- The Washington Times - Thursday, August 16, 2001

CHIBA, Japan — The shoppers at the Costco outlet in Japan come looking for much more than the towering stacks of Doritos chips.
They want a taste of the American lifestyle — no-nonsense pricing and do-it-yourself shopping that's very different from the expensive brands, fancy wrapping and bowing sales clerks they are used to.
Costco Cos., based in Issaquah, Wash., is not only part of a rising wave of foreign investment that is reshaping Japan's corporate landscape, it is also helping to change consumer attitudes.
"Shopping at Costco is like taking a trip to America," said Noriko Tsukahara, a 36-year-old clothing company employee, throwing a bunch of towels into her cart. "It's big, you choose the items yourself, and it's cheap."
The recent surge in foreign investment is a direct sign of Japan's hard times.
Opportunities are opening up for businesses catering to bargain-hunters. Costco, which runs an international chain of outlets, opened its first Japanese store in 1999 in Fukuoka, southwestern Japan, and added another one late last year in the Tokyo suburb of Chiba.
At the same time, troubled Japanese companies are being forced to accept cash inflow from abroad to stay alive. Nissan Motor Co., the nation's No.2 automaker, is now 36.8 percent owned by Renault SA of France.
In the past, Japan's corporate culture was cautious toward foreign capital. But in the fiscal year ending in March, foreign companies invested a record $25 billion in Japan, up 30 percent from a year ago, and nearly tenfold from five years ago.
Costco doesn't release figures on sales or profits, but Nissan, long in the red, has turned a profit, as has Shinsei Bank, which had failed previously and was taken over by backers that include Ripplewood Holdings, a U.S. investment fund.
The economic downturn has encouraged foreign investment by pushing down real estate prices. Distribution and other costs have also declined. It's much easier to attract qualified workers, and other barriers to newcomers are unraveling, such as the practice of companies holding each other's stocks.
Ripplewood is on a shopping spree in Japan, snapping up Shinsei Bank, a seaside resort, an auto-parts supplier and a recording company.
Foreign companies ranging from American Internet retailer Amazon.com to Paris-based fashion house Hermes are expanding here.
But has Japan grown fundamentally more open to outside capital? Or is it just a short-term response to the recession?
Japan has a long way to go in opening up; foreign direct investment in the United States is 20 times more than it is in Japan, and 30 times more in Europe.
"Distressed companies that have nowhere else to go" make up nearly all the deals in Japan, said Nicholas Benes, president of JTP Corp. in Tokyo, which advises on mergers and acquisitions.

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