The continuing interdependence of California and Japan was highlighted last week at the 22nd annual meeting between the California Chamber of Commerce and Japan business leaders.
The June 15 meeting underscored the importance of the state’s continued partnership with Japan, a key trade and investment partner, and destination for the trade mission led by California’s Lieutenant Governor in March.
Leading the Japanese business delegation were Masahiko Yamamoto, president of the Japan Business Association of Southern California (JBA) and general manager of Mitsubishi Corporation (Americas) Los Angeles branch; as well as Nobuyuki Baba, president of the Japanese Chamber of Commerce of Northern California (JCCNC) and general manager of Mitsubishi Corporation (Americas) Silicon Valley branch.
Representing the CalChamber at the 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 recent California trade mission to Japan, economy, homelessness, the supply chain, labor laws, the semiconductor market, and the tight labor market that both California and Japan continue to experience.
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 small and medium-sized Japanese companies that are investing in California.
The group also discussed this year’s trade mission to Japan led by California Lieutenant Governor Eleni Kounalakis and Dee Dee Myers, director of the Governor’s Office of Business and Economic Development (GO-Biz).
The CalChamber was among 100 participants in the March trade mission that included businesses from the energy, agriculture, tourism, and airline industries, among others.
The group touted the success of the mission and the many business connections that were developed and strengthened as a result, touching on the importance of 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 $80.317 billion in 2022, making it the fourth largest export destination for the United States. Imports from Japan to the United States were $148.33 billion, with transportation equipment accounting for 33%.
According to the most recent figures, U.S. direct investment to Japan totaled $118.746 billion in 2021, largely in financial, software and internet services. Foreign direct investment (FDI) from Japan into the United States was $721.03 billion in 2021, making it the largest source of FDI in the United States that year.
In 2020, Japanese FDI in the United States supported 931,900 jobs and contributed $12 billion to research and development, as well as another $75.3 billion to expanding U.S. exports. The top industry sectors for Japanese FDI are auto components, industrial equipment, software and information technology services, plastics, automotive OEM and metals. (Select USA)
California continues to be the top exporting state to Japan, accounting for more than 14.4% 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 $11.607 billion in 2022. Computers and electronic products accounted for 18% of total exports. Imports into California from Japan were $29.367 billion, with transportation equipment accounting for more than 34% of total imports. California is currently the top importing state in the United States for products from Japan.
In 2022, Japan was the largest source of FDI in California through foreign-owned enterprises (FOEs). Japanese FOEs in California provided 101,169 jobs through 3,471 firms, amounting to $11.685 billion in wages. The top jobs by sector are manufacturing, wholesale trade, retail trade, professional/business services, and information. (World Trade Center Los Angeles FDI Report, April 2023)