JETRO Invest Japan Report 2023
Chapter1. Inward FDI Trends in the World Section 3. Responses of Global Companies to Geopolitical Risks

As international policy directions have been increasingly fragmented (Chart 1-3), geopolitical risks are rising and companies are getting more interested in reshoring. According to a survey by the International Monetary Fund (IMF), a rapid increase in interest in reshoring was particularly seen from 2019 to 2020 and from 2021 to 2022 (Chart 1-4). According to this survey, comparing companies that mention reshoring in their earnings calls with those that do not, statistically significant differences were found in profitability, percentage of intangible assets, sales, and number of employees, with particularly large differences in profitability and number of employees, showing that companies with higher productivity are more interested in reshoring.

Chart 1-3: Foreign Policy Distance Index
The Foreign Policy Distance indicator is an index of the differences between the voting patterns of the United States and China in foreign policy at the United Nations General Assembly. Compared to the three periods of 2010 to 2014, 2015 to 2019, and 2020 to 2021, the figures gradually increased.
  1. Note:

    Index based on the difference in voting behavior of the United States and China at the UN General Assembly. The higher the number, the greater the difference in voting behavior.

  2. Source:

    IMF Global Financial Stability Report (April 2023), Häge (2011)

Chart 1-4: Growing Interest in Reshoring
IMF, the International Monetary Fund conducted a measurement survey of the frequency of references to 'reshoring,' 'friendly shoring,' and 'near shoring' in firms' earning calls, and created an index of companies' interest in reshoring. The index of interest in reshoring has remained almost unchanged since 2005, showing a slight increase in 2015 and 2017, but slightly decreased in 2018. During the covid-19 pandemic, the level of interest increased sharply in 2020, more than twice that of 2019. Ukraine war also led a significant increase of the level of interest, nearly five times from 2019 to 2022. This shows that as geopolitical risks increase, interest in reshoring also increases.
  1. Note:

    The geopolitical risk index shows interest in reshoring and is measured by the frequency of references to "reshoring," friendshoring," and "nearshoring" in earnings calls.

  2. Source:

    IMF World Economic Outlook (April 2023), Hassan and others (2019), NL Analytics

JETRO Invest Japan Report 2023

  1. Introduction

  2. Chapter1.

    Inward FDI Trends in the World

    1. Section1.

      Global Inward FDI Flow in 2022

    2. Section2.

      Global Greenfield Investment in 2022

    3. Section3.

      Responses of Global Companies to Geopolitical Risks

    4. Section4.

      Changes in Global Investment Destinations due to Geopolitical Risks

  3. Chapter2.

    Trends in Inward FDI in Japan

    1. Section1.

      Trends in Inward FDI to Japan

    2. Section2.

      Trends in Inward FDI to Japan by Country and Region

    3. Section3.

      Trends in Inward FDI to Japan by Industry

    4. Section4.

      Trends in Greenfield Investment in Japan

    5. Section5.

      Trends in Inbound M&A in Japan

    6. Section6.

      Long-Term Trends in Greenfield Investment Projects in Japan

    7. [Column 1]

      JETRO's initiatives for the entry of semiconductor-related companies into Japan

    8. [Column 2]

      With the recovery of inbound tourism, Japanese tourism assets is once again in the spotlight

    9. [Column 3]

      Promotion of More Active and Desirable M&A in Japan

  4. Chapter3.

    Recent Government Measures

    1. Section1.

      Basic Policy on Economic and Fiscal Management and Reform 2023

    2. Section2.

      Action Plan for Attracting Human and Financial Resources from Overseas

    3. Section3.

      Green Innovation Fund Projects

    4. Section4.

      Fund for Advanced Semiconductor Production Infrastructure Development

    5. Section5.

      Project to Accelerate Biomanufacturing Revolution

    6. Section6.

      Subsidy for Development of Regional Data Centers

    7. Section7.

      R&D Project of the Enhanced Infrastructure for Post-5G Information and Communication Systems

    8. Section8.

      Innovative Information and Communication Technology Fund Project (Beyond 5G (6G) Promotion Fund Project)

    9. Section9.

      Establishment of a "New System" for Accepting Highly-Skilled Foreign Professionals (from April 2023)

    10. Section10.

      Startup Development Five-year Plan

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