island Sahalin. During World War II, Japan joined the Axis Powers, but following the war, it developed close ties with the US and the Europe. The Emperor is the sign of national unity (Japan).

Japan-EU Relations

EU-Japan relations are impressive and are developing steadily in various areas of collaboration. The 1991 Political Declaration set the primary principles and specific common goals for these collaboration and further conformed a framework for yearly bilateral meetings (Ministry of Foreign Affairs).

In the 2001 EU-Japan Summit, a 10 year plan of action was adopted to strengthen bilateral relations:

• Promoting peace and security,
• Strengthening the economic and trade partnership,
• Coping with global and societal challenges, and
• Bringing people and cultures together.

Economical information of Japan

Close interrelation between the government and the countries businessmen, a sturdy work ethic and high technology have facilitated the country to become a strong economy worldwide. Currently there is a reduction in the full employment of the urban population. The industrial sector relays heavily on imported raw materials and fuel. The somewhat small agricultural segment is subsidised and protected by the state, with very high crop yield.

For three decades, the country’s rate of development was high, slowing in the 1980s, as a result of state intervention to avoid profiteering at the international stock exchange markets. Recently the economy has decelerated and this has been attributed to international economy recession the antique structure of the banking system in the country as well as it public utilities. However, programs of the Koizumi government, ranging from reforms in the banking sector and the public sector privatisation. These have contributed to the recovery of the Japanese economy (Ministry of Foreign Affairs).

Japan’s political and legal environment

No manager can afford to overlook the regulations and policies of the country from which he carries out international marketing transactions (Japan). Several regulatory or legal measures are target international activities are modeled to support domestic companies.  U.S. government also encourages Japan to establish protection for Intellectual Property Rights such as:

a)      Policies & Regulations

Violations of intellectual property rights occur anywhere. In Japan goods are brought to the markets in ways not preferred by the manufacturers. The government therefore has the mandate to perform its duties in order to reduce trade barriers or to increase trade opportunities.  

b)      Embargoes and Sanctions   

There are several governmental actions in the country that distort the free movement of trade in goods and services to the international market. Some of the prevalent issues that should to be addresses include economic sanctions which can force countries to behave peacefully in the global market or community. Unilateral sanctions in the country are not likely to since most governments often treat them as them as being free of cost (Japan).

c)       Export Controls 

Export Control mechanisms are developed by the Japanese government in order to inhibit or at least delay the acquisition of strategically important goods to adversaries.

Similarly, just like in U.S. export control system is founded on an Export Administration Act, administered by the Department of Commerce, and the Munitions Control Act, administered by the State Department laws control all exports of goods and services. There are three departments that control exports in Japan which include: national security, foreign policy, and nuclear proliferation.

d)      Export License 

The international marketing consequences of export controls are significant. One country’s firms are positioned at a competitive disadvantage with firms in other countries whose control systems are less inhibitive.  

A Changed Environment for Export Controls 

a) Failure of the Iron Curtain, Disappearance of the Eastern Bloc the soviet union. 

b) Currently principal focal point of export controls have to rest on the Third World owing to nuclear technology and chemical weapons. 

c) Loosing of mutual bonds among the allied counries. 

d) Increased accessibility to high technology goods. The large availability makes any denial of these products further difficult to implement.

Export management problems and conflicts 

a) Ongoing arguments on constitutes civilian utilization of products and military use products as well as dual utilization of products.

b) To subject the export of physical goods only to surveillance is not enough. Transfer of technology and knowledge is also important

Quota System  

Policymakers experience various problems:  

a) The controls siphon a huge price from local consumers 

b) the overall economic efficiency is impacted upon by biased against consumers and protected groups

c) a downstream change also occurs in import composition