JAPAN’S economy may have lost its drive but, with a population of 126.8 million and an average per capita income of more than $50,000 a year, it remains the second largest market in the world and Australia’s largest trading partner since 1969.
In 2001 Australia exported $23 billion worth of goods to Japan, an increase of 8.8 per cent over the previous year, despite flat Japanese economic conditions.
Imports in 2001 were valued at $15.3 billion.
Western Australian exports to Japan are almost three times the value of the State’s second largest export market, South Korea, and in 2000-01 exceeded $8.3 billion. While dominated by the resource sector, agricultural and fisheries exports still account for around $700 million in exports each year. Sales of Western Australian crustaceans add around $130 million to WA’s export trade.
The Federal Government has been keen to extend the bilateral relationship with Japan. In the Department of Foreign Affairs and Trade 2002 Outcomes and Objectives Statement the Government made it clear that Australia’s trade relationship with Japan was still “about quarries, farms and beaches for the Japanese, and about steel, power companies and cars for Australians”.
Trying to spread the economic relationship with Japan, the Federal Government released a report in 2001. Strengthening Australia-Japan Economic Relations, which found that changes in the Japanese economy offered new opportunities for Australia.
Deregulation in Japan’s energy sector, biotechnology and the ICT sectors were pointed out as being new markets for Australian industry.
However, while opportunities exist, the Export Finance and Insurance Corporation remains cautious about backing exporters to Japan.
“The uncertain economic out-look means that the future profitably, cash flow and balance sheet structure of in-dividual buyers matter more than their payment history and historical financial performance,” EFIC says in its latest market watch.
“We remain very cautious towards risk on Japanese banks, especially regional ones. Our concern revolves around lack of disclosure by some banks about bad debts and fears of more large corporate failures.”
Austrade State manager Jenny Matthews said there was a common perception that Japan was not a good place to export to, particularly in view of the current economic slowdown.
“But what we are hearing is that there are a good number of opportunities across all sectors for small to medium enter-prises,” she said.
“It is a very sophisticated market where packaging is very important, particularly in the food and beverages area.
“But Australia is often seen as green and clean, which goes in our favour.”
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