It’s unfortunate that Japan is often overlooked by the world’s media these days, as reporters chase frothier stories of economic bonanza on the Asian mainland. But while Japan’s star in Southeast Asian business activity may have faded in the past couple of decades, it would be a mistake to assume the trend is permanent, or that there is a declining interest among Japan’s tourists, consumers and investors.

Quite the opposite is true. Trade between Japan and the 10 ASEAN members has grown steadily since 1990, from US$60.38 million that year to its 2008 height of $211.05 million. That number dipped to $158.34 million in 2009, a year in which few did well, but its rebound to $200.46 million in 2010 shows a healthy level of activity with a natural urge on both sides to build further ties. Amid increased competition from neighbors China and South Korea, Japan remains a significant player in ASEAN’s economy and development.

ASEAN-Japan Centre front window

The ASEAN-Japan Centre (AJC) in Tokyo has played a large role in the relationship. Established in 1981 by the governments of Japan and ASEAN member states, the Centre has remits to invigorate three core activities: exports from ASEAN to the Japanese market, investment from Japan to ASEAN including technology and skills transfer, and Japanese tourism to ASEAN destinations. The AJC also supports and works closely with others such as the Japan External Trade Organization (JETRO) in finding new markets for Japanese exports, the Japan International Cooperation Agency (JICA) on aid and development projects, with government trade and tourism boards from ASEAN countries, and member countries’ embassies in Tokyo and around the region.  >>

The AJC office itself employs 32 staff including four rotating positions for representatives from ASEAN countries. Under new Secretary General Yoshikuni Ohnishi it moved to new premises in 2009 and now features a permanent exhibition hall and 160-seat theater space, attracting 39,000 people that year to country-specific events, exhibitions and seminars. Events are varied: the last few months of 2010 alone saw a sustainable tourism workshop, a Vietnam investment seminar and the third ‘Little Indonesia in Japan’ product show, among others.

Wayang Kulit display

Wayang Kulit and Sbek Thom display at AJC, January 2011

Old ties, new opportunities

“Japan had a very good relationship with ASEAN countries and maintains the same,” says Hidehiro Yoshii, the AJC’s Director of Planning & Coordination. He added though, that factors like Japan’s economic situation and the increasing international focus of China and South Korea had seen his country’s influence diminish. Japan’s Official Development Assistance (ODA) to ASEAN was also down on past years.

Yoshii said Japanese companies, like those in most other developed nations, were looking to Southeast Asia for its lower labor costs. With that, however, comes skill-level issues and it was important for the AJC to support capacity building initiatives to train workers to suitable levels. Given the high general quality of local products, Japanese consumers have notoriously strict standards and any slip by a manufacturer can lead to long term reputation damage, especially in food production.

Trade missions and product exhibitions at the AJC from Laos, Indonesia and Vietnam in the past few months gave ASEAN manufacturers the chance to introduce and ‘test’ their products on the Japanese market, as well as make direct contact with local buyers. The Centre also conducted a training course in October 2010 in Osaka for Myanmar food analysis inspectors, teaching new testing apparatus and allowing participants to tour Japanese supermarkets to observe food labeling and presentation.

Many Japanese investors are watching Myanmar. The country produces a lot of Japanese favorites like wheat for soba noodles and varieties of beans, and Yoshii sees a lot of potential to develop the industry if trade barriers and economic sanctions are lowered. Agricultural and fisheries products from ASEAN countries like Myanmar will have import duties eliminated by 2012 under the ASEAN Free Trade Area (AFTA) and agreements with Japan like the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) and Effective Preferential Tariff (EPA) will see efficiency improvements in production, labor allocation and logistics across the Mekong region.

Japanese companies are adopting a “China plus one” strategy in ASEAN, not wanting to rely too heavily on China for their manufacturing needs. Countries like Vietnam and Indonesia were most promising if workers can acquire the requisite skills, though the threat of inflation has made some investors cautious.

Tourism traffic rises

Tourism between Southeast Asia and Japan was mostly one-way in the past, but economic progress saw an influx of 615,000 visitors to Japan from the ‘Asean-5’ nations (Indonesia, Malaysia, Singapore, Philippines and Thailand) in 2009 despite the worldwide downturn. The AJC does everything it can to ‘vitalize’ Japanese tourist traffic to ASEAN with tourism seminars around the region to sample local attractions and share ideas. It seems to be working. “Singapore and Thailand are very good destinations for Japanese… the Singapore Tourism Board is attracting more tourists with new flights and services for businesspeople,” said Yoshii. Recent political unrest in Thailand saw benefits to neighboring Vietnam and Malaysia, with many Japanese choosing to venture there instead.

New Horizons

Running alongside ‘traditional’ trade projects are more emerging trends, and the Centre has been quick to realize their potential too. Spend enough time with young people in other parts of Asia and you’ll soon realize how much they adore Japanese pop culture, from classic anime and manga series to J-pop. Westerners have long bemoaned that Japan doesn’t grasp fully the overseas ‘soft power’ of its cultural products, but that has changed in recent years as Japanese cultural exports found more mainstream appeal. November 2010 saw the ASEAN-Japan Forum on the Development of the Contents Industry: Fusion of Pop Cultures in Singapore, in conjunction with the Anime Festival Asia 2010. The events were designed to do more than just promote Japanese content, but also to share knowledge and build networks with creators in other countries, whose work follows the Japanese style. Through closer collaboration and support, Japan is developing a deeper appreciation for its creativity to ensure its future survival through fashion shifts and ‘competition’ from other places.

AJC Library

The ASEAN-Japan Centre is as prolific in information sharing and material production as it is with exchange events. Its website has a wealth of information and statistics on its core areas of investment, trade and tourism and it produces a series of regular printed newsletters and updates on upcoming events. February 2011 will see Brunei Darussalam Week, a showcase of ASEAN’s smallest member and everything it has to offer Japan.

by Jon Southurst, Tokyo