Japanese expat

Is the era of sending armies of Japanese expats overseas really coming to a close?

Last month a China based executive for Japanese pharma Astellas was detained in Beijing and accused of espionage.

I am not going to get into the why’s and where’s of this particular case on this post, except to say that it is a troubling event; and it is not the first such incident.

Astellas CEO recently gave an interview with the FT where he said

The era of sending expats is coming to a close. This isn’t just about China . . . We want to create a local talent pool for each location

Astellas President, Naoki Okamura

China accounts for less than 5% of Astellas’s revenue however it’s an important source of raw materials for its drugs.

According to Japanese government statistics the number of Japanese living overseas is now over 1.3 million. Pre covid it climbed every year.

Perhaps not surprisingly America has the biggest Japanese permanent resident population of around 418,000. Interestingly and significantly the second biggest overseas Japanese population is in China with around 102,000. I think it’s fair to say the vast majority of these are there for work.

Japan’s foreign direct investment in China amounted to $10.2 billion in 2021 and is one of the largest international investors.

Photo: Ling Tang

Does this mean other Japanese corporates are going to shed their expats?

I’m not sure. It’s true that some Japanese corporates have promoted more non-Japanese into the boardroom. A good example is Takeda whose CEO Christophe Weber is French. Suntory which has acquired many global businesses has non-Japanese in Europe for example although its Asean business is run by Takayuki Sanno.

Ajinomoto, which is one of Japan’s biggest food businesses has no internationals on its global team, its General Managers for North America, Asean and Europe & Africa are all Japanese.

Aeon, a leading retail group, is similar. Its heads of Asean, China, Malaysia and Vietnam are all Japanese.

As some of you know I worked for Nestlé for many years. At the time I found it a truly globally minded and diverse organisation, and subsequently, having worked with a very ecletic range of businesses from all corners of the globe stand by that statement. Whilst I met with many Swiss executives none of my bosses were ever Swiss.

What makes a great global executive in 2023?

It’s not an easy question to answer but if I had to choose just 5 criteria, the first would be business and functional expertise. You simply have to know what you’re doing. That’s why I can understand many Japanese corporates stick to their own as it were. Second would be cultural and communication sensitivity. Third having access to broad networks, certainly not restricted to one community. Fourth flexibility and fifth resilience. 

Should the era of the Japanese expat be coming to an end? I think the Astellas CEO is right but whether others in Tokyo will agree is highly debatable.

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