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Analysis of Political, Economic and Legal System of Japan: Globalization Assessment Answer

Political Economy and Foreign Direct investment 

Case Overview - This assignment is intended to give you an opportunity to apply some key concepts from this course in a real world context. Specifically, you are required to select a country of your choice (not your home country), review the country’s political economy (political, economic and legal systems) from a reputable data source such as the CIA Wold Factbook and critically discuss the country’s attractiveness or otherwise for foreign direct investment. 

Learning Objectives – This assignment requires you to explore and evaluate the costs and benefits of FDI with respect to your selected country in particular and host economies in general. It therefore, fulfils broad learning objectives related to this course. However, the primary learning objective of this assessment task is to appreciate the macro-economic causes of growth in an economy and the subsequent and/or consequential influence on FDI. Through an analysis of the political economy in this context, this assessment is also designed to evaluate your ability to apply your understanding of the political economy and country attractiveness for investment.   

Advice – Remember that the political economy stresses that the political, economic and legal systems of a country are interdependent; they interact and influence each other, and in doing so they affect the level of economic well-being.  The study of the political economy stresses the combined effect of factors in assessing the economic well being of a country and subsequently that country’s attractiveness as a destination for foreign direct investment. In light of this, it is expected (and even encouraged) that you will overlap and integrate your discussion around the different components of political economy (e.g. the connection between political decisions and economic management being the most obvious overlap. You will find that the following reading (located in Short Loans Online) is an excellent initial source of information on the political economy: Hill, C. (2007) International Business: Competing in the Global Marketplace 6/e. McGraw-Hill Irwin, New York, Chapter 2 (National Differences in Political Economy).

Formatting, submission and word count - Size 12 font (Arial or Times New Roman) and 1.5 line spacing. You are required to submit this assessment electronically through Turnitin.  No hardcopies are required. The word count of your case study analysis is 1200 words +/- 10%. You are required to demonstrate your ability to keep within the recommended range of words while still providing a comprehensive analysis of the case.  If you go above the maximum word count you will be penalised.

Answer

POLITICAL ECONOMY AND FOREIGN DIRECT INVESTMENT

Introduction

Globalisation is a process of integration and interaction among people, government and companies of different nations. It is also a process by driving international trade and investments and helped by technological advancement. In the study, Japan as a country is chosen to analyse the political, economic and legal system of the country during dealing with globalisation. The political system of the country is major responsible for the growth of the economy. In addition, the political and legal system also enhances the international trade fair, which alternatively effects on the growth of the economy. 

Economy of Japan

Japan is a developing country with its advanced technology that attracts most of the industries. The technology has aided Japan to growan advanced economy. In the year 2017, Japan was the fourth-largest economy in the world. In the year 2013, Japan has enjoyed the uptick growth in economic revitalisation agenda. The agenda was controlled by Bank of Japan’s antagonistic financial facilitation. Hence, Japan is creating one of the modest developments in finishing of deflation as well as a decline in demography (Cia 2019). Therefore, the government is focusing over maintaining balance in between the growth and institution economic reforms which are needed for addressing its sizable public debt by 235%. It has helped in raising government revenue. 

Japan government has adopted legislation in the year 2012 that gradually helps in raising the consumption of tax. After the disaster from tsunami and earthquake in the year 2011, all nuclear plants in Japan were destroyed. After that,Japan becomes more dependent on fossil fuel. Hence, the ABE government is focusing over restarting the nuclear power plants to meet the need of the country as well as emphasising the nuclear energy’s significance as power sources (Cia 2019). Japan has positively resumed the atomic power plan in the year 2015.  Under the ABE governance, Japan Government has created new opportunities for export in foreign. In the year 2016, Japan was the country to ratify the TPP. The core elements help in modifying the agreements which are named as Comprehensive as well as Progressive agreements for Trans-Pacific Partnership (CPTPP). The country was also engaged in making a new agreement with the European Union on Economic Partnership Agreements in the year 2017. 

The mutual worth of import and export is equal to 31.3% of GDP. The regular practical tariff rate is approximately 2.5%. It is also wanted to deal consequently with WTO with 381 non tariff events in power. Japan has also insulated which is behind other republics in dealing with the bilateral trade agreements. According to the CIA report, the GDP was dealing with the various sections they are as follows:

GDP
Rate in the year 2017
purchasing power parity
$5.443 trillion
official exchange rate
$4.873 trillion
Real Growth rate
1.7%
GDP Per capita
$42,900
Gross National Saving
28%
The industrial production growth rate
1.4%
Labour forces
65.10 million
Unemployment rate
2.9%
Tax and other revenue
35.2%
Public debt
237.6%


Table 1: Economy of Japan

(Source: Cia 2019)

The political system in Japan

The political system in Japan is parliamentary is engaged in conducted a multi-party bilateral parliamentary representative self-governing legitimate monarchy. The Prime Minister is the head of government and head of the cabinet system. The government of Japan is focusing on expanding business worldwide (Forum 2019). The trade promotions and marketing is a major key component of Japan political system in the marketing plan. In addition tradition promotion is also engaged with advertising channel, digital marketing as well as social media that help in offering various opportunities. The state participation in economic activities which is limited; hence, government controls influences over business is stronger (DeCaro et al. 2017). Therefore, the government plays a role in consultation with business as well as incidental participation in investment. The Japanese bureaucrats utilise the discretionary power with written directives by offering managerial direction for communication with official policies. 

The Department of State Bulletin and other agencies are engaged in maintaining international trade fair. The agencies are one of the economic planning agencies which are undertaken by the Ministry of Economy (Debroux 2017). The transportation system of Japan was also engaged in promoting international brands. Thus it alternatively helps in increasing the economy of the country.Japan’s Law on Rule of Broadcast of StatedElectric Mail has been likely engaged in opt out the scheme in which dispatcher can stop distribution receipts (Forum 2019). Hence, Japanese requires using the opt-in system through which emails can only send to citizens who have permitted to receive it.  Japan is focusing on social media as well as digital marketing that continue for growing as well as offering promotional opportunities to different companies under certain laws and regulations. Apart from companies,the government is also focusing on the agricultural policy that eventually crucial part for the growth of the economy. Apart from it, the domestic product cannot satisfy the demand of Japan. Hence, import from other countries is done. 

The legal system of Japan

The legal system of Japan is based on the civil law system. Japan’s Ministry of Economy, Trade and Industry (METI) has been prepared with various agencies and bureaus for formulating perform a wide range of financial, manufacturing as well as trade strategies which is required for managing the international trade fair of Japan. As stated by Betting (2018), the legal system of Japan can carry out various activities which have been engaged by trade policy, import licensing, import ban and restrictions and many more. The METI trade policy deals with geographical as well as the functional region which is one of the primary responsibilities of Japan’s administrative system (Shinoda Shinoda 2018). Import licensing is obligatory for certain properties such as perishables, capitals, florae and faunae. Licenses are also obligatory for goods subject to import shares which are counting certain fish goods as well as measured materials which are listed in the Montreal Protocol on Substances. 

Japan’s tariff has been lowest which approximately increased by 2% for non-agricultural harvests that is needed with scheduled that has been founded with Japan customs which has been granted with Most Favoured Nation (MFN) focuses on meeting certain criteria they are as follows:

  • WTO member
  • Under article 5 of Customs Tariff Law cabinet facilities passes the order
  • Mutualagreement with Japan

WTO Information Knowledge Agreements which is agreed to eradicate tariffs which are one of the most information technology goods that remain needed for managing the customised articles which are engaged in managing the trading system (Shatkin 2016). The Japanese Measurement Law has been required for imported products as well as shipping document that shows metric weights measures which are engaged by managing labelling system in better ways. Japan has also focused over economic partnership agreements (EPAs) and15 free trade fair agreements (FTAs) with different countries to deal with successful trade system. 

Conclusion

It can be concluded that the economic system is high, which has been raised that is considered by analysing various ways that help in making it utilised in a better way. It has been analysed that the political system helps in raising the marketing of products with marketing plans. It has been emphasised that the legal system of Japan is also engaged in provided better guidance for importing and exporting of products. 

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