1. Country Presentation: Japanese Business and Economy

2. Objective of this Presentation Accurate Knowledge about Japanese Business Gain International Aspect Prepare for the Japan Trip

3. My Background Ministry of Economy Trade and Industry (METI, former MITI)  Overall economic policy making, trade police, energy policy and industry policies Areas I worked on:  Reforming Corporate Rules (Commercial Codes, Bankruptcy Codes, Tax, Accounting etc.)  Brand Valuation Model  Promoting Venture Business, PE and Turnaround Business

4. Q1 How much is GDP of Japan? (Hint: USA $11 trillion) $10 trillion $7 trillion $4 trillion $1 trillion EU China Japan

5. Size of the Japanese Economy: Japanese economy composes of about 14% of the world economy.

6. Downturn Japanese Economy in 1990’s -Structural Change in 1990’s- Burst of the Bubble Economy Globalization (Especially Financial Market) Traditional System New System

7. Traditional Japanese System :  Long term and close relationship among Government, Banks, Companies and Employees Government Banks & CompaniesEmployees  Short term relationship based on flexible financial market like US Economy.

8. Traditional Japanese System : GovernmentClose Relationship (National Project, Regulation, “Amakudari”) “Cross Shareholdings” Employees / Individuals Lifetime Employment Company Union (Few Industry-wide Union) “Main” Bank“Keiretsu” Company A (Electronics) Company B (Material) Company C ・・・・ (Automobile) “So-go Shosha” Trading Company （ Distribution, Trade and Investment)

9. Changing System : “So-go Shosha” Trading Company （ Distribution, Trade and Investment) “Main” Bank Company A (Electronics) Company B (Material) Company C ・・・・ (Automobile) Government Employees / Individuals Close Relationship (National Project, Regulation, “Amakudari”) “Keiretsu” “Cross Shareholdings” Lifetime Employment Company Union (Few Industry-wide Union) Deregulation New Corporate Laws Bankruptcy Laws Restructuring Private Equity Flexible Job Market Direct Financial Market Bad Loan Problem