The political mess following the Social Democratic Party's exit from the ruling coalition is sure to hamper the economic policies of the embattled government of Prime Minister Yukio Hatoyama.
The government will unveil this month a growth strategy intended to serve as a road map for a Japanese economic revival, aiming for a nominal average growth rate of 3% through 2020. The government has planned to devise a strategy that transcends the parochialism of individual ministries -- liberalization to boost demand in the health and medical fields, for example, as well as efforts to help Japanese companies break into overseas infrastructure work. Should the government's sway weaken, ministries will once again focus on protecting their interests, with watered-down deregulation robbing the strategy components of punch.
Repairing tattered government finances must entail raising the consumption tax and reducing government spending, topics that the ruling coalition wants to avoid ahead of an upper house election. If the government announces plans that fall short on details, however, investors could express their disappointment by exiting Japanese markets.
Source: The Nikkei June 1. 2010
China's economy will be four times the size of Japan's in 2030, the Cabinet Office predicted in a report released Friday. According to the report, China is expected to generate 23.9% of the world's gross domestic product in 2030, up from the current 8.3%, while Japan's share of global output is withering from 8.8% to 5.8% because of its shrinking labor force. The U.S. will account for 17% of world GDP, down from 24.9%, the report said. The estimates were based on the potential growth rates of each economy by taking into account such factors as changes in populations and aging of societies.
China's economy, which grew an average 10% in the 2000s, is seen expanding 9.1% this decade and 7.9% in the 2020s. Although the pace will slow in the 2020s as the workforce dwindles, it will continue to grow strongly compared with other big economies. For instance, Japan's economic growth rate will decline to 0.4% in the 2020s, down from 1.4% in the 2000s. And growth in the U.S. will slow from 2.4% to 1.6%. India's growth will decelerate from 7.2% to 5.7% in the 2020s. But its share of the world economy will inch up from 2.2% to 4%.
As a result, whereas GDP rankings for 2009 had the U.S. in the top spot, followed by Japan, China and Germany, China will be No. 1 in 2030, with the U.S., Japan and India trailing. Asia is seen accounting for 40% of the global economy in 2030, up from 25% now.
Source: The Nikkei May 29, 2010
The leaders of China, Japan and South Korea decided Saturday at a two-day summit here to deepen trilateral economic cooperation, believing their countries will play more important roles as Asia continues driving global growth. Chinese Premier Wen Jiabao, Japanese Prime Minister Yukio Hatoyama, and South Korean President Lee Myung-bak adopted "Vision 2020," a series of proposals intended to bolster cooperation among their countries on a wide range of economic issues over the next 10 years.
The document calls for boosting investment and joining forces in devising green technologies and measures. The leaders also drafted four documents calling for, among other things, cooperation on devising quality and environmental standards for industrial products, and for joint research in such areas as environmental technologies and life sciences . Proposals contained in "Vision 2020" include speeding up economic integration through early conclusion of free trade agreements, and setting up a panel to discuss labor and employment issues.
But despite their calls for cooperation, the countries sharply disagree on a variety of trade and other issues, creating a number of hurdles that must be cleared before they begin talks with one another to sign such free trade pacts.
Source: The Nikkei May 30, 2010
Japan and China have agreed to set up a panel to enhance their cooperation in the area of electronic commerce amid rapid expansion of the Chinese e-commerce market, the Japanese trade ministry said Monday. Under a memorandum of understanding signed earlier in the day, the two countries will share knowledge on policies related to electronic business transactions and how companies are making use of them. Japan, for its part, is hoping that the two countries will be able to create a cooperative relationship that would help Japanese companies make inroads into the Chinese market.
In relation to the area of energy efficiency, which is Japan's strong point, the two countries also signed a memorandum under which Japan will offer training to some 400 government officials and others from China over the next three years.
The memorandums were signed during Chinese Premier Wen Jiabao's visit to Japan
Source: The Nikkei, May 31, 2010
The Lower House of Parliament passed legislation Monday to reverse the privatization of the nation's sprawling postal services, likely intensifying tensions with U.S. and European officials worried that such steps could work against non-Japanese financial firms.
Monday's development could add to speculation that the U.S. and Europe may bring a suit to the World Trade Organization over the move, which they argue would impede what they call fair competition. The Office of the U.S. Trade Representative issued a statement earlier this month saying the U.S. and European Union have concerns that the current legislation, among other things, would give Japan Post Holdings Co. "additional competitive advantages, including less rigorous regulation" over its operations.
Japan Post holds assets valued at about $3.3 trillion, making it one of the world's largest financial institutions. Under the legislation, Japan Post will continue to control its two financial units, Japan Post Bank and Japan Post Insurance, allowing it to provide universal services across the country.
The deposit ceiling on postal savings will be doubled to Y20 million per customer, enabling Japan Post to increase its vast assets. The Japanese government's plan will also exempt Japan Post from getting regulatory approval from authorities such as the Ministry of International Affairs and Communications when starting new financial businesses. Local Japanese bankers, financial analysts and newspaper editorials have warned that if Japan Post grows even larger thanks to implicit government guarantees, that would hurt private sector businesses and Japan's growth potential.
Source: The Japan Times, May 31, 2010
Japan and China agreed to cooperate in promoting food safety, at a meeting of ministers in Tokyo Monday. In the first-ever minister-level talks between Japan and China on food safety, Akira Nagatsuma, Japan's minister of health, labor and welfare, and Wang Yong, China's minister of general administration of quality supervision, inspection and quarantine, agreed to hold such bilateral meetings once a year, as well as conditionally allow the countries to inspect each other's related facilities if the safety of food imports is in question.
Source: The Nikkei May 31, 2010
The government has decided to apply its genetically modified (GM) food labeling rules to papayas, opening the way for the import of modified papayas as early as this summer. The fruit would be the first GM food meant for consumption raw to be allowed distribution in Japan.
The decision by the Cabinet Office committee for consumer affairs clears the way for the Ministry of Health, Labor and Welfare to recognize the GM papayas for import and distribution under the Food Sanitation Act once the plan passes a public input phase.
The decision applies specifically to papayas genetically altered for resistance to harmful viruses. The modified fruit is now being grown in Hawaii, and has been on sale in the United States since May 1999. Japan's Food Safety Commission ruled in July last year that the papayas did not present a health risk. If the fruit go on sale in Japan, they must carry a label stating they are GM products.
There are currently seven fresh and 32 processed GM foods approved for import to Japan, though most are ingredients for processed goods or animal fodder, and are not marketed as food for raw consumption by humans.
Source: Mainichi Japan, May 25, 2010
Amid continuing declines in per-customer sales, restaurant chain operators are converting existing locations into ones that serve low-priced offerings.
Colowide East Japan Co. plans to renovate 60 or so of its mainstay Amataro pubs in the current year through March 2011. Of these, 80-90% will be turned into Umaimon Sakaba Ekohiiki pubs, which serve dishes and drinks for 299 yen each. Colowide Co., the parent of Colowide East Japan, saw its various pub and restaurant chains draw 3.1% fewer customers this April than a year earlier. The Umaimon Sakaba Ekohiiki chain bucked this trend by recording a 30% rise. Encouraged by this success, the firm plans to sharply expand the chain from its 35 locations as of the end of March 31.
Yakinikuya Sakai Co. plans to turn some of its namesake barbecue restaurants into lower-priced Osaka Karubi barbecue restaurants. Per-customer sales come to about 2,500 yen at Yakinikuya Sakai and around 1,800 yen at Osaka Karubi. At the seven Yakinikuya Sakai locations that the company turned into Osaka Karubi restaurants in the year ended March 31, customers doubled and sales jumped 50%. Yakinikuya Sakai plans to double the number of conversions to 14 this fiscal year.
As existing-store sales continue to decline year after year, more family restaurant and pub chain operators are increasing their low-priced locations.
Source: The Nikkei May 29, 2010
Seven & i Holdings Co. may collaborate with foreign makers for its private label offerings, says Yasushi Kamata, Seven-Eleven Japan Co.'s managing executive officer in charge of merchandising. After selling its Seven Premium products at domestic outlets of its group supermarkets and convenience stores, the retail giant is introducing the products overseas.
Our attitude toward creating products is the same for the Japanese and foreign markets. We are going international with our "team merchandising method," in which retailers, makers and vendors share information. We aim to take advantage of our global scale. To reach the Seven Premium idea, we asked them to give us information on their markets as well as make requests. Our partners for private-label offerings do not have to be limited to Japanese companies; Chinese makers told us they want to supply products for our private brand. We need to think about how to cooperate with Western makers as well.
There are many things we can do to operate in other Asian market. In addition to sharing products and ingredients, we can share manufacturers. We have 37,000 Seven-Eleven stores around the world. Of these, more than 15,000 are in Asia excluding Japan. These will serve as our sales channels.
Source: The Nikkei Marketing Journal May 28, 2010
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th