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Press Conference by Minister Nishimura (Excerpt)

*Note: This is a provisional translation for reference purposes only.

8:39-8:50 a.m.
Tuesday, November 28, 2023
Cafeteria of the House of Representatives


Opening Remarks

Results of the follow-up survey regarding Price Negotiation Promotion Month

 I will announce the results of the survey regarding the most recent Price Negotiation Promotion Month of September on a preliminary basis.
  First, Panel 1 shows the results concerning price negotiations. The percentage of companies that said they held negotiations in response to order-placing companies’ proposals almost doubled, increasing 6.7 percentage points to 14.4%. In addition, the percentage of companies that wished to hold negotiations but were unable to do so declined nearly 10 percentage points. Furthermore, the percentage of companies that considered price negotiations to be unnecessary increased. Given these three points, we can presume that a mood favorable for price negotiations has gradually been developed.
  On the other hand, there are two problems. One is shown here. There are companies that said price negotiations were unnecessary despite cost increases. This means that there are still companies that remain unable to hold price negotiations despite their wish to do so because of their inability to prepare reference materials necessary for negotiations.
  On the whole, the percentage of companies that did not hold price negotiations declined while the percentage of companies that considered price negotiations to be unnecessary rose due to no cost increase being incurred. Therefore, progress has been made in promoting negotiations and a favorable mood has been developed, but some companies were unable to hold negotiations for reasons such as a lack of preparations.
  The percentage of companies that realized price pass-through is 45.7%, down slightly—almost flat. In addition, the percentage of companies that were unable to realize price pass-through at all or were forced to reduce prices decreased slightly. While those points indicate that the price pass-through movement is gradually spreading, it is important to further raise the price pass-through rate.
  Panel 2 shows the percentages regarding price negotiations and price pass-through by industry. The percentage of companies that held price negotiations but were unable to realize price pass-through at all was very high—an average of 11% in all industries. Particularly, the percentage of companies that were unable to realize price pass-through was higher than 20%—nearly 30%—in the telecommunications, broadcasting content, and trucking industries. This presumably indicates that companies with a high ratio of labor cost and industries with multiple layers of subcontractors, many of which are self-employed businesses, are facing structural challenges.
  Going forward, our inspectors who monitor subcontracting businesses will conduct intensive surveys and interviews, mainly with those industries. We would like to promote thorough efforts to secure the fairness of transactions on an industry-wide basis. Given the rising labor costs and given the need for wage hikes, regarding price pass-through, METI will widely raise awareness of the guidelines concerning labor costs that the Cabinet Secretariat and the Japan Fair Trade Commission will publish in the near future. We will make sure to promote and spread the use of the guidelines in actual transactions.
Therefore, we are examining the survey results closely, and in January next year, we plan to announce a list of evaluation ratings for order-placing companies. The top management of companies with poor evaluation results will be given instructions and advice in the names of the ministers who have jurisdiction over the relevant industries in consideration of the outcomes of the surveys conducted by subcontracting business inspectors.
We would also like to encourage the use of collective agreements as a means to increase negotiating power, for example, through business cooperatives. That was pointed out in the Diet. Individual companies find it difficult to conduct negotiations on their own, so they will be encouraged to engage in negotiations collectively.
In any case, for small and medium-sized enterprises (SMEs) to overcome labor shortages, they need to raise wages. To do that, they should make thorough efforts to realize price pass-through. We plan to announce the results of the survey on the company-by-company status of transactions in January next year, and subcontracting business inspectors will hold further interviews in cooperation with the Fair Trade Commission. We would like to promote those efforts so that progress can be made in price pass-through.
The guidelines concerning labor cost negotiations will also be published next spring. We hope that SMEs will not hesitate to propose price negotiation, and we will provide full support.

Question-and-Answer Session


Q: At the end of this month, COP28 will start in Dubai. Please tell me about your opinions and expectations regarding how to accelerate decarbonization initiatives amid the severe and diverse energy circumstances. Please also give me your view on new financing measures, including the establishment of a fund that was decided last year.

A: This is a milestone year when the so-called global stocktake is conducted—the first year when the status of climate action initiatives is examined. From now on, that will be conducted once every five years, and the first global stocktake will take place this year. Japan will emphasize the importance of simultaneously achieving emissions reduction, economic growth, and a stable energy supply, despite the very unstable international situation, as you mentioned just now. In relation to that, we would also like to firmly communicate Japan’s commitment to contribute to initiatives for promoting decarbonization globally under diverse paths that are suited to the circumstances of individual countries.
  In particular, regarding fast-growing Asian countries, which are said to have the greatest growth potential in the world, Japan will support them in realizing an energy transition under diverse and realistic paths that are suited to each country’s circumstances by making use of all sorts of technologies, including those related to energy efficiency improvement, renewable energy, biotechnology, hydrogen, ammonium, and CCUS.
  Last evening, Japan concluded a memorandum of understanding (MOU) with Viet Nam on energy transition cooperation. Japan has already concluded similar MOUs with various other countries, such as Thailand, Indonesia, and Lao PDR, and we intend to provide firm support for Asian countries’ energy transition.
  COP’s president is Minister Sultan Al Jaber of the UAE, who I may call an ally as we communicate with each other almost on a daily basis. Because the UAE is a gas- and oil-producing country, it is eagerly engaging in research and development, including the development of new technology and energy. In that sense, I expect President Al Jaber to exercise leadership at the conference. As he is upholding the motto of taking actions and delivering results, I am looking forward to concrete outcomes that will move us toward global carbon neutrality through COP, and Japan would like to make a steady contribution as well.

Last updated:2023-12-06