I would like to wish you all a Happy New Year in 2016. As this is the beginning of a new year, I would like to comment on some challenges regarding economic and industrial policies, and share my aspirations.
Reconstruction of Fukushima
First of all, the decommissioning and contaminated water management at Fukushima Daiichi Nuclear Power Station along with the reconstruction of Fukushima are the most important challenges for which the Ministry of Economy, Trade and Industry (METI) should take responsibility.
In March 2016, a full five years will have passed since the Great East Japan Earthquake struck our nation. The evacuation order for Naraha Town, where all residents had been evacuated since the disaster, was lifted in September 2015. For disaster-affected businesses, I will cooperate with all the people concerned, and will continue to make progress with intensive support from public-private specialist teams, steady advancement of the Innovation Coast Scheme and job creation through promoting the establishment of new businesses.
Regarding the measures taken for decommissioning and contaminated water management at Fukushima Daiichi Nuclear Power Station, the sub-drain facilities began operating in September 2015, and the closure of a seaside impermeable wall was completed in October 2015. In accordance with the Mid- and Long-Term Roadmaps, the Government of Japan will continue to play a proactive role in steadily and safely advancing such measures.
Robust Economy that Gives Rise to Hope
The second challenge is the realization of a robust economy that gives rise to hope.
The Government of Japan is attempting to create a society in which all citizens are dynamically engaged in order to tackle the structural issues of an aging society with a falling birthrate and build a new nation by looking to the future. Amidst these challenges, achieving the largest nominal GDP in postwar history--600 trillion yen-- and creating a robust economy that gives rise to hope is the central core of METI’s mission.
Now, the Japanese economy is almost at the point of overcoming deflation. In the Outline for Tax Reform compiled in late 2015, the government approved a reduction in the percentage level of the effective corporate tax rate down to the twenties in FY 2016, and the establishment of the first-ever tax reduction measure regarding the fixed-asset tax with the aim of promoting investments to ensure a virtuous economic cycle.
I once again would like to ask private companies to boost investment in infrastructure, technology, and human resources under the tax treatments mentioned above and would like them to continue to make their utmost efforts to increase wages as in the last two years, and to pay fair prices to the SMEs that are most directly affected by the rise in costs.
A drastic improvement in company productivity is essential in realizing a robust economy. I will accelerate innovation and expand future investment in human resources that support innovation, so that Japan can become the world’s first nation to realize the Fourth Industrial Revolution.
Since 2015, I have been discussing the future visions of industries in a wide range of fields such as autonomous driving, robots and drones, and health and medicine. I have also driven pioneering projects through the activities of the IoT Acceleration Consortium. In 2016, I will make efforts for bold revolutions through discussions on the New Vision for Industrial Structures, which presents new directions of change in industrial structures and employee working styles.
It is also a critical challenge to ensure cybersecurity, which is a key foundation for modern industry. I will make efforts to strengthen cybersecurity measures at incorporated administrative agencies and for key infrastructure industries, such as electric power industries, by leveraging the experience and knowledge of the Information-technology Promotion Agency (IPA).
Improving the mobility of technologies and human talent while attracting the world’s best human resources and investments to create world-class R&D hubs is critical to accelerating innovation. In the field of regenerative medicine, for example, world-leading research and development and aggressive deregulation have been drawing human resources from around the world. I will be proceeding with “internal globalization” by promoting foreign direct investment in Japan as well as by promoting the development of human resources in cooperation with educational institutions in Asia with the aim of proactively recruiting both researchers and other highly-skilled human resources, such as entrepreneurs and IT specialists.
I will also endeavor to strengthen our IP strategy and to establish international standards originating from Japan so that the outcomes of research and development supported by such measures can be leveraged for market development.
In addition, I need to ask SMEs nationwide to lead regional economies. I will formulate specific guidelines for various business fields, such as the service industry, to encourage improvements in their productivity and will newly establish a support framework for SMEs in a precise, responsive, and attentive manner. It should also be noted that I will make every effort to allow business operators the time and resources necessary to smoothly prepare for the introduction of the increase in the consumption tax rate, and the special reduced tax rates on foods and certain commodities.
Economic Development through Trade Negotiations
The third challenge is the realization of economic development by making the best use of trade negotiations.
In October 2015, after lengthy negotiations, an agreement in principle was reached on the Trans-Pacific Partnership (TPP) Agreement. Furthermore, in December 2015, the Information Technology Agreement (ITA) expansion negotiations, chaired by Japan, were concluded as the first large-scale tariff elimination negotiations in the 21st century in which both developed and developing countries participated. The creation of the huge free-trade area resulting from these negotiations provides opportunities for new growth for many companies.
In particular, I will proceed with the establishment of a “Consortium for New Export Nation” by concentrating a broad range of support organizations such as JETRO and the Organization for Small & Medium Enterprises and Regional Innovation, Japan (SME Support, JAPAN) and by strengthening collaboration between convenience stores and the Japan External Trade Organization (JETRO) to support mid-ranking companies and SMEs that aim to develop their markets and expand their businesses by taking advantage of the opportunities provided by the TPP at every stage.
It is also important to work on capturing markets that are growing thanks to the TPP through the collaborative efforts of agriculture, commerce, and industry. Through these collaborations, I will steadfastly proceed with efforts such as the development of new products, improvements in the efficiency of logistics, and the development of sales channels while integrating the knowledge and experience of related ministries to implement a “growth- oriented agricultural policy.”
The export of infrastructure systems is also an important effort for obtaining overseas markets. I am steadily advancing the Partnership for Quality Infrastructure, whose system was recently drastically improved, and I anticipate about 30 trillion yen worth of orders for infrastructure systems by 2020.
In addition to overseas expansion, the rapid increase in foreign tourists visiting Japan is a boost to Japan’s economy. METI will continue discussions about the ideal state of finance and civil infrastructure development of communities surrounding tourist attractions to ensure the success of the tourism industry in Japan. We will tap into the potential resources of tourism to develop a strong industry which attracts the world and thereby increase consumption and, thus, a tourism hub suited to foreign visitors to Japan.
In the future, I will aggressively promote economic partnership negotiations and approach multilateral and plurilateral agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and a Free Trade Agreement (FTA) between Japan, China, and the Republic of Korea (ROK), in addition to negotiations on the Japan-EU Economic Partnership Agreement. I will proactively endeavor to take advantage of the growth of overseas markets.
Responsible Energy and Environment Policies
As the fourth challenge, I will promote responsible energy and environmental policies.
At the end of 2015, the 21st session of the Conference of the Parties (COP21) adopted the Paris Agreement. It was a historical turning point in the creation of a fair and effective system, in which every country put aside their differences and participated regardless of their economic stage of development. The Japanese Government will formulate the Plan for Global Warming Countermeasures by the spring of 2016. In addition, I will proceed with strengthening our development of technological innovation in the fields of energy and the environment and will make international contributions to the Asia-Pacific region and other areas.
Furthermore, Japan is to serve as the chair country for the G7 in 2016. I am highly honored to have been chosen as a host of the G7 Energy Ministerial in Kitakyushu in May 2016, leading a discussion on energy security and global sustainable development.
Regarding the domestic electricity market, the full liberalization of retail sales is to be implemented in April 2016. This will enable all households and offices in Japan to freely choose their preferred service plans and power companies. I will steadily proceed with electricity system reform considering technical comments by the independent commission, the Electricity Market Surveillance Commission.
To reform electricity-system and to optimize energy mix, it will be essential to decisively increase investments in energy resources and achieve a balance between economic growth and CO2 emissions reductions. Therefore, by the spring of 2016, I will compile the Innovative Energy Strategy. This strategy will ensure the maximum implementation of energy conservation and renewable energy, and will contribute to the strategy for economic growth and the plan against global warming.
Regarding renewable energy, it is my basic policy to proceed with introducing renewable energy as widely as possible, while keeping the consumer’s costs as low as possible. The installed capacity of the electricity grid has doubled within the three years since the feed-in tariff system began. On the other hand, various energy issues have been recently become apparent. In order to deal with them, I will continue to revise the system.
Regarding nuclear power plants, under the Strategic Energy Plan, I will continue to prioritize safety over all other matters and move forward with restarting nuclear power plants that are deemed safe under the new regulatory requirements of the Nuclear Regulation Authority. I will also continue to revise the system so as to steadily proceed with reprocessing of spent nuclear fuel, regardless of effects of liberalization of the energy markets.
Regarding the final disposal of high-level radioactive waste, the government plays a proactive role in resolving relevant issues concerning said disposal. I will create an environment where people and local communities can accept the issue by increasing understanding both for safety of geological disposal and the new process for disposal site selection, and I aim to present the scientifically suitable areas before the end of 2016. I will also continue close dialogue with the public and with local governments in order to steadily proceed toward the final disposal of radioactive waste.
Regarding the development and securement of energy resources such as petroleum and natural gas, investment in such resources by Japanese companies is becoming increasingly difficult because the prices of energy resources have been sluggish since 2015. I will proceed with aggressive resource diplomacy and supplying investment funds to Japanese companies through the Japan Oil, Gas and Metals National Corporation (JOGMEC).
This is the Year of the Monkey in Chinese astrology. The Japanese word for monkey is “saru,” which shares its pronunciation with the Japanese word meaning “to leave”. Since ancient times, the monkey has been considered a sign of good luck, because evils such as disease or hardship are said to “leave” you. Furthermore, in Japanese writing, when adding the “human radical” (亻) to the kanji character for “monkey” (申) the result becomes the character for “growth” (伸). Thus, in 2016, I hope that the current state of deflation leaves Japan and that people play active roles in spurring Japanese economic growth.
As we move into the new year, METI will continues to make every possible effort towards creating a robust economy that gives rise to hope, and I appreciate your continued understanding and support.
January 1, 2016
Minister of Economy, Trade and Industry