The Japanese appreciate the strengths of the Germans.
An interview with Mr Makoto Sekikawa - the representative for the state of Niedersachsen in Tokyo gives an insight into his work and the local economic situation: The Japanese people very much value German strengths in car manufacturing, machine construction, life science, environmental protection, renewable energies and in SDGs.
Mr Sekikawa, the state of Niedersachsen has had representation in Japan since 31 March 2020 and you are the representative. You bring extensive business experience to your work as representative. We’d like to know more about your role and professional background.
I worked for a medium-sized Japanese machine manufacturer for many years. The company sent me to Germany twice for a total of eight years as an international expert.
Large companies can hire Japanese-speaking lawyers, consultants and economic advisers in Germany. But I had to establish a company and organise an asset deal in Germany myself without the help of specialists. This experience was a particular challenge in itself. That’s why I understand the challenges that Japanese SMEs in particular face in Germany.
On the other hand, I can also totally understand the difficulties faced by German firms when they want to gain a foothold in Japan. Over the course of my work I have also gained experience helping German companies set up an operation in Japan: I was able to help a German IT start-up successfully establish a branch in Japan.
How challenging was the period of severe restrictions during the corona pandemic?
Immediately after the representative office opened on 1 April in Tokyo, a state of emergency was declared on 7 April because of COVID-19. The general public was asked to ‘stay at home’ and work from home if possible.
Unlike some major cities in Europe or the US, thankfully there was no comprehensive lockdown. Freedom of movement was therefore not restricted by law. I was still able to go to the supermarket or to the hairdresser. Hospitality and certain cultural establishments closed voluntarily. Travel was to be avoided where possible. Many businesses switched to working from home at this time.
Many businesses switched to working from home at this time.
The state of emergency has been lifted, but unfortunately the infection rates are going up again. We’ll probably continue to work online for a while longer, rather than meet face-to-face.
The corona pandemic has had a negative impact on economic development in all countries. How do you see the economic situation as we head into 2021?
Some experts claim that without a vaccine against the corona virus, there will be no return to normal everyday and business life. Without a vaccine, it’s questionable whether the Olympic Games will go ahead in Tokyo next year.
Forecasts are being made on the premise that the effects of the corona virus will abate in 2021 and that the Olympics will take place as planned. The Mitsubishi UFJ Financial Group Bank (MUFG) is Japan’s largest bank and estimates that the Japanese economy will grow by 3.6% compared to 2020. MUFG believes the development of 5G networks will be a major growth factor.
Will the free trade agreement between Japan and the EU that came into effect last year generate new momentum for economic cooperation?
We have already seen a significant impact on import trade. One example: the import tax on wine from the EU was reduced to 0% straight away. As a result, after the EPA agreement came into force, the import of German wine increased by 33.3% in 2019 compared to 2018.
The Japan External Trade Organization (JETRO) anticipates that the agreement will promote the export of Japanese foodstuffs to the EU. I see great opportunities here for companies in both Germany and Japan.
Where customs duties are removed gradually, it will take longer to see the positive effects. This applies to sectors such as automotives, machine construction and steel.
According to a study by the government, the free trade agreement is expected to increase Japanese GDP by 0.99% and create jobs for 290,000 people.
These studies were compiled before COVID-19. How the economy will develop as the pandemic continues is, however, uncertain. But in the long term, both German and Japanese companies will benefit from the free trade agreement.
Niedersachsen-based companies are particularly strong in the fields of mobility, energy, foodstuffs and life science. Where do you see special opportunities for Niedersachsen-based companies in Japan?
Large companies based in Niedersachsen such as Volkswagen, Continental and Ottobock are present in Japan. But very few Japanese people associate these companies with Niedersachsen. I’d like to raise awareness of these companies and the strengths of the state of Niedersachsen.
In doing so, we can capitalise on the fact that Japanese people very much value German strengths in car manufacturing, machine construction, medicine, life science, environmental protection, renewable energies and in SDGs.
There’s some catching up to do in the agricultural technology and IT sectors. I believe we need to highlight the potential and diversity of the state of Niedersachsen as a business location at every opportunity to strengthen the image of Niedersachsen in Japan.
What special economic and cultural aspects of Japan does a company from Niedersachsen need to adapt to?
That depends on whether it’s a B2C or B2B operation. In my own experience B2B companies should attach particular importance to quality, reliability, durable products and business relations as well as value for money to become established in Japan. Companies should asses whether or not they could work together with a Japanese partner or get involved with an established Japanese company to make market entry easier.
What are the challenges you see facing companies from Niedersachsen and how can you help them specifically?
In recent years in particular we have seen a growing interest of Japanese companies in Europe as a business location. How can Niedersachsen benefit from this?
It’s true that Japanese companies have become increasingly interested in Europe since the signing of the free trade agreement. This represents an opportunity for Niedersachsen too. My job is to promote Niedersachsen as a business location in Japan. We have to raise awareness of the strengths of the state and the many support options in Japan, while specifically catering to the needs of Japanese companies. I can help here with my experience and contacts.