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New Year Greetings 2024 - Minister of Economy, Trade and Industry

Japanese

January 1, 2024

Introduction

At the outset, I would like to offer my heartfelt prayer for the souls of those who lost their lives in the 2024 Noto Peninsula Earthquake, which occurred on January 1, 2024, and to express my sympathy to all those affected by the disaster.

The Japanese Government will make a concerted effort toward rescue efforts and saving lives by putting human life first.

The Ministry of Economy, Trade and Industry (METI) will also make a concerted effort, in cooperation with related ministries and agencies, to

(1) Restore the energy infrastructure of electricity, oil, and gas,

(2) Implement "push-type support" for supplies under the jurisdiction of METI, such as stoves and other heating equipment and kerosene,

(3) Reinforce supply of relief supplies from convenience stores, etc.

(4) Reinforce financial support for small and medium-sized enterprises (SMEs) and small businesses,

We will continue to work with a sense of urgency on these and other issues. We would like to ask for the continued cooperation of the public, including the industrial sector, in these efforts. At the same time, Japan is facing the challenges I am about to mention, and our situation is such that even the slightest pause in policy implementation is unacceptable.  Forty years ago, when I joined the then Ministry of International Trade and Industry, which is now METI, I made a commitment to dedicate myself wholeheartedly to the conduct of international trade and industrial policies. At the beginning of the new year, while recalling that commitment I made to my duties in my early days, I believe that I must work with a sense of urgency.

The "Sea Change" for the Japanese Economy

Thanks to the efforts made by business circles, the Japanese economy is beginning to witness signs of the “Sea Change” toward growth and reform, such as an increase in the scale of domestic investments to nearly 100 trillion yen and a wage increase of higher than 3.5%, both of which mark the highest levels in 30 years.

This provides a golden opportunity to turn around the long-stagnant Japanese economy and change the shrinking－equilibrium, deflationary mindset. To consolidate this trend and realize the sustainable growth of the Japanese economy, the Ministry of Economy, Trade and Industry will implement bold industrial policy initiatives.

In particular, we regard the area of resolution of social challenges such as GX (green transformation) and DX (digital transformation) initiatives as a strategic policy area that provides a wellspring of growth. By systematically promoting those initiatives on a large scale and over the long term under the leadership of the public sector, we intend to put the Japanese economy on the path of growth.

2024 should be the opening year of a new stage for the Japanese economy, so to speak. To make that come true, we will promptly implement the supplementary budget that was enacted in the extraordinary Diet session last year and aggressively accelerate domestic investment to strengthen the economy’s growth potential in addition to responding to the current crisis.

Toward successful holding of Expo 2025 Osaka, Kansai

Expo 2025 Osaka, Kansai, which will open one year from now, will be an opportunity to map out the vision of a post-COVID-19 world, a future society to be created by next-generation technologies and social systems, and to demonstrate the potentials of Japanese innovations to the world.

After experiencing the COVID-19 crisis and as we continue to face the tense situations in Ukraine and the Middle East, there is strong awareness once again about the significance of human life across the world. In this situation, the mission that we would like to accomplish through this expo is to uphold its theme, “Designing Future Society for Our Lives,” to bring together wisdom from all over the world, overcome various challenges through innovations, and show how to open a path toward a bright future in order to ensure a peaceful and prosperous world.

I believe that achieving that is up to Japan, which has a history as a pacifist state with the capacity to create innovations.

The Expo Site will feature a number of attractive demonstrations embodying innovations, including an android robot talking about life, myocardial sheets consisting of induced pluripotent (iPS) stem cells and other materials created by regenerative medicine, Advanced Air Mobilities, and multilingual translation technology.

I would like to make this expo an opportunity to bring together wisdom from across the world, an opportunity for various people all over the world, including children, on whose shoulders the future rests, to inspire each other and to cultivate the spirit of taking on the challenge of “designing future society for our lives”—an event that encourages people to participate, experience and take action. With that in mind, we will do our utmost during the period of preparation—with around 450 days left to the opening—to make this a successful expo.

Measures to realize GX and contain inflation and elevated energy prices

At the end of last year, we adopted Sector-specific Investment Strategies—for each of the sectors, such as energy, everyday life, and industry—as part of the effort to put into practice the “Pro-Growth Carbon Pricing Concept”. Based on the strategies for those sectors, we will implement investment promotion measures using GX Economy Transition Bonds worth around 20 trillion yen.

This year is an important milestone in which we will discuss the review of the Strategic Energy Plan at the same time as implementing concrete measures to realize GX. Building on the results of meticulous deliberations so far, we will hold fundamental, in-depth discussions.

In light of the importance of ensuring a stable energy supply and realizing a decarbonized society, we will simultaneously take steps to prepare for future energy crises and realize GX through a comprehensive set of initiatives, including: securing a stable supply of LNG and critical minerals; implementing support measures focusing on the price gaps between hydrogen, etc. and conventional fuels and creating a legal framework for supporting the building of hub facilities in order to develop supply chains of hydrogen and so forth under the concept of integrated regulation and support; and developing a business environment, including the creation of a legal framework for CCS (carbon capture and storage), which is essential to industries for which reducing CO2 emissions is difficult, such as thermal power generation, oil refining, steelmaking, and cement.

In addition, we will devote efforts to maximizing the introduction of renewable energy with strengthening discipline of business operations for coexistence with local communities, promote the development of power grids, introduce storage batteries, facilitate the restart and extension of the operational period of nuclear power plants with the top priority given to safety, and develop and construct next-generation advanced reactors. We will also consider every possible measure to realize a stable energy supply on a permanent basis.

Moreover, as a way to deal with the current elevated energy prices, we will maintain until the spring of this year measures to mitigate the impact of the high fuel prices and electricity and gas charges. At the same time, in order to realize a transition to energy-saving economic and social structures, we will provide support for companies and households.

Wage hikes, and policy toward meddle-ranking companies and SMEs

Workers are the driving force of economic growth. It is essential to turn the ongoing sea change into a sustainable trend and keep raising wages on a regular basis. To enable SMEs and small enterprises, which together form the backbone of the Japanese economy, to raise wages to a degree commensurate with the rising inflation, the government as a whole will thoroughly promote measures to support the price pass-through initiative, which is the key to wage hikes, and provide powerful assistance for labor-saving and other efforts by those companies as well as by middle-ranking companies to improve productivity.

Another important point is strengthening the growth potential and income-earning capacity of regional SMEs and middle-ranking companies. As part of the FY2024 tax system reform, we plan to implement measures such as creating quotas for middle-ranking companies under the tax programs to promote investment for the future and wage hikes at the regional level and launching a new tax program to promote the formation of groups among middle-ranking companies and SMEs. Through those measures, we will promote large-scale investment by middle-ranking companies eager for business growth and increase their income-earning capacity on a group basis, and in addition, we will revitalize regional economies by realizing sustainable wage hikes at the regional level.

At the same time, we will strengthen the system to provide consultation to SMEs facing a severe environment for business succession, rehabilitation, or closure. We will also continue to provide careful support so that SMEs can adapt to the qualified invoice-based method (the invoice system). 

To resolve the 2024 logistics crisis, which poses the risk of creating transportation capacity shortages due to the severe labor shortages and the introduction of an upper limit on truck drivers’ overtime work in April this year, we will implement every possible support measure, including the automation and mechanization of consignor companies’ logistics facilities.

Innovation, and investment for growth

Human resources are also a wellspring of innovation. “Investment in human resources” is “investment in the future.” The Ministry of Economy, Trade and Industry will continue to implement an integrated set of support measures covering career consultation, reskilling, and job change. The government as a whole will develop an environment that enables people—regardless of whether they are regular or non-regular employees or whether they seek an internal job transfer or a new job at another company—to climb to a higher career stage.

Innovation is indispensable to sustainable economic growth. To promote innovation in Japan, we will provide powerful support for activities such as research and development programs aiming to create disruptive innovations, strengthening of AI development capacity, and the introduction of AI by SMEs.

We will also provide a broad range of support for global business expansion and human resource development by startups that stand behind innovation.

To stimulate innovation and build a resilient, flexible economy, it is important to take bolder policy steps to induce domestic investments that lead to growth. From that viewpoint, based on a policy package for promoting domestic investment that was worked out at the end of last year, we will make further efforts to stimulate domestic investment, mainly in sectors critical for the entire nation.

Regarding strategic sectors that are the key to future economic growth, including semiconductors, storage batteries, AI, quantum technology, and space engineering, we will provide further support for domestic investment, research and development, and human resource development. At the same time, we will support the reinforcement of domestic manufacturing infrastructure related to critical goods and the strengthening of supply chains through research and development.

In addition, we will promote the nationwide development of digital lifelines that form the infrastructure of the digital age—hardware, software, and rules based on common standards—and develop an environment conducive to ensuring cybersecurity so that the benefits of digital technology, including drones and autonomous driving, can spread across Japan.

External economic policy

The external environment surrounding Japan is becoming more and more difficult day by day, as indicated by Russia’s aggression against Ukraine, the intensification of competition between superpowers, and the aggravating situation in the Middle East. As those incidents have had a considerable impact on the Japanese economy, society and supply chains, the importance of economic security is also growing. Under these circumstances, Japan must engage in the difficult balancing of further developing the free and fair trading system while ensuring economic security.

In order to maintain and strengthen the free and fair economic order, it continues to be extremely important to use multilateral frameworks like the WTO, economic partnership agreements such as the CPTPP, and partnership frameworks of like-minded countries, including the G7.

As Japan held the G7 Presidency last year, the Ministry of Economy, Trade and Industry exercised leadership in discussions at three ministerial meetings, namely the ministerial of climate, energy and the environment, the trade ministerial, and the ministerial of digitalization and technology. At the most recent G7 Digital and Tech Ministers’ Meeting, regarding AI, emphasis was placed on the importance of securing the right balance between promoting innovation and maintaining discipline. It is important to preserve and pass on the legacy of the G7 Presidency this year and beyond. In addition, we will continue to promote the strengthening of cooperation with the Global South, which was agreed upon at the G7 Hiroshima Summit. In particular, it is important to engage in activities in cooperation with like-minded countries such as building resilient and reliable supply chains and responding to economic coercion and non-market policies and practices. The fact that member countries shared perspectives on those matters at the G7 Hiroshima Summit and the G7 Trade Ministers’ Meeting is a significant achievement, and building on that achievement, we will spread those activities across more and more countries.

Last November, the frameworks such as the Japan-U.S. Economic “2+2” and the IPEF led to the commitment to concertedly confront the challenges shared among Japan, the United States, and other like-minded countries. In addition to supply-side policies, it is also necessary to implement demand-side policies that meet requirements such as sustainability, for example in terms of environment, or reliability. We will examine the possibility of incorporating these ideas into the implementation of various important policy initiatives such as GX and DX. At the same time, we will develop fair market and business environments globally while conducting concrete collaborative activities with like-minded countries.

Finally, in December last year, we held the first Asia Zero Emission Community (AZEC) Leaders Meeting, at which the leaders of Japan and other partner countries shared the principles of AZEC and adopted the AZEC Leaders’ Joint Statement. We will promote tangible activities to strengthen industrial cooperation based on the key concept of Co-Creation, which refers to collaborative efforts to create industries that will drive the future of the ASEAN-Japan relationship in the next half century.

Reconstruction of Fukushima, and arts and culture

The reconstruction of Fukushima and the decommissioning and the handling of ALPS treated water of Fukushima Daiichi Nuclear Power Station of Tokyo Electric Power Company continue to be the most important challenges for the Ministry of Economy, Trade and Industry.

Since the start of the discharge of ALPS treated water into the sea in August last year, which marked a major step toward the decommissioning of Fukushima Daiichi Nuclear Power Station, three rounds of discharging have so far been conducted. We will continue to do our utmost to secure the safety of and transparency regarding ALPS treated water, implement measures to prevent adverse impacts on reputation, and support livelihoods. In particular, in order to enable those engaged in fishing as an occupation to continue their work with confidence, we are implementing measures to expand sales channels for products whose exports have fallen significantly, strengthen the processing system, and support the finances of processing companies, and we will continue to promptly and steadily implement those measures in a timely and appropriate manner. In addition, in order to make steady progress in the decommissioning work, we will support technically difficult research and development programs to retrieve the fuel debris.

At the same time, we will steadily promote the reconstruction of the disaster-affected areas through efforts to lift the evacuation order for the Restricted Areas and activities such as the rebuilding of businesses and livelihoods, creation of new industries, expansion of non-resident populations, and development of new attractions based on arts and culture.

Furthermore, in regions other than Fukushima as well, we will promote efforts to capture in-bound tourism demand through the overseas expansion of culture, arts, and contents industries and encouraging the use of regional areas as filming locations, thereby revitalizing regional economies and supporting the re-creation of local cultures.

Through those activities, we will strive to develop Japan into a global cultural center.

Closing remarks

According to the traditional Chinese horoscope, 2024 is the Year of the Wood Dragon, when major events are expected to occur and when the cumulative efforts that people have made over time are believed likely to bear fruit and make their dreams come true. In the last Year of the Wood Dragon (1964), Japan accomplished grand projects symbolic of the country’s postwar reconstruction, such as holding the Tokyo Olympics and opening the Tokaido shinkansen high-speed train service. Now is the time to turn the cumulative efforts that we Japanese have made up to last year into concrete achievements and realize a further leap forward for the Japanese economy. For my own part, I will perform my duties so that I can pass the baton of economic policy management that I have taken over at a major turning point in history on to the next generation. I look forward to taking a new step into the future with you so that we can make 2024 the opening year of a new stage for the Japanese economy.

I appreciate your continued understanding and support.

January 1, 2024
SAITO Ken, Minister of Economy, Trade and Industry
(Corrected on January 5)