Japanese Economy Evaluation of Opportunities for Foreign Investors - Essay Example

However, in 2005 Japan succeeded in getting itself out from the economic depression cycle it was in. The economy started showing a positive growth reaching 2% in the third quarter of 2005. This resulted in an increase of capital investment, reaching 9.6% in the same quarter. Japan is and will remain one of the largest markets in the world. With 125 million people, well advanced, and an established infrastructure, it offers international businesses a valuable opportunity to establish itself in this economy.

Japanese consumers have become more willing to purchase imported products such as food, computers, machinery, medical devices, pharmaceuticals and services. In addition Japanese companies have become more willing to accept foreign investment and cooperate with foreign partners, and as such Japan has never been as accessible to foreign goods and services. The Asia Pacific countries include China, Indonesia, Malaysia, Myanmar, The Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam and Japan.

The 'Big Five' economies in the region are Korea, Taiwan, Hong Kong and Singapore and Japan followed by a second group of Thailand, Malaysia and Indonesia. China and Vietnam comprise the next level of economies in the region. The Asian financial crisis was a major event that led many Asian governments to sit upright and pull up their socks. The crisis emerged in July 1997 and stormed the financial markets of Thailand. It spread on to other neighbouring countries until it became a pandemic. The crisis did not seem to touch Japan since it was already on a long 15 year old recession.

But at the turn of the century, things have started to look-up. Japan has tuned up its banking systems to the right note and the Asian symphony is just going great. Japan is now leading the way in a new Asian business paradigm. Industrial output in Asia has been growing at a staggering +7.7% every year. This is more twice that of the United States. China is the largest recipient of FDI in the region with over $50