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56.9% of companies support “free trade”

July 17, 2018

 

 

~ Discussion and implementation of countermeasures against trade protectionism do not progress ~

 

In recent years, exports from Japan have continued to increase and have been a catalyst for economic growth, with the backdrop of recovery of the global economy. The government promotes policies such as the Free Trade Agreement (FTA), the Economic Partnership Agreement (EPA), the Trans-Pacific Partnership Agreement (TPP) to expand transactions with other countries and regions. On the other hand, there is a concern about the global spread of trade protectionism, such as the intensifying China-US trade friction.

Teikoku Databank has conducted a survey on corporate attitudes towards trade protection. This survey was conducted in conjunction with the June 2018 TDB Trends Research.

 

*Survey period: June 18 – June 30, 2018, Companies Surveyed: 23,149, Valid Responses: 9,694 (Response Rate: 41.9%).

 

  *Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com)

 

Survey results (Summary)

 

1. While 56.9% of companies said “free trade” is desirable for all of Japan, those companies that said that “trade protection” is desirable, including domestic industry protection, remained at 9.9%.  On the other hand, for the industry to which their companies belong, companies saying “free trade” is desirable fell to 43.0%, while those in favor of “trade protection” rose to 13.1%.

 

2. When the policy of trade protectionism spread globally, 28.7% of companies said that has a “negative impact” on the company’s performance; those saying “positive impact” remained at 2.5%, 38.5% said “neither,” and those saying “no impact” stood at 12.7%.

 

3. Companies that have implemented countermeasures against growing trade protectionism to date stood at 0.5%.  Even combined with those companies that are “currently discussing countermeasures” (4.4%), those who have implemented or are discussing some kind of countermeasures remained at 4.9%.

 

4. With respect to countermeasures that have been implemented or discussed, “strengthening information gathering and analysis” is at the top, at 57.0%, followed by “review of suppliers” (32.0%), “review of sales planning” (28.8%), “review of company’s types and contents of products and services” (26.9%), and “review of production planning” (20.8%).

 

5.  What has been implemented or discussed by those companies that have conducted a “review of production planning” is “expansion of domestic production,” at 30.6%.  With respect to “review of sales planning,” the “expansion of domestic sales” stood at 46.3%.  Companies tend to focus on “domestic” expansion through review of production/sales planning.

 

 

Appendix

1.Research Subjects(Companies Researched 23,149 ; Valid responses: 9,694 ; Response rate: 41.9%)

 

 

2.Research Items

*Business Confidence (current, in 3 months, in 6 months, in 1 year)

*Business Conditions (sales, purchasing and selling unit price, inventory, capacity utilization ratio, number of employees, overtime work hours)

 

3.Research Period and Methodology

 Internet-based survey conducted June 18 – 30 2018

 

The explanation of the Economic Diffusion Index

Research Purpose/Researched Terms

TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry business performance and operating climate.  The primary purpose of such a survey is to assess the current state of Japan’s economy.

 

Selection of the Subject Corporations

Companies of all sizes in all domestic industries are eligible to participate in the survey.

 

DI Formula
The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the diagram below) to each of seven possible responses.  Then multiplying the percentage of each response by the appropriate number, and adding the results.

 

 

A DI over 50 is in the range of “Good.” A score under 50 is “Bad.”  The number 50 is the dividing point (“Neither Good or Bad”).  All numbers are rounded off to the hundredth.  It should be noted that no weight is given to a company’s responses based on its size.  Calculations are made according to a “one company, one vote” rule.

.

For example, all corporations rated ‘Very Good’.

DI=6/6x100(%)=100

All corporations rated ‘Neither Good nor Bad’.

DI=3/6x100(%)=50

 

 

 

 

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