The Development Bank of Japan published the "Chugoku Handbook 2025 Edition," a comprehensive regional economic report analyzing economic, industrial, and social conditions across the Chugoku region (Hiroshima, Okayama, Yamaguchi, Tottori, and Shimane prefectures).
Regional Economic Scale and Demographics
The Chugoku region maintains a total population of approximately 7.24 million residents as of October 2024, representing 5.8% of Japan's national population. The regional gross product (GRP) reached 26.9 trillion yen in 2024, contributing 4.9% to national GDP with annual growth rate of 2.1%, slightly below national average of 2.8% but demonstrating steady recovery from pandemic impacts.
Population density varies significantly across prefectures, with Hiroshima Prefecture containing 2.82 million residents (39.0% of regional total), Okayama Prefecture 1.89 million (26.1%), Yamaguchi Prefecture 1.34 million (18.5%), while Tottori and Shimane maintain smaller populations of 0.56 million and 0.67 million respectively.
Industrial Structure and Manufacturing Excellence
The region's industrial foundation centers on heavy industry, automotive manufacturing, and petrochemical processing. Hiroshima Prefecture hosts Mazda Motor Corporation's global headquarters and primary manufacturing facilities, producing 1.34 million vehicles annually and supporting extensive automotive supply chain networks throughout the region.
Steel production capacity reaches 23.4 million tons annually through JFE Steel Corporation's Kurashiki Works and other major facilities, representing 18.7% of national steel output. Petrochemical complexes in Okayama and Yamaguchi prefectures contribute significantly to Japan's chemical industry capacity, producing basic chemicals, synthetic materials, and specialized industrial compounds.
Shipbuilding industry maintains strong competitive positioning with facilities capable of constructing large commercial vessels, specialized ships, and offshore structures. Regional shipbuilding output accounts for 12.3% of national tonnage, supported by skilled workforce and established supply networks.
Transportation Infrastructure and Logistics Advantages
Strategic geographic positioning provides exceptional logistics advantages with major ports including Hiroshima Port, Okayama Mizushima Port, and Tokuyama-Kudamatsu Port handling combined annual cargo volume of 234.7 million tons. These facilities serve as crucial distribution hubs connecting Japanese manufacturing with international markets, particularly Asian trade routes.
Transportation network includes completed San'yo Expressway system, comprehensive railway connections via San'yo Shinkansen and conventional lines, and Hiroshima Airport providing domestic and international air connectivity. Infrastructure investments totaling 456 billion yen through 2027 will enhance regional connectivity and logistics efficiency.
Innovation Ecosystem and Research Capacity
Regional innovation capacity benefits from 23 universities, 67 corporate research facilities, and specialized research institutions focusing on automotive technology, materials science, and environmental engineering. Hiroshima University's research programs generate significant intellectual property and technology transfer opportunities supporting regional industrial development.
Startup ecosystem development includes 34 business incubators, venture capital funds with 12.3 billion yen under management, and entrepreneur support programs facilitating technology commercialization and new business creation. Regional innovation strategy emphasizes automotive technology evolution, renewable energy systems, and advanced manufacturing processes.
Future Development Strategy and Economic Outlook
Long-term economic projection indicates potential for sustained 2.4% annual growth through 2030, supported by continued manufacturing excellence, infrastructure advantages, and strategic innovation investments. Key development priorities include electric vehicle technology leadership, renewable energy industry expansion, and international trade facilitation through enhanced port capacity.
The handbook concludes that Chugoku region's combination of established industrial base, strategic location advantages, and innovation capacity positions it for continued economic leadership within Japan's regional economy network.