Press Release

Japan to strengthen key strategic alliances under new Prime Minister, German company survey finds

2024/09/25

The majority of German companies expect Japan’s new administration to make strengthening strategic alliances a key priority of its foreign policy, according to a recent survey by the German Chamber of Commerce and Industry in Japan.
Many companies call for the incoming administration to make the strengthening of economic and fiscal policy a key pillar of its domestic policy.
While some were dissatisfied with the performance of the former administration, most German companies in Japan confirmed a positive business development in the past twelve months and expect growth going forward.

September 25, 2024 | Tokyo - With a new administration in Tokyo in sight, the majority of German companies in Japan expect the new Prime Minister to make economic and fiscal policy a key priority of Japan’s domestic policy. In a recent flash survey by the German Chamber of Commerce and Industry in Japan (AHK Japan), 68% of German companies call for Japan’s new administration to place its focus on stronger economic and fiscal policy to revitalize the nation’s economy. 59% see structural and labor market reforms on top of the agenda. 54% hope for effective measures to revitalize technological and industrial innovation.

In terms of foreign policy, 68% of German companies in Japan appeal to the new Prime Minister to expand strategic alliances with international partners as a core part of the foreign policy going forward. In light of today’s geopolitical challenges, 64% view regional security and defense as top priority for Japan. 50% respondents want the new administration to focus its policies on all issues related to immigration and demographic change.

Despite the challenging economic environment and volatility in foreign exchange markets, most German companies in Japan remain resilient and continue to thrive. 74% of respondents experienced growth or stable business during the past twelve months. 51% of them confirmed a positive business development versus 27% negative responses. For the next twelve months, 60% of the companies expect their sales to increase, an additional 23% see their business to be stable.

“German business in Japan has been very robust despite the challenges caused by the volatile development of exchange rates in recent months. For Japan’s new administration, it will be important to stabilize economic and fiscal policy and strengthen alliances with international partners such as Germany”, said Marcus Schuermann, Chief Executive Officer of AHK Japan and Delegate of German Industry and Commerce in Japan. “In an era of rapid technological change and geopolitical uncertainty, Germany remains Japan’s most important economic ally in Europe.”

With regards to the performance of Prime Minister Kishida’s administration, 47% of German companies had a neutral stance towards the outgoing administration. However, 38% said they disapproved of the performance of the outgoing administration. Some of the surveyed voiced dissatisfaction with regard to a lack of reforms in key policy areas, e.g. modernizing Japan’s bureaucracy, strengthening economic competitiveness, supporting women in business, and stimulating demographic change given the lowest birth rate ever.

Japan is a key partner for German business. With a trade volume of 45.8 billion Euro, Germany is the Number 1 European exporter to Japan and vice versa. 12,480 German companies export to Japan, 730 German companies have their own subsidiary in Japan with 85 of them running manufacturing sites. The German stock of foreign direct investment in Japan adds up to 16.5 billion Euro.

The current AHK Japan online survey ran from September 2 to 6, 2024. Responses from 26% of 470 surveyed companies were included in the evaluation.

Full results of this flash survey (PDF)

You can find previous surveys in our archive:

Surveys and Studies