No. 3 economy is Japan’s attraction
Location: An island nation in the Pacific Ocean, Japan is slightly smaller than California.
Language: Japanese. And while most Japanese students study English starting at age 12, many of them learn to read it, not speak it. The goal is to pass an exam, not to communicate in English. Plan to use a trained bilingual negotiator for deals.
Total population: 126.7 million
The red circle in the center of the white background represents the sun. The flag is called Hinomaru, which means “circle of the sun.” The sun plays an important role in Japanese mythology and religion as it is said the emperor is a direct descendent of the sun goddess, Amaterasu.
Government: Parliamentary constitutional monarchy
Religion: Shintoism 79 percent; Buddhism 67 percent (many people practice both)
Economy: As the third largest economy in the world (after the U.S. and China), Japan is a key player in the global economy and international trade system. It’s the fourth largest importer of U.S. products (after Canada, Mexico and China) and has a large middle class and consumer economy. Japan is the world’s largest net buyer of food products. Its large government debt—now totaling more than 250 percent of GDP—is a long-term challenge. The success of Prime Minister Shinzo Abe’s “Abenomics”—a three-pronged economic strategy that combines expansive fiscal policy, monetary easing and structural reform—in revitalizing long-term growth is uncertain. Japan continues to take steps toward economic recovery following the combined earthquake, tsunami and nuclear accident of March 2011.
GDP (official exchange rate): $4.73 trillion
Currency: Japanese yen; (conversion rate at press time: 1 JPY equals $0.0088 USD).
Franchising in Japan: Franchising’s growth trend continues in Japan, dominated by convenience stores, which account for 42 percent of the market; foodservice chains have 17 percent. In the service sector, a wide variety of franchise concepts have developed, particularly in education and fitness-related businesses, reflecting Japan’s declining population and the increase in health consciousness.
Import restrictions: Japan has very strict import guidelines concerning food colors and dairy products.
Ease of doing business ranking by World Bank: 34, down two from 32 in 2016.
Cultural notes: Younger members of your team should defer to their seniors during meetings. Their role will often be to socialize with their Japanese counterparts at night, when the real scoop on how the deal is proceeding will be conveyed to them.
Sources: U.S. Commercial Service, CIA World Factbook, World Bank, “Kiss, Bow, and Shake Hands.”