Kiwis on back foot in Japan: NZ envoy

By DANIEL RIORDAN

New Zealand's exports to Japan are back to pre-Asian crisis levels, but we should be doing better, says our ambassador, Phillip Gibson.

In the year to June, export receipts from Japan rose 17 per cent to $3.4 billion.

But although New Zealand exports have been growing, the share of total Japanese imports they represent continues to fall. Last year it was 0.6 per cent, compared with nearly 0.9 per cent in 1988.

The reasons for the fall are not all bad, says Mr Gibson.

Some Kiwi exporters have tried to increase profitability rather than volume.

In other cases, Japanese firms have moved their operations to lower-cost countries, and New Zealand exports have moved to those countries for processing before entering the Japanese market.

But overall, New Zealand's competitors are doing better despite what Mr Gibson calls our highly developed "Japanese literacy."

Japanese are keen on our clean, green image and Kiwi exporters have taken advantage of that.

New Zealand companies have also built up a huge reservoir of knowledge about doing business in Japan over the past 40 to 50 years.

Many young New Zealanders speak Japanese and have visited the country.

To those hard-won advantages could be added a Kiwi dollar that has wilted against the yen as well as the greenback, he says.

Japan's anaemic economy may be recovering slowly but when 1 per cent growth equals New Zealand's entire GDP, any recovery is something for Kiwi exporters to welcome.

Mr Gibson says the last 10 years of fiscal stagnation in Japan have been oversold in New Zealand, feeding a tendency to view Japan as an economy in trouble.

It is easy to see why, as the Japanese Government has poured billions of dollars into the economy to rescue ailing companies.

This week, research agency Teikoku Databank reported that liabilities left behind by corporate bankruptcies in Japan hit a postwar high of 10.9 trillion yen ($256 billion) in the first half of this fiscal year.

Bankruptcies in the first half of fiscal 2000, which began on April 1, rose 20 per cent over the same period last year to 9473 cases, the seventh-highest figure since the Second World War.

But Mr Gibson notes that the Japanese economy is reviving, if somewhat tentatively, with forecast growth of 1 per cent this year.

Japan is NZ's biggest single market for chilled beef, cheese and curd, fish and shellfish, vegetables, wood, pulp and aluminium.

Not only is Japan the richest market in Asia, it is also NZ's most profitable - a market where consumers are happy to pay huge premiums for top quality.

Thorough preparation is the key to success in the Japanese market, says Mr Gibson, noting that Japanese business people are "formidably well-prepared."