Kaoru Haraguchi, founding partner of Haraguchi International Law Office, delivered the following speech on November 22, 2016 at the Mingfa Daisi Hotel in Xiamen, Fujian Province in China.
Kaoru was invited by the Xiamen branch of China Export & Credit Insurance Corporation (“Sinosure”), the largest trade insurance company not only in China but also in the world.
His speech was aired in China by the Xiamen Media Group. Please refer to the URL of the TV program uploaded by the television company. You could view the program from 3 minutes and 9 seconds of the video onwards.
The English translation of the program in relation to Kaoru’s speech is as follows.
Next is the news of the world economy.
The exports of Xiamen companies are increasing in general. Xiamen companies, however, have not been doing sufficient marketing research. Recently, a Japanese expert suggested that it is of vital importance for Xiamen companies to manufacture and export products of the highest quality. He also recommended Xiamen companies to exercise more care and due diligence towards ensuring the financial credibility of importers from Japan.
Because of various factors, including but not limited to the dramatic increase of labor costs in China, the rate of payment defaults amongst Japanese importers have increased dramatically.
According to the Xiamen branch of Sinosure, the exports of Xiamen companies to Japan have decreased by 6%.
Due to the payment defaults of Japanese importers, Sinosure has paid trade insurance to ten Xiamen companies amounting to 5.56 million RMB and is currently subject to claims for about 3 million RMB for the period of January 2016 to September 2016.
Concerning the above situation, Sinosure invited Mr. Kaoru Haraguchi, a Japanese attorney specializing in risk analysis and debts collection in regards to Japanese companies on behalf of Chinese companies.
Kaoru Haraguchi delivered a speech on the current Japanese economy, the impact of the US presidency election and risks associated with international transactions between Japan and China.
Kaoru Haraguchi stated to a wide audience that the Japanese economy is heavily dependent on the US and Chinese economies. The Chinese economy will become worse if the president elect, Mr. Donald Trump, actually imposes a huge tariff on Chinese products in the United States. The decline of the Chinese economy will lead to a worsening of the US economy. These economic issues in the US and China will have extreme adverse effects on the Japanese economy.
Because of the increase of labor costs in China and a paradigm shift in certain industries, such as the tomb industry in Japan, payment defaults by Japanese importers have increased.
It is necessary to mitigate the risks of default by using the services of trade insurance companies such as Sinosure wisely.
Upon bankruptcy of the company in Japan, more than 95% of the sales proceeds owed to the Chinese exporter by the Japanese company are irrecoverable without a security interest. He thus recommends Chinese exporters to create a security interest as soon as possible if the Japanese company does not pay their debts on time.