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Yomiuri Rumor: A ‘District’ for Foreign Businesspeople to be Built in Tokyo

May 5, 2007
By Ken Worsley


Over the past decade, the number of subsidiary and branch offices of foreign financial firms in Tokyo has reportedly fallen by a third. We’ve seen several firms move their Asia headquarters to Hong Kong or Singapore over the past few years, and this is starting to make the Japanese government a tad nervous.

Although our only source for this story is the Yomiuri, the paper quotes ‘government sources’ as reporting:

In an effort to make Japan more attractive to foreign businessmen, the government plans to create an international financial center in Tokyo that will be modeled on the City of London…The Urban Renaissance Headquarters, chaired by Prime Minister Shinzo Abe, and the Financial Services Agency will work together to develop a district where overseas businessmen can go about their day-to-day lives speaking English by providing condominiums, day care centers and medical facilities for foreign residents near Tokyo Station.

So what’s going on here? We’ve already seen Roppongi Hills go up, the Tokyo Midtown Tower, and countless other projects designed to appeal to exactly this crowd (and the native population at the same time). With Goldman Sachs in Roppongi Hills, Morgan Stanley in Ebisu Garden Place and Cisco in the Midtown Tower, we have to wonder whether or not there is a need for a Dejima-type ‘district’ designed to appeal specifically to foreign businesspeople.

Or is this just an Amakudari project?

The government is correct in realizing that services for foreigners are lacking in Tokyo and that some effort needs to be made to promote Tokyo as an international financial center that is actually open to international corporations and people.

But, the lack of English services hardly seems to be the reason why so many foreign firms have moved their operations out of Tokyo. Regulations, closed markets, the recent inability to open branch offices in Japan without incorporating as at least a subsidiary - these factors seem much more significant in terms of decisions made to move headquarters to another country.

We’ll certainly be keeping a watch on this story and the reaction to it, not to mention which firms get in on the construction bidding.

Filed Under Business, Japan 

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Comments

5 Responses to “Yomiuri Rumor: A ‘District’ for Foreign Businesspeople to be Built in Tokyo”

  1. Gen Kanai on May 5th, 2007 7:57 pm

    Market forces are very powerful and the reasons why foreign firms have left Japan are not changed by some yet-to-be-built high class gaijin ghetto. Abe needs to do more than change some real estate laws if he is serious about foreign firms doing business in Japan.

    Why not start with the banking system (closed to foreigners; no NYCE or CIRRUS networks in Japan) or the phone system (DoCoMo and KDDI still closed to foreign networks; Softbank getting better but still a long way to go) or foreign ownership of Japanese companies, or any number of a million other factors which businesses use to determine whether to have an office in Japan. Reasonable real estate is only one among many.

  2. Ken Worsley on May 6th, 2007 12:47 am

    Gen, I should have let you write the post! Seriously, that’s all the stuff my mind was drawing a blank on when I was thinking about it.

    Excellent points all around. In terms of real estate, Goldman’s, Morgan Stanley et al. have been buying up enough recently, so one has to wonder if they’re looking at reselling or actual property development. I think comparing their Japan-based holdings in REITs to what happened with Hong Kong over the past few years will give some indication in terms of what they’re planning there…

    That said, yes: the banking system, and of course, the TSE itself. Corporate governance and transparency in general would go a long way.

    You’re absolutely right in the first sentence. It costs millions to move an Asia headquarters, and I don’t see any firms coming back to Tokyo from Hong Kong just because of this plan.

  3. John S on May 6th, 2007 3:58 am

    “Dejima-type”…haha…but really, is there some assumption that foreign firms want to be sectioned off from Japan in order to do business in Japan? This can’t be serious. It’s like saying, “We have cement in our heads.”

  4. Project Dejima is for real: Financial Services Agency to Announce ‘District’ for Foreign Businesspeople Near Tokyo Station : Japan Economy News & Blog on December 2nd, 2007 10:35 pm

    […] Back on May 5, we posted on a rumor that had surfaced in the Yomiuri that reportedly had the newly-founded Urban Renaissance Headquarters, chaired by Prime Minister Shinzo Abe, and the Financial Services Agency planning to work together to develop a “district where overseas businessmen can go about their day-to-day lives speaking English.” […]

  5. Fukui: India to surpass Japan around 2025; Will that district for foreigners help? : Japan Economy News & Blog on December 2nd, 2007 10:37 pm

    […] district in Tokyo for businesspeople from overseas. This time, XFN-ASIA has picked up the story (about a month after we did, but that’s not too […]

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