INTERVIEW: Japan Biz Looking Abroad amid Supply Chain Rewiring

By Hiroki Shimoo Tokyo, June 3 (Jiji Press)–With global supply chains adjusting to changing geopolitics and the artificial intelligence boom, Japanese businesses will continue to seek investment opportunities abroad as they become more globally relevant due to their competitiveness, a senior official at U.S. financial giant Citigroup Inc. says. “There’s a little bit of a reconfiguration of the global economy,” Marc Luet, managing director and head of Japan, Asia North and Australia, and Banking at Citi, said in a recent interview with Jiji Press. “But there’s no retreat of globalization. It’s just that supply chains might become more complicated and more regionally distributed.” A report drawn up by the group in February showed a multipolar global trade landscape where cross-border goods flows were growing overall between major regions, with companies apparently reorganizing supply chains amid heightened geopolitical tensions, including the U.S.-China tariff dispute. According to the report, goods exports from North and East Asia, including Japan and China, to South Asia and the member states of the Association of Southeast Asian Nations rose 44 pct over about five years to 2024. Meanwhile, South Asia and ASEAN saw a 50 pct increase in shipments to North America. In addition, the United States diversified its import base to reduce dependence on a single region. Away from geopolitics, the Frenchman says that AI is another significant factor driving the supply chain reconfiguration, as building AI systems requires many components such as critical minerals and memory chips from countries around the world. Luet, who monitors such cross-border trade flows at the group, which has a global financial services network in about 180 economies, expects the supply chain rewiring “will get accelerated because of the energy situation in the Middle East.” Against this background, Citi sees “a continued flow of capital out of Japan to the rest of the world,” Luet said, attributing the trend to growing calls for corporate reform to improve capital efficiency in the country. Luet expects that overseas investments by Japanese companies will continue in the AI era, noting the country’s strengths in related industries such as precision manufacturing and energy technology. “It’s not only because of the financial power of Japan but because of the industry relevance that Japan brings to the world,” he states. Citi, which exited retail banking operations in Japan in 2015, has since focused on corporate services, including investment banking. The U.S. group plans to strengthen its Japan business, hoping to support more overseas expansions by Japanese companies, including midsize ones. “Japan is a key market for us,” Luet said. “We will continue to invest in skill sets and human capital for investment banking business.” Luet, now based in Hong Kong, has lived and worked in about 10 countries, including Canada, the United States, Britain, Russia and Australia, over his more than 30-year career in the financial industry. His advice for a successful international career is “to be positively curious,” he says. “If you’re working in an international environment, you need to be welcoming of the diversity of thought and culture that you encounter. Staying curious is a good recipe for success.” He lived in Japan for about two years from 2023, serving as Japan CEO. “I miss the little things (of Japan), and I like the quietness of life. It was very soothing for the family,” he says. “Everything was an experience, and you never get used to it. You feel foreign but in a good way. Japan was a great adventure.” “We’re built for times like these, when there is uncertainty and corporates and investors want relevant advice and local connectivity,” Luet said. “Citi has been in Japan for 124 years and we certainly intend to be here another 124 years.” END [Copyright The Jiji Press, Ltd.]