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Thursday, April 24, 2003

Work to be done in Kansai to attract cash


Staff writer

OSAKA -- Kansai offers great potential for foreign direct investment -- but numerous problems are deterring foreign firms from doing business in the region, according to American and Japanese participants at a seminar Wednesday in Osaka.

To revive the local economy, which is suffering under some of the highest unemployment rates in Japan, Kansai's business and government leaders are aggressively attempting to develop two industries -- biotechnology and information technology.

"These are the two areas that can become pillars of foreign direct investment," said Osaka Gov. Fusae Ohta in her opening remarks.

The seminar brought together approximately 250 local business leaders and American government officials to discuss increasing FDI, particularly from the U.S. It was sponsored by the U.S. Embassy, the Ministry of Economy, Trade and Industry and the Japan External Trade Organization.

Many participants emphasized that Kansai's primary advantage in developing the biotech and IT fields is the presence of universities that conduct research in these fields. They suggested that foreign firms can work with local businesses and the government to help take ideas out of the university laboratory and into the marketplace.

"By working with these universities, Osaka is emphasizing several areas for foreign direct investment, including medical care, biotechnology and robot technology," said Tsukasa Fujimoto, of Osaka city's economic bureau.

While welcoming Kansai's efforts to attract FDI, however, some participants also noted that the region has yet to tackle a number of deterrents to foreign investment.

A survey conducted last year by METI's Kansai bureau of 15 area consulates and 29 foreign firms, and whose results were announced a couple of weeks ago, showed a number of problems with increasing FDI in Kansai. One is that even Kansai-based Japanese companies are relocating to Tokyo because of a better environment for doing business globally than other parts of Japan.

"Kansai's challenge is to increase the speed at which it interacts at a global level," said Steve Iwamura, an American CPA with Deloitte Touche Tohmatsu in Osaka. "Kansai companies have to learn how to communicate and negotiate on a global scale. It's now more risky not to try to compete globally than it is to compete."

Regional economies remain flat

Regional economies remained mostly flat in late March and early April, despite bright spots in the automotive and electronics sectors, according to a quarterly report released Wednesday by the Finance Ministry's regional bureau chiefs.

Of the ministry's 11 regional bureaus, those in Hokkaido, Tohoku, Kanto, Tokai, Kinki, Shikoku, Kyushu and Fukuoka reported a flat assessment. The economy showed some improvement, however, in Hokuriku, Chugoku and Okinawa.

Overall, the bureaus said unemployment rates remain high across the board.

Consumption was also slow amid uncertainty over the impact of the war in Iraq and the outbreak of severe acute respiratory syndrome.

"The situation is still severe, but I believe the regional economies are mostly flat," a senior ministry official said.

Some regions reported positive signs. The number of tourists in Okinawa is rising, for instance, partly thanks to a reluctance to travel overseas.

In the Chugoku region, demand for electronic devices was high, as mobile phone users upgraded to models equipped with cameras. Automobiles, iron and steel in the region were also supported by overseas demand, the report says.



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