1. Top
  2. Executives' Comments
  3. Press Conferences
  4. Chairman Nakanishi's Statements and Comments at His Press Conference

Executives' Comments  Press Conferences Chairman Nakanishi's Statements and Comments
at His Press Conference

October 24, 2018

Spring Labor-Management Wage Dialogues

The term kansei shunto (「官製春闘」), denoting wage dialogues orchestrated by the government, is nonsense. As well as considering the economic situation and background, the government has indicated its belief that wage levels in Japan are low by international standards and should be raised somewhat. The business community shares this belief and is making its own efforts to raise wages. It is ridiculous to call this government orchestration. Nor can I understand contention over whether Keidanren supports the government's calls for wage rises. If there is a need to indicate approximate levels for such increases, Keidanren is willing to discuss the matter.

We are conducting investigations to prepare the report of the Keidanren Special Committee on Management and Labor Policy. These encompass discussion of not only wages, but also working style reform, which goes beyond rectifying long hours of work and the issue of regular versus non-regular employment. As working styles undergo major changes, corporate executives constantly consider whether conventional conditions of employment are fit for purpose. In this sense, spring labor-management wage dialogues present a valuable opportunity for discussion.

Wage increases were once decided on an industry-wide basis, but this practice has already disappeared. I understand that the Japanese Trade Union Confederation (Rengo) is also examining calls for wage rises, etc., from various perspectives extending beyond just the level of pay scale increases. As management considers ways of rewarding eager employees, I regard Rengo's call for views on suitable approaches as supportive.

Welcoming Foreign Workers

The government is devising new residence statuses to facilitate acceptance of foreign workers. The systems being designed reflect many of the views expressed by Keidanren. How should we interpret the reality that many foreigners are working in Japan? This question needs to be considered not only by central government, but also by local governments and enterprises. Developing good systems will depend on the ability to thoroughly discuss this point.

In examining fields where foreign workers can be accepted, it is first important to consider whether they can play useful roles. Industries facing labor shortages are also urging acceptance of foreign workers. We should start by ensuring complete readiness for such sectors to accept workers. It is difficult to discuss across-the-board measures, and I understand that one of the purposes of forthcoming legislative revisions is to discuss industry-specific issues relating to the acceptance of foreign workers.

The government aims to introduce new systems next spring, and will discuss them between now and then. I do not think this is too hasty. We need to begin by making assumptions, creating systems, trying them out, and improving them. We require fast-moving efforts in order to change things.

At the same time, if we are to make our industries even more competitive, our ability to secure highly skilled people is crucial to winning out in international competition for human resources. We first need to consider matters from workers' perspectives and create an environment making it easy for foreigners to work in Japan, whether they are top-flight specialists or laborers.

Consumption Tax Increase

The first priority is to raise the rate of consumption tax to 10%. When Japan increased consumption tax from 5% to 8%, it suffered the trauma of an economic downturn. I am not opposed to the government taking economic measures to avoid a similar situation. However, a rise in consumption tax must contribute to fiscal consolidation. It is difficult to examine the effects of individual measures. A complicated package of measures such as cashless payments and discount vouchers might be burdensome to implement. The government and the ruling parties will prioritize discussion of measures before next year's consumption tax increase, and Keidanren will participate in these discussions.

The spread of cashless transactions is a separate issue to consumption tax. In global terms, Japan is lagging in this field, and financial institutions now have a sense of urgency. Many SMEs do not even accept credit cards, and this is hampering the spread of cashless transactions. Encouraging cashless transactions is a consumption tax measure that can be implemented at little cost. More in-depth investigation of how to achieve this is required.

Japan-US Business Conference

Although the business community is not directly involved in trade negotiations, private-sector dialogue plays a vital role. Trade problems also reflect socioeconomic factors in relevant countries, including social disparities and industrial structures. Next week's meeting of the Japan-US Business Conference will provide a valuable forum for discussion including the nature and trajectory of such socioeconomic factors.

Japan-China Relations

China has set forth a "new normal" and changed course from expansion to high-quality economic growth. Partly due to such policies, the Chinese economy is entering a new stage of development, and this is expected to open up new markets. The Japanese business community has been discussing these opportunities with Chinese businesses. It is now important for China to shift away from the mass-production growth model that made it "the world's factory" to develop industries that create new added value, and achievement of this goal would be significant for Japan too. Some industries in China have comparative advantages while others do not. We would like to build complementary, win-win relationships between Japan and China.

Although trade friction between the US and China creates an element of uncertainty, it is useful for both Japan and China to discuss economic cooperation focused on the future. Japan has ceased providing official development assistance to China. This is a natural progression, and in future we are likely to cooperate on a growing number of business projects in third countries.

Amid ongoing rapid changes in the geopolitical environment, it will be important for governments and business communities to play their respective roles to further strengthen the relationship between Japan and China.

Executives' Comments