JAPANESE CAPITAL IN CENTRAL-EUROPE

From the 1960's onward Japan's presence in Central Europe gradually increased. First foreign trade developed, then Japanese sogo shosha (general trading companies) established themselves, Japanese banks extended credits and, after the systemic changes in Central European countries of 1989, direct investments into the region showed a dramatic increase. The real importance of Japanese investments is far greater than their statistical share owing to their modernizing effect. For Japanese business, Central Europe is a strategic door to the huge markets of both the former Soviet Union and Western Europe. After recent privatization Central European countries have been seriously hoping for active Japanese participation but, due to their long decision-making processes, Japanese firms are being squeezed out by German and U.S. firms.