Japan is an Island located in Northeastern Asia between the Sea of Japan and the North Pacific with an area of about 377,940 square kilometers. The nation is equitably sizeable archipelago of approximately 6,851 island but there are four major islands such as Shitoku, Kyushu, Hokkaido and Honshu, account for about 98% of the population (World Population Review, 2017). The official figures on Japan population were last released during the 2010 census and the final statistics showed Japan had approximately 128,056,027 individuals, making it one of the most populated country in the world. Japan population is in sharp decline. Based on the United Nations projections, population growth declined by about -0.1% in 2016 (World Population Review, 2017). The estimated population in 2016 represents about 127 million, showing a decline compared to the 2010 census (World Population Review, 2017).
Japans population is more homogeneous with the population statistics showing the country has 98.5% of ethnic Japanese people. The number of foreign workers is very small with the majority being Brazilians, Peruvians, Chinese and Koreans. The largest ethnic group is Yamato people while the largest minority group include Ainu and Ryukyuan people (World Population Review, 2017). Although Japan look homogeneous based on its culture and ethnicity, there are no instances of ethnic and racial statistics for the nationals. The nation does not recognize ethnic differences and the former Prime Minister of Japan once described the country as one race, one culture, one language, one civilization and one nation (World Population Review, 2017).
Japan is considered one of the oldest country in the world and it is expected that by 2050 the population in Japan will be over 65. Reports show that the population of Japan will fall by about 30% (87,000,000) by 2050 (World Population Review, 2017). This is because of the disparity in death and birth rates is due to low fertility rate among women. Another explanation is that the number of opportunities for young people is few in a country where men are expected to support families and become breadwinners. Thus, the country produces a class of men who do not marry because they cannot take good care of their families. Thus, by 2050, the population in Japan is estimated to drop to 96 million. The country continue to have debates on ways to fix the issue with immigration incentives and birth incentives being the major suggestions to the solution of the problem of aging population (World Population Review, 2017). The figure below shows the age breakdown in Japan.
Political & legal environment
Political System and Government
The political system in Japan is founded on Japanese constitution that was enacted in 1947 (Neely, 2016). The government in Japan is a constitutional monarch and it is divided into the judicial branch, the legislative branch and the executive branch (Neely, 2016). The executive power is conferred by the cabinet and it is headed by the prime minister who is also the head of the government. The legislative branch is coffered by the bicameral parliament that involves the lower house and the upper house whose members serve for only six years. The Emperors power is restricted and limited primarily to ceremonial duties and he acts as the de facto head of the country mainly on diplomatic occurrences. The Liberal Democratic Power (LDP) got the largest number of seats in 2014 and the Prime Minister Shinzo Obe was re-elected (Neely, 2016). Therefore, the government is a coalition government between the pacifist Komeito party and the LDP. The prime minister promised to restore Japan both internationally and domestically following two decades of deflation in the economy.
Jinken, is the word or human rights in Japan, which was coined in the 19th century (Asia-Pacific Human Rights Information Center , 2014). The Jinken law bans any form of discrimination based on the provisions of Article 11 of the fundamentals of human rights. There are other human rights issues that are catered for by the Jinken law such as rights relating to Ainu people, foreign nationals, and persons with disability, elderly people, sexual preferences, children and women (Asia-Pacific Human Rights Information Center, 2014). Japan continue monitoring arrest, intimidation and harassment of political dissidents, religious activists, defense lawyers, Internet writers and journalists (Asia-Pacific Human Rights Information Center , 2014).
The legal System
The legal system in Japan is different from that of the Unites States. Any individual looking to carry out a business in Japan should realize that municipalities or prefectures can create regulations and laws as long as they do not interfere with the laws in the country (Japan External Trade Organization, 2009).
Japanese people are not so much litigious as they prefer mediation and arbitration to law suits. Most settlements are done out of court and the amount of money for compensation is just a fraction of what can be awarded in the US (Japan External Trade Organization, 2009).
Foreign corporations looking to enter and operate in Japan have the following business entities available for them, Limited Liability Company, Corporations, general and silent partnerships, using a representative office and by registering a foreign corporation as a branch (Japan External Trade Organization, 2009).
Foreign investment laws are regulated through the Foreign Exchange and Foreign Trade Law (Japan External Trade Organization, 2009). Approval or reporting requirements may be awarded based on the jurisdiction of the investor, the industry that the company is looking to operate, and the nature of the asset involved.
National taxes such as corporation tax, personal income tax, and consumption tax are applicable. The corporation tax is about 30% of all earnings of a particular company (Japan External Trade Organization, 2009). Personal income tax are paid by individual resident taxpayers who pay income tax on the total income they earn. Income tax ranges from 10% to 38% (Japan External Trade Organization, 2009). Consumption tax is the same as value added tax and it is imposed on lease or transfer of assets and services offered by Japanese companies.
Labor laws are the main laws governing labor and employment relations in Japan. The labor law standards sets the conditions that employees can work, the rules of employment, company practice and customs, individual employment contracts and relevant case laws (Japan External Trade Organization, 2009).
Thus the legal system is complex in Japan because of several laws. The legal system is has been impacted by Roman-Dutch and English common law owed to its colonial history. Japan has strong labor laws that outline age, industrial safety, age, working hours and minimum wage (Perry, 2015). The company law framework and the Export and Import Control Act regulate businesses in Japan. There are some government authorities protecting and regulating the environment like The Central Environmental Authority (CEA) and The Ministry of Environment and Natural Resources (ME&NR) (Perry, 2015).These regulations hurt industries that tend to dump low-quality products in the country. There have been concerns of companies dumping waste products risking social and environmental welfare. Most of the chemicals from factories are dumbed irresponsible and result in environmental pollution. This is why Japangovernment is pushing to ban some companies from trading in the country (Perry, 2015).
Japan exists in a stable political environment and Abe, the Prime Minister pursuit for economic reforms has maintained that Japan has a low relative risk (Political Monitor, 2017). However, the increase in regional enmity may alter the countrys risk outlook. The major test is the level at which the Japanese continue supporting the reform agendas by the Prime Minister. The country also has the institutional capacity of addressing political and economic issues. However, with the increase of public debt to about 250% of GDP, Japan has not been able to fully recover and ensure there is a long term capacity, which remains at the center of its political and economic community (Political Monitor, 2017).
Although, Japan is a peaceful nation, there is a continuous troubles and fights due to its militaristic past with its neighbors particularly North Korea, South Korea and China (Political Monitor, 2017). While the security in the country is assured by the US, the country is vulnerable particularly to its neighbors. The security of the country therefore rests in the US spoke system and hub of alliances in Asia. The only growing tension in the country is about territorial disputes with South Korea and China on the Senkaku islands and the Takeshima islands respectively (Political Monitor, 2017). However, these disputes have been borne out of a history of way. With the US backing Japan security, it is unlikely that the country is subject to impending attacks from its neighbors.
The major economic policy in Japan is Abenomics through its structural reform, a flexible fiscal policy and of monetary easing. The Abenomics has succeeded in flattening the stock market, stabilizing the yen exchange rate, and boosting business confidence that has led to the recovery of corporate investment. Japan has made many steps particularly in negotiating with the United States and other countries on the Trans-Pacific Partnership and through the European Unions Economic Partnership Agreement to address its structural reforms such as corporate, energy sector, and agricultural reforms. Despite the fall in value of Japanese yen, there has not been an increase in exports as was expected. Economic analysts believe it is as a result of weakening of most firms in Japan and recent offshoring of most Japanese operations. The public sector debt today stand at 250% of the GDP. The countrys rate of consumption tax was increased from 8% to 10% in April 2017. The Japanese government also pumped in a 29 billion dollars stimulus package to boost its economy in 2014. Since Japan has limited resources, and the country depends primarily on food, gas, oil and raw materials.
Gross Domestic Product (GDP)
In 2016, Japans GDP was worth 4939.39 billion US dollars. The value of Japans GDP represents about 7.97% of the global economy (Trading Economics, 2017). Japans GDP averaged 2646.84 USD Billion since 1960 till 2016, realizing an all-time high of 6207.20 USD Billion in 2012 (Trading Economics, 2017). Thus, Japans GD is the World Bank Group. The figure below shows Japans GDP as of 2016.
Gross National Income
Japans Gross National Product increased to 560124.30 JPY Billion from 555568.50 JPY Billion in third quarter of 2017 (Trading Economics, 2017). Gross National Product averaged 452128.86 JPY Billion since 1980 till 2017, realizing reaching approximately 560126.30 JPY Billion in third quarter of 2017 (Trading Economics, 2017).
Foreign Direct Investment
In October 2017, Japans Foreign Direct Investment improved b...
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