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The 47th Basic Survey on Overseas Business Activities (July 2017 Survey) Conducted FY2016 trends in business of overseas affiliates of Japanese companies

The Ministry of Economy, Trade and Industry (METI) annually conducts a Basic Survey on Overseas Business Activities, targeting business activities of overseas affiliates of Japanese companies (hereinafter referred to as “overseas affiliates”) and publicizes the compiled results. This survey aims to ascertain the current situation of overseas business activities of Japanese companies and the impact of such activities on partner countries and Japan. METI hereby announces that it compiled the results of the 47th survey and releases it.

The FY2016 trends in business of overseas affiliates are as follows.

  • The number of overseas affiliates was 24,959. The share in China decreased.
  • The number of employees hired in such affiliates was 5.59 million, up by 0.3% from the previous year.
  • The total sales of such affiliates were 257.6 trillion yen, down by 6.0% from the previous year.
  • The ratios of overseas production in the manufacturing industry (based on all domestic companies) were 23.8%, a decrease for the first time in five years.
  • Operating profits and net income of such affiliates reached a record-high.The total amount of capital investment by such affiliates in the manufacturing industry decreased. The ratios of overseas capital investment also decreased.

1. Summary of findings

(1) The ratio of overseas affiliates in China to the total such affiliate oversees has been decreasing.
  • The total number of overseas affiliates as of the end of FY2016 was 24,959 of which 10,919 were in the manufacturing industry and 14,040 were in non-manufacturing industry.
  • Looking at the ratios of overseas affiliates in Asia (66.2% of all such affiliates are running business) to all such affiliates, those in China showed a decrease of 30.2%, while those in ASEAN-4 economies and other Asian regions (for e.g., Viet Nam), showed an increase of 18.1% and 6.7%, respectively.
(2) The number of employees in overseas affiliates grew.
  • The number of employees in overseas affiliates as of the end of FY2016 was 5.59 million, showing an increase by 0.3% from the previous year, and those of such affiliates that have responded in both 2016 and 2017 also showed an increase of 2.0% from the previous year.
  • By industry, 4.33 million were in the manufacturing industry, showing a decrease of 2.1% from the previous year, while 1.26 million were in non-manufacturing industries, showing an increase by 9.3% from the previous year.
  • By region, an increase was seen from the previous year in North America at 0.73 million, up by 6.8%, and in Europe at 0.55 million, up by 0.5%, while a decrease was seen in Asia at 3.94 million, down by 1.4%, in particular, in China at 1.57 million, down by 3.0%, and ASEAN-4 economies at 1.41 million, down by 2.2% from the previous year.
(3) The total sales of overseas affiliates decreased.
  • The total sales of overseas affiliates were 257.6 trillion yen, down by 6.0% from the previous year, and those of such affiliates that have responded in both 2016 and 2017 also decreased by 6.0% from the previous year.
  • Looking at the total sales by type of industry, a decrease was seen in most of industries, including the transportation equipment, information and communication electronics equipment, and wholesale industries.
  • Looking at such sales by region, a decrease was also seen in all of Asia, North America, and Europe.
(4)The ratios of overseas production in the manufacturing industry declined.
  • The ratios of overseas production in the manufacturing industry (based on all domestic companies) were 23.8%, down by 1.5 percentage points from the previous year, showing a decrease for the first time in five years.
  • Looking at the ratios by type of industry, a decrease is seen in some industries, including transportation equipment at 46.1%, general-purpose machinery at 32.9% and information and communication electronics equipment at 27.3%.
(5) Operating profits and net income of overseas affiliates reached a record-high level.
  • Operating profits of overseas affiliates were 12.2 trillion yen, up by 26.9% from the previous year, and those of such affiliates that have responded in both 2016 and 2017 also increased by 14.6% from the previous year, both of which reached a record-high level.
  • Net income of overseas affiliates was 9.0 trillion yen, up by 37.9% from the previous year, and those of such affiliates that have responded in both 2016 and 2017 also increased by 27.0% from the previous year, both of which reached a record-high level.
  • Retained earnings in FY2016 were 4.3 trillion yen, up by 114.5% from the previous year, while the retained earnings balance was 33.7 trillion yen, up by 5.2% from the previous year, both of which showed an increase.
(6) The total amount of capital investment in the manufacturing industry decreased. The ratio of overseas capital investment to the total such investment in the industry also decreased.
  • The total amount of capital investment by overseas affiliates in the manufacturing industry was 3.8 trillion yen, down by 17.6% from the previous year, while that of such affiliates that have responded in both 2016 and 2017 in the industry also decreased by 21.4% from the previous year.
  • Looking at the total amount of capital investment by industry type, a decrease was seen in some industries, including the transportation equipment and chemicals industries.
  • Looking at such amount by region, a decrease was also seen in all regions, i.e. in Asia, North America, and Europe.
  • The ratio of overseas capital investment to the total investment by overseas affiliates were 20.7%, showing a decrease by 4.8 percentage points from the previous year.

2. Outline of the survey

(1) Purpose

The survey aims to uncover the current situation of overseas business activities of Japanese companies, thereby obtaining basic data to contribute to the planning, preparation and implementation of a variety of measures.

(2) Targets of the survey

The survey targeted Japanese companies having overseas affiliates (hereinafter referred to as the “headquarters”) as of the end of March 2017. These companies exclude those in the finance and insurance, and real estate industries. The term “overseas affiliates” in the survey is a collective term referring to overseas affiliates and second-tier affiliates operated by the headquarters that satisfy the following requirements:

The term “overseas affiliates” refers to an overseas corporation in which a Japanese company has been investing at a ratio of over 10%.

The term “second-tier affiliates” refers to an overseas corporation in which an overseas subsidiary company with a Japanese capital contribution at a ratio of over 50% has been investing at a ratio of over 50%.

(3) How to conduct the survey

METI conducts written surveys, in which it distributes two types of questionnaire sheets (those for the headquarters and those for overseas affiliates) to the headquarters and the headquarters sends the completed sheets back to METI.

(4) Timing of achievements uncovered in the survey

METI conducted the survey on July 1, 2017, targeting responding companies’ achievements [i] as of the end of March 2017 or the timing before this month and closest to the closing date of financial accounts in FY2016 and [ii] at the end of FY2016.

(5) Data on collection of questionnaire sheets

Collection ratio: 74.1%
Number of target companies that operating business: Headquarters: 6,523, overseas affiliates: 24,959

(6) Note to data users

METI adopted the Japanese Yen, in principle, as the currency unit in aggregating data on the related items of the survey targeting overseas affiliates, and converted the yen to local currencies using the average exchange rate (period average) under the International Financial Statistics (IFS) released by the International Monetary Fund (IMF).
Please note that changes in yen value to local currencies are seen depending on survey years if the rates of the yen to the local currency in the country where a target overseas subsidiary operates business are compared between the target year and the previous year. For example, as for the Japanese yen rate against the US dollar, the exchange rate was 108.79 yen/dollar in the 2017 survey, showing an appreciation of the yen by 10.1% from the previous survey (121.04 yen/dollar), and as for the Japanese yen rate against the Euro, the exchange rate was 120.88 yen/Euro in the 2017 survey, showing an appreciation of the yen by 10.1% from the previous survey (134.49 yen/Euro).

Release date

April 5, 2018

Division in Charge

Enterprise Statistics Office, Research and Statistics Department, Minister’s Secretariat

Related website

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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