Ministry of Economy, Trade and Industry
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New Year Greetings 2015
Yoichi Miyazawa, Minister of Economy, Trade and Industry

Introduction

  • First, I would like to wish you all a Happy New Year in 2015.
  • I have been reappointed as Minister of Economy, Trade and Industry in the Third Abe cabinet which was inaugurated after the House of Representatives elections held late last year. As this is the beginning of the New Year, I would like to comment once again on the major challenges I face as Minister of Economy, Trade and Industry and the broad policy direction we will adopt this year.

Reconstruction of Fukushima

  • First of all, I must reach out and connect with the 120,000 people in Fukushima who were evacuated and are still living away from their homes and do my best to achieve the recovery of Fukushima.
  • Since I was appointed Minister of Economy, Trade and Industry in October of last year, I have strived to affect the recovery of Fukushima while listening closely to the voices of people there and feeling their sentiments in my heart. In the future, I will proceed with measures such as lifting the orders for evacuation, rebuilding the region’s living infrastructure, achieving industrial recovery and working out the specifics of the “Fukushima Innovation Coast” Scheme.
  • Regarding the decommissioning and contaminated water management at TEPCO’s Fukushima Daiichi Nuclear Power Station, which are prerequisites for the recovery of Fukushima, the removal of fuel rods from the Unit 4 spent fuel pool was completed in December 2014 and the construction of frozen soil impermeable walls is scheduled to begin at the end of the current fiscal year. The Government will play a proactive role in steadily proceeding with the decommissioning plan and management of contaminated water.

Realization of Virtuous Economic Cycles

  • As a result of economic policy implemented under the “three arrows approach” of Abenomics in the past two years, a virtuous economic cycle has begun to arise, led mainly by employment and corporate earnings. For example, the effective ratio of job offers to applicants rose to the highest level in 22 years, the rate of wage hikes last year was the highest in the past 15 years, and ordinary profits of companies climbed to record highs. Increasing the power of these virtuous cycles is the primary missions I must accomplish. With a strong resolve, I will work to ensure that actual economic recovery can spread throughout the entire country.
  • While the economy has recently continued to recover at a moderate pace, it is still weak in some aspects, as shown by the second consecutive quarterly contraction of real GDP.
  • It is our intention to deal with this situation through quick implementation of target measures. The Cabinet therefore decided to approve an economic package at the end of last year. We will deal with increased economic burdens, such as increases in electricity rates and materials costs, by supporting the introduction of energy saving facilities at regional factories, offices and retail locations and fundraising and business rehabilitation for small and medium-size enterprises (SMEs) and microenterprises. In addition, we will support innovative capital investment and development of services and prototyping efforts in order to promote business innovation in SMEs and microenterprises.
  • Moreover, aiming to reduce percentage level of the effective corporate tax rate down to the twenties in several years, we will carry out growth-oriented reforms. Through bold corporate tax reform, we will strengthen the competitiveness of Japan as a business hub and promote capital investment by companies. At the same time, we will strive to increase inward direct investment by improving the business environment and by actively inviting foreign companies to establish business operations in Japan.
  • The Government has been asking private companies to implement wage hikes. In order to increase the power of the virtuous economic cycles, it is important to accelerate the trend of wage hikes among regional SMEs. As was agreed upon at a government-labor-management meeting last year, we are asking the business world to do its utmost to raise wages and also undertake comprehensive measures, including passing on price increases and providing support and cooperation while taking rising purchase prices from suppliers into account.

Growth Strategy and Regional Revitalization Led by SMEs

  • The story of Japan’s growth is not simply the story of the success of a small number of very large companies. It is essential to create small companies that produce small volumes of products and provide high added value services which address a variety of needs. SMEs play the leading role in advancing these efforts under the Growth Strategy.
  • I regard the third arrow of Abenomics, namely the realization of the growth strategy, as the process of replacing Japan’s economic engine. Japan’s post-war economic engine provided success in an era of high growth, but it was unfortunately neither energy-efficient nor environmentally friendly. For the future it is necessary to shift the basis of our economy towards compact, environmentally friendly, high value-added models for success.
  • We will provide strong support for “second startups,” which refers to the efforts of medium enterprises and SMEs to advance into new growth sectors, and the development of venture companies. We will also engage in initiatives that will improve the productivity and profitability of the Japanese economy as a whole, including both production and service sectors, through enhancing corporate governance, promoting bold business realignment and the use of IT.
  • In addition, we aim to make Japan the world’s most excellent intellectual property-based nation by promoting intellectual property and standardization strategies, including the revision of the employee invention system, the strengthening of protection for trade secrets and cultivation of personnel with an in-depth knowledge of intellectual property. We will promote innovation system reform and lead excellent research and development results towards commercialization and industrialization. At the same time, we will promote the acquisition of international standards and the strategic development of an authentication infrastructure through close cooperation between the public and private sectors.
  • By further expanding the activities of SMEs, which play the most critical role in innovation, it will become possible to enhance regional economies. Therefore, in order for the government as a whole to support initiatives that take advantage of regional diversity and independence, we will actively implement measures under the Headquarters for Overcoming Population Decline and Vitalizing Local Economy in Japan, which was established last year, while cooperating with relevant ministries and agencies.
  • In the next ordinary Diet session we will make every possible effort to ensure the enactment of a bill for the Act for Demand Creation for SMEs, which is highly anticipated throughout the country. We will aim to create demand for regional entities through encouraging newly-launched SMEs to receive orders from the government and public agencies as well as developing regional-based specialties, and cultivating sales channels for such specialties. Furthermore, in order to foster personnel to lead new regional businesses and facilitate smooth business succession, we will organize and enhance our support for resolving problems faced in each of the following stages: preparation for company business startups, business startups, business continuation and development, and business succession.

Energy Policy

  • Regarding energy policy, the Government will continue to conduct various initiatives under the new Strategic Energy Plan which was revised in April 2014, with the realization of “3E + S” – Energy Security, Economic Efficiency, Environment and Safety– as the basis. In particular, regarding the energy mix, we will carefully discuss the ideal future approach to developing a realistic, well-balanced energy supply-demand structure.
  • We will continue to introduce renewable energy to the maximum possible extent in a sustainable manner. At the end of last year, the Government announced measures to deal with the current situation in which some general electricity utilities are suspending new applications for grid connections for renewable energy power generation facilities. Through the measure, we will bring an early end to the suspensions and seek to (1) introduce renewable energy in a well-balanced manner without an overreliance on photovoltaic power and (2) maximize the installed capacity through detailed output control.
  • Through promoting high levels of energy conservation and maximizing the installed capacity of renewable energy, we will minimize Japan’s dependence on nuclear power. Meanwhile, under the Strategic Energy Plan, nuclear power is currently positioned as an important base-load power source. If nuclear power plants are deemed safe under the new regulatory requirements under the Nuclear Regulation Authority, the Government will act in accordance with the NRA’s decisions and restart those safe nuclear power plants. In that case, the Government will be at the forefront of efforts to obtain the understanding and cooperation of the municipalities in disaster areas and other relevant parties.
  • Regarding final disposal of high-level radioactive wastes, we will steadily proceed with the selection of disposal sites while seeking understanding from people and local communities by suggesting scientifically suitable sites so that this issue will not be left to future generations.
  • In order to realize a low-cost, stable supply of electricity, the Government will submit a third bill for electricity system reform to the next ordinary Diet session, which will complete the reform. When the bill is enacted, the neutrality of the power transmission and distribution sectors will be further ensured through legal unbundling between 2018 and 2020 so that business operators can use transmission and distribution networks fairly. In addition to this electricity system reform, we will promote integrated reform of the energy supply structure, including gas system reform. From the perspective of creating integrated energy companies, we will implement reform measures such as full retail competition of city gas and deregulation of heat energy charges.
  • Moreover, in light of the recent international situation, Japan as a whole will work to reduce energy costs by realizing imports of shale gas and LNG from the United States, securing resource interests as well as diversifying supply sources and strengthening buyers’ bargaining power through holding conferences of LNG producing and consuming countries. We will also continue efforts to ensure a stable oil supply through such measures as restructuring oil refineries and strengthening the oil supply chain.

External Economic Policy

  • Capturing the rapidly growing emerging markets is essential for the growth of Japanese companies, including SMEs. We will conduct strategic initiatives while taking into account the characteristics of individual countries, including the degree of growth and the competitive environment. We will also promote infrastructure system exports by taking advantage of Japan’s strengths such as its advanced environmental and energy technologies; support the cultivation of sales channels for SMEs and expand the Cool Japan initiative internationally. In addition, Japan will cooperate with the United States and European countries through developing regulations and standards in order to capture foreign markets, promoting harmonization of competition policies, and strategically setting high-level region-wide rules.
  • We will actively engage in negotiations on international trade frameworks that support Japan’s growth. We will not only do our best to conclude the Trans-Pacific Strategic Economic Partnership Agreement (TPP) at an early date but also actively promote negotiations on nine economic partnerships, including the Japan-EU Economic Partnership Agreement (EPA), for which 2015 is the target year to conclude an agreement, the Regional Comprehensive Economic Partnership (RCEP) and a Free Trade Agreement (FTA) between Japan, China and the Republic of Korea (ROK). Regarding the World Trade Organization (WTO), we will promote multilateral and plurilateral negotiations, including the Doha Round and the Information Technology Agreement (ITA) Expansion Negotiation.

Conclusion

  • This year marks the seventieth anniversary of the end of World War II. From the postwar ashes, our forebears worked hard to build the Japanese economy into what it is now. All of us at the Ministry of Economy, Trade and Industry will strive to further develop the Japanese economy so as to enrich lives. We appreciate your continued understanding and support.

January 1, 2015
Yoichi Miyazawa
Minister of Economy, Trade and Industry

Last updated:2015-01-19
Ministry of Economy, Trade and Industry
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