Following is the gist of remarks made by Mr. Takashi Imai, Chairman, Keidanren, at a scheduled press conference after monthly Chairman and Vice Chairmen's meeting on 7 September 2001. Translation is rush and tentative, and sequence of the gist does not necessarily coincide with words delivered.
(Asked on how he views decline in the second quarter GDP for FY2001)
It could be expected the sharp drop because of recent upward correction of the first quarter figures. I believe the Japanese economy peaked in autumn 2000 and started declining afterward -- it remains there in the bottom. It is possible to have annual negative growth during FY2001 if we see no grow in months to come, as bad as -0.6% recorded in 1998.
The real problem lies in the continuous decline of nominal GDP. Unless consumer price decline would stop soon, effect on corporate earning will be large.
(Asked on his view over FY2001 supplementary budget)
Supplementary budget will be necessary to cover obligatory increase of social insurance and to provide enough funds for disaster relief. However, if the purpose is to increase public demand, I am against it for it would increase national debt, lessen trust on government bond, and increase long-term interest rate.
What government could do is to increase employment and to expand safety net. With employment moving in faster pace from manufacturing to services sector becoming inevitable, the government, for example, can extend the maximum number of days one can receive unemployment benefit from current 330 days, or create additional employment in day care center for old and young by promoting deregulation.
(Asked on what he expect from visit to China next week)
This mission will study how Japan can cooperate in developing western China. There is a list of 30 different projects, and the mission will study each and find out either how we can cooperate or what are the problem prohibiting our cooperation. The result will be conveyed to respective Chinese authorities in Beijing.
On other fronts, I think that the government will have to explain about our ODA policy and how we think about the issue of safeguards/countermeasures. As China joins WTO, it will have to think about opening its market, including its dollar-pegged currency. Also, China must become more cognizant of concerns of South East Asian countries. We will talk about entire Asian economy with Chinese leaders.