*Note: This is a provisional translation for reference purposes only.
Tuesday, August 29, 2023
Press Conference Room, METI Main Building
First, I would like to talk about generative AI. I believe that this is important technology that will significantly change the economy, society and workstyles. In particular, it is very important technology in that it significantly affects the future growth of the Japanese economy. It is necessary to quickly establish the basic development capability for generative AI in Japan.
Therefore, METI is striving to expand computing resources. As an action that can be immediately taken, we have already publicly invited proposals for a support program to develop large-scale language models using ABCI, which is an AI supercomputer owned by the National Institute of Advanced Industrial Science and Technology (AIST).
In the first round, a proposal from Preferred Networks was adopted. At this time, the second round of public invitation starts today, August 29, with a view to granting exclusive use of around 10 to 25% of ABCI’s computing capacity. As a result of examination, at least one company’s proposal will be adopted, with the use of computing power scheduled to begin in early October. As AIST handles the public invitation procedures, I hope for participation from far and wide.
Going forward, in order for Japan to further accelerate the development of generative AI, the government will consider various measures, including a drastic expansion of ABCI, AIST’s AI supercomputer, to continue supporting the development of large-scale language models by private-sector companies.
The second point is cost-to-price pass-through. In September, the Price Negotiation Promotion Month initiative will start again. We conducted a survey on the results of this initiative in March. Having sorted out replies from more than 17,000 small and medium-sized enterprises (SMEs), we will today publish a list that describes the state of negotiation and cost-to-price pass-through with respect to around 120 companies on the order-placing side.
In particular, starting this month, the competent ministers have provided guidance and advice for improvements to the top management of around 20 order-placing companies whose state of negotiation and cost-to-price pass-through was inadequate.
Furthermore, at this time, we published cases of excellent practices by order-placing companies. Some examples of excellent negotiation and cost-price pass-through are:
- The top management expressed, internally and externally, their intention to exercise leadership in price negotiation and cost-price pass-through;
- Order-placing companies’ officials in charge of procurement actively called on suppliers to engage in price negotiations;
- Ordering placing companies prepared and used formats covering not only raw materials costs but also energy and labor costs in price negotiations.
I hope that many order-placing companies will look at those cases for their reference.
The Price Negotiation Promotion Month initiative will start on September 1. This initiative is conducted in March and September. Generally, price revisions are made in April and October, so the months prior to those months have been selected for this initiative. I would like to recommend that subcontractors should not hesitate to propose price negotiations.
The cost-price pass-through rate is always very low in the trucking industry, but we may face a situation where goods cannot be transported due to labor shortages. Therefore, I would like to recommend that trucking companies should not hesitate to propose price negotiations to order-placing companies or consignors.
Ultimately, order-placing companies will make their own situation worse if they shift the burden to subcontractors. They may face a situation where it is impossible to manufacture goods or transport them. Therefore, I hope that with a view to ensuring prosperity in the overall supply chain, order-placing companies will raise awareness on a company-wide basis so that they can actively engage in negotiations to realize appropriate pass-through.
Later, the administrative staff will announce detailed information. This list enumerates company names. Assessment grades are given based on points. Grade “D” is the worst, and “C” is not so good, and the companies that received those grades are underlined in blue. Among them are major, well-known Japanese corporations. I would like to strongly request order-placing companies to engage in negotiations and accept appropriate pass-through.
Once again, I would like to recommend that suppliers and subcontractors should actively propose negotiations and request pass-through. We will provide full support.
Nuclear fuel cycle
Third, earlier today, a meeting of the Nuclear Fuel Cycle Council was held at the Prime Minister’s Office. Aomori Governor Miyashita made requests concerning the promotion of nuclear power and nuclear fuel cycle policies, the final disposal of high-level radioactive waste, fostering of human resources with nuclear energy expertise, and research and development. I conveyed my intention to appropriately promote nuclear power and nuclear fuel cycle policies after obtaining the local communities’ understanding. Once again, I stated that Aomori will not be turned into the site of the final disposal of high-level radioactive waste.
In addition, there was a request for the establishment of a conference body to consider how to achieve co-existence between nuclear power facilities and host communities, and I replied that such a body will be established at an early time. In relation to that, regarding an interim storage facility being constructed by the Recyclable-Fuel Storage Company in Mutsu, I understand that yesterday, approval for the revision of the safety regulations that set rules on the operation of the facility was granted by the Nuclear Regulation Authority. I hope that this company will steadily proceed with safety-enhancing construction work and prepare for inspection ahead of the start of the operation while continuing to place the top priority on ensuring safety.
In November 2020, permission was obtained from the Nuclear Regulation Authority for changes to the operation of this interim storage facility based on the new regulatory standards. Approval has been granted for the revision of the safety regulations concerning the operation of the facility. Going forward, I request that construction work and inspection be appropriately conducted.
In any case, we will continue to promote the nuclear fuel cycle policy with safety as the utmost prerequisite and top priority while seeking the understanding of relevant local governments and the international community. For detailed information, the administrative staff will give you a briefing later.
Visit to Hokkaido
Fourth, on Friday, September 1, I will visit Hokkaido to attend the ground-breaking ceremony for Rapidus Corporation. On that day, in addition to attending the ground-breaking ceremony, I am scheduled to have a meeting with top global semiconductor-related companies and organizations, including ASML, Lam Research, and Imec, and to exchange opinions with Japanese companies investing in Rapidus.
Next-generation semiconductors represent a key technology essential for strengthening the competitiveness of the Japanese industry and the entire Japanese economy. It is extremely important to secure manufacturing infrastructure for this technology in Japan from the viewpoint of economic security.
In particular, Rapidus, which constitutes the core of international cooperation related to semiconductors, is expected to play an important role in the global supply chain of like-minded countries and regions in the field of advanced semiconductors. METI will continue to firmly provide the necessary support.
At this ceremony, many relevant stakeholders will get together, including people from the governments of Hokkaido and Chitose City, domestic and foreign semiconductor-related companies, and related local companies. I would like to use the ceremony as an opportunity to ensure that relevant stakeholders work together toward the successful implementation of Rapidus’ project while asking participants for cooperation once again.
Visit to Osaka and Kyoto
Let me move on to the fifth and last point. From tomorrow, August 30, I am scheduled to make an overnight trip to Osaka and Kyoto. In Osaka Prefecture, I will visit the Japan Association for the 2025 World Exposition. During this visit, I will give an address to the association’s employees and receive a briefing on the progress in event hall construction on the observatory deck of the Osaka Prefectural Government’s Sakishima Building. With less than 600 days left until the expo’s opening, I would like to check the progress of site construction and to further strengthen cooperation with the employees by giving an address to them so that more efforts will be made to accelerate the preparations for the opening.
In Kyoto, I am scheduled to visit the Organization for Small & Medium Enterprises and Regional Innovation’s Creation Core Kyoto Mikuruma, which is an incubation facility through which industry, academia and government cooperate in providing support to startups and to exchange opinions with people from companies using the facility, startup companies (including startups derived from Kyoto University and other universities, and other startup companies), as well as people involved in the startup ecosystem.
While the government as a whole is providing intensive support to startups, I would like to directly listen to the opinions of relevant people and use the feedback for future policy planning.
China’s suspension of imports of fishery products
Q: Let me ask you about developments related to China, which is protesting against the discharge of treated water from the Fukushima Daiichi Nuclear Power Station.
Since China announced a suspension of all imports of Japanese fishery products on August 24, the impact has been widely felt in many quarters. For example, there have been calls for a boycott of Japanese cosmetics in that country, and in Japan, there has been a stream of harassing telephone calls that were presumably made from China. Please comment on this escalating cascade of incidents.
Also, until now, you have been emphasizing the importance of discussion based on scientific evidence. Please tell me about how you will deal with these incidents in the future.
A: I am aware of the news that there are calls for a boycott of Japanese cosmetics in China as you mentioned. We are gathering information, and we will deal with this in cooperation with businesses and industries.
Since the start of the discharge of treated water into the sea on August 24, in Japan, there have been many harassing telephone calls that were presumably made from China. It is very regrettable, and we have deep concerns. In particular, yesterday, I heard from people in Fukushima about many harassing telephone calls made to hospitals. This is a life-threatening matter. I want this to stop immediately.
On this matter, through diplomatic channels, Japan has called on the Chinese government to quickly take appropriate actions, such as asking the Chinese people to behave calmly in order to prevent the situation from aggravating further. In any case, I want this to stop immediately.
As you pointed out, regarding the discharge of treated water into the sea, Japan has continued to provide explanations to the international community in a transparent manner while undergoing reviews and checks by the IAEA, with an IAEA expert stationed onsite. After the start of the discharge, Japan has been publishing all results of various monitoring activities in a transparent manner. The safety has been confirmed.
In addition, with respect to the comprehensive report in which the IAEA concluded that the discharge conforms to international safety standards, countries in a broad range of regions, including Europe, the United States, Asia and Oceania, and South America, have expressed their support and appreciation. At international conferences, such as the NPT Review Conference, which concerns nuclear non-proliferation, many countries, including Germany, the Czech Republic, Spain, France, Italy, the United Kingdom, Belgium, and Malaysia have issued statements of understanding and support for the efforts made by Japan and the IAEA. A great many countries, including the United States, Canada, Australia, New Zealand, and Paraguay, have expressed their understanding and support. Japan will continue to provide explanations to the international community in a transparent manner.
Japan will also continue to provide China with information based on scientific evidence. I would like to call on China to appropriately discuss and think about this matter based on scientific evidence, and for my part, I will use various opportunities, including international conferences, to provide information. The government will strongly call for the immediate repeal of the import restriction measure against Japanese food products once again.
Discharge of ALPS treated water
Q: Earlier, there was a question about this, but let me ask you once again about the discharge of ALPS treated water into the sea. Following China’s ban on all imports of Japanese fishery products, Russia, which is also a BRICS member, announced an intention to expand exports to China. As shown by the expression of concern by Pacific island countries as well, the impact of China’s announcement of opposition to the discharge of treated water into the sea is spreading.
Going forward, can you definitely say that there is no possibility that BRICS, to which six countries, mainly Middle East oil-producing countries, have joined as new members, will reduce or halt energy resource exports to Japan? Is it not conceivable that it will suit national interests to halt the discharge into the sea, even temporarily?
A: I would like to mention two points regarding this. The first is support for the people involved in fisheries. There are support measures using funds totaling 80 billion yen, including funds worth 30 billion yen and 50 billion yen each. The Ministry of Agriculture, Forestry and Fisheries (MAFF) is now considering various forms of support, including for processing industries. In terms of economic structures, the value of products that are exported to Europe and the United States after being exported to China and processed there is fairly high, so the possibility of processing products in Japan is under consideration. As for export destinations, MAFF and METI will cooperate with each other in considering measures to deal with this matter, including exporting to other regions and countries, and, of course, all ministries and agencies will continue to make efforts to stimulate domestic consumption.
Around the beginning of this year, I visited countries in the Middle East, and each time I attended energy ministers’ meetings, I reaffirmed cooperation with relevant ministers of Saudi Arabia, the UAE and other countries. The relationship between the Middle East and Japan is very deep. There have been great expectations, both historically and now, for Japanese technology, human resources and investment, particularly at a time when decarbonization is proceeding in the long term. Therefore, in order to prevent the spread of such international moves, Japan will continue to cooperate with the international community, and like-minded and allied countries including the G-7.
At the NPT meeting and the G20 energy ministers’ meeting, we carefully explained Japan’s efforts. As I mentioned earlier, the efforts made by Japan and the IAEA received support from many countries at the NPT meeting, so we will continue to provide explanations while continuing to appropriately present scientific evidence to the international community in a highly transparent manner.