JAPAN
P.E.L.T. ENVIRONMENT
 
 
 
 
 

POLITICAL ENVIRONMENT

FORM OF GOVERNMENT
Japan has a constitutional monarchy with a parlimentary government. 
POLITICAL STABILITY
Japan's political relations with the United States are anchored in the U.S.-Japan Security Treaty and characterized by close cooperation on important bilateral and multilateral issues.  The U.S.-Japan security relationship contributes to the peace and
prosperity of both Japan and the Asia/Pacific region.  President Clinton and Prime Minister Hashimoto reconfirmed the importance of our bilateral security relationship at their summit in Washington in April 1997.  Japan and the United States are cooperating closely through the Common Agenda to tackle such
global problems as AIDS, population growth and protection of the environment.
FOREIGN POLICY
Foreign investment in Japan is regulated by the Foreign Exchange and Trade Control Law, whose provisions are much more liberalized than previous laws.  Japan has always been opposed to foreign investment, but recently enacted laws have relaxed that position. 
STATE COMPANIES
There are several industries that are state owned but the number is decreasing. 
ROLE OF THE MILITARY
The Japanese have a sizable military with  29,000,000 active military soldiers.
LEVEL OF TERRORISM
Japan, like the US, has been a victim of terrorist attacks.  Several years ago, Tokyo had a terrorist incident involving poisonous gas. 
IMPORT/EXPORT RESTRICTIONS
Because Japan has limited natural resources, it must rely heavily on imports.  The US represented the largest import partner for Japan in 2001. 

 

ECONOMIC ENVIRONMENT

ECONOMIC SYSTEM
Goverment-industry cooperation, a strong work ethic, mastery of technology, and a comparatively small defense allocation have helped Japan advance with remarkable speed to the rank of second most technologically advanced nation.  Japan's has the third largess economy in the world. 
STAGE OF DEVELOPMENT
Highly Advanced 
ECONOMIC STABILITY
Although the past few years for Japan's economy has been characterized with a contracting economy, the future still looks very bright.  Japan's growth has been stagnant because of both domestic issues as well as a recession in the US which is its largest trading partner.
GROSS NATIONAL PRODUCT
Japan's GDP growth rate is estimated at 0-1% for the year ending 2001.  Japan has one of the world's highest living standards. 
INTERNATIONAL FINANCIAL STANDING
Japan's international standing has improved considerably since World War II.  Its import and export business is very formidable.  Japan supplies the world a prodigious amount of motor vehicles, semiconductors, and chemicals.  It has a very favorable balance of trade.
MONETARY/FISCAL PROPERTY
Monetary policy is already very stimulative, but could be challenged further by weak private sector credit demand, suggesting the yen may have to depreciate further to provide a boost to exports.
FOREIGN INVESTMENT
In previous years foreign investment was discouraged, but more recently enacted laws are encouraging it.  The Japanese are more receptive to equity deals with foreign interest as opposed to outright foreign ownership.
Japan, the world's second-largest economy, is an immense potential market for U.S. foreign direct investment (FDI).  The Government of Japan (GOJ) imposes few formal restrictions on FDI in Japan, and has worked to remove or liberalize many of the
legal restrictions that apply to specific economic sectors.  The government does not impose export-balancing requirements or other
trade-related FDI measures on firms seeking to invest in Japan.  Moreover, risks associated with investment in many other countries, such as expropriation and nationalization, are not an issue in Japan.
   

 

LEGAL ENVIRONMENT

LEGAL SYSTEMS
A US-style Supreme Court, appointed by the cabinet heads of a legal system of lesser courts divided into four arms: the High Court, District Courts, Family Courts, and Summary Courts.
PREVAILING INTERNATIONAL LAWS
Everything falls under the Foreign Exchange and Foreign Trade Law enacted in 1997. 
PROTECTIONIST LAWS
Japan has several protected industries.  The most popular is the rice industry.  Other industries where protectionism or subsidization exist are petrochemicals, finance, aluminum and ship building. 
TAX LAWS
The tax code in Japan is very similar to the code in the US.  It is administered by the Minister of Finance.  Corporations pay 34% tax rate 
ROLE OF CONTRACTS
Japan's contract law differs somewhat in that the parties not only do not stipulate in a detailed manner the rights and duties under the contract, but also thing that even the rights and duties provided for in written agreement are tentative rather than definite. 
PROPRIETARY PROPERTY INFORMATION
Japan's has several laws relating to copyrights and patents. 

 

TECHNOLOGICAL ENVIRONMENT

LEVEL OF TECHNOLOGY
Japan is considered the second most technologically advanced country in the US. 
AVAILABILITY OF LOCAL TECHNICAL SKILLS
Japan has a highly skilled work force and almost a non existent illiteracy rate.  Over 25% of the population has internet access. 
NATIONAL TECHNICAL REQUIREMENTS
Japan has several laws governing the technical requirements of the imported and exported products, which is governed by the WTO. 
APPROPRIABILITY
Minimal 
TRANSFER OF TECHNOLOGY
Most of Japan's technology is developed domestically.  However some transfer technology was used in the steel industry. 
INFRASTRUCTURE
Japan's technologically boom in the late 1900's can be attributable to its highly trained labor force and its infrastructure for innovation.  The internet is ubiquitous in the Japanese population. 
ENVIRONMENTAL PROTECTION
Environment--international agreements:
party to: Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping,
Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands signed, but not ratified: Desertification

 

Sources:  Central Intelligence Agency, “The World Factbook – Japan” http://www.odci.gov/cia/publications/factbook/geos/ja.html (21 Jan. 2002)