Australia-Japan Relationship

LONGREAD: the second wave of Japanese investment in Australia

Japan became Australias leading export destination in 1966-67 and

remained so until 2009-10. Today, Japan is Australias second-largest
foreign direct investor and trading partner.
Japanese investment into Australia commenced in the 1960s and was
primarily achieved through minority interests in primary production joint
ventures. As the relationship matured, the last decade has seen a distinct
second wave of direct investment in the Australian domestic market.
These recent 100-per-cent acquisitions have targeted revenue and profit
growth as Japanese investors seek a natural hedge to Japans
demographic challenges of an ageing and declining population.

Australia in Japan: a tale of two teams

Japan is showing the way through some interesting Australia-based

ventures which leverage local strengths to tap Asian demand.
A great recent example is the Mitsubishi Group subsidiary Kaiteki Fresh,
which exports fresh and packaged vegetables out of Australia into high-
end supermarkets in Hong Kong and Singapore.
Australia and Japan jointly targeting ASEAN countries

A senior executive of Mitsui, Masayuki Kinoshita, said his company's new

focus on building food businesses in Australia in sectors such as wheat,
beef and salt was driven by a strategy of exporting to ASEAN countries
and other parts of Asia. "We want to expand investment in food and to
expand Australian exports to Asia," he said.
 Bluescope Steel's decision to sell half its south-east Asian business to
Nippon Steel Sumitomo Metals Corporation has also opened doors to new
opportunities. NS Bluescope vice-president Simon Linge says the company
is now producing two varieties of a specialist Nippon Steel product used in
home appliance manufacturing at its Thai factory.
LONGREAD: the Rising Sun rising again in Australia

Hakubaku now has a profitable noodle business in Ballarat which exports

about a third of its output to the US and markets a third domestically while
selling only a modest amount in Japan.
AUSTRALIA AND JAPAN CREATE A NEW ECONOMIC PARADIGM

What distinguishes Japanese FDI into Australia is its diversity. It does not
flow into just real estate, coal and agriculture.
Unfortunately, the ABS does not freely produce FDI data according to
industry so I have relied on the Bank of Japan Balance of Payments data.
At the end of 2015 Japanese total FDI had reached a total of 147.8
trillion. Australia was the fifth highest destination and had received 8.1
trillion or 5.5% of the total (behind USA, China, Netherlands and the UK).