KANSAI Close-up

Western Japan firms cut overseas investment

Manufacturers in Kansai and other parts of western Japan are expected to cut back on overseas investment in fiscal 1997, the first decline in four years, the Export-Import Bank of Japan reported in its July-September survey.
The survey covered firms in Kansai and further west with three or more overseas units. A total of 116 firms responded to the survey, 85 of which took part in the study for fiscal 1996. These 85 firms will make 174.1 billion yen in direct foreign investments in fiscal 1997, down 21.4% from the previous year.
To the question of which county they consider most promising for investment over the next three years, respondents named China, the U.S., Indonesia, India and Vietnam as favored destinations.
Thailand, which ranked third in the previous survey, slipped to the sixth spot due partially to its currency crisis, while every year a growing number of companies consider India a promising target for investment. The country has climbed to the fourth place in the popularity poll.
Among Latin American countries, Brazil and Mexico, tied for ninth place among investment recipients, are also drawing attention.
On the recent fall in the yen, 76.1% said a depreciation of the Japanese currency would not alter their investment plans, suggesting the impact of the yen's decline was rather small.
Besides the survey on the firms in western Japan, the bank has released the results of the survey covering manufacturers across the nation.