TOKYO (Nikkei)--Japan's trade ministry wants to give the government a freer hand to slap taxes on foreign goods dumped onto the market at unfair prices.
The Ministry of Economy, Trade and Industry aims to lower the criteria for investigating possible cases of dumping, making it easier for firms and industry groups to seek action.
Japan hits imports with anti-dumping taxes far less often than foreign governments do to Japanese-made goods. METI says it has received numerous requests from domestic companies for a system that provides better protection. It will include its proposals with its other requests for tax code changes for next fiscal year.
When overused to prop up weak domestic firms, anti-dumping duties can constitute a trade barrier. To avoid giving way to protectionism, Japan has adopted stricter rules on imposing such levies than those of foreign countries.
In Japan, a company urging the government to investigate a dumping claim must show that it has the backing of more than half its industry. The ratio is calculated by dividing the number of supporters by the total number of firms, including those whose preference is not known.
This creates a high hurdle for Japanese businesses that believe they are the victims of dumping. In such industries as household products and agriculture, which consist mainly of hard-to-reach small and midsize companies, it is all but impossible to apply for an investigation in many cases.
METI contends that the ratio should take into account only those firms that have expressed an opinion either way, in accordance with international rules. Companies that succeed in getting a claim looked at generally see duties imposed on the goods in question. According to the ministry, 70-80% of investigations lead to taxes.
From 1995 to 2008, there were 106 cases in which Japanese goods were hit with anti-dumping taxes, but Japan only resorted to duties only seven times. By contrast, India imposed anti-dumping taxes in 386 cases, while the U.S. did so in 268, the European Union in 258, and China in 108.
METI reckons that a more liberal use of anti-dumping duties can help domestic companies become more competitive and sustain R&D and employment. The ministry will also consider following the U.S. Department of Commerce's example and set up a government focal point to advise firms considering making dumping claims.
Source: The Nikkei July 16
TOKYO (Nikkei)--Pigs feed on slope overlooking the Pacific Ocean on the Osumi Peninsula in Kagoshima Prefecture. The pig farm is operated by a company called Eco-Farm, based in Kimotsuki, Kagoshima. This spring, a group of 186 investors put a total of 10 million yen over five years into a fund managed by the company.
The fund seeks retail investors, whose money goes to cover land costs and part of the breeding expenses. It distributes the profits to shareholders from sales of pork and ham.
Eco-Farm grazes its pigs in untended mountain forests or abandoned farmland to make them productive again. It also creates pig feed from composted school-lunch leftovers.
Agriculture is attracting new players in Japan -- investors and corporations. An employee with an IT firm in his 30s, who manages 5 million yen via stock and bond investment funds, invested 60,000 yen in the Eco-Farm fund, together with his wife. "The investment in Eco-Farm is aimed at not only returns but also (making) a social contribution," he said.
Major supermarket chain Ito-Yokado Co. set up a wholly owned subsidiary, Seven Farm, in early July as its main nationwide farming operation.
Ito-Yokado, a unit of Seven & I Holdings Co. (3382), set up a farming business in Tomisato, Chiba Prefecture, in August 2008, together with the members of the local agricultural cooperative. The firm grows vegetables using compost made from food waste at Ito-Yokado supermarket, which the supermarket sells.
Ito-Yokado and other supermarket chains have entered the farming business one after another as the revised food recycling law took effect in 2007. The law requires them to increase recycling of food waste.
The farming business in Tomisato turned a profit in the business year ended in December 2009. It is now operating on a 5 hectare farm, two and a half times larger than when it started.
Encouraged by its successful launch, Ito-Yokado is preparing to set up farming units across Japan.
Room for growth
Agriculture has been considered an inefficient industry, with harvests fluctuating wildly, as agricultural cooperatives have traditionally dominated production and wholesale operations. According to the Japan Productivity Center, the productivity of agricultural labor is only about 30% that of the average for all industries in Japan.
But that is improving as new entrants into the sector bring advanced management techniques and create new companies staffed by motivated farmers, which in turn has drawn investment.
The labor productivity of rice-growing companies, for example, is about five times that of independent farmers.
This shows that agriculture can be a growth sector if its potential can be tapped. Investors and companies are drawn to agriculture, as they are both concerned about Japan's food self-sufficiency, which has dropped to 40%, an increase in abandoned farmland, and concerns about food safety.
Investors want to ensure safe and tasty food products by investing in agriculture, while companies that have entered agriculture not only seek profit but also look to impress consumers and shareholders with their efforts to protect the environment.
Ito-Yokado says its farming operations are part of its corporate social responsibility.
The number of farming companies has continued to grow as more companies enter the business and more farmers incorporate their operations. As the revised farmland law -- which aimed to foster company farms -- took effect last December, more firms are expected to join the fray.
Agribusiness is expanding rapidly worldwide. With the United Nations forecasting that the world's population will reach 9.1 billion in 2050, up from 6.9 billion in 2010, global demand for grain is expected to grow even faster, as people in developing countries eat more meat as they grow richer.
Companies with market capitalizations of several trillion yen, such as Syngenta AG of Switzerland and Monsanto Co. of the U.S., are competing in global markets for agrochemicals and seeds.
In addition, major multinational grain companies, which exert a great deal of influence on agribusiness, are "trying to control prices by dominating the market from processing, to distribution, to sales," said Takeshi Iio, chief fund manager at Mitsubishi UFJ Asset Management Co.
In a global agribusiness market in which gigantic companies fight it out, attention is growing on how this struggle will shape Japan's own investment in agriculture.
Source: The Nikkei Veritas July 18
TOKYO (Nikkei)--Japan's trade deficit with China likely shrank to around 480 billion yen last fiscal year as the booming Chinese economy stoked demand for imported cars and the like.
Since the mid-1990s, Japan's trade deficit with China had stood at around 2-3 trillion yen each year.
"The trade balance hit the black in the January-March quarter, discounting seasonal factors," says Barclays Capital Japan Ltd.'s Kyohei Morita, who calculates a surplus of an annualized 740 billion yen for the period, based on Ministry of Finance data that the brokerage seasonally adjusted.
This marks the first quarterly surplus in roughly 21 years.
Signs of a turnaround in trade with China are also evident in the Finance Ministry's published data.
Passenger vehicles, trucks and other transport equipment accounted for 10.12% of the value of Japanese exports shipped to China last fiscal year. This is up more than 3 percentage points from a year earlier and almost double the most recent low of 5.15% recorded in fiscal 2004. The export value of audiovisual equipment, including video cameras, surged 60% on the year in the January-March quarter. For digital cameras, the leap was roughly 80%.
The drawn-out trade deficit is blamed largely on efforts to localize production in China, with its cheap work force. Apparel makers had made China their core production base by the 1990s, with electronics manufacturers following suit from the 2000s. But at the same time, Japanese firms were exporting materials and parts that flowed back into the nation as final products.
Now, however, the trade balance is being driven by exports of final products to China. Around 96,400 vehicles were shipped to China in the January-May term, up 50% from a year earlier, according to the Japan Automobile Manufacturers Association.
While Japan's purchasing power is floundering in the face of sluggish wages and a declining population, fast economic growth is lifting China's purchasing power. Based on this gap in growth, Japan could very well enjoy trade surpluses with its neighbor in the near future.
Source: The Nikkei July 19
TOKYO (Nikkei)--The government seeks to cap the combined total of general expenditures and local tax grants at 71 trillion yen in the fiscal 2011 budget, but the opposition camp's new dominance in the upper house is expected to make negotiations particularly grueling.
Prime Minister Naoto Kan and Finance Minister Yoshihiko Noda met Tuesday to discuss budget request guidelines and agreed on the figure, which excludes debt-servicing costs. They aim to obtain the cabinet's approval at a July 23 meeting.
To meet the 71 trillion yen target, the government is mulling plans to slash policy spending by around 10% across the board, except for social security outlays.
Reining in runway social security costs is key to restoring fiscal health. But when the Liberal Democratic Party and New Komeito were in power, the Democratic Party of Japan had strongly objected to the coalition's plans to curb social security spending. To avoid being seen as a flip-flopper, the DPJ-led government is likely to allow a 1.3 trillion yen increase in the fiscal 2011 budget.
Some government officials have proposed setting reduction targets for other policy expenditures. But government spending for compulsory education as well as tax revenue grants, which are determined by local revenue and other factors, are expected to be excluded from these targets as well.
The government will also have to find funding sources to implement the programs stipulated in its growth strategy and economic measures in the DPJ's policy platform, including child-rearing payouts and eliminating highway tolls.
Noda also said Tuesday that government ministries are expected to come up with funding sources for their own budget requests.
Spending cuts have gained renewed prominence after the DPJ's massive defeat in Sunday's upper house election. In postmortem finger-pointing, the government and the ruling coalition have grown reluctant to discuss tax reform, including a consumption tax hike.
The ruling coalition no longer has a majority in the upper house. While a budget can be single-handedly approved by the powerful lower house, where the ruling bloc still maintains a majority, other bills necessary to execute the budget will still require upper house approval.
Source: The Nikkei July 14
TOKYO (Nikkei)--Retail customers made 6.7 trillion yen worth of online purchases last year, up 10% on the year and accounting for 2.1% of all commercial purchases for that year, according to a survey conducted by the Ministry of the Economy, Trade and Industry.
By contrast, the business-to-business e-commerce market shrank 18% to 131 trillion yen, hurt by the fallout from the global financial crisis that began in September 2008.
Cross-border transactions, in which Japanese consumers made purchases through overseas Web sites, accounted for 17.8% of all such purchases last year, up from 8.9% a year earlier.
But the percentage was far lower than China's 48.1% and the 25.4% logged by the U.S. Many Japanese online shoppers were reluctant to buy from foreign sites, citing concerns about the quality of after-sales service provided by online retailers from abroad. They were also uneasy about how their personal information would be used by these retailers.
Source: The Nikkei July 18
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th