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New Year Greetings 2020 – KAJIYAMA Hiroshi, Minister of Economy, Trade and Industry

January 1, 2020

Introduction

I would like to wish you all a Happy New Year.

This is the first New Year’s celebration of the Reiwa Era. Starting in July, the Olympic and Paralympic Games will be held in Tokyo.

On the occasion of the previous Games in Tokyo, held in 1964, Japan presented to the world the successful results of its postwar reconstruction. One of the pillars of the reconstruction was the development of the Shinkansen high-speed railway, which embodied the fusion of advanced technologies. Previous generations of Japanese people dedicated their efforts and wisdom to this project and realized an important innovation in long-distance transportation despite criticism in those days that speeding up railway travel was anachronistic. Fifty-six years after the opening of the first Shinkansen line and the 1964 Games in Tokyo, Japanese high-speed railway technology is supporting passenger travel in countries around the world.

Throughout history, our forbearers have embarked on journeys into new eras while facing unpredictable futures. Those in 1964 could hardly imagine what the world would look like in 2020, yet their great efforts have shaped today’s way of life. We Japanese who live in this age must also create and leave for the future important innovations, like the Shinkansen, that we can be proud of across generations.

As for world affairs, Japan is surrounded by global challenges, including the U.S.-China struggle for power supremacy, Brexit (the United Kingdom's exit from the EU), and climate change. Domestically, Japan is also facing considerable challenges, such as a labor shortage due to the aging of society coupled with a low birthrate, a shift to digitization, energy constraints, and the reconstruction of Fukushima from the triple disaster of 2011.

The key to overcoming these challenges is bold technological innovation, such as in artificial intelligence (AI) and the internet of things (IoT). The future that we are facing is more complex and difficult to predict than ever before. However, we must pass the baton of prosperity to future generations by fostering new ideas that birth innovations which can be utilized to overcome these many and pressing challenges. With a strong resolve to do so, the Ministry of Economy, Trade and Industry (METI) will implement the following five initiatives.

Realizing Society5.0

First, Japan will realize Society5.0. By incorporating and leveraging digital technology and data, which increasingly constitute the sources of corporate value, into all industries and social life ahead of other countries, Japan will resolve various challenges through technology and creating new value.

In particular, 5G service, which will start on a commercial basis this year, constitutes a vital infrastructure of Society5.0. 5G has the potential to change society dramatically through application not only in mobile phones but also for a wide range of industrial uses, including smart factories, autonomous driving, and remote medicine. We aim to develop a safe and secure 5G system through unprecedented, bold policy support based on legal, budgetary, tax and other measures.

To gather greater fruits from the growth to be brought by digital technology and data, it is essential to make maximum use of human, physical and financial resources, which are concentrated in existing companies. To strongly support that effort, we will facilitate growth by promoting investment in start-up ventures by existing companies through the establishment of the "Open Innovation Promotion Tax Program."

In this new age, the value of data can be unlocked only if the data are transferred under trustworthy rules. Based on the concept of "data free flow with trust," we aim to develop an international network of data transfer. We will also accelerate the development of specific rules intended to ensure the transparency and fairness of transactions between digital platform companies and users.

Trade and external economic relations

Second, we will implement trade policy as a standard-bearer of free trade. Japan's worth as a trading nation is being tested, as uncertainty over global economic and social environments is growing, exemplified by the intensifying confrontation between the United States and China, Brexit, and the spread of protectionism across the globe. As an exemplar of free trade, Japan will continue to play a leading role in supporting the international economic system based on free and fair rules.

By using the Trilateral Meeting of the Trade Ministers of the United States, the EU and Japan, we will promote the reform of the World Trade Organization (WTO) and rule-making concerning e-commerce transactions and other matters under the Osaka Track. We also aim to lead the negotiations over the Regional Comprehensive Economic Partnership with a view to signing an agreement between the 16 participating countries by the end of 2020.

In addition, we will strengthen bilateral economic relationships. As for the relationship with the United States, the Japan-U.S. Trade Agreement and the Japan-U.S. Digital Trade Agreement will be put into force. We will further deepen the Japan-U.S. economic relationship by encouraging Japanese companies to make maximum use of the results of those agreements. Moreover, we will further strengthen cooperation with the EU in addition to prompting the use of the Japan-EU Economic Partnership Agreement (EPA), which was put into force last year, in light of Brexit. With China, we will strengthen the economic relationship, including cooperation in third countries and cooperation in the fields of energy conservation and environmental protection. As for the relationship with Russia, I, as the Minister for Economic Cooperation with Russia, will further put the eight-point cooperation plan into practice.

Support for SMEs and micro-businesses

Third, we will address challenges faced by small and medium-size enterprises (SMEs) and micro-businesses. Last year, major natural disasters, including heavy rains in the Kyushu region in late August, Typhoon No. 15 in September, and Typhoon No. 19 in October, occurred one after another across Japan. We must avoid a situation in which business operators that have strived hard to support local economies while facing harsh business headwinds, including the labor shortage, are forced to give up on continuing their business because of the impact of natural disasters.

Hoping to provide thorough support to disaster-stricken business operators, we adopted the Living and Livelihood Support Package in November last year. This has enhanced support for disaster-stricken business operators to an unprecedented level. We expect that disaster-stricken business operators will resume their business as soon as possible and serve as supporters of local economies once again.

We have heard from across the nation voices of grievance from business owners who have to discontinue their operations because of the absence of successors. It is a serious loss for the Japanese economy that companies with wonderful technology and knowledge go out of business due to the absence of successors. In addition to supporting business succession within families, we will also assist business succession at companies facing difficulty securing future leadership based on the Comprehensive Package to Support Business Succession by Third-Party Persons. In some cases, even if there is a successor candidate, companies give up on continuing business because the requirement for personal surety stands in the way. With a resolve to abolish the practice of requiring personal surety during the lifetime of our generation, we will implement bold measures, such as creating a new credit guarantee system that does not require personal surety at the time of business succession.

We will provide continuous support for efforts to improve productivity, including capital investment for the development of innovative products and services, so that SMEs and micro-businesses can achieve prosperity by overcoming structural changes, including the aging of society, labor shortage and population decline, and institutional changes related to workstyle reform and wage hikes. In addition, we will facilitate further growth by helping to improve the productivity of SMEs and micro-businesses through the dissemination of cashless financial settlements.

An age has arrived when the competitive environment for SMEs and micro-businesses is becoming more and more severe, testing their ability to create innovations and their international competitiveness across entire industry value chains, including product planning, procurement, production and sales. In light of this situation, we will hold discussions on a "co-existence, co-prosperity model" that enables both large companies and SMEs and micro-businesses to earn income at the Council of Eminent Persons on Value Creation Companies, which was established with business managers from major companies and SMEs as its members. At the same time, regarding measures to ensure the appropriateness of individual transactions, we will conduct a study on how to realize appropriate cost sharing and how to protect intellectual property and business knowhow.

Realizing social security that benefits all generations

Fourth, we will realize social security that benefits all generations.

For the Abe Cabinet, which advocates "dynamic engagement of all citizens," reforming social security systems so as to benefit all generations is the most important challenge. At a time when the aging of society with a low birth rate and the diversification of lifestyles are proceeding simultaneously, it is necessary to reform social security systems in general, including pension, labor, healthcare and nursing care systems, in order to give reassurance not only to elderly people but also to children and child-bearing and working-age generations in view of the coming arrival of the 100-year lifespan.

METI will cooperate with relevant ministries and agencies to secure employment for people aged up to 70, realize flexible, diverse working styles, including engagement in side business, and develop the supporting industrial infrastructure.

Energy and environmental policies

Finally, we will realize stable energy supply, which forms the foundation of all business activities. For Japan, a country with a scarcity of natural resources, it is perpetually essential to curb energy costs and reduce dependence on supply from overseas. Implementing the decarbonization initiative based on the Paris Agreement while ensuring stable energy supply in the face of energy constraints is the mission that our generation must complete in order to create and pass a sustainable society on to future generations.

In order to implement the Paris Agreement, countries around the world are devising approaches for how to achieve effective decarbonization. In addition to pursuing thorough energy conservation and developing renewable energy as a major power source, Japan will make fundamental efforts to reduce CO2 emissions. The key to doing so is developing and disseminating innovative technologies, including hydrogen technology and carbon recycling technology that makes full use of CO2 as a resource. We will realize a virtuous cycle between the environment and growth by accelerating radical innovations through the promotion of green finance and other activities.

As it is an urgent task to deal with the damage caused by natural disasters, including the Hokkaido Eastern Iburi Earthquake and powerful typhoons, it is important to implement quick restoration work in order to minimize the impact on electricity supply in the event of emergencies. It is also necessary to ensure stable supply of resources and fuels in addition to expanding the introduction of renewable energy that takes advantage of the characteristics of power sources by promoting necessary investment in power transmission and distribution networks. Regarding nuclear power, we will proceed with the restart of nuclear reactors while placing the top priority on safety under the policy of minimizing Japan's dependence on nuclear power stations. In light of the above points, we will develop a robust and sustainable energy supply system.

Reconstruction of Fukushima, decommissioning of damaged nuclear reactors, and measures to control contaminated water

Reconstructing Fukushima from the nuclear disaster is always the most important policy challenge. As for the decommissioning of damaged nuclear reactors and the management of contaminated water, the government will exercise leadership in safe and secure implementation based on the Mid-and Long-Term Roadmaps.

With respect to the reconstruction of Fukushima, the development of a favorable environment for the return-home of evacuees is proceeding steadily. Based on a basic policy worked out late last year, we will make every possible effort to rebuild businesses and livelihoods through support provided by the Public-Private Fukushima Soso Reconstruction Joint Team and to create local communities where Society5.0 can be realized on a pilot basis by inducing all sorts of challenging initiatives through the implementation of the Fukushima Innovation Coast scheme.

Final remarks

The torch relay for the forthcoming Olympic Games will start in Fukushima. The reconstruction of Fukushima from the unprecedented catastrophic disaster will proceed in earnest through the creation of new industries, including hydrogen energy, robotics and drones. Renewable energy-derived hydrogen produced in Fukushima will be used for fuel cell vehicles used in the Olympic Games. Just as Japan presented to the world 56 years ago what its war reconstruction had achieved, Fukushima will demonstrate to the world what its reconstruction is achieving through the creation of innovations in cutting-edge fields.

In 2025, the Osaka-Kansai World Expo will be held. Based on the Expo theme "Designing Future Society for Our Lives," we aim to make the Osaka-Kansai region a testing field to demonstrate new technologies by using the Expo site to attract diverse players as a laboratory for future society. The coming five years will be a critical period. The whole of Japan, including the central and local governments and the business community, will be united in efforts to present to the world Japan's vision of future society and its various innovations.

According to the 60-year Chinese zodiac cycle, 2020 is the beginning of new sprouting and prosperity. Let us seize this once-in-a-60-year chance to take on new challenges with new ideas that are not constrained by precedent. All of us at METI will work as one to support growth in all fields.

I appreciate your continued understanding and support.

KAJIYAMA Hiroshi
Minister of Economy, Trade and Industry