The Journal The Authority on Global Business in Japan


MARCH 2015

Biggest Export Market

The United States remained Japan’s largest export market for the second consecutive year in 2014 (Journal of Commerce, January 27).

It was a close race between the world’s three major economies—the United States, Japan, and China. China had been the primary destination for Japanese exports for five years until 2013, and many expected the country to regain its top status last year. The United States edged China by a narrow margin—¥13.65 trillion versus ¥13.38 trillion.

The 2014 numbers reflect the opposite circumstances of Japan’s primary trading partners. While China’s economic growth slowed to 7.4 percent last year, the US economy is recovering. Growth in Japan’s exports to the United States was led by autos, steel, as well as construction and mining machinery.

California Rail Project Faces Tough Fight

Rail-car makers in Japan are facing strong competition from China in the emergent US market (The Japan Times, February 11).

Several companies worldwide are preparing to put in a bid later this year to provide cars for a high-speed rail link in California. An alliance of Japanese companies will promote Shinkansen technology, given that California is an earthquake-prone region that is tightening environmental regulations, much like Japan. Chinese rivals are a threat, as they have offered significantly lower pricing for similar projects in the market.

Beijing is openly pushing railway exports. Last year China CNR Corporation Ltd. overtook Kawasaki Heavy Industries Ltd. and others to win a bid to renew Boston’s subway trains. CNR’s bid was about 37 percent below that of Kawasaki’s.

Netflix Coming to Asia

Video streaming giant Netflix will begin operations in Japan this fall (Wall Street Journal, February 5).

The US company, which celebrates its 20-year anniversary in 2017, said it aims to launch its service in 200 countries by the end of next year. It announced that Japan would serve as a starting point for further expansion in Asia. It has appointed Gregory Peters as its first general manager outside the United States. With the third-highest average connection speed of any country, and broadband in nearly 36 million homes, Japan is an attractive market.

Challenges loom, however. Competitor outlet Hulu sold off its Japanese operation last year after spending three years in the market, and SoftBank Corp. has been aggressively expanding into digital content distribution.

NY Campus Lands Culture Grant

Press2Tokyo has announced a $5 million grant to New York’s Columbia University to fund a position for a professor of Japanese politics and foreign policy (Wall Street Journal, January 26).

This is the first endowment of its kind in over 40 years, and is seen as part of a push to enhance Japan’s reputation overseas. It also comes at a time when rival nations such as China and South Korea are investing heavily in US academic institutions. China’s Confucius Institute, a government-run body to promote language and culture, now has a presence at 97 US universities.

Some have expressed concern that Columbia is losing, or having trouble retaining, teaching staff for its Japan programs, which are among the largest in the United States.

TV Maker Exits North America

Toshiba Corp. will cease development and sales of televisions in North America (The Japan Times, January 30).

In the face of growing price competition in the global TV market, the electronics maker will license its TV business in the region to a Taiwanese company. It is reportedly considering exits from other regions as well. The company decided to change its business structure, despite having recently launched new big-screen TVs and similar products in ailing markets.

The decision comes on the heels of robust April to December earnings. Toshiba’s group operating profit rose 6.2 percent from a year earlier to a record ¥164.81 billion for the period.