- An Overview of the Past Four Years
- Acquisition of US Steel by Nippon Steel
- Choice of Separate Surnames for Married Couples
An Overview of the Past Four Years
Today, I will be giving my final regular press conference. Over these past four years, I have given over 140 press conferences, including those in my capacity as Chairperson of the Japan Association for the 2025 World Exposition. As the questions I received during my regular press conferences were always broad-ranging in their scope, I always looked forward to studying up and being prepared for these events. I sincerely thank everyone in the press corps for creating a friendly atmosphere and allowing me the opportunity to articulate my views on a range of topics.
When I assumed my role as Keidanren Chairman in June 2021, we were in the very midst of the coronavirus crisis. The day I assumed this post, I delivered an emergency proposal Keidanren had crafted on COVID19 vaccination to then-Prime Minister Yoshihide Suga, and that left a deep impression on me.
Since becoming Chairman, I have championed the social point of view that we cannot have a viable economy without working to build a better society. Building on that stance, I set about the task of addressing two key issues brought on by the excesses of capitalism, namely ecosystem collapse and the exacerbation, entrenchment, and perpetuation of inequality. As products of that effort, I arguably achieved some success, including promoting the green transformation (GX) and working to bring about the first significant increase in wages in over 30 years. Also, in the arena of private-sector economic diplomacy, for example, acting on behalf of Keidanren, I was pleased to contribute to improved ties between Japan and South Korea by establishing Japan-Korea and Korea-Japan Future Partnership Funds together with our South Korean counterpart, the Federation of Korean Industries,.
However, many challenges remain. For instance, we are only halfway toward our goals of alleviating the public's feelings of uncertainty about the future through fiscal restructuring and reforms that will create a fair, equitable, and sustainable social insurance system for all generations. Additionally, recent US tariff measures, among other factors, have led to deepening turmoil on the international front, demanding that Japan align itself with likeminded nations and assume a leading role in sustaining and strengthening the free and open international system based on the rule of law.
Amid these developments, in December 2024, I announced FUTURE DESIGN 2040, a medium- and long-term economic and societal vision of the future toward which Japan should aspire. Japan has no choice but to become a world power in the spheres of science and technology, as well as trade and investment. I fervently hope it will act to implement the vision I have articulated and move forward to achieve these goals. We cannot have a viable economy without sustainable growth, nor can we achieve sustainable growth without a discussion that addresses the distribution of wealth. These were my thoughts in advocating a virtuous cycle between growth and the distribution of wealth as a key phrase symbolizing my FUTURE DESIGN 2040 vision. This is the first time in 30 years that the "distribution of wealth" has been integrated into the business policies of Keidanren.
At Keidanren's upcoming regular general meeting on May 29th, I will formally step down from my post as Chairman and entrust it to my successor, Chairman-elect Yoshinobu Tsutsui. I would like to see Keidanren continue with a policy of sound reasoning based on the social point of view.
I will continue working in my capacity as Chairperson of Expo 2025 and will do my best to ensure the Osaka, Kansai Expo is successful as a safe, secure, and appealing event. I urge your cooperation in promoting the appealing aspects of this Expo.
(In response to a question regarding the Chairman's most impressive accomplishments during his four years at the helm of Keidanren, as well as his unfinished business) Although I have thought well of all our projects, the green transformation (GX) is the accomplishment that had the deepest impression on me. Although interests regarding GX were mixed within the business community at the outset, and it amounted to an undertaking that would entail enormous investments, we nevertheless pushed it as something essential for Japan's economic growth and submitted proposals to the government on that understanding. This is not something aimed purely at achieving carbon neutrality. We view it as a comprehensive growth strategy that will strengthen Japan's industrial competitiveness while improving its international standing as a nation that shares its technologies with nations across Asia and elsewhere worldwide.
As to unfinished business, that would include the task of building a social insurance system for all generations as a measure toward redressing inequality. Public anger and uncertainty over conditions of inequality are at the root of the deepening rifts dividing the world today. In Japan as well, conditions of inequality are steadily spreading across society and must be remedied. To that end, attention needs to be focused on the distribution of wealth. Thanks to the efforts of the corporate community, Japan appears to be on track to witness major wage increases for the third year straight, but so far, that has not translated into expanded levels of consumption, essentially cutting the economic benefits of the wage increases in half.
In terms of fostering more consumption, efforts to reform the social insurance system count as a notable challenge. Compared to when the social insurance system was created, the percentage of elderly citizens in the population is much higher now, and the burden has become extremely heavy for the current working generation that supports it. Japan's current moderate-welfare, low-burden social security system is not sustainable. To make it more equitable and just, we must thoroughly apply the ability-to-pay principle and, depending on the circumstances, expand the consumption tax rate and decisively pursue other measures in integrated tax- and social security system-related reform.
(In response to a question regarding the outlook for full implementation of the ability-to-pay principle) We need a discussion on the best way to put the ability-to-pay principle into effect as a measure to make the social insurance system sustainable. One point worth noting in this connection is the effectiveness of capturing income and assets through utilization of the My Number ID system. By tying My Number IDs together with data on both income and assets, this system would be beneficial not only in facilitating full and accurate implementation of the ability-to-pay principle, but also in quickly supplying needed assistance to citizens seriously impacted by natural disasters or other emergency events. Steps to harness the My Number ID system should be taken as quickly as possible.
(In response to a question seeking the Chairman's impressions regarding the current state of the Japanese economy compared to when he assumed his post) Starting with the impact from cost-push inflation, rising prices set the stage for wage increases and ushered in a virtuous cycle between prices and wage growth. In fact, inflation is now in the process of shifting from cost-push to the demand-pull type.
Moreover, domestic investment is showing firm growth. Historically, domestic investment has accounted for approximately 20% of GDP when the economy is running well, and the situation is close to that level now. Ideally, we will continue to see revitalized levels of domestic investment driven by public-private cooperation, in turn leading to improved levels of productivity, wage growth, and consumption, and ultimately creating a virtuous cycle between growth and the distribution of wealth.
However, with the current social insurance system being unsustainable, the younger generations will not be spending their earnings on more consumption. This is a serious problem that underscores the urgency of building a social insurance system that serves all generations if Japan is to create a virtuous cycle. Although this task will take time to achieve, that is precisely the reason we must begin exploring solutions now.
(In response to a question regarding the role the Chairman played in efforts to foster sustainable capitalism, build a broad-based middle class, and achieve the current level of wage increases) Although I am not the person to rate the level of accomplishment in terms of wage increases and other efforts, I will say I did my best on those occasions that brought results. And while I have had to reflect on how certain things should have been done, I never felt any regrets that my efforts were ever insufficient.
Wage increases are something influenced by economic trends then in play. It is extremely fortunate that, in contrast to the deflationary environment that hit the Japanese economy with three lost decades, I assumed my post as Keidanren chair at a time when prices were rising and Japan was returning to a regime of positive interest rates. I thus decided to take action on the realization this opportunity must not be allowed to slip away. Also, my thoughts often aligned with those of Tomoko Yoshino, president of the Japanese Trade Union Confederation (RENGO), and I had the sense we were engaged more in a joint struggle than competition. Additionally, I found myself to be very much tuned in to the same wavelength with Japan Chamber of Commerce and Industry Chairman Ken Kobayashi, as well as with his predecessor, Akio Mimura. Furthermore, in coordinating Keidanren's internal affairs, I had extensive support from Tetsuji Ohashi, Chair of our Committee on Management and Labor Policy, over these past four years. All in all, I believe that having this environment led to my success in helping bring about major wage increases.
(In response to a question regarding the Chairman's call, in FUTURE DESIGN 2040, for Japan to become a powerhouse in the spheres of science and technology and his support for strengthening research prowess by doubling the nation's grant funding for research ventures in science and technology) Japan must become a nation firmly rooted in science and technology if it is to position itself as a major power in the fields of trade and investment. Strengthening its research abilities will be indispensable to its quest to supply innovative goods and services to its trading partners worldwide.
To that end, our scientists and researchers must not be constrained by a lack of funding or time. We should improve their opportunities to have more freedom and pursue basic research in emerging fields. Grants-in-aid are one of the few funding resources to which young researchers have open access, and it is urgently important that we act to at least double the amount of grant funding made available.
(In response to a question regarding opinions that Keidanren should return to its traditional focus on making proposals related to industrial policy) Growth is a must for the Japanese economy, and strengthened industrial competitiveness is vital to that growth. However, without a discussion on the distribution of wealth, we will not be capable of achieving sustainable growth. That is why I do not think it was a mistake to champion the social point of view and expand the focus of Keidanren's activities.
Acquisition of US Steel by Nippon Steel
(In response to a question regarding the acquisition of US Steel by Nippon Steel) Nippon Steel's plan for the acquisition of US Steel seems to be precisely the kind of deal that President Trump expects of foreign companies. Under this plan, a corporation based in Japan, a key US ally, will create thousands of new jobs in the US and provide training, so, why the US had concerns for its economic security is hard for me to fathom. Generally speaking, if the US only allows a foreign investor to acquire less than a lone majority stake in one of its firms, it seems extremely rare that the management rights to the acquired firm's treasured technologies would transfer to that investor. I hope this acquisition will be successful.
Choice of Separate Surnames for Married Couples
(In response to a question regarding the inclusion [on May 7] of a list of problems attributable to using one's former surname as their common surname in "Toward a Society of Choice," Keidanren's proposal for the creation of a system allowing separate surnames for married couples) It is highly commendable that relevant stakeholders are moving, and have made progress, toward eliminating business-related issues stemming from the use of one's former surname. In light of these developments and heeding the advice and recommendations of outside parties, we decided to include that list. Although we may update it provided there are any significant developments going forward, we have no plans to hold a press conference in the event of such a change.
However, this is not solely a question of whether a system allowing separate surnames for married couples is convenient or not, but also an issue that hinges on the identity of those with a desire to have a choice of surname. This is a matter that should be settled through public discourse, and I would like to see our lawmakers deliberate on it in earnest.
* Secretariat's Note: In regard to the addition of notes to the proposal titled "Toward a Society of Choice," Keidanren distributed related documentation at its May 7 press conference and posted an updated version of the proposal on its website.