CICC TOKYO DAYORI vol.105

Japanese export companies are at the mercy of friction due to Trump's
tariffs and comments and comments by politicians and diplomats regarding
Taiwan and China. To minimize these political impacts, Hitachi, a
leading Japanese manufacturer, has long sought "independent,
decentralized global management." This approach is based on a "local
production, local consumption" approach, where product development,
production, and sales are completed in each region: North America, EMEA,
Japan, China, the Asia-Pacific region, and India. Rather than relying on
trade such as exports and imports, this approach completes the supply
chain from production to sales in each region. While final
decision-making is retained at headquarters in Tokyo, intellectual
property and other management infrastructure are shared, and
decision-making authority is decentralized, allowing local issues to be
resolved locally and prevented from affecting other regions. Even in the
event of political conflict, armed conflict, or natural disasters,
Hitachi is able to continue operations in other regions and avoid
company-wide disruption. Indeed, this approach has worked well during
the global supply chain disruptions caused by the COVID-19 pandemic.
Now, Hitachi’s sales by region are broken down as follows: Japan 36%,
North America 15%, EMEA 21%, China 12%, ASEAN and India 8%.
Previously, the majority of Hitachi's sales revenue was generated in
Japan, but now overseas sales account for 60%. Local procurement rates
in each region have risen to 80%, resilience to currency fluctuations
has strengthened, and it appears that the company is becoming more adept
at dealing with geopolitical risks.
Establishing such a geographically distributed structure will not be
easy. Securing talented local management talent is key, and there is a
risk that headquarters will lose control.
The global economic turmoil caused by the Lehman Shock in 2008 forced
Hitachi to record huge losses. It made Hitachi to have decided to change
their traditional business model.
There have been several crises in free trade, including frequent trade
frictions such as the current Trump tariff issue, the COVID-19 pandemic.
And, we have ongoing conflicts around the world such as Ukraine and
Myanmar and so on.
Now that the United States, led by President Trump, is abandoning the
free trade system it has led, how should Japanese companies respond to
this turmoil?
This "independent, decentralized global management" that Hitachi has
built over time is very interesting and I would like to continue to keep
an eye on it.

Hirokazu MORITA

＜Topics of Government＞

(1)Memorandum Signed on Mutual Recognition of Labeling Scheme based on
Japan Cyber-Security Technical Assessment Requirements (JC-STAR) and the
UK Product Security and Telecommunications Infrastructure (PSTI) Act
　https://www.meti.go.jp/english/press/2025/1106_002.html

(2)Joint Statement on the Global Cybersecurity Labelling Initiative
(GCLI) Released
　https://www.meti.go.jp/english/press/2025/1023_001.html

(3)18th ASEAN-Japan Cybersecurity Policy Meeting Held
　https://www.meti.go.jp/english/press/2025/1016_001.html

＜Topics of Industries＞

(1)New system that helps predict worksite hazards using Hitachi's
next-generation AI agent Naivy demonstrates enhancements of on-site
safety while boosting efficiency
　https://www.hitachi.com/New/cnews/month/2025/10/251007a.html

(2)Hitachi and OpenAI form strategic partnership centered on global AI
data center expansion
　https://www.hitachi.com/New/cnews/month/2025/10/251021c.html

(3)NEC and the Cambodian Mine Action Center Successfully Predict
Landmine-Contaminated Areas in Cambodia Using AI
　https://www.nec.com/en/press/202510/global_20251029_04.html

(4)Fujitsu establishes international consortium to tackle
disinformation/misinformation and new AI risks
　https://global.fujitsu/en-global/pr/news/2025/12/02-01

(5)Fujitsu develops multi-AI agent collaboration technology to optimize
supply chains, launches joint trials
　https://global.fujitsu/en-global/pr/news/2025/12/01-02