- Challenge Zero
- Recommencing Economic Activity
- Economic Situation
- Second Draft Supplementary Budget for Fiscal 2020
- Responses to Social Change Stemming from COVID-19
- US-China Friction
- Japan-UK EPA
Today marks the full-scale launch of Keidanren's new project "Challenge Zero". An increase in extreme weather events and other threats has underlined the urgency of climate change responses. When we called on enterprises to detail innovative measures they are taking to address climate change in Japan, a country lacking energy resources, we received impressively ambitious responses from 137 companies and organizations. As well as encouraging people and companies that are working hard to overcome the challenge of achieving a net zero carbon society through innovation, Keidanren will intensively publicize their efforts at home and abroad. We will continue to solicit new participants in the project and have also established a dedicated Challenge Zero website, which will be updated as required. Joining forces with the government, we will further expand this campaign.
Recommencing Economic Activity
Two weeks have now passed since the declaration that the state of emergency would be lifted, and there has been no explosive spread of COVID-19 infections. Many enterprises are striving to prevent infection, for example by continuing telework. Until vaccines and therapeutic drugs are developed and deployed, it will be a case of gradually recommencing economic activity while continuing to take measures to prevent infection. A return to full-scale activity is likely to take several months.
Japan's GDP growth rate for the first quarter was revised upward to a 2.2% contraction, but this is merely due to the impacts of COVID-19 not being particularly severe during that period. Although the Nikkei topped 23,000, I do not regard this as evidence of economic recovery.
Second Draft Supplementary Budget for Fiscal 2020
In the face of a once-a-century crisis, this draft budget was compiled with an eye to not damaging the Japanese economy. I hope that it will be swiftly passed and put into effect with a sense of urgency. Now is a time for fiscal stimulus, and governments are increasing expenditure not only in Japan, but also around the world. Fiscal consolidation remains a major challenge in Japan, and various approaches need to be examined.
Responses to Social Change Stemming from COVID-19
The efficacy of contactless solutions varies depending on industry, but the impacts of COVID-19 are boosting the economic logic of such solutions and raising their potential for opening up new markets. Even industries where contact is a prerequisite, such as nursing care, are minimizing contact and making serious advances towards contactless solutions using technologies such as robots and sensors. Japanese companies have great potential in this field, and I expect developments to accelerate as needs become clear.
However, in many countries including the US, COVID-19 is placing the socially vulnerable in even more difficult circumstances. Although the pandemic has revealed challenges such as addressing disparity, offering support measures for SMEs, and rectifying over-centralization in Tokyo, these were existing issues requiring solutions. These social issues should be addressed at the same time as moving ahead with pandemic countermeasures.
Viewing trade imbalances and technological dominance as serious problems, the US is taking an antagonistic stance toward China. However, Japan needs to maintain a good relationship with China, which is an important market. Japan's relations with both countries enable frank discussion. Keidanren will continue to engage in active dialogue with business groups in both the US and China, and contribute to further development of economic relations through efforts such as the One Belt One Road initiative and the Free and Open Indo-Pacific (FOIP) strategy.
Keidanren hopes that a higher quality economic partnership agreement will swiftly be concluded with the UK based on the Japan-EU EPA, and that Japan and the UK will maintain a free and open environment for trade and investment.