The Study Of Japan’s FDI Strategy In Southeast Asia In Post-war

According to U.S. arrangement, Japan chose to return to Southeast Asia in which establish superiority through ODA, trade and FDI that called Trinity Cooperation Approach in the post-war period. Among the countries, Thailand, as an important strategic highland in Japan’s regional strategy within Southeast Asia, had been the main destination for FDI from Japan’s automotive company. During the course of contact between the two sides in decades, Japan take effort to fit the limitation of the Thailand’s policies on foreign investment and to change its FDI tactics according to Japan’s grand strategy.The paper attempt to analyze Japan’s FDI strategy on Thailand’s automotive industry, furthermore, to figure out Japan’s FDI motive, features and efficiency in Southeast Asia in post-war. The paper was designed following time changed, and also discussed the influence of Japan’s FDI strategy imposing by environment variables at different stages and the change on strategy made by Japan in line with the stages so that to analyze the evolution of the Japan’s FDI strategy, and find out the internal rules at last.This thesis consists of Introduction, the main body, and the Conclusion.The introduction will explain the origin and the significance of this paper, and organize the research status at home and abroad, and then introduce the structure and research method of this paper.The first section of the main body is theoretical review which demonstrated the impact of the International Political Economics as a theoretical guide to this thesis.The research will be divided into three parts; the initial stage from 1945 to the end of 1950s,1960 to 1985, and after 1985. The reason of classification is the change of Japan’s motive in FDI strategy. As a result of the different motivation developed different FDI plan, the effect of Japan’s FDI to Southeast Asia is also totally different. Simultaneously, this research focus on the influence factor and effect of FDI strategy imposing by Japan’s political and economic environment as well, then analyze Japan’s solution on how to cope with the challenge from her environment and how to alter her FDI strategy respectively. Moreover, the paper stressed the whole course of Japan’s investment in Thai, from the conflict onto cooperation. It is needed to note that the last part of every chapter summary Japan’s merits and demerits in FDI through the analysis of the effect of the FDI flow from Japan to Thai, to make the analysis structure of the paper completely.In the early stage of post-war, Japan needed to acquire a stable trade channel on resource resulting in the shortage of Japanese domestic material. Under the influence of U.S., Japan resumed the trade relation with Southeast Asia where is rich in resources through the Reparation Diplomacy, and then entered into the market of Southeast Asia by ODA (Official Development Assistance). As a consequence, Japan protected her own resource channel safety. Not only make a credit for resuming Japan’s industrialization, but also laying the groundwork of business environment for Japan’s FDI in the future.The 3rd Chapter focus on 1960 to 1985, the Strategic Opportunity Period for Japan, when adjustment of Japanese income structure amplify overall labor costs, render a large part of Japan manufacturing start to invest abroad, such as Toyota and other Japan’s well-known auto companies had been the first investors by the "Liberalization Policy" from Japanese government, and then expanse the market share in Thailand rapidly. After Thailand government introduce the policy of "local content requirement", Toyota gradually proceed toward the goal of localization. At the same time, the Japan’s suppliers also entered into Thailand market by means of Soga Soshe even gain representation in there. Overall, Japan’s enterprise had taken a huge part of market share in Thailand from the start, and Japan would stay ahead of the strategic competition.The 4th Chapter is started after 1985 when Japan’s export trade had been suppressed by the Yen appreciation brought about by Plaza Accord, which was also provide financial support to the expansion of Japan’s auto companies in abroad. On the other hand, the local government introducing a string of policies to open the local market made Japan’s companies confront the M&A by global automotive giants. Japan’s auto assemblies accelerate the transfer of "Keiretsu" group from Japan to Thailand so as to maintain strategic relative advantages. "Keiretsu" is helpful for Japan’s auto assemblies to resist the international competition, as well as for Japan’ auto companies formed a complementary international division of labor in such region, and then will become the dominant power in production network in Southeast Asia, return to domestic financial support at last. Japan’s monopoly advantage had been consolidated furthermore in Thailand through the implement of the policies.The last Chapter is Conclusion. As a summary for this paper, to answer the three fundamental questions according to the analysis above:what Japan’s FDI strategy served in Southeast Asia? How did Japan’s FDI utilize the inherent advantage? What reference from the case of Japan’s FDI strategy?As a developed country after the Second World War, Japan realized the recovery industrialization in a short time. What Japan did in the early stage of the process in FDI can provide a clearly case study for us which have implication for China to construct a FDI strategy in contemporary era. The incomplete analysis in this paper may well contribute a little to further studies in this field.