FOREIGN DIRECT INVESTMENT IN JAPAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R000200250010-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 21, 2016
• Document Release Date: May 2, 2008
• Sequence Number: 10
• Publication Date: January 1, 1983
• Content Type: REPORT

Approved For Release 2008/05/02 : CIA-RDP85M00363R000200250010-6
Central Intelligence Agency
FOREIGN DIRECT INVESTMENT IN JAPAN
Summary
The Japanese government has substantially eased most of its
legal barriers to foreign direct investment (FDI) and is
encouraging foreign firms to invest in Japan with measures such
as opening government investment and loan programs to foreign
firms, rapidly approving specific joint ventures, and actively
soliciting FDI in the semiconductor sector. Nonetheless, foreign
firms in Japan are affected by the legacy of Japan's past
restrictive policies, continuing government influence over
foreign firms, cultural barriers, and other trade-related
problems. 25X1
The current Japanese attitude toward FDI reflects: (1) a
desire to ease US-Japanese trade frictions; and (2) an increased
Japanese confidence in their ability to compete internationally
in high-technology sectors. Japan has generally allowed FDI in
these sectors only if domestic firms are judged competitive, or
if the foreign firm offers technology needed to develop Japanese
capabilities. 25X1
Japan's trading partners, Japanese businessmen fearful of
facing protectionist policies abroad, and local Japanese
officials seeking revenues from foreign firms all will pressure
Tokyo to maintain a more positive attitude toward FDI than in the
past.
Furthermore, we a tie-v o y
commitment to the development and maintenance of high technology
industries will limit its willingness to allow FDI. In our view,
ministry officials would restrict FDI in the future in cases in
which a foreign firm's presence was seen as threatening the
development or maintenance of a critical or politically sensitive
industry sector, teased on:
o Tokyo's commitment to ambitious high technology goals;
o Its demonstrated willingness to protect critical
industries;
Approved For Release 2008/05/02 : CIA-RDP85M00363R000200250010-6
 pproved For Release 2008/05/02 : CIA-RDP85M00363R000200250010-6
o Its flexible legal framework which allows restraints on
In the absence of outside pressures, we would expect Tokyo's
receptivity to FDI to diminish. We believe trade considerations
would discourage the Japanese from reversing official policies
toward FDI, but the Japanese could control FDI in sensitive
sectors through administrative measures similiar to those used in
t_ a ti_s t .
This memorandum was prepare
d by
~Civi Z
25X1
Technology and Industry Division
Information available as of 5 Au
, office of Global issues.
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Approved For Release 2008/05/02 : CIA-RDP85M00363R000200250010-6