[A-List] US imperialism: Japan

["Michael Keaney" <michael.keaney@xxxxxx>]

Japanese managers 'must woo foreign capital'
By David Ibison in Tokyo
Financial Times; Mar 13, 2003

Japanese managers must reject outmoded ways of thinking and embrace the
introduction of foreign capital if Japan is to stand any chance of
sustainable economic recovery, according to Taizo Nishimuro, chairman of the
Japan-US Business Council.

Mr Nishimuro - chairman of Toshiba, the diversified electronics company -
said in an interview that recent initiatives from the government to
encourage foreign direct investment could take Japanese companies only part
of the way to recovery.

"We cannot wait for the government to do something for us. We are the ones
in charge of making changes, making the company more effective, more agile
and competitive. That is our responsibility," he said.

His comments were made days before a government-sponsored panel is to
propose an action plan to Junichiro Koizumi, prime minister, discussing how
to achieve a pledge he made in his last policy address to double foreign
direct investment in Japan in the next five years.

"The goal is achievable," said Mr Nishimuro. "The current rate of FDI in
Japan is only 1.2 per cent of gross domestic product compared with between
20 and 40 per cent in European countries and the US. The target is only 2.6
per cent of GDP - this is not an astronomical figure."

The Japan Investment Council proposals are understood to focus on how to
overcome a fear of foreign capital prevalent among many Japanese companies
that foreign companies are "vultures" interested only in quick profit.

These fears have been stoked by certain politicians and bureaucrats,
primarily because they think the introduction of foreign managers would run
roughshod over their vested interests that guarantee them money and votes.

Perceptions of foreign capital as "vulture money" form part of a series of
invisible cultural barriers to FDI in Japan that have discouraged potential
investors from entering the country and forced them to seek opportunities
elsewhere.

According to research from the United Nations Conference of Trade and
Development (Unctad), China was the largest recipient of FDI in 2002 for the
first time, topping the long-time leader, the US.

Unctad forecasts FDI in China (excluding Hong Kong) will rise to over $50bn
(?45bn, £31bn) as a result of domestic economic liberalisation and
industrial reorganisation stemming from its entry into the World Trade
Organisation at the end of last year.

Mr Nishimuro said: "The FDI that will come to Japan will be in the form of
M&A. If you go to anyone outside Japan and ask them to come to Japan and . .
open a huge manufacturing facility, it is just a dream."