TOKYO (Nikkei)--The government will extend by one year a lending scheme aimed at small businesses. The Ministry of Economy, Trade and Industry introduced the program in the wake of the global financial crisis that hit in the fall of 2008 to help small businesses stay afloat. It had been scheduled to expire at the end of March.
The ministry decided to extend the program because many small companies still need financial assistance. No legal revisions are needed. The extension will take effect by changing operating rules of the Small and Medium Enterprise Agency, a METI body that oversees small business.
The loans are provided by Japan Finance Corp. and made available to companies that are placed under the supervision of local chambers of commerce for more than six months.
In April 2009, the length of working-capital loans was extended from five to seven years, with loan terms for equipment extended from seven to 10 years. The loan cap was also increased to 15 million yen from 10 million yen. The loans are unsecured and do not require a guarantor. The interest rate on the loans was 1.95% as of Feb. 4, lower than Japan Finance Corp.'s standard rate. The loans can be extended to companies that have 20 or fewer employees, and five or fewer for those in the service sector. Over 70,000 loans have been extended under the program through December, totaling more than 300 billion yen.
Source:The Nikkei Feb. 7
TOKYO (Nikkei)--Japan, China and South Korea are expected to agree on a trilateral investment treaty when their leaders meet in Tokyo in May, The Nikkei has learned. Direct investment among the three countries has recently increased. The accord is aimed at relaxing regulations on foreign businesses and lowering hurdles for cross-border investment.
The three nations began negotiating the trilateral treaty in March 2007. The 13th round of talks is expected to be held in Tokyo in March. The countries are likely to reach an agreement before Japanese Prime Minister Naoto Kan, Chinese Premier Wen Jiabao and South Korean President Lee Myung-bak meet in Tokyo in May.
China, Japan and South Korea will probably seek to bring the accord into effect by the end of 2012, after their respective parliaments approve it. An investment accord is intended to support the settlement of disputes among investors and nations and to protect intellectual property. It is easier to agree on an investment treaty than reach a free trade agreement, which liberalizes a wide range of areas from tariffs to customs procedures.
This will be the first trilateral investment accord among the three countries, though there are already bilateral ones among all three. The current Japan-China investment accord includes no clauses on protecting intellectual property. So when Japanese companies find that their intellectual property has been infringed on, they must take legal action based on Chinese law.
Japan therefore wants to have the trilateral treaty include a clause that will enable settling intellectual property disputes under international frameworks, as well as a clause that ensuring that companies can demand a clear explanation when the Chinese government applies or changes the law in an opaque manner.
The treaty covering the three countries would help cross-border business activity. For instance, it would make it easier for a Japanese company to have its Chinese subsidiary directly invest in a South Korean unit, or the other way. Tokyo hopes the parties will quickly agree on the trilateral investment treaty because Japanese companies have been calling for it to clear obstacles blocking the expansion of their operations in China and South Korea.
The accord would also benefit Chinese businesses, which are investing increasingly in other countries. Meanwhile, a team comprising experts from the government, academic and business sectors of the three nations is expected to have a meeting on a trilateral FTA in South Korea in March. The completion of its study will likely be moved up by a year to before the end of 2011.
Source:The Nikkei Feb. 6
TOKYO (Nikkei)--Nations engaged in Trans-Pacific Partnership negotiations are said to be pushing for broader market liberalization than stipulated under existing free trade agreements, seeking to set strict limits on items exempt from tariff elimination. Prime Minister Naoto Kan has pledged to make a decision in June on whether Japan will participate in negotiations to join the TPP, a multilateral free trade pact. With talks among the nine current and prospective TPP members picking up speed, Japan is ramping up efforts to gather information from them.
The TPP members seek broader market access than allowed under the bilateral FTAs that have been concluded to date, according to a report compiled by the Japanese government based on information from six nations: the U.S., Australia, Chile, New Zealand, Peru and Singapore. Under the 11 economic partnership agreements Japan has concluded so far, 84-88% of items are subject to tariff elimination. But rice, sugar and other agricultural products are excluded from such rules. The TPP members may decide not to allow such exclusions, a move that would create high hurdles for Japan's participation.
The TPP members are said to be making progress on a wide range of issues, such as establishing a joint committee that will effectively serve as their decision-making body. This committee will likely be tasked with resolving disputes among member nations and screening new member candidates, for example.
Details such as the duties of committee members and the frequency of their meetings are being fleshed out.
Other proposed rules being discussed include the creation of unified food safety regulations.
Singapore, New Zealand, Brunei and Chile are the current TPP members.
Source:The Nikkei Feb. 2,2011
TOKYO (Kyodo)--Japan and Australia on Monday held bilateral free trade negotiations for the first time in 10 months, a process that will likely test Tokyo's seriousness about its recent commitment to promote free trade. The focal point in the latest round of talks, which will last until Thursday, will be how far Japan would make concessions to the major agricultural exporter on tariffs on sensitive products such as beef and dairy products.
Concluding the negotiations, which started in 2007, is expected to build momentum toward Japan's possible participation in negotiations for a regional free trade initiative involving Australia and the United States, known as the Trans-Pacific Partnership.
While vowing to accelerate ongoing bilateral free trade negotiations with other countries, the Japanese government is considering joining the TPP talks, which would require in principle members to reduce all tariffs to zero.
Japanese Prime Minister Naoto Kan has said his government will decide whether to join the TPP negotiations around June, but there is strong opposition from farmers who fear they may be hit hard by an influx of cheap agricultural imports.
In the bilateral FTA negotiations, Japan is seeking to remove Australia's tariff on cars, while Australia is urging Japan to abolish tariffs on beef, wheat, dairy products and sugar. Japan has a 38.5 percent tariff on beef imports, and a 252 percent tariff on wheat imports.
But it is uncertain how much Japan would make concessions, with farm minister Michihiko Kano earlier saying the government would continue to engage in negotiations ''by taking heed to sensitive items.'' Participants in the 12th round of negotiations include Shinichi Nishimiya, Japanese deputy foreign minister, and Jan Adams, Australia's first assistant secretary of the Foreign Affairs and Trade Department. The previous round was held in Canberra last April.
Source:The Nikkei Feb. 7
In a worldwide first, household chemical products labeled with universal hazard symbols indicating risk or harmful effects are scheduled to be on the domestic market as early as within the week, according to sources. This is the first time that these marks, formulated by the United Nations, have been shown on household products, the sources said.
Classification methods and indications of product danger differ from country to country and these differences are believed to often cause misunderstandings. It is expected the adoption of the universal marks will improve household safety. The universal hazard symbols include a skull mark that indicates strong toxicity and a threat to life if the product is swallowed.
An exclamation mark indicates a skin irritation while an illustration of a human torso with damage to the chest shows respiratory risks such as cancer or asthma if the product is inhaled.
Industry groups such as the Japan Soap and Detergent Association and the Japan Paint Manufacturers Association decided to adopt the hazard warning labels for some of their products shipped in January.
Concerning detergent products, skull and exclamation mark warnings informing users about the danger of mixing chlorine-based detergent with oxygen-based detergent will be added to the conventional indications and marks already printed on containers.
Kao Corp. has labeled a chlorine bleach for kitchen utensils, Kitchen Hiter, with the appropriate hazard symbol and has begun shipping of the product. Other manufacturers plan to adopt the universal hazard symbols sequentially within this year. A U.N. expert panel formulated universally common rules, including these symbols, in 2003 and has urged each country to adopt them.
Regarding industrial goods, universal hazard symbols are commonplace throughout the world. In Japan, the Industrial Safety and Health Law has stipulated proper product labeling since 2006.
However, the labeling of household items, such as detergent, has been delayed because of difficulties in determining the products' toxicity. Tuesday, Feb. 1, 2011
Source:The Yomiuri Shimbun Feb.1,2011
Chinese suppliers set to lose workers; fraying of ties could accelerate The upcoming Lunar New Year holidays in China could create an even bigger headache for Japanese apparel companies, which are already having a hard time securing enough suppliers there.
Japanese apparel firms are heavily dependent on China, which produces almost 90% of the clothes sold in Japan. But with China's rapid economic growth pushing up wages, and labor shortages there turning into a problem that becomes particularly serious after the Lunar New Year break, this dependence could become a real liability.
The issue became obvious last year. China increased public works projects in inland areas, creating jobs and prompting migrant workers from these less-developed areas to stay home after the holidays instead of returning to work in big cities.
Things became especially tight at sewing plants, where workers are said to put in longer hours for lower pay than their counterparts in other industries. According to an official at a textile trading company, 50-60% of workers at such plants did not return to work after the Lunar New Year holidays in 2010 - about five times more than in a usual year. The same thing is expected to happen this year
Transition time
The holidays begin Feb. 3 this year, but migrants have already started heading home. Forcing them to stick around is not an option - plants that acquire reputations for being tough on workers may have difficulty hiring new employees.
An official at a Japanese apparel maker said migrant workers tend to think about leaving their jobs over the Lunar New Year because their parents may try to persuade them to find work in their hometowns, or they may exchange information on more lucrative opportunities with friends.
Factory managers are used to some workers not showing up after the holidays, but the extent of the problem is much greater now than in the past. This is due to China's economic growth and employees' rising awareness of their rights.
Employers have limited options for holding onto their workers. Wages for plant employees in coastal areas are said to have risen 10-30% in the past year, and some factories that could not afford to pay up had to stop operating.
Adding to Japanese firms' woes is the rise of Chinese apparel makers, which are placing more and more orders to plants, weakening their ability to meet Japanese demand. Japanese players also have to compete with Western rivals, which are seeing a recovery in clothing demand after the global financial crisis.
Last fall, a Chinese sewing plant that has long been a supplier to Sumikin Bussan Corp. turned down an order from the Japanese company, citing the large number of orders it had received from American firms.
Chinese factories are now finding business with Japanese apparel makers less attractive, due in part to procurement practices Japanese clients have adopted to better satisfy domestic demand. One example is that while Western apparel companies generally place bulk orders for single items, Japanese ones often order only several hundred units of each item, hoping to sell many kinds of products.
Compounding the matter is the fact that Japanese makers do not place orders far in advance. "We wait until the last moment to accurately predict market trends," explained Minoru Tanaka, managing director at Onward Holdings Co.
Clothing quarrels
One could say that Japanese clothing companies have not exactly been endearing themselves to their Chinese suppliers. "Their requirements have been increasing, but per-unit payments to us remain low," said an official at a knitting plant in Anhui Province. The plant has stopped taking orders from its longtime Japanese client and switched to European companies.
An employee at a Chinese trading company said some clothing factories are gradually moving away from Japanese apparel firms, saying they demand that their suppliers quickly meet their orders and satisfy their quality requirements, yet they are tough in price negotiations. On the other hand, Japanese apparel companies argue that they are frustrated by Chinese suppliers that place little importance on honoring contracts or maintaining trust.
"Before the National Day holiday last October, our Chinese supplier told us it would be able to meet the due date," an official at a Japanese apparel maker said. "But they didn't even start cutting for some items until just before the date." Will Japanese apparel companies and Chinese clothing plants be able to renew their weakening bonds? The actions of workers, plants and their clients after the upcoming Lunar New Year may provide hints about the future of their relationships.
Source: The Nikkei Weekly Jan.31,2011
TOKYO (Nikkei)--Japan's rice exports surged 45% from the previous year to a record 1,898 tons in 2010, according to data released by the Agriculture Ministry.
The amount of rice shipped abroad is still only a tiny fraction of last year's domestic crop of about 8.24 million tons, which excludes rice used for processing and livestock feed. But more rice farmers are setting their sights on overseas markets as domestic consumption continues to shrink due to an aging population.
Last month, officials from China's state-run corporations visited Japan for consultation with the farm ministry, local governments and businesses over ways to increase rice shipments to that country.
The sharp increase last year is partly a reflection of the paltry 1% growth in 2009 due to the global economic slump. Having declined the previous year, the value of rice exports rose 27% to 691 million yen in 2010.
Shipments to Hong Kong, the largest market for Japanese rice, expanded by 36% to 654 tons.
Singapore bought 334 tons, up 81%, and exports to China tripled to 96 tons.
Exports to Russia quintupled to 52 tons, while shipments to Germany grew sevenfold to 50 tons.
Source:The Nikkei Feb.3,2011
TOKYO (Nikkei)--To boost rice exports to China, the government will start subsidizing mill inspections next fiscal year. Warehouses and mills must prove that they are bug-free in order to qualify for Chinese exports. Only one mill and one warehouse currently qualify. The two sites handle 55,000 tons and 3,000 tons annually, falling short of the Ministry of Agriculture's target of shipping 200,000 tons to China.
The ministry earmarked funding for inspecting warehouses this fiscal year, with eight sites checked so far. As a result, warehouse capacity for China-bound rice will increase to 30,000 tons. Next fiscal year, government-paid inspections will be expanded to include mills. In 2010, only 96 tons of rice was exported to China.
Source:The Nikkei Feb. 5
TOKYO (Nikkei)--In a sign of Asia's growing prominence as a trade partner, Japanese exports settled in yen accounted for a record 41% of the total last year, up 4.9 percentage points from 2000. By contrast, 48.9% of exports were paid for in dollars, down 3.5 points from 10 years earlier, according to trade data from the Finance Ministry, which began compiling it in 2000.
The increase in yen-denominated exports is expected to blunt the impact of the strong yen on corporate bottom lines.
Euro-denominated exports accounted for 6.2% of shipments. And 1.1% and 0.6% of exports were settled in the Australian dollar and Canadian dollar, respectively.
Taking into account all of Japan's exports last year, 56% were to Asia, including China, in value terms, a surge of 15 points from 2000. Shipments to North America, however, shrank 15 points from 10 years earlier to just 16%.
Of all North America-bound exports, 85% were paid for in greenbacks. Shipments to Asia were settled evenly in dollars and yen. Most exports to China were dollar denominated, but yen-based shipments to Southeast Asia, South Korea and elsewhere accounted for a relatively large chunk. This is attributed to an uptick in yen-based trade following the Asian currency crisis in the late 1990s. Many Japanese companies trying to mitigate foreign exchange risk also increased yen settlements.
Meanwhile, 71.7% of imports were dollar denominated.
That crude oil trade is greenback-based is a major factor contributing to the dollar's dominance. A total of 23.6% of imports were paid for in yen, followed by 3.2% in the euro and 0.3% for both the British pound and Swiss franc.
Sourcr:The Nikkei Feb. 3,2011
TOKYO (Nikkei)--The government of Prime Minister Naoto Kan is hoping that the health and nursing care sector will help drive economic growth amid rising demand, but it could end up being a drag unless the segment's low productivity is addressed.
According to research by Dai-ichi Life Research Institute, using data from the Ministry of Finance, a corporate worker created on average 5.64 million yen in added value in fiscal 2009, compared with just 3.42 million yen for a worker in the health and nursing field. But this comparison is solely for joint-stock companies. Ministry of Internal Affairs data shows that medical corporations and social welfare agencies generated an average of 3.62 million in sales per employee in 2010. The figure for healthcare workers was 8.76 million yen, but that lagged behind the 10.83 million yen for services industry employees.
In need of a productivity boost.Because added value cannot exceed sales, it is clear that the medical and nursing fields are beset by low productivity. Analysts identify several reasons for the problem.
Barriers to entering the fields reduces competition, providing fewer incentives to raise productivity.
Also, because prices for welfare services are set by the government, it is difficult to differentiate offerings in the sector.
But with an aging population, demand for health services will grow in Japan. One labor survey estimates that the welfare field has added a million workers over the past five years and now employs 6.35 million, accounting for more than 10% of the nation's entire workforce. In addition, wages per health worker fell 16.6% between 2000 and 2010, much steeper than the 9.5% drop for all industries. Over the same time, labor productivity fell 6.8% for the health sector, but rose 10.3% for manufacturing. Consequently, if the health sector workforce expands while productivity languishes, wages are unlikely to increase. And less money routed to consumer spending could be a hindrance to economic growth.
"Productivity is certainly low in the health and nursing sectors, according to economic indicators, but Japan as a longevity nation is also a society in which anyone can receive hospital care at low cost, so simple calculations are difficult," notes Yoshihiro Kaneko at the National Institute of Population and Social Security Research.
But clients may not be getting all the services they desire, and this inhibits productivity growth. So a wider selection of services is essential. Places such as the U.K. are experimenting with using competition to spark productivity in its health sector. By letting patients and the elderly freely choose treatments and facilities, service quality could improve and hospital stays could shorten, helping to keep expenses down. Deregulation would be key to this development.
In addition, if government-set prices for health services were made more flexible it could usher in a wider array of services, resulting in higher wages for workers in the field. A professor at Gakushin University estimates that a nimbler pricing system would expand the nursing care market by 1.2 trillion yen and child care by 1.1 trillion yen.
Source:The Nikkei Feb. 7
TOKYO (Nikkei)--Nonmanufacturers' combined group pretax profit soared 33% on the year in the October-December term, a fifth straight quarter of gains and blowing past the 16% increase logged by manufacturers.
The data was based on 359 listed nonmanufacturers that had announced earnings for the October-December period as of Friday. Pretax profit ballooned more than 17-fold at marine shippers. At Kawasaki Kisen Kaisha Ltd. , business was brisk for containerships handling sundries from China and elsewhere in Asia. And demand for shipping iron ore, grains and other materials also strengthened. With emerging-market demand driving up resource prices, pretax profit climbed 41% at trading houses, including Mitsubishi Corp.
Domestic infrastructure firms also enjoyed the benefits of booming emerging-market economies.
With factory utilization rates on the rise due to solid Asia-bound exports, Tokyo Electric Power Co.'s pretax profit skyrocketed 160% on increased sales of industrial electricity.
Another boon was the government's eco-points system. With appliances covered by the program flying off shelves, Yamada Denki Co. logged an all-time high quarterly pretax profit. And Yamato Holdings Co. saw strong demand for services to install electronic appliances. Internet firms were strong as well. Thanks to the eco-point program, Kakaku.com Inc. saw increased traffic on its price comparison Web site, helping lift pretax profit. Visitors to its dining recommendation site are also on the rise.
There is uncertainty, however, about whether earnings can keep improving at nonmanufacturers. Due to floods in Australia, marine transport is undergoing a correction. And the eco-point program, which drove domestic-demand-related firms, is due to expire at the end of March.
Source:The Nikkei Feb. 5
TOKYO (Nikkei)--The October 2012 merger of Nippon Steel Corp. and Sumitomo Metal Industries Ltd., Japan's biggest and third-biggest steelmakers, will significantly reshape the industrial landscape as the biggest tie-up in the country's steel sector in a decade. Second-ranked JFE Steel Corp. and fourth-ranked Kobe Steel Ltd., which has capital tie-ups with Nippon Steel and Sumitomo Metal, will only fall further behind in production scale after the merger. The two companies may resort to countermeasures, and industry officials are speculating on the possible reaction of Posco, South Korea's biggest steelmaker. Posco has a capital alliance with Nippon Steel.
Shortly after 2 p.m. Thursday, Kobe Steel President Hiroshi Sato was left stunned by separate phone calls from Nippon Steel President Shoji Muneoka and Sumitomo Metal President Hiroshi Tomono saying that they would announce the merger deal shortly. They made the announcement two hours later at a press conference at a Tokyo hotel. Kobe Steel says its relationship with Nippon Steel and Sumitomo Metal will remain the same after the two companies merge, but many Kobe Steel executives expressed shock, noting how they had been kept completely in the dark about the tie-up, despite the three-way capital alliance the companies have had for the past eight years.
While the new company will be a major shareholder in Kobe Steel, Muneoka said the latest deal has nothing to do with Japan's fourth-biggest steelmaker. The possibility that Kobe Steel will join the deal remains low, so industry attention has centered on speculation over whether the company will try to survive on its own or seek new partners.
Nisshin Steel Co., the fifth-largest Japanese steelmaker, learned about the merger deal at roughly the same time as Kobe Steel. Nippon Steel holds almost a 10% stake in Nisshin Steel. According to some sources, Nisshin Steel rejected an informal merger proposal from Nippon Steel late last year, prompting the industry leader to seek a similar deal with Sumitomo Metal. JFE Steel, which is comparable to Nippon Steel in terms of production scale, has been reinforcing its overseas business.
The company, a core member of the JFE Holdings Inc. group, last year acquired a 15% stake in major Indian steelmaker JSW Steel Ltd., for example.
But the new entity that will emerge from the Nippon Steel-Sumitomo Metal tie-up will boast an output scale 1.5 times larger than JFE Steel's, stoking the smaller player's fears that it may be left behind in negotiations to set prices of steel products and raw materials. If JFE Steel actively seeks a partner in the Japanese steel industry, it may try to forge new business relationships with Kobe Steel or Nisshin Steel.
While Nippon Steel and Posco have invested in each other, the South Korean steelmaker's post-merger stake is likely to fall from its current level of 3.5%. Although the two companies also collaborate and supply each other with steel products, Posco firmly remains a rival for the Japanese companies.
As Posco expands its operations throughout Asia and other parts of the world, it is attempting to cut costs by localizing production ahead of its Japanese rivals. The Korean steelmaker is set to directly compete with the new Nippon Steel-Sumitomo Metal entity for market share in emerging economies.
Source:The Nikkei Feb. 7
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th