The 21st annual meeting between the California Chamber of Commerce and Japan business leaders was held in person once again following the COVID-19 pandemic. The meeting highlighted California’s continuing interdependence with one of its largest trade and investment partners.
Leading the Japanese business delegation were Hironori Kobayashi, president of the Japan Business Association of Southern California (JBA) and vice president general administration in the Americas and the Los Angeles office of All Nippon Airways Co., Ltd.; as well as Tsuyoshi Tsurumi, president of the Japanese Chamber of Commerce of Northern California (JCCNC) and managing director of MUFG Union Bank.
Representing the CalChamber at the Wednesday, June 15, 2022 luncheon were Jennifer Barrera, president and CEO, and Susanne T. Stirling, vice president, international affairs.
The JCCNC was established as a nonprofit corporation in 1951 to promote business, mutual understanding and good will between Japan and the United States.
JBA, founded in 1961, is a nonprofit organization consisting of nearly 500 Japanese corporations doing business across Southern California.
The JBA and JCCNC meeting covered a variety of themes, including the economy, homelessness, the supply chain, labor laws, the semiconductor market, and the tight labor market that both California and Japan currently are experiencing.
Environmental and trade policies also were on the agenda, on a state and federal level. The Japanese business delegation also discussed any incentives that may exist for companies that are considering moving their operations out of California.
The group also spoke about the many important Japanese contributions to the California economy, as Japan is the top foreign direct investor in California.
The United States is a large supplier of chemicals, transportation equipment, and computer and electronic products to Japan. Japan is also one of the largest U.S. foreign markets for agricultural products.
U.S. exports to Japan were $74.97 billion in 2021, making it the fourth largest export destination for the United States. Imports from Japan to the United States were $135.13 billion, with transportation equipment accounting for 35.5%.
According to the most recent figures, U.S. direct investment to Japan totaled $131.64 billion in 2020, largely in financial, software and internet services. Foreign direct investment (FDI) from Japan into the United States was $679 billion in 2020, making it the largest source of FDI in the United States that year.
In 2019, Japanese FDI in the United States supported 973,800 jobs and contributed $12.9 billion to research and development, as well as another $82.3 billion to expanding U.S. exports. The top industry sectors for Japanese FDI are auto components, industrial equipment, plastics, automotive OEM, software and information technology services, and metals (Select USA).
California continues to be the top exporting state to Japan, accounting for more than 15.8% of total U.S. exports. Japan has remained California’s fourth largest export market since 2010, after Mexico, Canada and China.
California exports to Japan, the world’s third largest economy, totaled $11.869 billion in 2021. Computers and electronic products accounted for 16% of total exports. Imports into California from Japan were $22.39 billion, with transportation equipment accounting for more than a fifth of total imports. California is currently the top importing state in the United States for products from Japan.
In 2020, Japan was the largest source of FDI in California through foreign-owned enterprises (FOEs). Japanese FOEs in California provided 115,420 jobs through 3,672 firms, amounting to $10.6 billion in wages. The top jobs by sector are manufacturing, wholesale trade, retail trade, financial activities, and professional/business services (World Trade Center Los Angeles FDI Report, June 2021).