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Executives' Comments  Press Conferences Chairman Tokura's Statements and Comments
at His Press Conference Following the Keidanren Regular General Meeting

June 1, 2022

Aspirations for Second Year as Keidanren Chairman

Today we have welcomed five new vice chairs. Faced with an array of pressing issues on both the domestic and international fronts, we will unite in devoting our energy to overcoming such crises with a sense of urgency.

During the year since my appointment as Chairman of Keidanren, I have advocated for the importance and necessity of sustainable capitalism and, from the social point of view, centered attention especially on balancing COVID-19 countermeasures with economic activity and achieving green transformation (GX).

This year Keidanren will take further steps in practicing sustainable capitalism. Digital transformation (DX) and GX lie at the heart of such efforts and require transformation of society. Keidanren is resolved to constantly expose itself to change as it leads these unprecedented reforms, and today has launched three new committees focused on promoting promising fields expected to power the Japanese economy forward: creative industry, bioindustry, and mobility industry.

At the same time as advancing growth strategy with innovation at its core, Keidanren will proactively address two key measures. One is rebuilding a free and open international economic order, and the other is realizing diverse work styles and reforms to create a social security system oriented to all generations. To leave a bright future for coming generations, Keidanren will purposefully propose and implement policies to address immediate issues, while responding swiftly and flexibly to changes in domestic and international circumstances.

New Committee Action Plans

In addition to Web 3.0, the metaverse, and non-fungible tokens, which have drawn attention recently, the Committee on the Creative Economy will further enhance soft power in areas such as manga and games, where Japan has particular strengths. Such efforts are expected to power a virtuous economic cycle that boosts fans of Japan, leading to more tourists visiting our country.

The Committee on Bioeconomy will examine ways of utilizing biotechnology to resolve global healthcare, food, and environmental issues. Biotechnology is well suited to digitalization, giving rise to many startups in the US. While ensuring consistency with the Biotechnology Strategy developed by the government and bioindustry, Keidanren will participate in examining the formation of bio-clusters currently evolving in the Kansai and Tokyo regions.

The Committee on Mobility will strengthen the international competitiveness of the mobility industry. The "Mobility as a Service" concept requires solutions to digitalization challenges such as lowering barriers to mobility to make life more comfortable for older people who wish to get out, achieving carbon neutrality, and developing autonomous vehicles. Since various industries are involved in mobility, Keidanren will address these issues in close collaboration with the Japan Automobile Manufacturers Association and other relevant groups.

Causes of Low Economic Growth in Japan

Over the past 20 years, the Japanese economy suffered yen appreciation and deflation. Although the strength of the yen encouraged overseas investment, domestic investment lagged. The creation of new added value through start-ups and innovation also remained inadequate in scale. Moreover, labor productivity struggled to rise as the population declined. We must now break free of this situation, which has been dubbed "Japanification."

To this end, Japan needs to spark innovation based on science and technology and increase added value. Positioning DX and GX as focal domains for investment, it is vital to build a startup ecosystem and trigger innovation. In the GX sphere, fortunately the government has set its Nationally Determined Contribution, and investment in research and social implementation must proceed to fulfill this public commitment. Estimating that cumulative investment of around 400 trillion yen will be required by 2050, Keidanren is calling for action. This is a golden opportunity to stimulate domestic investment.

(In response to a question on wage trends, which have long remained flat) Ideally, it is desirable to drive the economy by covering rising prices with pay scale increases and reflecting business results in bonuses as they occur. According to a Keidanren survey of the first statistical results from spring labor-management wage dialogues, monthly wages are up by 2.27% year-on-year, a high level of increase reversing three consecutive years of declines. Companies that have restored results to pre-pandemic levels have attained increases of 3.02%. It will be crucial to ensure that this wage rise momentum is maintained next year and beyond.

Energy Situation in Japan

(In response to a question on the ruling against restarting the Tomari nuclear power plant) I respect the decision of the judiciary, and will refrain from commenting on individual rulings. Keidanren will monitor future movements on this issue.

Consideration of the energy situation in Japan requires a sound understanding of Japan's geographical constraints. Since Japan is an island nation unconnected to the grids of neighboring countries, interchange of electricity is not available. Bearing in mind this limitation, we must increase sources of renewable energy. Per area of flat land, Japan already has the world's highest level of solar power generation, and installation of further facilities in the future is obviously restricted. Since the seas around Japan are very deep, construction costs are high for offshore wind power generation facilities. There is also potential for geothermal power generation, but this is difficult to balance with protection of national parks and quasi-national parks, and no progress is being made. Furthermore, renewable energy is inevitably affected by weather conditions. Given these realities, nuclear power generation is clearly essential as a source of base load electricity.

Passing inspection by the Nuclear Regulation Authority, gaining the understanding of local residents, and assuring safety and security are fundamental to restarting nuclear power plants. Considering energy demand in the near future, maximum use should be made of existing nuclear reactors, while simultaneously replacing facilities and building new plants, promoting small modular reactor initiatives, and innovating with a view to nuclear fusion. In advancing overall nuclear power efforts, it is essential to address the back-end issues of nuclear fuel cycle and final disposal.

Border Measures

I appreciate the steady progress on border measures. However, the daily cap on visitor entries remains at 20,000. I hope that the government will raise the cap and strive to ultimately abolish entry quotas and bring Japan into line with other G7 nations.

Executives' Comments