The Business Environment in Okinawa The Bank of Okinawa,Ltd 3 People’s Bank Competitive Advantage of Okinawa’s Ideal Location With major Asian cities within range of 4 hours, located in the heart of East Asia Overnight freight network with Okinawa as the hub Freight network linking major cities Connections to ANA in Japan and Asia, centered on Various domestic and cities in international routes Naha Airport Asia Nagoya Kansai ~Jun. 4 Haneda North America, Europe Cargo freighter (B767-F) night Kitakyushu Narita services to major Asian cities Jun. 5 ~ Quick connections to major Various Various cities in Seoul Okinawa Taipei cities in Japanese cities via Haneda Asia Asia 21 direct domestic passenger Shanghai Singapore routes Various Inland China cities in Various cities in Guangzhou Bangkok Asia Asia Hong Offers express services within Asia Kong Asia Inland China Middle East Oceania Asia Middle East Oceania 2018 summer schedule Source: ANA Cargo The Bank of Okinawa,Ltd 4 People’s Bank Okinawa Growth Industry Strategy: Development as a Gateway to Asia Okinawa Growth Industry Strategy: Development as a Gateway to Asia State of Okinawa of State Points The Conference of Industrial Competitiveness in Kyushu and Okinawa was established An international air cargo hub business began in 2009 to connect various Asian cities to consider growth strategies in the Kyushu and Okinawa regions, in light of an with the mainland, utilizing the locational benefits of Okinawa. Okinawa is highly suited emergency resolution by the Japan Revitalization Strategy and National Governors’ as an industrial location targeting emerging markets. Association. A world-class research educational institution (OIST) was opened. Startup venture firms To consider growth strategies in Okinawa and cooperative measures between Okinawa and IT firms have entered and converged. and Kyushu, the Okinawa Session was established under the Conference. A wealth of attractive regional resources (environment, agricultural products, and culture) Basic Concept Okinawa’s Potential Position Okinawa as a “Gateway to Asia” hub for trade and “Knowledge Foundations” Research and development institutions to attract Okinawa’s Potential interaction in people, products, money, and information and develop personnel “Locational Benefits” Okinawa Institute of Science and The center of East Asia International logistics hub-related Health / Bio / Sports / ICT Industries Technology (OIST) industries Making Okinawa a hub for internal and external →World-class academic and Key cities of Tokyo, Seoul, Concentrating products nationwide to Okinawa advanced information and technology exchange international research and education Hong Kong, Shanghai, Taipei, and expanding into Asia Okinawa Clinical Simulation Center →Facility for personnel development in Manila, etc., within 1,500km Enriching and differentiation for international Strengthening intellectual foundations by the latest treatments (within four hours by airplane) expos and business meetings, including the concentrating internal and external advanced researchers and companies from Naha Great Okinawa Trade Fair Strengthening cooperation with other regions Creating and adding value in sports-related Concentration of Okinawa-type industries industries adjacent to airports and sea ports Effective utilization of IoT and big data Maintenance of infrastructure toward Promotion, etc., of measures in island-type environmental business, renewable energy Sapporo strengthening logistics hub functions development, and energy conservation Beijing Okinawa’s Potential Aomori Pyongyang “Regional Resources” Seoul Subtropical climate and diversity born of an island Tokyo Busan Osaka environment Kagoshima Nature and landscape that includes Shanghai blue skies and seas and mangrove Fuzhou Okinawa forests Taipei Industries Utilizing Regional Resources Traditional entertainment and culture Hong Kong Creating new industries in view of the Asian market through use of Okinawa’s diverse biological and such as music, “eisa,” and traditional tourism resources, etc. dance Adding value to tourism Unique island produce such as Manila Expanding production strength and adding value to agricultural peucedanum japonicum, turmeric, and fishery products and foods produced in Okinawa hemerocallis fulva, and lxeris Broadcasting artistic and cultural industries to the world Personnel development to support key strategic industries Developing world standard global business personnel Personnel to create new businesses via Personnel with advanced technological skills comprehensive cooperation across industrial sectors Source: Okinawa Subcommittee Report, The Conference of Industrial Competitiveness in Kyushu and Okinawa The Bank of Okinawa,Ltd 5 People’s Bank Population of Okinawa (Future Prospects) The population of Okinawa is expected to take a downward turn in and after 2030. Population is on the increase at this stage, but active steps towards population growth are being taken now. (in thousands) Population trends in Okinawa (2100) Efforts to facilitate natural 2,030 increase in population (2050) Creation of a society that allows people to marry, 1,620 give birth to and raise children without undue (2035) worries 1,434 1,393 1,540 Elimination of childcare waiting list (2015) (2010) Promotion of “health and longevity in Okinawa” campaign Projected population curve based on risk scenarios Efforts to enhance growth of society Creation of a dynamic society that is open to society (2100) Job creation and securing diverse human 840 resources Increasing tourists and visitors Aims to revitalize isolated islands and depopulated regions Creation of a society that delivers well-balanced Source: Statistics Bureau, Ministry of Internal Affairs and Projected population and sustainable population growth Communications of Japan, the National Institute of Population Improvement of conditions for long-term and Okinawa Prefecture residence Projected future population: National Institute of Population and Social Security Research Industrial development by demonstrating (in thousands) 2015 2020 2025 2030 2035 2040 attractive regional characteristics Okinawa 1,434 1,460 1,468 1,470 1,466 1,452 Japan 127,095 125,325 122,544 119,125 115,216 110,919 The Bank of Okinawa,Ltd 6 People’s Bank Number of Visitors to Okinawa FY2017 marked a record 9.57 million tourists visiting Okinawa The number of overseas tourists was 2.69 million (up 26.4% YoY), renewing a record high Target for FY2021 revised upward: 10,000,000 ⇒12,000,000 Trends in the number入域観光客数と観光収入の推移 of visitors and tourism revenues (単位：人)(persons) (単位：百万円)(¥ million) 12,000,000 Target2018年度計画 for FY2018 1,000,000 9,820,000982万人 10,000,000 800,000 8,000,000 Target2021度計画 for FY2021 600,000 6,000,000 1,200万人12,000,000 400,000 4,000,000 2017年度 Number of visitors in FY2017 入域観光客数957万人 200,000 2,000,000 9,570,000 (up by 800,000 YoY) （前年度比80万人増） 0 0 07 08 09 10 11 12 13 14 15 16 17 21 (fiscal(年度) year) Source: “Tourism Overview,” Number of port calls Okinawa(出所) Prefecture沖縄県「観光要覧」 by cruise ships in 2017: 515 Japanese国内客(左軸) visitors Overseas外国人客(左軸) visitors Tourism観光収入(右軸) revenues (left axis) (left axis) (right axis) Scheduled number of port calls in 2018: 662 (up 29%) The Bank of Okinawa,Ltd 7 People’s Bank Housing Market Trends in Okinawa ・ Housing market in Okinawa remains strong ・ According to the national census 2015, growth rate of population and number of households are both the highest in Japan Number of new housing starts by housing type Total number of households in Okinawa 20,000 世帯数 Owner-occupied House for Company Condominiums and Total number of households 18,000 持家 rent貸家 -owned給与住宅 detached分譲住宅 housing 640,000 1,829 2,258 16,000 2,077 1,933 632,826 1,339 621,790 41 620,000 14,000 25 163 30 52 610,129 944 600,573 12,000 1,381 85 600,000 591,269 205 578,976 10,000 580,000 10,772 568,860 10,914 10,726 11,135 11,263 8,000 8,253 560,000 7,469 6,000 540,000 4,000 520,000 2,000 3,976 2,773 3,431 3,148 3,170 3,103 3,018 201111年 2012 12年 2013 13年2014 14年 2015 15年 2016 16年2017 17年 0 201111年 2012 12年 2013 13年2014 14年 201515年 2016 16年2017 17年 Source: Statistics Section, Planning Department, Okinawa Prefecture The Bank of Okinawa,Ltd 8 People’s Bank Economic Trends in Okinawa 1 BOJ Tankan Overview ◆The prefectural economy is expanding BOJ Tankan Business Confidence DI overall. ◆In terms of personal consumption, trends are strong against a backdrop of an increase 50 in the prefecture’s population, tourism 全国National average 沖縄県Okinawa demand, and an improved employment and 40 earnings environment within the prefecture. ◆In terms of tourism, performance is favorable as domestic demand is strong and demand 30 from foreign visitors is rising. ◆In construction-related terms, public 20 investment is solid. Additionally, residential investment is trending at high levels against a backdrop of an increase in the prefecture’s 10 population. ◆In terms of employment and earnings trends, improvement is advancing. 0 ▲10(10) 13.03Mar. 13.09Sep. 14.03Mar. 14.09Sep. 15.03Mar. 15.09Sep. 16.03Mar. 16.09Sep. 17.03Mar. 17.09Sep. 18.03Mar. 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 Source: BOJ Naha Branch The Bank of Okinawa,Ltd 9 People’s Bank Economic Trends in Okinawa 2 Official land prices Overview Residential land prices ◆Average residential land prices in Okinawa （％） 6.0 increased by 5.5%, after increasing 3.0% in 5.0 the previous year and continue to trend Okinawa沖縄県 4.0 Fukuoka福岡県 upward. Demand remains strong overall for 3.0 National average全国 land for both detached homes and 2.0 1.0 condominiums against a backdrop of an 0.0 increasing population. In particular, the ▲1.0(1.0) Shintoshin area, the adjacent Makabi area, and ▲2.0(2.0) ▲3.0(3.0) other land under land readjustment programs ▲4.0(4.0) is becoming scarce as it is very popular and 201414年 2015 15年 2016 16年 2017 17年 2018 18年 there is little vacant land owing to its convenience and good environmental Commercial land prices conditions.