Press Conference by Minister Saito (Excerpt)

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

11:19 to 11:39 a.m.
Friday, August 30, 2024
Press Conference Room, METI Main Building

Opening Remarks

At the beginning, I would like to mention three points.

Joint Sessions of the Inter-Ministerial Council for Contaminated Water, Treated Water and Decommissioning Issues and the Inter-Ministerial Council for Steady Implementation of the Basic Policy on handling ALPS Treated Water Held

First: today, the Inter-Ministerial Council for Contaminated Water, Treated Water and Decommissioning Issues and the Inter-Ministerial Council for Steady Implementation of the Basic Policy on handling ALPS Treated Water were jointly convened.

At the sessions, we affirmed the status of implementation of the basic policy on handling ALPS treated water and the direction of future measures. At the same time, we affirmed the progress made in the decommissioning work at Tokyo Electric Power’s Fukushima Daiichi Nuclear Power Station (FDNPS).

Regarding the discharge of ALPS treated water, we reaffirmed the policy indicated at the same meetings last year—that the government will assume full responsibility for handling ALPS treated water until its completion.

Moreover, with respect to necessary measures, such as support for the maintenance of livelihoods for those who are engaged in the fishery industry, expanding domestic consumption, and developing overseas sales channels, Prime Minister Kishida stated that the government will make sure to support the fishery industry across the nation by steadily implementing those measures, including economic measures that the government aims to work out in autumn.

The Ministry of Economy, Trade and Industry will also dedicate its full efforts to measures to support the maintenance of livelihoods for those who are engaged in the fishery industry, including the Protection of the Fishery Industry package.

Price Negotiation Promotion Month

The second point. September is a designated Price Negotiation Promotion Month. Now that a high rate of wage increase has been realized, achieving price pass-through in entire supply chains is the critical key to shifting the Japanese economy from 30 years of stagnation to a new stage for the economy.

I would like to call on order-placing companies to respond to supplier companies’ requests for price pass-through in order to support the realization of wage hikes at supplier companies and investment by them and to strengthen entire supply chains.

In particular, it will be good if order-placing companies encourage their suppliers to conduct negotiations with sub-suppliers and realize price pass-throughs so that the ripples of these price pass-throughs can reach all ends of the supply chain.

I hope that small and medium-size enterprises (SMEs) on the supplier side seize this moment, when price pass-through is being promoted on a society-wide basis, to request price negotiation without hesitation. We will release a video message to request business operators to respond to price negotiations and the pass-through; we recommend SMEs to watch it.

The Small and Medium Enterprise Agency website contains a leaflet summarizing the key points regarding price negotiation by suppliers and the guidelines concerning labor cost useful for negotiation. We hope SMEs make use of this.

Revision of the M&A Guidelines for SMEs

Third, from the viewpoint of appropriately promoting merger and acquisition (M&A) activities by SMEs, today we will publish the revised M&A Guidelines for SMEs following discussions under the Small and Medium Enterprise Agency’s expert council. In the light of acts of misconduct during M&A deals by SMEs concerning business owner guarantees, the revised guidelines stipulate specific responses that the intermediary agencies and financial advisors should take.

In addition, to assure the quality of assistance provided by intermediary agencies and financial advisors, the revised guidelines describe the specifics of regulations concerning sales activities and advertising by the intermediary agencies and financial advisors along with provisions prohibiting them from being involved, such as conflicts of interest.

It is also stipulated that in cases of violation of the guidelines, registered organizations under the M&A Support Organization Registration System, which are required to comply with the guidelines, may be subject not only to the revocation of registration but also have their business names made public, depending on the nature of the case. Through those revisions, we will ensure the effectiveness of the guidelines.

Furthermore, in addition to publishing the revised guidelines, today we have published the fee structures of registered organizations under the M&A Support Organization Registration System to make the fee structures that intermediary agencies and financial advisors charge to their users more transparent.

Through this disclosure, we would like to stimulate competition between support organizations by providing transparency over M&A-related fees. I hope that SMEs considering carrying out M&As will use this information when selecting support organizations from which they can receive assistance.

We will promote the development of a sound environment in the M&A market for SMEs and the improvement of the quality of assistance provided by support organizations through the dissemination of the revised guidelines.

The staff in charge will provide you with further details later.
I will end my remarks here.

Question-and-Answer Session

FY2025 budget requests and tax system requests

Q: I would like to ask you about the budget requests and tax system requests for the next fiscal year, for which today is the submission deadline. Recently, interest rates have entered a rising phase, and the current situation appears to be considerably different from the situation of last year and earlier. I would like to know what points and what goals you have devoted particular efforts to in this environment.

A: A positive sea change is arising because of the bold industrial and economic policies implemented in recent years. On the other hand, international competition in terms of industrial policy is intensifying as other countries have made a dramatic shift to a domestic industry first approach, and Japan cannot afford to lose in this competition. In this situation, it is important to secure the ongoing momentum of domestic investment and wage increases and accelerate economic growth. We have made the latest budget and tax system requests from that perspective.

Specifically, in addition to supporting the development of innovative technologies in growth areas, we will provide full-fledged support for capital investment for the world’s first market launch of an all-solid-state battery, which is regarded as important amid the intensifying global Electric Vehicle (EV) competition, and the perovskite solar cell, which has been developed in Japan.

Regarding Artificial Intelligence (AI) and semiconductors, we have made item requests with a view to future economic measures. We will also develop new legislation, not to mention our implementing of budget measures to promote investment for research and development and mass production over multiple years on a large scale and strategically.

In addition, for SMEs, which account for 70% of employment, we will support capital investment for productivity improvement, business succession and M&As intended to pass human resources and technologies on to future generations, exports, and overseas expansion.

Moreover, while promoting the decommissioning of the Fukushima Daiichi Nuclear Power Station and the reconstruction of Fukushima, we will also make requests intended to ensure preparations for the Expo 2025 Osaka, Kansai. At this moment, when interest rates and prices are rising, it is important for the government to come to the fore and secure the momentum of wage increases and investment, so we will actively implement industrial policies not only through the latest budget and tax system requests but also by preparing future economic measures and developing the necessary legislation in a comprehensive manner.

Investment in Rapidus by the government

Q: I would like to ask you about the semiconductor company Rapidus Corporation. Regarding the submission of a bill that would enable investment by the government, you remarked yesterday that the bill will be submitted as early as possible. Please tell me once again about the need to submit the bill.

A: As I commented in a TV program, it is not factual at the moment that the government has decided to invest in Rapidus. In order to continuously expand domestic investment in the fields of AI and semiconductors, the Basic Policy on Economic and Fiscal Management and Reform 2024 states that the government will support intensive investment in those fields, including investment for mass production and research and development, over multiple years on a large scale and systematically. It also states that in doing so, the government will examine the necessary legislative measures for mass production of next-generation semiconductors and also consider the diversification of methods of support, including increased use of necessary investment and loans.

Therefore, we are deliberating based on that policy. Although it is still too early to provide concrete answers regarding the content of the bill and the timing of its submission, we will deliberate on it with a view to realizing an early submission to the Diet in time for Rapidus to achieve the goal of starting mass production in 2027.