TOKYO (Nikkei)--The Ministry of Economy, Trade and Industry hopes to slash the corporate tax rate to 28.5% for five years for foreign businesses, part of a broader plan to attract R&D sites and supervisory units for the Asian region.
The effective corporate tax rate is already slated to be cut by 5 percentage points to 35.64% under tax code revisions for fiscal 2011, but eligible firms will enjoy an even lower tax rate for the first five years under the METI proposal. Plans also call for allowing individuals to defer payment of income taxes on equity warrants issued by overseas parent companies. In addition, the ministry seeks to cut patent-related fees by half.
Under the proposed plan, screening for residency permits will be completed in roughly 10 days for foreign workers at eligible firms, instead of the usual 30 days. And the waiting period to establish a new firm after submitting an application to do so will be shortened to a maximum of two weeks from a maximum of 30 days.
METI is securing a combined 2.5 billion yen under the fiscal 2010 supplementary budget and the proposed budget for fiscal 2011 for grants to cover up-front investment costs. The ministry hopes that its all-around program will lead to the establishment of 15 R&D locations and an equal number of Asian supervisory units. It plans to submit a bill to the Diet that will spell out eligibility requirements for its program, such as a condition that annual R&D expenses total at least 100 million yen.
Foreign direct investment in Japan equals 3.6% of the nation's gross domestic product, lower than South Korea's 10.5% and 15.8% in the U.S. Experts have pointed out that the high cost of operating businesses in Japan, including the heavy corporate tax, and intricate regulations have kept foreign firms away.
Source:The Nikkei Jan. 6,2011
The government's plan to remove more than 400 made-in-China items from a preferential tariff list came after fierce criticism that a nation whose products increasingly compete with this country's goods should not receive favorable customs treatment. The 400 products, however, are only a fraction of the total number of items imported from China, meaning the issue is not likely to disappear.
Under the current system, to remove an item from the preferential tariff list, the government must prove preferential tariffs seriously damage domestic industries. To get around this roadblock, the government hopes to abolish this condition in next year's ordinary Diet session.
In its place, the government will propose a rule that if objective criteria are fulfilled, preferential tariffs on an item could be removed. If, for example, an item from a country has a 50 percent or higher market share on average for three years, the government could remove the item from the list.
Consent of the exporting country would not be necessary to take an item off the list. In fiscal 2009, Japan imported 1.6 trillion yen worth of products under the preferential tariff system, with Chinese goods accounting for 86 percent of the total.
Many people in the government have said it is strange for a country with such a huge influence on the global economy to dominate a system aimed at helping developing countries. This view has spurred the effort to revamp the preferential tariff system. The Finance Ministry estimates changing the system would cut China's exports to Japan under the preferential tariff system by hundreds of billions of yen.
However, many Japanese firms rely heavily on imported Chinese products to remain competitive.
The retail industry is especially worried. "We'll try to keep prices from rising by negotiating with suppliers," an official from a supermarket chain said. Nonetheless, a hike in what consumers must pay for certain products is likely inevitable.
Also, some Japanese firms have set up production facilities in China hoping to sell their products in Japan. If the companies lose preferential tariff treatment, the advantage of having operations in China would be reduced. But as the increased tariffs will only be several percentage points for most products, the Economy, Trade and Industry Ministry predicted the effect on Japanese companies would be limited.
About 3,100 Chinese imports will remain subject to preferential tariffs. Because the application of preferential tariffs is based on a country's per capita income, China is categorized as a developing country. The preferential tariff system has a subcategory targeting a wider area of products from the least developed countries. Some government officials have said preferential tariffs for countries other than the least developed should be scaled back.
Source:The Yomiuri Newspaper,Dec. 30, 2010
The Agriculture, Forestry and Fisheries Ministry has decided to offer 1 million yen annual grants to people who start farming after migrating from metropolitan areas to rural ones, the ministry said Wednesday. Under the "U-turn, I-turn subsidy" program, the government aims to utilize uncultivated farmland and revitalize farming, which has been strained by declining numbers and advancing age.
"U-turn" is a name given to the phenomenon of people returning from metropolitan regions to their hometowns, and "I-turn" is the phenomenon of city-born people moving to rural areas in search of work.
The ministry plans to work out details of the program at the government's headquarters to promote the rehabilitation of the food, agriculture, forestry and fishery industries, and start a model project as early as fiscal 2012.
The government would provide 1 million yen annual grants for five years to farm-born people who return to their hometowns to take over their family farms and city-bred people who take up farmwork after leaving a company job, according to the ministry.
The government will likely allow new graduates to apply for the program as part of efforts to attract a wide range of people. The ministry will also likely open the program to those entering fishery and forestry industries, which are also expected to face manpower shortages, it said. The ministry expects that up to 10,000 people a year will join the program, and estimates the annual budget will come to about 50 billion yen.
The government thinks strengthening the farm workforce and making agricultural operations more efficient is necessary to promote trade liberalization in the form of bilateral economic partnership agreements or even the multilateral Trans-Pacific Partnership. The government plans to decide around June whether Japan will join the TPP.
With the project to be considered part of agricultural administration reform, the ministry plans to seek the understanding of financial authorities and the public amid strained financial circumstances.
In another effort to revitalize local areas, the government also plans to offer initial investment loans to help farm households set up minshuku bed-and-breakfast accommodations to attract vacationing city dwellers.
Source:The Yomiuri Shimbun Jan. 6, 2011
TOKYO (Nikkei)--A public-private partnership set up to revitalize industry aims to supply up to 130 billion yen to eco-community development projects overseas involving Japanese firms, The Nikkei learned Wednesday.
By providing funds at the early stage of an eco-city project, Innovation Network Corp. of Japan aims to create opportunities for Japanese firms to win orders down the road to supply and manage green infrastructure equipment and facilities overseas. INCJ hopes to recoup its investment by selling its stake after a project gets on track, an estimated five to seven years later.
To begin, INCJ plans to provide funds for a smart-city project in India. A consortium including Mitsubishi Heavy Industries Ltd., Mitsubishi Corp. and Electric Power Development Co. is scheduled to ink this month a basic agreement with the Indian government and the state government of Gujarat for the establishment of a special-purpose company to spearhead the green city project.
INCJ plans to supply 10 billion yen for the SPC, providing 30% of the capitalization. The SPC, which could be set up as early as the summer, will oversee planning for solar power energy facilities as well as water-processing and urban transportation systems in Gujarat. It will eventually become a vehicle for the project's orders.
INCJ aims to subsequently broaden its investment, especially as more Japanese firms look to participate in overseas infrastructure projects. For instance, such companies as Toshiba Corp., Hitachi Ltd. and JGC Corp. are also exploring projects in India. With Japanese companies also pursuing projects in China, Indonesia and Vietnam, INCJ will supply funding when it determines that such initiatives can be realized.
Smart-community development is unique in that companies and others are involved from the planning stage. Development plans requiring advanced technologies therefore provide a potential boon for Japanese companies seeking to supply their expertise.
The Ministry of Economy, Trade and Industry has set aside a proposed 40 billion yen in funds within the fiscal investment and loan program for fiscal 2011 to fund INCJ's support for smart-community development abroad. INCJ will also raise funds through loans and other measures.
Source:The Nikkei Jan. 6, 2011
Prime Minister Naoto Kan said Wednesday night he will stake his political life on his ability to realize consumption tax reform. Commenting on his plan to tackle tax and social security reform as related issues, Kan said: "I may have to ask the public to bear a larger burden to some extent, but we have to create a secure society. I'm putting my political career on the line. I have the fortitude to see it through to the end."
Kan was speaking on a TV Asahi news program. At a New Year's press conference Tuesday, Kan said his government is ready to hold talks across party lines on overhauling the social security system and raising the consumption tax rate. The government expects to finalize its plans around June, Kan said.
Before the news program, Kan attended a meeting of the Japanese Trade Union Confederation (Rengo), the Japan Business Federation (Nippon Keidanren), the Japan Chamber of Commerce and Industry and the Japan Association of Corporate Executives in Tokyo. At that meeting, he called on senior officials of opposition parties to join the ruling Democratic Party of Japan in discussing a consumption tax increase.
"It's clear to everyone that we have to secure revenue sources to fund the social security system. I'm determined to start discussing this issue across party lines," Kan said at the meeting. In the news program, Kan also said he would reorganize the Cabinet and appoint DPJ executives before an ordinary Diet session convenes at the end of this month.
The Liberal Democratic Party and New Komeito said they would not join deliberations on tax hike issues at the coming Diet session unless Chief Cabinet Secretary Yoshito Sengoku and Land, Infrastructure, Transport and Tourism Minister Sumio Mabuchi--both censured by the House of Councillors last year--resign their posts.
The prime minister's remarks were read by some observers as an indication of his intention to replace Sengoku as chief cabinet secretary in the personnel reshuffle. Regarding former DPJ leader Ichiro Ozawa, Kan suggested he should resign as a lawmaker or leave the DPJ voluntarily if he is indicted on charges of violating the Political Funds Control Law. "Properly, a politician should decide how to behave by listening to the public. I believe he'll make a solid decision," Kan said.
Source: The Yomiuri Shimbun, Jan. 7, 2011
TOKYO (Nikkei)--The Ministry of Economy, Trade and Industry will launch testing of air-cooling technology that makes use of solar thermal power in the United Arab Emirates as early as this spring.
The trials will be conducted over a three-year period by Japan's New Energy and Industrial Technology Development Organization in partnership with an Abu Dhabi government organization.
Test equipment will be set up in a zero-emission community under development in Abu Dhabi since 2006. The cooling system uses heat gathered through sunlight-collecting mirrors to generate steam, then takes advantage of a heat transfer mechanism to cool the air.
METI will study the effectiveness of the technology in office buildings and the profitability of investment, earmarking as much as 3 billion yen. Japan seeks to promote its solar thermal power technologies in the Middle East and Africa, regions with strong direct sunlight.
Source: The Nikkei Jan. 4,2011
TOKYO (Nikkei)--The government will embark on a campaign to have Japanese technology adopted as international standards in strategic areas, including rail transport, human genetics, next-generation cars and appliances.
The Intellectual Property Strategy Headquarters, which is overseeing the effort, will form a public-private organization to propose common global standards and seek to steer international negotiations to Japan's advantage.
In the field of appliances, Japan will first take aim at standards for energy-saving models, making its case to the International Organization for Standardization and the International Electrotechnical Commission.
In conjunction with this effort, major appliance makers, including Panasonic Corp., Mitsubishi Electric Corp., Hitachi Ltd., Toshiba Corp. , Sony Corp. and Fujitsu Ltd., will form a consortium to promote Japanese standards. The Ministry of Economy, Trade and Industry's National Institute of Advanced Industrial Science and Technology will also take part.
METI and Transport Ministry officials will work with the Japan Automobile Manufacturers Association and other auto industry players to develop an action plan for advancing electric car standards, aiming to finish up around March.
In a Japanese-led initiative, the ISO is beginning to make progress on international standards for devices used in regenerative medicine involving induced pluripotent, or iPS, stem cells. At the IEC, discussions are under way on safety standards for LED light bulbs. The ISO and the IEC are both considering integrating performance and safety standards for lithium ion batteries.
In the U.S. and Europe as well as in Asian emerging markets, governments are leading the charge in the battle over whose standards will become the global norm.
Japanese electronics and appliance producers that made their designs public have seen South Korean and Chinese rivals steal away their market share with cheaper products in some cases. Some railroad industry firms, meanwhile, have not received recognition overseas despite clearing domestic safety standards that are among the highest in the world.
The government will work with the private sector to create a strategy for internationalizing Japanese standards.
Source: The Nikkei Jan. 5,2011
TOKYO (Nikkei)--The government will expand trade insurance coverage to protect exports of goods produced by Japanese firms' overseas units, The Nikkei learned Friday.
Trade insurance, which guards against risks that payments may become unrecoverable, currently covers only exports originating in Japan. But as more domestic companies shift production abroad, a growing number of transactions bypass Japan entirely and are ineligible for protection.
The government-backed Nippon Export and Investment Insurance and private-sector nonlife insurance firms will begin offering policies to safeguard such transactions. As the first deal under the new rules, the Singaporean unit of Mitsui Sumitomo Insurance Co., a member of MS&AD Insurance Group Holdings Inc., has inked a basic agreement with Denki Kagaku Kogyo KK to insure exports from Singapore to Colombia.
Nonlife insurers' overseas units will sell policies to Japanese manufacturers' foreign plants. The insurers will then obtain reinsurance coverage on those policies from Nippon Export and Investment Insurance, which can sell reinsurance only to foreign corporations and international organizations. It will charge the same premiums as it would for exports originating in Japan.
Electronics firms, automakers and machinery manufacturers have increased shipments from overseas bases, reflecting the globalization of production and distribution networks. In fiscal 2008, the value of such exports reached 55.88 trillion yen, or 80% of the value of shipments originating in Japan.
The percentage has steadily risen since hitting 50% in fiscal 1999.
Many Japanese manufacturers export value-added parts and semi-finished products to production bases abroad for final assembly and shipment to other markets. Such exports are expected to continue growing, especially as the manufacturers ramp up production capacity at facilities outside Japan.
The expansion of trade insurance coverage could have some drawbacks, including a hollowing out of domestic production as more output moves overseas. The government, however, believes that an increase in exports and production by overseas bases will help lift output in Japan, and that companies here could pocket higher dividends from their foreign units.
Source:The Nikkei Jan. 8,2011
TOKYO (Nikkei)--Corporate bankruptcies triggered by the yen's strength reached 56 cases last year, up from the 35 of 2009, according to data tabulated by Teikoku Databank Ltd.
The Japanese currency rose to a 15-year high against the dollar in 2010, eroding exporters' profits.
And in certain cases, importers were forced into bankruptcy after incurring hefty currency derivatives losses. For instance, some that had arranged to lock in fixed exchange rates were hit with losses after the yen appreciated beyond 85 against the greenback, leading to a cash crunch.
Many of these transactions were apparently set up before the 2008 eruption of the global financial crisis -- a time when the yen was weaker than 100 to the dollar. Even among companies still in business, many remain saddled with derivatives losses, observers say.
Source:The Nikkei Jan. 5,2011
Major consumer goods makers are trying to woo 20- to 40-something women into the bath. So they are coming out with bath additives that make a few promises - scents that will last longer, ingredients that will make the skin softer and an experience that will bring a little luxury to life.
Sales of Kao's Bub Exotic Spa were 30% higher than initially targeted
In September, market leader Kao Corp. launched Exotic Spa under its Bub brand. The bath cubes come in four scents, including a sandalwood fragrance it calls Mysterious Wood. Sales of a 12-cube box that goes for around 450 yen ($5.40) were slow at first because the record summer temperatures were still lingering. But sales have rapidly expanded since the mercury began receding, and a lot of the buyers are young women drawn in by the product's strong scents.
Sales between the start of October and mid-November were 30% higher than initially targeted. Yuki Nomura, brand manager of the bath additives group, said demand from consumers who want to relax in fragrant water has grown rapidly over the past several years. Kao now sells five Bub scent assortments whose sales from October to mid-November were up 20% over the same period a year earlier. The packages of assorted additives are Bub's top sellers.
A majority of bath additive buyers are people in their 50s and older. Young people busy with work and domestic chores are increasingly only taking showers. At the same time, a growing number of people want scented bath additives. To meet this demand, Kao has expanded the lineup of scents to more than 30. When they debuted in 1983, Bub bath additives came in only two fragrances - yuzu citrus and wood.
According to Kao, the percentage of people who like to soak in the bath for more than 20 minutes rose from 13% in 2005 to 16% in 2009. Among working women, the figure doubled, from 11% to 22%. Many of these bathing enthusiasts read magazines or massage their bodies while taking a bath.
Another recent Kao release, Micro Bub, which hit stores Oct. 9, is a powder, which sets it apart from other Bub additives. The powder produces carbon dioxide gas bubbles 10 times smaller than those of conventional additives. According to Kao, the tiny bubbles penetrate the skin more quickly and facilitate blood flow, warming hands and feet and alleviating dullness.
Micro Bub has gone over well with young women. Sales of a four-pack that goes for around 500 yen were 20% higher than projections through mid-November.
Famous hot springs
A new item in the Tabinoyado Bihadanoyu bath powder series by Kracie Home Products Ltd. has grown into an unexpectedly big hit.
When the company released Bihadanoyu on Sept. 21 with a free facial sheet, the first shipment of around 6,000 units immediately sold out. The gift attracted women who give themselves facials in the bath.
Tabinoyado has been on the market since 1986, and its customers are aging. The new item is meant to help Kracie Home Products reach out to potential customers who are in their 30s. A 12-pack goes for about 700 yen. The additive reproduces the alkaline levels of famous hot springs across Japan. The powder reputedly helps to remove dead skin cells and make the epidermis soft. It also contains fragrances that Kracie Home Products says produce the kind of relaxing effects demanded by today's young women. The maker says sales are in line with projections.
Bathclin Corp., meanwhile, completely renovated its namesake bath powder in September. Sales rose 20% on the year between September and October. The revamped products contain five times more jojoba oil, which helps to keep the skin moister after stepping out of the bath, at least more so than Bathclin's original powders. Bathclin also increased the amount of fragrance by 10-20% so the scents will linger longer. The company also added two new scents, including one it calls European Rose, to attract young women to the additives, which sell for around 420 yen.
With the relaunch, Bathclin is also stepping up its TV advertising. An official of the firm's product planning division said a lot of women in their 30s and 40s who have small children are too busy to Tabinoyado Bihadanoyu by Kracie Home Products is attracting buyers who want to take better care of their skin.
take a bath with their tots. The TV spots, he said, urge parents to deepen their communication level with their kids by taking baths with them. The company said it is currently airing more TV spots than it ever has in the past and that viewer response has been positive.
Shower era
Japanese are taking fewer baths these days. According to a survey by Kao, Japanese took 5.6 baths a week in winter 2010; in winter 2006, the figure was 6.2. The drop-off is due to the increased number of working women who are too busy to take the time to prepare a bath and go for a shower instead. And empty nesters tend to cut down on the number of baths they take, thinking baths are too much of a luxury for only two people to indulge in.
Sales of additives , however, have not been affected. Turns out those still taking baths want to luxuriate at home as much as possible, even to the extent of cutting down on visits to onsen hot springs and salons.
Source: Nikkei Weekly Dec.27,2010
METI will set off the new project to promote “Cool Japan Culture” including, animation, fashion, food to foreign countries from FY2011. The project consists of setting up pilot shops to introduce Japanese liquor and food, and assisting tie-up with local distributors in the export countries.
METI backs up the products made by small companies or individuals such as a craftman and a creator and aims to the export valued about 13 Yen trillion by 2020.
On the budget draft of FY2011, METI allocates 1.4 Yen billion as “Cool Japan Strategy”. In particular, METI selects 10 projects like the fashion & livingware export to China ,or the animation & electric appliance sales to Brazil where adopted Japanese style of digital terrestrial broadcast, and proceed them.
In China, METI set up the joint consortium composed of Japanese designers and product manufacturers, and do trial sales through pilot shops and internet sales. As the next step, METI assists the tie-up with local distributors that operate shopping malls aiming continuous sales.
Mainly the cultural industry is initiated by individual such as designer or small companies. When they think of oversea business, they felt insecure due to the lack of fund and know-how. METI will dig up these potential operators and assist tie-up with oversea distributor in order to foster as the export industry.
According to the METI’s estimation, the global market scale of the fashion, food and contents industry as of 2020 is 932 Yen trillion and Japan can get 1.4% of the market, it reaches to 13 Yen trillion.
If Japan can explore the global market with familiarizing the domestic cultural industry to the world, .that bolsters the country image. As the similar ploject, “Cool Britannia” launched by the British government during the latter 1990s is well-known. Currently the Korean government promotes their electronic appliances and apparel products to Asian countries though Korean movies and TV dramas.
Source:The Nikkei Newspaper Jan.8,2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th