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Japanese investors optimistic AEC will begin to bear fruit in 1 to 2 years

KUALA LUMPUR—Japanese investors are optimistic that the Association of Southeast Asian Nations (Asean) Economic Community (AEC) will start to bear fruit in the next one to two years, creating more business opportunities across the region.

Japan External Trade Organization (JETRO) Kuala Lumpur Managing Director Akira Kajita said amid concerns over a slowdown of China’s economy, most Japanese companies have adopted a “wait-and-see” approach.

“We are hoping that the positive trend will get back on track once the AEC is established.

“It will provide a better and streamline-investment climates in the region, especially with all member-states currently having different rules and regulations for foreign investors,” he told Bernama on the sidelines of the 47th Asean Economic Ministers’ Meeting and Related Meetings here on Tuesday.

He said more integration of standards, elimination of nontariff barriers, as well as further liberalization of the services sector could further boost Japan-Asean trade and investment.

Kajita also said that the role of small, medium enterprises (SMEs) were also seen as one of the catalyst for growth of the 10-member grouping.

He said JETRO assisted 1,500 Japanese SMEs to start business last year with more than half interested in doing business in the Asean region of 600 million people.

In Malaysia, he said, out of about 1,400 Japanese companies which invested in the country, more than half were SMEs.

He also took note of the proposal made by the Federation of Japanese Chambers of Commerce and Industry in Asean (FJCCIA) which suggested the establishment of a credit- rating reference body in the region.

The chamber said the credit-rating agency can evaluate credit-worthiness and account performances of every company across the region.

Currently, he said it was difficult for Japanese companies, for example, to evaluate “company A” from Malaysia and “company B” from Indonesia, which have their own financial and accounting rules.

It was difficult to make business evaluation when it comes to comparing companies from different countries, Kajita pointed out.

“We want to have one Asean measure to evaluate these companies, a single standard-credit reference so that companies can evaluate their potential and performances better,” he added. Japanese investment in Asean has been increasing steadily, recording over $20 billion in 2013 and 2014, three times more when compared with China last year.

According to the inward foreign direct investment (FDI) stocks in each economy, reported by the International Monetary Fund (IMF), Japan is the largest investor in Thailand and Vietnam, and second largest in Malaysia and the Philippines.

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