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THEMES // RESTRUCTURING JAPAN // THE WAY FORWARD, ASIA BOOM |
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The Way Forward – Investment Opportunities
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Despite the massive steps taken to redress the structural inadequacies in the corporate sector,
the turnaround in Japan is still an enormously under-appreciated reform from a global perspective.
- Outside directors now form an integral part of the boards of major corporations,
and firms are leaner and more agile.
- Near-neighbourChina is undergoing unprecedented structural reform, and this has
led to an insatiable appetite for goods and services.
- In spite of weakness in the nineties, Japan is still the #2 economic powerhouse
in the world, and has turned the corner in recent years.
- A renewed self-belief is emerging, and a domestic-driven recovery is now well
under way. It is a popular misconception that Japan is an export-driven economy, while in fact
only 15% of the economy is exports. The China expansion may push this higher, but that can only be
good news -a "double whammy" of greater domestic demand plus China.
- Pension reform policies have changed Japanese saving habits to include more stock
market participation at the retail level than ever before.
- An ageing population poses challenges, but also presents opportunities.
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Benefitting From The Asia Boom
// JAPANESE EXPORTS 1990 - 2006, ANNUAL IN US$ BILLIONS
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// Sources: Ministry of Finance Japan
- Exports to Asian nations have risen dramatically.
- China is a notable (albeit predictable) destination for an increasingly large amount of Japanese exports.
- China has now overtaken the EU as a major market for Japanese exports, and is closing in on the USA
as the number one market for Japanese goods and services.
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