Introduction to Kansai, Japan

• Place
• Culture
• Government
• Economic world
• Kansai’s economic outlook

Kansai is a part of Japan that is smaller in size than New Zealand – about the size of the top half of the South island, above Christchurch. The population has been around 24 million. In the future, with the ageing of society, it may decline.

Kansai is the eighth biggest economy in the world.

Consider the Kansai from the perspective of a train traveller, and then of some of the 850 Kiwis who visit and live there, people they meet - and Kansai's economic outlook.

You can travel through Kansai’s big cities where most live - in several hours by local train.

You can get to Tokyo also in a couple of hours by bullet fast train.

Tokyo may be the political capital – but the Kansai’s castles and temples are reminders of its own substantial heritage.

Osaka, Kansai’s commercial capital, and Tokyo, look at each other much as Auckland and Wellington do.

Osaka, Kyoto, Kobe, Sakai and Minoh are amongst the big and small places in the Kansai known to New Zealanders – particularly by young Kiwis who visit their sister cities, work teaching English or study abroad.

Many of the Japanese who visit New Zealand, and the New Zealanders who visit Japan, fly in through the Kansai International airport, an artificial island open 24/7.

It is pretty easy to get there, and increasingly easy to find the information, services and relationships that make it practical to plan your own visit – or to meet New Zealand based Japanese connections.

Place

Access, getting there
International travel has increased access to places in which to live and learn. Almost daily flights have been available for about a decade between New Zealand and Kansai International Airport.

In total about 150,000 Japanese visit New Zealand a year, but the growth has slowed down. 20-30,000 Kiwis visit Japan each year.

More could make the trip, and perhaps more would if they knew more about how to get around other places in which they may live and learn. Certainly, there are more places that welcome, and help, Kiwi kids to study abroad. There are Kiwi places where Japanese are encouraged to study and visit.

Urbanisation, Kansai’s big cities
You might have a view of old Japan that does not have much connection with modern reality. Don’t ignore old Japan – see it in World Heritage sites in the Kansai. Kansai was the centre of Japanese religion and politics for 1300 years; with cultural heritage. Explore history, such as Osaka Castle, which was established in 1583, and was the base for the top Samurai leader, Toyotomi. See old Imperial centres in Kyoto.

But the global reality means the differences between Japanese and foreigners are diminishing, and if airplanes, mobile phones, the internet and traveling ideas and people have anything to do with the future, contacts by Kiwis and the Kansai will grow.

Get onboard one of those many affordable trains crisscrossing across the eighth biggest economy in the world for a couple of hours, and you can learn a lot about Japanese people – just by looking.

If you get more involved with Japanese – and many of them learn English expecting to mingle more with people like us – you may find your imagination and their reality are not the same.

Know more and you can act differently. As someone says, let your fingers do the walking – and aim to get around by train and walking with the crowds.

The Osaka Chamber of Commerce and Industry (OCCI), and the Kansai International Promotion Public Relations Organisation (KIPPO) are prime sources of information and introduction to doing business in Kansai. New Zealanders wrote a book “Doing Business in the Kansai” in 1993, with the support of the OCCI., and which looks at sectors of interest to New Zealand.

Kansai is specialist in distribution for Japan
Its promoters single out five key features: Convenient transport, comfortable living, economic power, diverse industry and intellectual resources, and its open, entrepreneurial climate. OCCI says emphasis on entrepreneurial “most important”

Kansai is at the geographic centre of the Japanese archipelago
Osaka is Japan’s second biggest city.

Kansai is convenient for those who want to develop business.Kansai International Airport (KIX) opened in 1994, links now to 71 international and 17 domestic cities. KIX 2nd runway to open Aug 2007, with 24 hr operations, able to take more cargo. Kansai is linked by a well developed rail system good for business and students. It is one hourr by air and two and a half hours by Shinkansen, the bullet train, to Tokyo.

Kansai is a huge market, with high purchasing power, as big an economy as some developed countries. It is home to world class companies and many small and medium enterprises. It is a centre of innovation – from the first world futures market to Karaoke and noodles.

Future perspectives
The relationship between Japan and New Zealand has developed very dramatically; both countries are very different from what they were in the immediate post war years. Much of the change in New Zealand has been brought about by the arrival of manufactured products from Japan, most of which have in the nature of things, come from Kansai. There have, of course, been many political and social initiatives but in terms of the impact on the daily life of New Zealand households, the products of the Kansai have been hugely important.

Culture

Student exchange: bringing us together
Government policy, developed in Tokyo and reflected in Kansai, has fostered internationalization – first by encouraging Japanese to visit foreign countries, and now with a push to get foreigners to visit Japan. Student exchanges, particularly between secondary schools, stimulate studies of Japanese culture and present it on visits to schools, homestays, sister city offices and visits.

JETs to Japan: adapting to difference
New Zealand and other graduates who are selected for the generous JET programme have a year or more to immerse themselves in Japanese culture firsthand – in secondary schools or local government.

Heritage: conserving the past
Kansai was the political capital of Japan for about a thousand years – two hundred years ago the situation changed, and the Emperor shifted to Tokyo.

Samurai who used to hold power over groups of local people lost their power to national and local parliaments, councils and governments.

Several hundred years ago Japan was largely closed to the outside world. Prior to that a few people such as the Portugese had came to Sakai and had sought to develop trade.

Since World War two Japanese society has changed. Its democratic institutions have developed, its trading reach has helped make it one of the world’s strongest economies.

As the growing number of World Heritage sites in the Kansai illustrate, the country has given us all access to buildings that reflect their past. Families with homes used in different ways a hundred years ago realized that if they don’t advocate conservation, their two hundred year old homes might be lost for all time, swallowed up by the big city.

Government

System of government: making it happen
Government decisions affect people’s lives in many ways – and not just through policy announcements made by national government.

The Japanese government has touched many lives through the internationalisation programme it has run through central and local government agencies – the old push to visit foreign countries, the sister city, the JET and the Nippon Maru projects each touch many lives constructively. The Kansai International Airport – a big project by any standard – use the power that cooperation between central an d local government in a big economy can produce

Government decisions affect how people perceive they are being represented – sometimes opposition parties and the public can effectively – and ineffectively – advocate change.

People seek to influence the government decision making process – not only at election time but also by lobbying between elections.

Government decisions: rubbish recycling
Rubbish collection is a local government task in Kansai cities such as Sakai – and that city government has also made recycling a local project, with the help of modern technology and organisation.

Who choses?: lunchbox dilemma
The school lunch programme for elementary school children in Sakai City’s Mahara ward is shaped by central and local government agencies. Tokyo officials responsible for educational, health and agricultural administration influence how much is bought locally and internationally from local wholesalers. The Sakai City government employs a nutritionist to guide what is provided daily for school lunch. In the 1960s New Zealand cheese was for the first time included in the school lunches.

Economic world

Interconnections: Japan New Zealand trade
The Japanese and New Zealand economies are interconnected by trade – Japan is much more important to New Zealand than New Zealand is to Japan.

Since the 1960s New Zealand has got cameras, high fi equipment, trucks, cars, radios, tvs, cellphones, play station three and more from Japan…..which have hugely changed our lives in this country. We have quickly become accustomed to Japanese advertisements and billboards. Japan is New Zealand’s number three export market.

We sell food – dairy products, meat and fruit: and fibre – wood and wool. The New Zealand government would like Japan to reduce the protection it gives its farmers. The two governments have for long been involved in debates over freeing up international trade.

Aluminum, however, is New Zealand’s single biggest export item to Japan – based on bauxite from Australia and our hydro power. New Zealand faces decisions – should it continue to use its renewable hydro energy for economic growth, manufacturing aluminum, or for other uses. Should the future sale of hydro power to the aluminum smelter be a commercial decision or a government decision?

Entrepreneurs: Kiwi and Japanese ingenuity
The history of the trading relationship between Japan and nz over the last 50 years offer countless examples of entrepreneurs introducing businesses that their forefathers would never have envisaged. Some run sushi shops where none existed before. Some use the skills of science to develop new foods – such as gold kiwifruit with less fur on their skins. Now some are processing fresh blackcurrant to make health drinks beneficial to people with some eye conditions.

Blackcurrants NZ work cooperatively in Japan, and with major Japanese companies, to research and develop different Japanese markets.

Selling identity: tourism

Concentrated effort was made around the 1960s to build tourism from Japan to New Zealand. From a time when there were no direct flights and little more than a trickle of visitors we built up a profitable tourism business, which employs many New Zealanders. About a decade ago New Zealand was benefiting from about 150,000 Japanese visitors a year – but since then there have been fluctuations, and now a gradual trend downward. New Zealand officials have not been making bold predictions about how the flow could keep increasing – but they have been encouraging new tourism product to help attract additional Japanese – such as baby boomers – to spend more and longer in New Zealand’s attractions. There are opportunities for New Zealanders to design and develop new tourism product for baby boomers, smart affluent young Japanese women and other market segments.

Over the last few years the Japanese government has reduced its emphasis on encouraging people to visit foreign countries [in the 1980s the target was ten million a year} – the people are now used to making their own travel choices. Now Japan’s governments push their “visit Japan” programme.

When people go from one place to another, it stimulates travel back the other way – as relationships grow.

Kansai’s economic outlook

Yasutsugu Kohzuki, Director of the international division of the Osaka Chamber of Commerce and Industry (OCCI), briefed the Kansai through Kiwi eyes project on the potential for educational exchange, two way tourism, wood and food with New Zealand.

Dr Tim Beal, senior lecturer in the School of Marketing and International Business at Victoria University, asked if the economy has fully come back. “It is improving and expanding. Kansai including Nagoya is also expanding. So is the Kinki (Tokyo) region” Yasutsugu Kohzuki said at the end of 2006.

Why, asked Dr Beal?
OCCI: Exports to China. So there is strong investment in metals, machinery and equipment. Kansai has the giant electronics company Matsushita. Matsushita has decided to invest more in Kansai region. 5-10 years ago its focus was investment in China. It has come back to Osaka. Total investment overseas by Japanese companies is not decreasing. But the stance of Japanese companies has changed on investment from overseas to domestic a little bit. Matsushita and Sharp have increased their domestic investment.

Beal: Why not invest in China close to Kansai companies’ big markets?
OCCI: One reason is knowledge rights, patent issues are not resolved in China. So the (Kansai companies) want to keep the patents. They invest heavily in their high level technology.
Haas. Nagoya. Toyota. Several Osaka citizens have told us Kansai is loosing companies to Tokyo, and is challenged by Toyota of Nagoya.

OCCI: Ten years ago after the collapse of the bubble economy many major companies’ head offices went to Tokyo. Factories went from Osaka to China. Recently, manufacturing has played a very important role in the regional and local area. The big company Toyota is in Nagoya. It has lots of supporting industries. Auto industries. They are very good performers. Export to China and the US is very strong. For the local economy the manufacturing sector is very important. In Osaka there are many SMEs.
Beal. Some of your local companies would be supplying Toyota?

OCCI: Daihatsu in north Osaka has Toyota as a shareholder.
Beal. Robotics. How important?

OCCI: OCCI focuses on new industries. Particularly IT, robotics. There are a lot of robot tech based companies near Osaka, particularly SMEs. Some are big, e.g. Sanyo which is making some robots for welfare, for ageing people.
Beal: Ageing society in Japan, what challenges and opportunities does this provide for Kansai? What is the new market environment?

OCCI: In Japan we are tackling the problem of ageing people who are increasing over the last 10-15 years. We have been trying to encourage our economy. We have to improve productivity and maintain the economy. We have to make the research function stronger. It is very important to develop new industries to make money. We have been creating new industries, e.g.tourism, robotics, and life science which includes health.
Beal. Who is “we” developing these three industries – who is planning?

OCCI: In the life science industries we would like to make the bio cluster in north Osaka. Life Science Park.
The background. We promote life science or biotech industries. Around 400 years ago there were major pharmaceutical industries in the centre of Osaka. Eg Takeda.
Beal: Is the Life Science Cluster a programme of city or prefectural government?
OCCI: Osaka Prefectural government and the OCCI are jointly trying to expand life science or biotech cluster.

Beal: The Osaka Prefecture and OCCI – is there any body for the whole of the Kansai. A Government body. Doing Kansai wide planning?
Norihiko NAKAMURA, Director KIPPO: The OCCI plays its role in the Kansai International Promotion Public Relations Organsiation (KIPPO).
Haas: KIPPO may be part of the answer to this question.
Beal: Good point.

Nakamura: Kansai is a geographic area including prefectures. Kansai has a number of definitions. OCCI does not include all of those in its information, that KIPPO includes. KIPPO has major business bodies in its membership. There are nine prefectures in KIPPO’s definition. And many bodies. Particular bodies promote aspects of Kansai. So the definition depends on the body. The term Kansai has a variety of meanings.
Beal: I did not realize “Kansai” had a number of definitions.

Anthony Haas: (sought short, school oriented, summaries of four sectors covered in 1993 in his contributions to the book “Doing Business in the Kansai” – wood, food, education, tourism)

Haas: Wood. There was a significant Kansai market for furniture products. What is the current outlook and health for the building sector. Its health and condition affects the pattern of demand for furniture manufacturers and NZ radiata remanufacturers.

OCCI: In Japan there are 47 million households. It is said that in the future there will be 51 million households. The increase in the number of households is due to the change of lifestyle. There are those who do not marry. One person households are increasing. The small size condo will increase, especially in the city centre.

Haas: Food: What are the trends in consumption of food, particularly the fruit and vegetables you distribute through the wholesale market?

OCCI: Lifestyles of Japanese people have changed, particularly to get a lot of calories/energy in the old style. Recently, we take care of health. So more healthy food is favoured by the Japanese people. Recently functional food is more favoured. This interests young ladies. I also take functional medicines. Supplements.
Michel Rod: Nutriceuticals?

OCCI: Yes.

Haas: Education: There is increased Kansai interest in learning English. What is the coming need for English language services, supplied here, or offshore? Education is an industry.
The industry is illustrated by numbers of public and private institutions, and used by them by young and old. I noticed calls for improvement of English language capacities among Japanese. This is only one part of education, but we seek general comment on the demand for educational services in the Kansai.

OCCI: English teaching is in demand. According to the newspaper the government has decided to increase English teachers from now on. Because they want to teach English in the elementary primary school. Now teaching English starts from the secondary school basically. So in the near future I think teaching English in elementary school will start. So that means we need more teachers of English.

Haas: Tourism: I have read your OCCI tourism strategy. We are here significantly because your Ambassador to New Zealand has been working to implement former Prime Minister Koizumi’s policy to encourage people to Visit Japan. New Zealand has its own interest in Japanese visiting New Zealand. So my question is for your comment about visiting Japan and visiting New Zealand. What are you trying to achieve with your Visit Japan work? Will you upgrade inbound instead of outbound, or both?

OCCI: So in the policy of the Japanese government inbound is more important. The reason is inbound visitors to Japan is very few compared to visitors overseas. But in global market I think in and outbound is very important to understand both Japanese and overseas cultures. So inbound and outbound is important for us.
Haas. When I was here at OCCI 1992-93 there was very little interest in tourism by OCCI. What is your interest and involvement in tourism strategy now?

OCCI: We would like to use tourism resources for tourism. Nara and Kyoto particularly have these. We use those. We need more visitors from overseas. It is important to know each other – for Japanese and for people overseas.
Haas: How far will you drive this from OCCI?

OCCI: Our Chamber promotes the Kansai International Airport (KIX) in Kansai. That is gateway to Asian countries. So to promote KIX is useful for tourism industry indirectly.

From Anthony Haas, Asia Pacific Economic News service and Roger Peren, former New Zealand Ambassador to Japan

14 March 2007

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