Interview with Masahiro Sato, National Chairman, The Japan Hong Kong Society
1. Could you provide an overview of Japan’s reliance on trade and its overall domestic market structure?
According to the statistics, the Japan's export and import are rather small compared with GDP figure. The export and import amount in 2019 were respectively US$ 738 and 776 billion, while GDP was US$ 4,972 billion. That is to say, the comparison of Ex/Im amount with GDP is respectively 15.0 and 16.5% which appear actually small.
As to the overall domestic market structure, we can safely say that Japan made a drastic transformation after the World War II attaining the current ratio of over 70% for Tertiary industries, 25% for secondary industries and only 4% for the primary industries. In other words, IT, commerce, monetary/finance, transportation, medicals, education, welfare for the elderly prevail in Japan nowadays.
2. What do you see as the most exciting trends for Hong Kong and Japan in terms of trade?
Hong Kong remains as No. 1 market as an export destination for Japanese food, agricultural and marine products worldwide.
Although many Japanese suppliers are hoping to continue export businesses with Hong Kong, however, due to the unprecedented hazardous influences caused by COVID-19, most suppliers are estimating great decrease in the outcome for this year.
Among 11 chapters of the Japan Hong Kong Society in various areas of Japan, however, Niigata chapter representing Niigata area in Japan remains robust in its rice export to Hong Kong and is expecting 10% increase in its export value as compared to that of the last year, according to the Chairman of Niigata Chapter.
Although there are many SMEs, restaurants, beauty parlors, life supporting businesses and other small scale businesses and stores interested in launching into Hong Kong market, however, due to the psychological impact from the underlying concerns for the seemingly unresolved Hong Kong protests last year and the current COVID-19 emergency situation, we see there are a number of SMEs that started to feel doubt and are becoming hesitant to launching new businesses into Hong Kong.
3. What are some of the recent developments in terms of projects, cooperation or infrastructure that you can highlight?
Hong Kong and Japan are both having high ratio of elderly people in society and, therefore, we consider the nursery service or nursing home industries might be most promising area for possible bilateral cooperation. In fact, we hear that already some projects are going on and, for instance, one nursery project is being implemented by a major Japanese trading firm, Mitsui & Company.
4. How has COVID-19 changed things in the short run for business and trade? What do you think are the long-term implications?
Seemingly long-lasting influence is brought about by COVID-19.
In the short term prospects, businesses with Hong Kong would probably drop largely, and the brakes might be put on by companies before launching businesses into Hong Kong from Japan and from Japan to Hong Kong vice versa.
In the long term prospects, along with the winding down of the present COVID-19 situation, businesses should gradually show recovery tendency, however, it is still difficult to forecast the future at the moment. There are other concerns, such as:
Concern about financial stability of Hong Kong Market (due to the underlying influence of protests in Hong Kong);
Concern about the power of influence of the Chinese government on Hong Kong markets;
We see some Japanese makers launching businesses into China through Hong Kong readjusting their supply chains and making shift to other countries or even returning back to the domestic market in Japan due to the rising costs and concern about the political situation; and
Concern about the weakening of the position of the financial center, what used to be the biggest strength, of Hong Kong.
5. Could you share one recent success story of a Hong Kong company making waves in Japan and vice versa?
‘Tim Ho Wan’, a gourmet restaurant from Hong Kong, which is famous for being the cheapest Michelin-starred restaurant, had opened a branch in Hibiya, Tokyo on April 8, 2018 and the second branch in Shinjuku, on May 24th 2019. The article below depicts the restaurant before its opening in Tokyo.
Since their openings, we see long lines of customers formed in front of the stores telling us that both stores are making great prosper and success in Japan. We find it’s interesting, in a sense, that as much as Japanese food is loved by Hong Kong people, Hong Kong food is also loved by Japanese people, the underlying fact that there are very similar tastes between the two may be the one strong reason contributing to the strong attachment and love between the two.