POLICY & DIPLOMACYTWO -WAY STRATEGY
OF THE NEW FORM
OF CAPITALISM:
PM KISHIDA’S MESSAGE AT THE NYSESEPTEMBER 22, 2022
Full Text: https://japan.kantei.go.jp/101_kishida/statement/202209/_00009.html

On September 22, 2022, Prime Minister Kishida delivered a speech in English at the New York Stock
Exchange (NYSE) on Wall Street in New York City of the United States, the center of the global economy.
Explaining that his New Form of Capitalism is characterized by the two-way growth and sustainability strategy,
he introduced Japan’s five priorities: 1) to invest in people; 2) to invest in innovation; 3) to invest in green
transformation (GX); 4) to implement the Asset-Income Doubling Plan; and 5) to build a nation that grows
together with the rest of the world. He then appealed for active investment in the Japanese economy.
Thank you for this opportunity to address you today.
I also want to thank you for your heartfelt condolenceson the death of my friend and great predecessor, former
Prime Minister Abe. We Japanese will never forget yourkindness.
Almost 60 years ago, because of my father’s job, I livedin Queens. Maybe you can tell that I have a hint of a NewYork accent.
1960s America was a generous, diverse, colorful andvibrant place to me. As a kid, I was greatly influenced bythat vision of America and its reverence for freedom andenergy.
It was also here in New York that I encounteredbaseball, a sport that I love from the bottom of my heart.
Today, Shohei Ohtani and Aaron Judge are in dead heat
for the MVP under a nationwide spotlight, but when I
came to the US, there was no Japanese in Major LeagueBaseball.
Later, while I was still in Queens, Mashi Murakami of
the SF Giants became the first Japanese to play in MLB,
here at a Mets game at Shea Stadium. He became my hero.
After I returned to Japan, I played baseball on my highschool team. I think baseball taught me values that I
respect as a politician, such as “teamwork,” “perseverance”
and that “the game isn’t over until it’s over.”

One other thing I want to mention since I am here in
the citadel of capitalism. I am the only post-World War
Two Japanese prime minister with a financial background.
I worked as a banker in foreign exchange and corporate
restructuring. That is why I feel about free enterprise theway Mark Twain felt about good whiskey—“too much isbarely enough.”
So, I have come here today to Wall Street, the center ofthe global economy, with this message: “Japan’s economy
will continue to show strong growth. You can invest inJapan with confidence.”
I advocate an economic policy of a “New Form ofCapitalism,” which is a comprehensive package to renew
the growth of the Japanese economy.
If I use my favorite player Shohei Ohtani as a metaphor,
the defining feature of a “New Form of Capitalism” isthat it is a two-way strategy. Of course, it is not to hit andpitch, but to promote growth and sustainability.
I firmly believe that the creative energy of the private
sector is crucial for prosperity and a strong economy.
Growth will only be achieved if we harness this energy.
At the same time, we must uphold sustainability by
responding to the various risks that constrain our economy,such as global inflation, an unstable energy supply, climatechange, a declining birthrate and an aging population, asPrime Minister Kishida speaking at the New
York Stock Exchange, the world’s center ofcapitalism. He delivered the message, “Japan’seconomy will continue to show strong growth.
You can invest in Japan with confidence.”well as an increasingly severe security environment.
Can Japan really accomplish great change? I am here
to say we can. History shows that we can. The Meiji
Restoration and the postwar economic miracle arereminders of that ability.
And now, once again, we can see changes happening inJapan.
What I am proposing is to transform the various social
challenges we face into engines of growth, and to share thefruit of growth for even further growth.
To meet these challenges, I intend to mobilize every
possible policy instrument, including the budget, taxation,and regulatory reform.
One very important policy is corporate governancereform.
As a result of numerous reforms Japan has made in
the last decade, the behavior of Japanese companies has
significantly changed.
ROE ratios have soared, and almost all companies now
have independent outside directors. We also expect morecompanies to appoint women and foreign talent to theirboards.
We have witnessed more companies undertaking vast
corporate reforms not seen in the past, such as divesting
non-core businesses and pivoting to new fields.
We will accelerate and further strengthen corporate

governance reforms in Japan, such as establishing a forumin the near future to hear from investors from around theworld.
I would also like to note that today marks the signing of
the Memorandum of Understanding between the NYSE
and the Tokyo Stock Exchange. We will continue on with
our TSE reforms which started this year, and revive Japanas an international financial market.
It has been three decades since the burst of the “bubble”
economy in Japan. Since then, Japan has cut costs bytackling excessive debt, excessive investments and excessivecapital. We have achieved a slim, cost-sensitive economy asa result. But clearly more is required.
We face the challenge of investing in the future anddeveloping an economy that consistently creates newvalue.
Let me share Japan’s five priorities.
First is to invest in people.
Digitalization and greening have drastically changed
the economy. We know that a source of a great deal ofadded value will be intangible, not tangible, assets. And inparticular, it will be human capital.
So, we will advance a society where human capital iscentral.

POLICY & DIPLOMACYThe second is to invest in innovation.
We have formulated national strategies and targets
in the areas of AI, quantum, biotechnology, digital, anddecarbonization.
I place particular emphasis on startups.
Diverse challengers to the status quo are alreadyemerging in Japan. A graduate student founded aunicorn startup that developed a uniquely Japanese biomanufacturing technology and is now expanding intothe United States. A female CEO, who launched a novel
networking service in the consulting field, acquired a U.S.
company last year and now the business has expanded to190 countries across the globe. The energy brought by
women and young people is the Japanese economy’s hopefor prosperity.
Next TOYOTAs and SONYs will spring from the drive
and determination of these challengers. The important
thing is to create an ecosystem in Japan where startups
will flourish. We need to expand tax incentive measures
on startup investments based on profit from selling stocks
and incentive stock option system. We will also try tobring in US universities with high reputations on startup
education.
The startup market is currently in a difficult situation,
but because we are in such a situation we will further boost
support.

After his speech, Prime Minister Kishida rang the NYSE Closing Bell and observed thesigning of a memorandum of understanding between the Tokyo Stock Exchange (TSE)and the NYSE to support cross-border investment between Japan and the U.S.

Labor market reform is my priority. Japanese labor
management will be updated, from a seniority-based,
lifelong employment system into a new Japanese system
where job-based pay is located at its core, through thecooperation between the government and business
community.
This will facilitate labor mobility and give birth to acycle in which paying higher wages attracts highly skilled
personnel, thereby increasing labor productivity and levelof salaries.
We will further bolster our support for the reskillingof workers in digital and other fields, while encouraging
labor mobility.
Japan’s future depends upon the vitality that womenbring to our economy. “Women empowerment” is crucial.
There has been a clear shift in the attitudes of the youngergeneration. Over the past 10 years, the percentage of fulltime female employees under the age of 35 has increasedby 10% or by 0.6 million -even though the population ofthis generation decreased by 1.2 million over the sameperiod.
We are determined to clear the obstacles that hinder
women’s advancement because women must be at the coreof the Japanese economy.
We need women to pursue their careers and havefamilies. There is no reason we cannot pursue both andhelp the declining birthrate. In April of next year, wewill establish the Child and Family Affairs Agency toconsolidate child-rearing policies. This is a landmark
policy that aims to meet the structural challenges of ourpopulation decline.
Reforming the wage system, investing in people,and women empowerment. All of these efforts will
be promoted in a transparent manner as we establish
disclosure protocols for human capital, and we will leadthe international rule-making process as well.

Third is to invest in green transformation or GX.
Japan is undertaking a major economic, social, andindustrial reform to achieve carbon neutrality by 2050.
This is a huge chance and can provide a booster rocket toJapan’s economy. By the end of the year, I will present aroadmap for the next ten years.
Through the combination of “growth-oriented carbon
pricing” and investment support, we will achieve over
150 trillion yen of GX investment in Japan over the nextdecade. We will also contribute to the advancement ofAsia’s GX investment. To achieve zero emission by 2050,
it is estimated Asia will require approximately 40 trillion
Among various investments in innovation, Prime Minister Kishida places particularemphasis on startups. Born of a science park among the rice paddies in Tsuruoka City,
Yamagata Prefecture, the remarkable unicorn company mentioned in his speech develops andmanufactures artificial protein materials, the next generation of biomaterials.

dollars. To attract transition financing from around theworld, we envision working on large-scale projects in Asia,
such as power generation, hydrogen, and grids, as well as
creating common standards within the region.
In light of the energy crisis triggered by Russia’s
outrageous war, we will also tackle head-on the issue of
nuclear power generation. I have ordered an intensive
expert analysis of restarting more than a dozen nuclear
power plants, as well as developing the next-generationof reactors that incorporate new safety mechanisms.
Building upon the discussion of experts, we will accelerateconsiderations, to make a decision by the end of the year.
My fourth point is our Asset-Income Doubling Plan.
We now have 2,000 trillion yen in personal financial
assets. Only around 10% of this is invested in stocks.
In order to double asset income and enable long-term
asset building for retirement, it is essential to make oursmall investment tax exemption system for individuals
permanent.
My fifth point is to build a nation that grows together
with the rest of the world.
Japan will continue to be a trading and investment
nation open to the world.
We are a nation that has flourished through the freeflow of people, goods and capital.
We have multilayered trade and investment relations
with countries around the globe and actively promoteeconomic partnerships including CPTPP and IPEF. Thiswill not change.
COVID-19, of course, interrupted all of these benefits.
But from October 11, Japan will relax border control
measures to be on par with the U.S., as well as resume visafree travel and individual travel.
Let me add that next year, Japan will host the G7
Hiroshima Summit. It is the mission of the G7 to protect
the prosperous global economy. As the G7’s president, I
take that mission very seriously.
Finally, let me say a few words about Japan-U.S.
cooperation. As allies, Japan and the U.S. are good partners
not only in the field of security but also in economics.
Japan is the largest investor in the U.S., and the U.S. is thelargest investor in Japan. The number of American jobs
created by Japanese companies is second out of all foreign

JFE ENGINEERING CORPORATION

In a new major waste-to-energy power project in the province of Bac Ninh, Viet Nam, aJapanese company is supporting the construction and operation of a plant, thereby helping topromote proper waste disposal and recycling in the region.
(Conceptual illustration of the plant)

companies. When Japanese companies prosper, so too
does the U.S. economy.
We intend to further deepen this strategic relationship.
When I met with President Biden in May, we
agreed to strengthen cooperation on semiconductor
manufacturing, which is key to our economic growth andsecurity. Projects, such as joint Japan-U.S. investment insemiconductor plants and research into next-generation
semiconductors, are already underway.
Such supply-side investment under international
coordination is globally crucial in addressing current
inflation levels. It might be one of the important issues tobe discussed at next year’s G7.
Ladies and gentlemen, let me start bringing this to aclose by saying that I am resolute in my ambition to makeJapan as prosperous and energetic as the New York of mychildhood and as the NYSE itself.
There is nothing more thrilling in baseball than acomeback win. I am here today to tell you that, with thehelp of the Japanese people, we will revive and revitalize
the Japanese economy.
And for inspiration, we need look no further than tothe dynamism of the NYSE, which remains ever-vibrant,ever-renewing and ever-changing. Its market energy is sounrelenting it can remake not just economies but societies.
I thank you for letting me share my vision of capitalismwith you today, at this very heart of capitalism, the New
York Stock Exchange.
Thank you for inviting me and thank you for yourhospitality.

SPIBER INC.

The above speech was republished from the website of the Prime Minister’s Office of Japan:
https://japan.kantei.go.jp/101_kishida/statement/202209/_00009.html