( ´゜д゜`)英字新聞

How should Japan boost competitiveness?
What can Japan do to find a way out of the stalling economy and boost its international competitiveness? The Economy, Trade and Industry Ministry has come up with a review of the nation's industrial policy.
The review refers to the ministry's "Industrial Structure Vision," which serves as a guideline for the nation's economic revitalization. The government hopes to make this a major pillar of the new growth strategy that it plans to decide on in June.
As such countries as China and South Korea are quickly catching up with Japan, Japan's international competitiveness is on the decline.
With the declining population at home, economic expansion will be limited if the nation relies too much on domestic demand. On the other hand, Japanese companies are accelerating their transfer of production abroad, raising the fear of a hollowing out of domestic industries. This sense of alarm underlies the ministry's vision.
The Yomiuri Shimbun made an emergency proposal in early May, calling on the government to advance bold policies for the nation's economic reconstruction. The ministry's vision contains many points that overlap with those contained in the proposal. Both are probably aiming at similar targets.
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5% tax cut in works
It is noteworthy that the administration of Prime Minister Yukio Hatoyama has for the first time made clear its intention to lower the effective corporate tax rate by about 5 percent in the next fiscal year and lower it further to a range of 25 percent to 30 percent in the future.
Compared with corporate tax rates of about 30 percent in European countries and 25 percent or less in other Asian countries, Japan's effective corporate tax rate of 40.69 percent is strikingly high.
Such heavy tax burdens deprive Japanese businesses of their corporate vitality, causing them to curb capital investment and reducing their international competitiveness.
Many foreign companies are apparently reluctant to advance into the Japanese market because of the high corporate tax rate, which might partly explain the sluggish foreign investment in Japan.
The Yomiuri Shimbun has proposed that the corporate tax rate be lowered to a range of between 20 and 30 percent. The government should accelerate internal discussion and slash the corporate tax at the earliest possible time.
The ministry's vision also points out the need to reinforce the framework of public-private cooperation in promoting the export of such infrastructure-related technologies as nuclear power generation systems and high-speed railways to other Asian countries or elsewhere.
We can expect great demand for social infrastructure abroad, involving a large sum of money. It is important for the government to adopt a strategy to pursue the benefits of expansion in both domestic and foreign demand.
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'All Japan' system needed
Nevertheless, the international competition with countries in Europe, the United States and such Asian rivals as South Korea is fierce. For Japan--which has lagged behind these rivals in the export of infrastructure-related systems--to win the market competition, it has to establish an "All Japan" system and promote comprehensive support for the projects. Such support should range from the provision of funds to after-sales services, with the prime minister and concerned ministers showing diplomatic leadership.
The ministry's vision also includes the reinforcement of five strategic areas such as the development of next-generation vehicles, as well as the expansion of the economic partnership accords with other countries.
The government needs to tackle all these measures expeditiously to boost Japan's competitiveness in the international market. Japanese businesses should not lose business projects despite having superior technological prowess.
Yet the mere presentation of the vision without its realization would be of no practical use.
Because the vision may conflict with similar growth strategies being advocated by other ministries including the Land, Infrastructure, Transport and Tourism Ministry, the government must coordinate these views and clearly prioritize policies.
The speed with which these policies are carried out will be a test for the political leadership in the days ahead.
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