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Held on September 29, 2006, at the Nadao Hall in Tokyo, the 17th GISPRI Symposium addressed the captioned issue with a keynote lecture, presentations and panel discussion. The summary of the proceeding is given below:
Keynote Lecture: "Industrial cooperation within the East Asian region, and the role of Japan" by Prof. Akira Suehiro, Institute of Social Science, University of Tokyo
What has been happening in Asian economies? That was the question Professor Suehiro asked in his keynote lecture. He pointed out that, since late 1980’s, the rise of China led to the increased trades between China and ASEAN, and stimulated inter-regional trade in ASEAN. As Asia as a market and Asia as a manufacturing and exporting center coincided, the region stride for the "Asianization of Asia".
Second point he asked was why we study one industry at a time. He drew attention to the uniqueness of each industry, such as personal computer market and automobiles and textile industries.
Third item he questioned was what kind of a framework should be adopted for regional industrial cooperation and who would be the main players of such a framework. He emphasized the need to consider industrial cooperation in conjunction with the cooperation in various levels, not only the government to government level, but also the levels of industrial associations, business associations, NPO/NGO, and universities.
Lastly, he identified the purpose of this Symposium as to find out how to draw scenario to develop co-developing symbiotic relationship among regional countries, where they develop and prosper together, as seen in today’s China-ASEAN and India-ASEAN relationships, instead of simple confrontational or zero-sum competition relationships of the past. He urged the experts of various industries gathered at the Symposium to have extensive discussion on the problems of each industry.
Presentation 1 "East Asian EPA Scheme and Japan’s Economic and Industrial Cooperation" by Mr. Kunihiko Sinoda, Director for Economic Partnership (EPA/FTA), Trade Policy Bureau, Ministry of Economy, Trade and Industry
In his presentation, Mr. Sinoda explained that the Free Trade Agreement (FTA) is mainly for the liberation of service trades and the cut in tariff, but the Economic Partnership Agreement (EPA) includes the facilitation and cooperation in the fields of investment, intellectual property rights, competition policies, etc., in addition to those embraced by FTA. He further indicated the purposes of Japanese Government’s efforts to enter into EPAs rather than FTAs, such as: (i) to compliment free trade regime led by WTO; (ii) to build a regional community in East Asia, where there is international network of industries beneficial to Japan; and (iii) to promote the structural reform of certain fields such as the domestic migration of people and the agriculture sector in Japan. Furthermore, he explained about the economic cooperation between Japan and ASEAN, and the East Asian Summit.
Mr. Sinoda indicated three paradigms in the history of economic and industrial cooperation between Japan and ASEAN. First paradigm started in early 1990’s when the stability returned to Indochina region with the peace in Cambodia. At the time, Japan supported the accession of Cambodia, Laos, Myanmar, and Vietnam to the ASEAN. The second paradigm was after the Asian economic crisis in 1997. In order to rebuild the economies and industries of ASEAN countries, Japan launched the Japan-ASEAN Economic and Industrial Cooperation Committee (AMEICC). Third paradigm started after 2000. China, Japan, India, Korea, Australia, New Zealand and other countries actively seek partnerships in economy, as they shift toward greater economic cooperation and collaboration.
The talk of East Asian Summit began during the first ASEAN+3 Summit in 1997. In view of China possibly dominating the forum of Japan-China-Korea-ASEAN, Japan tried to invite other countries, which share common values of more freedom, market-oriented economy, and democracy, such as Australia, New Zealand and India. Adding these countries to the forum, the first East Asian Summit was held in December 2006.
Presentation 2: "Rise of India and Look-to-East policy" by Professor Makoto Kojima, Faculty of International Development, Takushoku University
Following is the summary of his presentation:
Ever since its independency, India tried to develop their economy under the Nehru Regime. For 30 years until around 1980, their economic growth rate remained around 3.5%, but rose to 5% in 1980’s, and 6% since 1990s. In 1991, India introduced genuine economic reform. Especially notable was the rapid growth of service industries, which exceeded those of other industries. Unlike East Asia, India’s economic growth was led by service industries, as demonstrated in the growth of their IT (Information Technology) industry.
In view of specified export items in the category of software development, main items are customized application software development, application management, etc., with ITES-BPO (IT Enabled Services - Business Process Out-sourcing) recently increasing importance. Also drawing attention is the growth of so-called intelligent process out-sourcing.
The fundamental strength of India is its human resources. Students with academic excellence tend to take to natural science and engineering, and the high wages of IT industry further accelerate such tendency. Moreover, those with proficiency in English have greater advantage in pursuing international businesses.
Traditionally, India had close and strong ties with EU and US. Since 2001, however, its trade volume with East Asian countries has exceeded those with EU. Especially notable is the drastic increase in trade with ASEAN countries. China also finds increased trade with India, as the volume of China-India trade has exceeded that of Japan-India trade since 2003. Today’s volume of China-India trade is three times as much as that of Japan-India trade, and even Korea-India trade is approaching the level of Japan-India trade.
In the overall trade volume of India, Japan hold very minor share of about 2.6%, yet India is the biggest beneficiary of Japan’s ODA. If Japan is to use its ODA to build infrastructures in India, it will help Japanese companies to advance into Indian market, as under-developed infrastructure usually hinders their advancement. With the growing needs to develop more infrastructures in India, this may not only benefit India, but also facilitate the development and expansion of Japan-India relationship.
Panel Discussion: "Asian Intraregional Cooperative Framework and Implications of Industrial Partnership"
Moderator：Akira SUEHIRO（Professor, Institute of Social Science, University of Tokyo）
Panelist: Michio OKAWA（Counselor, Toray Industries, Inc.）
Eiji SAITO（Professor, Dean, Faculty of Economics, Osaka University of Economics）
Yuichi TAKAYAMA（Managing director, Gendai Advanced Studies Research Organization）
Junko TAKEUCHI（Senior Consultant, Global Business and Strategy Cluster Research & Consulting Division, The Japan Research Institute, Limited）
Tomoo MARUKAWA（Associate Professor, Institute of Social Science, University of Tokyo）
Yoshiki MIKAMI（Professor, Ph.D, Management & Information Systems, Nagaoka University of Technology）
Takeshi MINE（Ph.D. Course, Graduate School of Economics, University of Tokyo）
Hidehiko YAMACHIKA（Director, Technical Cooperation Division, Ministry of Economy, Trade and Industry）
- Textiles have an assortment of uses for apparels, household interiors, materials, automobiles and aircrafts, and for others industries as a highly functional and cutting-edge material. Thus, it could be a competitive business for developing countries, on cost, technology development and other fronts.
A regional chemical fibers business association was established in Asia, including Japan, South Korea, Taiwan, China, Malaysia, the Philippines, Indonesia, India, and Pakistan, to draw up an "Asian Chemical Fibers Industry Vision." The common vision in larger area was formulated to address various issues: environment, natural resources and energy, human resources, fossilized raw materials and other issues. It was compiled into the Action Plan of the association, bringing forth an industry-wide partnership.
- To measure technological level in die and mold, the skill or capability to make better propositions for users would be a gauge. It is said that about top 20% of Japanese die casting makers possess such abilities as to improve the quality of components by making them more efficient and functional. Thus, Japan leads the pack in technology level, followed by South Korea, Taiwan, and China.
How Japanese dies and molds have been flowed into other Asian countries? Currently, roughly 90% of Japanese automotive makers in China depend on Japanese die casting industry. It is necessary for us to develop strategies to maintain and foster the Japanese die casting business as well as to link business partnerships.
- As the automotive industries have developed in different ways in Southeast Asian countries, China, and India, regional division of labor and/or intraregional cooperation have rarely been seen in the region. The reason is that the degrees of maturity in automotive and components industries in the region are totally different by area and their foci are to enhance their competitiveness. It is especially so for China.
The key to reinforce collaborative relationships in automotive industry is to how to promote business-led technology transfer for local manufacturing plants rather than government-led initiatives. How the Japanese businesses could cooperate with Chinese joint ventures, or JV partners? China is trying to absorb independently developed technologies through joint venture operations or technical partnership. The Chinese government calls for Japanese businesses to surrender Japanese ownership rights of the intellectual properties of products manufactured in JV plants for the Chinese side. It is a challenge for all Japanese manufacturers to decide how far they could cooperate with them.
- The intraregional trade ratio of electronic items in East Asia including Japan stands at about 60%, with over 70% ratio of intermediate commodity. Intra-departmental business and in-house division of labor have played major roles. The "Asianization of Asia" is embodied in business activities or in "for-profit" enterprises.
Varying degrees and natures of competitive but complementary relationships could be seen in Asian countries. For instance, the increase in China’s export of final goods has led to the export increase of entire ASEAN nations. Although competitive relations are dominant in investment, complementarity is strong in trade relations of ASEAN nations.
On the other hand, competitive relations have been highlighted more in the relations of Japan, South Korea, and Taiwan. Technical alliance and/or relocation of domestic plants to South Korea or Taiwan have been seen as the last resort for Japanese companies that face fierce competition. However, such a complementary relation in those countries might turn into rather competitive one in future.
It is integral to develop enabling environment to facilitate business activities in view of further economic partnerships. Also, it is vital to establish and support a system where trades are facilitated and IP rights infringement issues are addressed.
- In mobile communication, technical standards have been differed from country to country in Asia up until the 1990s, which has hampered competitiveness of Japan/China/Korean industries while facilitated European counterparts to develop a top-notch global mobile business like Nokia. European integration has contributed to integrate mobile service providers within EU countries as well. The three Asian countries, especially Japan, who share a common sense of urgency, have launched a new joint project to forge a new global standard for the next generation mobile telecommunication services.
In future, Japan should grow out of the old turf rivalry and aim for a win-win solution. It would never be a pipe dream to seek a win-win solution with a sort of national pride. A mutually agreeable, beneficial and comfortable relationship must be the very way for which we should go.
- Only limited numbers of Southeast Asian or South Asian students have been accepted as international students in Japan. The inflow of international students into Japan would be a leading indicator for 10-20 years ahead.
The growth of Indian software industry has laid its basis in its strong Indo-American human network.
One challenge that international students are faced today in Japan is that they have to earn their living by doing part-time jobs rather than focusing on their studies. Another challenge is the lack of Japanese language teaching support. It is needed to expand human networks of people who can speak and teach Japanese to support students’ learning. Yet, the biggest reason why Japan is being an unpopular destination for international students to study abroad is that post-graduation career potential seems to be unclear in Japan due to the passiveness in corporate hiring of non-Japanese students and the barrier of immigration issues.
- In the late 1980s, the Chemical Tariff Harmonization Agreement (CTHA) was concluded by the International Council of Chemical Associations, in which a maximum tariff level is set at 6.5 percent. Thanks to the CTHA, movement of goods has been activated vigorously.
Currently the main activity of the International Council of Chemical Associations (ICCA) lies in environment issues. Globally, chemical industries have been trying to put more focus in the environment, health and safety (EHS) to survive fierce competitions across all sectors. Throughout the whole product life cycle spanning product development, marketing, consumption, and waste, EHS has been taken care of by the industry. However, Japan is the only ICCA member in Asia. The industry has put more weight on the production in Asia. However, unfortunately, Asian countries do not share a common sense of urgency that Japanese, American, and European chemical companies do have, which poses a major challenge for Asian companies to spread responsible care.
- The Ministry of Economy, Trade and Industry (METI) has departments in charge of formulating policies for a range of industries, spanning textile, automotive, die and molding, communications, electronics and chemical. They work out policies and measures on daily basis to cope with not only domestic issues but also international agendas. Technical assistance is one of their policy tools. Technical Cooperation Division at METI provides various tools to facilitate technical assistance in coordination with relevant departments, while providing technical assistance to help solve issues of departments in charge of bilateral/regional relations.
Currently, Japan’s technical assistance policy focuses on East Asia, with its fundamental aims to 1) promote the development of investment and trade infrastructure, 2) IPR protection and regional harmonization of various standards and certification, 3) promotion of highly efficient logistics, 4) technical assistance on environment and energy conservation, and 5) development of human resources in businesses.
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