The Office of Commercial Affairs,
Royal Thai Embassy in Tokyo, Japan
Govt Unit Lists 40 Deregulation Areas
TOKYO (Nikkei)--The Government Revitalization Unit has compiled a list of roughly 40 issues to be studied under the government's deregulation and administrative reform initiative. The list, to include such new economy- and finance-related regulations as insider-trading rules, will be presented to the subcommittee on deregulation and administrative reform Thursday afternoon.
Concrete proposals for each item will be drafted by the end of this fiscal year. Under current law, acompany is charged with insider trading if it carelessly repurchases its own stock before announcing its decision to dissolve an inactive subsidiary. The Financial Services Agency will list such trivial acts that constitute violations of insider-trading rules, and by the end of this fiscal year will begin to consider whether these acts can be excluded from material nonpublic information.
Another topic to be discussed is whether to make permanent a temporary measure through 2013 not to tax nonresident investors for interest on their corporate bondholdings. The measure was instituted to reinvigorate Japan's corporate bond market.
Other topics will include easing regulations governing the use of domestic airports by individuals and private companies, as well as creating a rice futures market. The roughly 40 topics fall into four categories: the environment, health and nursing care, economic strategy and finance, and revitalizing the farming sector and regional economies.
Source:The Nikkei Oct. 21,2010
Japan Firms Handling More Water-Related Work In Emerging Markets
TOKYO (Nikkei)--Japanese companies that design sewer treatment plants and other water-related facilities have been receiving a growing number of orders from emerging countries. Given that almost all of Japan is already covered by water and sewage systems, the firms hope to ramp up operations in emerging markets, where the populations are growing and factories are being built in cities.
Nippon Jogesuido Sekkei Co. (2325), the largest domestic player specializing in this field, received an order from Bangladesh last month to consult on efforts to improve collection of water fees. The previous month, it signed a deal to design and oversee construction of a sewage treatment plant in Costa Rica. And in May, it received an order for water purification plant repair in Basra, the largest city in southern Iraq.
The company has been increasing overseas offices, including one established in Oman in 2006. It projects 5 billion yen in overseas orders for the current fiscal year through Dec. 31, up 20% from the previous year. And foreign markets are expected to account for a record 30% of overall sales.
Nippon Koei Co. (1954) received an order this fiscal year to design sewer and drainage equipment for Hai Phong, a large city in northern Vietnam. It will also supervise construction of water pumps and pipes in the southeastern section of the country.
The firm's overseas orders for the design and construction management of water and sewer facilities are forecast to grow 14% to almost 2 billion yen on a parent-only basis for the current fiscal year through March.
CTI Engineering Co. (9621) was contracted last month to design waterworks in Ulan Bator, the capital of Mongolia. Its orders from abroad are expected to more than double to 360 million yen for the current fiscal year through Dec. 31.
Most of these orders received by Japanese firms are through Japan's official development assistance program. But the amount of yen loans provided by the government for water and sewage construction declined by about 20% to 181 billion yen in fiscal 2009. With the government curbing spending as its finances worsen, the ability of Japanese firms to increase orders will depend on their efforts to seek out demand outside of government channels.
Source:The Nikkei Oct. 19,2010
Yen's Trade-Weighted Value Soars To All-Time High
TOKYO (Nikkei)--The yen's value reached a record high Wednesday when measured by a trade-weighted index linked to a basket of currencies as expectations for an additional monetary easing in the U.S. continue to push up the Japanese currency.
The index, which is based on a reading of 100 in 2005, reached 125.762, topping the 125.226 marked on Jan. 26, 2009. The number suggests that the yen is strengthening against the yuan and won -- the currencies of rival exporting countries. Should this trend continue, Japanese exporters could face a debilitating blow to its earnings.
Some market analysts see the uptrend persisting. "The dollar may weaken further leading up to the Federal Open Market Committee meeting in November," says Shuji Shirota at Citibank Japan Ltd.
And Daisuke Karakama of Mizuho Corporate Bank says, "The euro may decline after being bought excessively, causing the yen to rise."
Source:The Nikkei Oct. 21,2010
Govt Weighs Tax Breaks To Attract Foreign Companies
TOKYO (Nikkei)--To convince more foreign firms to set up operations in Japan, the government is considering plans to offer corporate tax breaks that would lower their effective rates to 25-30%. This comes alongside government and ruling bloc discussions toward reducing the current effective corporate tax rate of 40% by around 5 percentage points as a way to revitalize business activity.
By offering an even larger break to overseas companies, bringing the rate closer to those in other major markets, the government hopes to woo them to Japan The growth strategy that the government unveiled in June places a priority on encouraging foreign firms to invest here. A council tasked with promoting investment is expected to unveil comprehensive measures in November.
Corporate tax breaks are set to be a key component of these measures. Under a proposed plan, overseas companies that set up R&D operations and other core bases in Japan would be eligible for an effective corporate tax rate of 25-30% for a period of around five years. Firms boasting advanced technologies in the medical and biotech fields, among others, are expected to qualify.
The specifics have yet to be fleshed out, including whether to grant the tax breaks to foreign companies that acquire Japanese businesses. The government also plans to offer subsidies that firms can use to lease office space and acquire property. And by easing visa requirements for highly skilled workers, Japan will strive to create a favorable working environment for foreigners.
Competition among Asian countries is heating up as governments seek to attract investments from abroad. South Korea currently offers income tax breaks to foreign engineers, while China has established special tax incentives to manufacturers holding advanced technologies.
By contrast, Japan has seen an exodus of overseas companies. According to a Ministry of Economy, Trade and Industry survey, 125 foreign firms exited Japan in fiscal 2008.
Source:The Nikkei Oct. 21,2010
Japan, Vietnam To Cooperate In Rare-Earth Development
TOKYO (Nikkei)--The Japanese and Vietnamese governments will join hands in the development of rare-earth metals, with Japan providing exploration and smelting technologies for mining in the Southeast Asian country.
Japan wants to diversify sources of rare-earth metals as its heavy dependence on China puts the nation at the mercy of Chinese policymakers.
China accounts for more than 90% of global output of rare-earth metals, which are essential for manufacturing high-tech products. It suspended rare-earth exports to Japan after Japanese authorities arrested the captain of a Chinese fishing boat that collided with Japan Coast Guard patrol vessels in waters near the disputed Senkaku islands this September. Japan has learned the hard way that China can play the rare-earth card in diplomatic rows.
Vietnam's rare-earth reserves are believed to include cerium and dysprosium, which are used for making LCD panels and hybrid vehicles.
Sumitomo Corp. (8053) has launched a feasibility study on a mine in the northern Vietnamese province of Yen Bai. The major trading house plans to begin exporting from this mine to Japan as early as 2013. Production at the mine will likely be handled by a joint venture with local companies and the Japan Oil, Gas and Metals National Corp.
Meanwhile, Toyota Tsusho Corp. (8015) and Sojitz Corp. (2768) are working with the Vietnam National Coal, Mineral Industries Holding Corp., or Vinacomin, preparing for the development of a rare-earth mine in Vietnam. The project will likely start moving along once the two countries sign the cooperation agreement.
The projects of Sumitomo and the Toyota Tsusho-Sojitz alliance will yield at least 7,000 tons a year of rare-earth metals -- the equivalent of more than 20% of demand in Japan. Initial investment for the two projects is estimated at roughly 200 million dollars.
Kan will arrive in Hanoi on Oct. 28 for a summit meeting of the Association of Southeast Asian Nations. Following that, Kan will begin meeting with top Vietnamese officials Oct. 31.
In their meeting, Kan and Dung will agree to create a framework for vice-ministerial-level talks in the areas of foreign affairs and defense.
They are also expected to agree on cooperation in the construction of nuclear power plants and a high-speed rail system in Vietnam and that country's satellite-launching business, as well as yen loans for infrastructure projects there.
In addition, the two leaders will likely reach a basic agreement on a nuclear power cooperation, paving the way for the exportation of nuclear power equipment from Japan.
For Vietnam, strengthening cooperation with Japan will bring more than economic benefits. The Southeast Asian country, which has its own territorial dispute with China over a group of islands, likely sees closer ties with Japan as a buffer against the Chinese military's growing might in the South China Sea.
Source:The Nikkei Oct. 22,2010
70% Of Japan Firms In Asia, Oceania To Report Profit In FY10
TOKYO (Nikkei)--About 70% of Japanese companies with operations in the Asia-Oceania region are expected to post an operating profit for fiscal 2010, according to an industry survey. The survey released Thursday by the Japan External Trade Organization, or JETRO, also showed that more than 60% of the respondents expect their operations to expand over the next year or two.
The results highlight how Asia has helped drive a marked recovery in their earnings. On management challenges, more than half of the respondents listed higher wages and intensifying competition. Wages rose 14.2% in Vietnam, 13% in Myanmar and 12.1% in China. They also climbed more than 10% in three other nations.
The survey targeted Japanese companies operating in 18 Asian and Oceanian economies, with about 3,500 firms responding.
Source:The Nikkei Oct. 22,2010
Keidanren Calls On Govt To Join TPP Talks
TOKYO (Kyodo)--The Japan Business Federation urged the government Thursday to offer to participate in the Trans-Pacific Partnership free trade talks at an annual summit of the Asia-Pacific Economic Cooperation forum in Yokohama next month.
''If the government loses the opportunity to make the offer, Japan may lag far behind other countries in developing an international business environment,'' the largest Japanese business lobby known as Nippon Keidanren said in an emergency proposal to the government.
Other major Asia-Pacific countries such as the United States and Australia have offered to join the TPP free trade agreement that has originally been signed by Brunei, Chile, New Zealand and Singapore.
Japan should promptly take part in the talks to make a strong case for its stance on farm product trade and positively engage in making trade and investment rules under the proposed TPP pact, the proposal said.
The Nippon Keidanren proposal also asked the government to boost the competitiveness of Japan's agriculture through structural reforms to achieve both the enhancement of domestic food supply infrastructure and the promotion of trade liberalization.
Tadashi Okamura, chairman of the Japan Chamber of Commerce and Industry, also called on the government Thursday to promptly take part in the TPP talks. Given its cooperation with the Association of Southeast Asian Nations, Japan should join the TPP as soon as possible, he told a press conference.
Source: The Nikkei October 21,2010
Haneda Opens New Intl Terminal
TOKYO (Nikkei)--Tokyo's Haneda airport opened its new international terminal building and fourth runway Thursday, marking the first step toward its goal of becoming a major international hub.
Earlier the same day, the airport welcomed its first international flight to the new terminal.
Previously, Haneda only offered short-distance chartered flights for four routes to and from Beijing and other East Asian cities. But starting Oct. 31, the airport will resume regular international flights for the first time in 32 years, with 17 routes linking Tokyo with San Francisco, Hawaii, Paris, Singapore and other major cities.
Haneda is just 15km from the heart of Tokyo, compared with more than 50km for Narita International Airport, the capital's main international gateway. The expansion of Haneda, which also offers 48 domestic routes, is expected to enhance the convenience of vacationers and business travelers.
According to an estimate by the Land Ministry, the airport will generate economic effects worth about 1 trillion yen annually, as its expansion will attract more overseas visitors.
Source:The Nikkei Oct. 21,2010
Japan Warms To U.S.-Led Free Trade Initiative
TOKYO (Nikkei)--A growing number of senior Japanese government officials, including Prime Minister Naoto Kan, have begun calling on Japan to join a U.S.-led Asia-Pacific free trade initiative, as the concept has gained traction among countries in the region.
Participation in the Trans-Pacific Partnership (TPP) would require Japan to make significant concessions, including further opening its agricultural market to imports. Despite this, Tokyo is eager to get on board, worried that it might fall further behind other countries in the region in signing free trade agreements if the initiative, which aims to boost trade by slashing tariff barriers, goes ahead without Japan.
Joining TPP could also help reduce Japan's growing trade dependence on China, which Beijing's recent halt in shipments of rare-earth elements has highlighted, by drawing it closer to the U.S.
The U.S. initiative grew out a free trade pact concluded in 2006 by Singapore, New Zealand, Chile and Brunei. The pact calls on members to eliminate all import tariffs, in principle. Very few exemptions have been granted, requiring Chile, for instance, scrap tariffs on key agricultural goods like dairy products.
The U.S. and Australia in 2008 expressed hopes of joining the free trade zone, and a total nine countries, including the four original members, launched talks earlier this year to expand the zone. In addition, the leaders of Canada, South Korea and Mexico have indicated willingness to join the talks.
The initiative "would enable Japan to set trading rules quickly with a relatively small number of countries," said a trade official. If the nine countries, including the U.S., agree to eliminate tariffs, end export restrictions and ensure free movement of labor, they will create a large bloc of countries committed to a comprehensive economic partnership.
The U.S. hopes the initiative will help it profit from fast-growing economies in Asia. China, on the other hand, wants to do the same by bolstering trade ties with ASEAN countries, because a trading bloc centering around ASEAN would shut the U.S. out.
Until recently, Japan has stressed the importance of expanding trade through APEC, a loosely knit forum of mostly Asian economies, because agreements among the members are largely symbolic.
But if an exclusive Asia-Pacific free trade zone is formed without Japanese participation, Japan will be handicapped as it fights for a share of that rapidly growing market.
How much is it worth?
The Kan government is also looking to shore up ties with Washington, particularly after Beijing halted shipments of rare earths to Japan in September, underscoring the country's growing trade dependence on China. That dependence gives Beijing economic leverage in any future disputes with Tokyo and is something Kan wants to reduce. Japan hopes to counter China's rising influence by further strengthening its trade ties with the U.S.
The Ministry of Economy, Trade and Industry estimates that taking part in TPP would raise Japan's gross domestic product by 10 trillion yen by boosting Japanese exports to member countries. The Cabinet Office's more modest estimate puts the value of a pact at 3 trillion yen. It is hard to tell which figure is closer to reality, but Japanese manufacturers are eager to see TPP go forward regardless.
But Japan faces high hurdles in joining the prospective bloc because it would have to fully open its agricultural markets to imports in the teeth of fierce domestic opposition. The Agriculture Ministry has raised the alarm, saying full trade liberalization would cut the value of domestic agricultural production in half, to 4 trillion yen, dealing a body blow to farm households.
The 11 economic partnership agreements (EPAs) that Japan has concluded so far exempt such agricultural products as rice and wheat from tariff reductions. But Japan is unlikely to get a carve-out under TPP. "Japan could be prevented from joining" if it asks for such special treatment, said a high-ranking official at the Foreign Ministry.
Prime Minister Kan expressed a strong desire to see Japan join the prospective free trade zone when he met with his cabinet members and senior Democratic Party of Japan lawmakers on Sunday, reassuring them that the country will be able to achieve the twin goals of fully opening its agricultural markets to imports and ensuring food security within 10 years.
Kan apparently wants to spell out Tokyo's intention to begin TPP talks with other countries when the government drafts its EPA guidelines in early November.
Fearing that taking part in TPP will seriously damage Japan's farming sector, more than 100 lawmakers have formed a caucus opposing Kan's policy. Many of these lawmakers have close ties to DPJ heavyweight Ichiro Ozawa, who recently challenged Kan for the party leadership, raising the possibility that a rift over trade policy will intensify strife within the ruling party.
Source:The Nikkei Oct. 25,2010
Source : http://www.depthai.go.th