While countries around the world are struggling to get inflation under control, businesses must consider highly volatile energy and food prices as the new normal. Businesses also face myriad complex and intertwining challenges, such as the need to reshape energy frameworks in line with the global push to decarbonize, and the need to re-forge supply chains due to fluid geopolitical circumstances. This month, the APEC Economic Leaders' Meeting will be held in San Francisco. I look forward to its leadership, which will guide the world toward stability, in the areas such as how to address the U.S. -China conflict and decarbonization.

Now turning our attention to the situation at home.
Japan once boasted a strong trade surplus, but in recent years it has turned into a trade deficit to reach 18 trillion yen in 2022. The question Japan must ask itself, is what kind of country it hopes to be in the new normal. If it wishes to maintain its presence as a nation built on manufacturing technologies, then it must get cutting-edge industries based on carbon-neutral energy back to Japan. It must also figure out how to balance that aim with moves to strengthen its alliances in Asia, which are vital for Japan to its very survival.

In order to achieve the goal, we need the following actions.
First, we need to consolidate public-private capabilities to develop internationally competitive CN power sources (renewable energy and nuclear power) and strengthen interconnectivity of nationwide grid for more efficient use of power.
Second, we need to conduct a comprehensive review on our country's business environment. Japan has received international recognition as a manufacturing hub for semiconductors and other products that drive progress in advanced fields. If we hope to maximize any momentum gained from that, then we will need to extend our focus beyond the energy sector and work to boost efficiency in logistics and other services, which will mean taking advantage of digital transformations and otherwise modernizing our nationwide industry.
Third, we need to promote innovation through tie-ups between industry and academia. Gone are the days when universities focused on the initial stage of research while businesses focused on the later stages of investment and practical application. Nowadays, sustainable growth is best realized through initiatives that ally those communities from start to finish, which is also why the roles of Japan's educational institutions must be rethought and rejuvenated.

Moreover, because many Asian countries are searching for a way to balance growth and carbon neutrality, Japan should contribute to energy transition there. Consequently, Japan can achieve further economic integration in the region. In order to maintain and enhance the past prosperous coexistence with Asian countries, Japan has to formulate bold strategies, including setting up in-depth cooperation, in the fields where Japan has been competitive.