NAGOYA – Whenever a big event such as the Olympics or the World Exposition ends, the host city’s economy is forecast to suffer a setback. But such a scenario seems unlikely for the Chubu region, where the 2005 World Exposition in Aichi Prefecture will end on Sunday.
Led by local blue-chip automaker Toyota Motor Corp., the region often dubbed as “the manufacturing kingdom” enjoys robust economic activity, with the ratio of job offers to job-seekers in Aichi Prefecture the highest in Japan.
Analysts say the regional economy is unlikely to plunge after the expo ends Sept. 25 because the area, which did not make an excessive investment to host the event, can count its heightened international profile and new infrastructure to lure investment.
“There are three key points to sustaining the current buoyant economy,” said Toshihiro Uchida, an economist at think tank UFJ Institute. “Namely, utilizing the new Central Japan International Airport (Centrair), promoting the service sector, and trying to strengthen the convention industry.”
Uchida, who works for the think tank’s office in Nagoya, pointed out that the expo has changed the image of the central city from that of a mere stopover point into a place to stay.
“Thanks to the world fair, this region has attracted a flow of people,” he said. “Now that the city has hotels for VIPs, the new airport and expressways, the area should continue to be a magnet for international conventions.”
The new airport, which has a 3,500-meter runway, is 30 minutes by train from Nagoya and draws many passengers transferring from domestic to international flights.
In addition, a couple of high-rise buildings to be completed near JR Nagoya Station are widely expected to become hot spots.
Among those skyscrapers under construction is a 247-meter, 47-story building scheduled to house Toyota’s overseas sales division, which is currently in Tokyo. The building will be finished next fall, and a commercial complex centered on the tower will open in March 2007.
“Following Toyota, other manufacturing-related companies may move their headquarters to Nagoya,” Uchida said. “The service sector would surely flourish in the proposed new office complex.”
The place “would be the most convenient site in Japan in terms of transportation” because it is close to both Centrair airport, which opened in February, and Nagoya Station, which is a major shinkansen stop, he said.
According to a recent government survey, six commercial locations in Nagoya ranked among top 10 areas in Japan with the biggest jump in land prices. Two of the six areas near Nagoya Station showed a year-on-year increase of more than 30 percent.
The economist said Nagoya’s economic zone should try to model itself after Atlanta, which became a major international convention site after hosting the 1996 Olympic Games.
The international sports event helped the city develop new infrastructure, including more expressways and hotels, he said.
Cashing in on the raised international profile of the Chubu region, local governments and businesses have been eager to draw investment from overseas.
With the local bureau of the Economy, Trade and Industry Ministry taking the lead, Aichi, Gifu and Mie prefectures, 23 cities and towns and 13 business organizations formed the Greater Nagoya Initiative to jointly call for foreign investment in the area.
As part of the government’s “Invest Japan” initiative aimed at doubling foreign direct investment in five years by the end of 2006, the GNI, launched in April 2004, received a state budget of 140 million yen in fiscal 2004 and another 50 million yen in the current fiscal year.
More than 280 companies, universities and research institutions in the region have signed up as “GNI partners” to share information on matchmaking business with foreign enterprises interested in advancing into the area.
After sending nine investment missions overseas and bringing 85 companies on an inspection tour of the area, GNI managed to lure three — a California information technology firm specializing in security systems for buildings and airports, a German auto parts firm and a Shanghai software development company.
“We proposed companies in this area do business with foreign enterprises so as to strengthen the Japanese firms’ management bases in the postexpo era,” said Kazunari Sega, director of the GNI office at the METI’s Chubu Bureau.
“In order to maintain the current high spirit of Nagoya economy, we thought we should make a move while favorable conditions continue,” Sega said.
He added that although the GNI outcome to date may not appear exciting, the office has succeeded in creating business alliances between Japanese and foreign firms.
The GNI director said that since Japan cannot compete with China or South Korea in attracting foreign investment on the strength of cheap labor, the region should stress other advantages, including its proximity to major global manufacturing industries represented by Toyota and strong consumption in the area.
Since the launch of the GNI, the region’s exposure to the foreign media has increased, according to a survey covering about 200 foreign publications.
Sega said he hoped the exposure of the Nagoya economic zone will be close to the level of Osaka amid the GNI’s investment-luring activities.
Guests and dignitaries from 117 countries and the United Nations had visited Japan for the 2005 World Exposition in Aichi Prefecture as of Thursday, the Foreign Ministry said.
A total of 110 National Day events were held since the Aichi Expo began its six-month run in March, said Yoshinori Katori, the ministry’s press secretary.
Chinese Vice Premier Wu Yi and Seif al-Islam Gadhafi, the second son of Libyan leader Moammar Gadhafi, were among those who visited.
Thursday marks the last National Day, sponsored by Georgia, before the expo ends Sunday.
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