Special Feature
Investing in Japan
Investing in Japan <br/>投資日本

Investing in Japan <br/>投資日本

Investing in Japan <br/>投資日本

Investing in Japan <br/>投資日本

Hong Kong was the leading source globally of foreign investment in Japan in 2021, with investments surging 533% to 1.3 trillion yen – an astonishing fact revealed by Chamber Chairman Betty Yuen at the “HKGCC X JETRO Invest Japan Webinar” held on 29 March. At the event, co-organized by the Chamber with the Osaka, Nara and Wakayama governments and the Japan External Trade Organization (JETRO), experts and Japanese government officials updated members on the latest economic developments in Kansai and also introduced businesses opportunities in each prefecture.

In his keynote presentation, Yasuyuki Murahashi, Director General of JETRO Osaka (for Kansai and Hokuriku regions), said while the gradual recovery from the Covid-19 impact continues, Japan's real economic growth rate was around 1.7% in 2022 due to the impact of global energy and food price hikes. "This year, the economy is expected to grow by around 1.5%, led by private demand, as investment in growth sectors driven by public-private partnerships as well as 'investment in people,' as promoted under government initiatives," he explained.

In 2021, foreign direct investment in Japan totalled over 3,600 billion yen, with a significant increase in equity capital, which represents a trend of new investments and capital increases in Japan. Looking at FDI flow by region that year, Asia was the largest at 2,368.6 billion yen, with Hong Kong's FDI flows rising to 539.4% over the previous year to 1,329.9 billion yen – a 36.9% share that makes it Japan's biggest investor by country/region. 

With a population of over 21 million, Kansai represents a significant market – it is Japan's second-largest economy after Tokyo, and has a high concentration of world-class manufacturing facilities, universities, research institutions and traditional high-skilled craftsmanship in various fields. Kansai is also known for technology innovation, especially in the green and life science sectors. And as the birthplace of many traditional Japanese performing arts, Kansai boasts several World Heritage sites, besides constantly topping international tourism destination lists.

The region's concentration of industries offers myriad business opportunities. Some of the biggest industrial clusters include life science, namely pharmaceuticals, medical equipment, and green energy, such as rechargeable batteries and hydrogen/fuel cells. Higashi Osaka is known as Japan's manufacturing heart, and its tagline "We can make anything" is no idle boast – it is home to over 6,000 factories producing everything from toothbrushes to airplanes.

Kansai is also famous for its research institutes, among them the Kansai Cultural and Academic Research City, Kobe Biomedical Innovation Cluster, and Harima Science Garden City. No less than 24% of industry-university joint research in Japan is conducted in Kansai; notably, the amount of funds received per research project in Kansai is higher than the national average. 

Murahashi pointed out that Kansai has excellent connectivity, offering ease of access to Japan's metropolises, from Tokyo to Sapporo, by air, road and rail, while doubling as a gateway to other Asian cities. The region also regularly tops international tourism rankings – Osaka and Kyoto were named second and third best cities respectively by Conde Nast Traveller in 2021 (Japan ranked first in the Travel and Tourism Development Index that year). Beyond the usual tried-and-tested attractions in these cities, Kansai boasts a trove of spectacular sites, from the San'in Coast to Kii Peninsula and Tamba.

In the panel discussion that followed, Yuko Sakata from Osaka City Government's Economic Strategy Bureau discussed Osaka's upcoming urban development projects, including plans to convert the popular Midosuji Street into a people-friendly zone. Construction along the avenue will include several commercial buildings, due to be completed between 2023 and 2027. Also significant is the Nakanoshima Project, which will house an "International Hub for Healthcare Innovation," and a railroad station that will be operational in 2031.

Osaka is also Japan's start-up hotspot with abundant business collaboration opportunities, and is significantly cheaper than Tokyo, allowing businesses to save nearly 35% on office rent, according to Kosuke Kimura, Deputy Director of International Business and Investment Division Department of Commerce, Industry and Labor, Osaka Prefecture Government. 

Sharing on Nara's potential, Mikiko Kigawa, Chief Director of JETRO Nara, said the city is famous for its rich history of sake production, besides being an idyllic tourist destination, while Marina Tsuda of the Nara Visitors Bureau introduced potential opportunities for hotel investment.

Presenting on Wakayama, Seizo Tsuji, Director of the Service Industry Investment Promotion Office, Wakayama Prefecture Government, said the city – known for its beautiful landscapes, hot springs and wildlife – enjoys close proximity to Osaka, making it ideal for a two-city break. 

Also joining the panel discussion were Hong Kong business leaders Oscar Chow, Non-executive Director of Chevalier International Holdings, and Lim Kiah Meng, Director of SIS Hospitality Holdings Limited, who shared their decades of experience in conducting business and investing in Japan.

Murahashi also revealed details of Expo 2025 Osaka, which will be held under the theme "Designing a Future Society for our Lives." Scheduled to run from 13 April to 13 October 2025 in Yumeshima, the Expo is expected to attract over 28 million visitors and will showcase 150 countries and 25 international organizations.


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