View on Year 2001 at theBeginning of the Year
Iwao Okamoto
Director-General, Manufacturing Industries Bureau,
Ministry of Economy, Trade and Industry

I wish to offer my wholehearted New Year’s greeting to eachand everyone of you at the beginning of the 21st century.
The economy of Japan has still not extricated itself from adifficult situation due to the delay in improving on its financial and consumption sectors but a continuous movement towards autonomous recovery centering on corporations does exit
and, overall, the tendency is a slow but steady improvement in
the right direction. To ensure that the economy is on the righttrack to self-recovery, the government is resolved to continue
reforming the structure of the economy in a form appropriate
to the new century whilst endeavoring to achieve economicrecovery.
I am of the firm belief that the domestic manufacturingindustry will continue to develop energetically in the new century and to support the economy of this country, but also I believe there are many outstanding issues that will need to beaddressed. Many such issues will depend to a large extent on
the endeavors of you in the industrial sector, but the administration will certainly attempt to come to grips with the essential matters which I will refer to hereunder in order to provide
support and promote your efforts in this connection.
I.

Strengthening Competitive Potential/Reorganization of the Business World
Improving the productivity of Japan’s industries andstrengthening their competitive potential are two extremely
vital strategic themes, the realization of which will enable oureconomy to secure sustainable growth in the first half of the21st century as the decline in the number of children and population aging become ever more conspicuous. Again, based on
the philosophy of the “Option and Concentration” of management resources, restructuring is being promoted in individual
enterprises even in the manufacturing industry, entailing affiliations and mergers as developments take place. However,with foreign competitors accelerating cross-border, large-scaleaffiliations and mergers and amidst an environment wherereforms and intensification are taking place in demand circles
worldwide in step with rapid increases in global procurements,
what the manufacturing industry of this country needs is a
drastic strengthening of its ability to compete. Towards suchrealization and to come to the point, improving efficiency on awider scale by way of the consolidation of business and mergers, achieving the optimum scale of production and risk investment to include research and development (R&D), are anticipated. In continuation of the enactment of the Industry Vitality Regeneration Special Law in 1998, the government has
been giving full support to corporate business restructuring
and to the reinforcement of legislation in connection with corroborative splits and taxation. Every effort will continue to bemade to resolve outstanding problems, such as the introduction of a consolidated taxation system, and reform of corporate
pension schemes, etc.
II. Strengthening Industrial Technology Skills
In order for Japan to be able to maintain its economic sta-2

tus in the new century, it is recognized that further improvements to its industrial technology skills are essential and, tobe specific, we plan to focus on tackling the points which I will
now refer to.
In the field of biotechnology, with the announcement of asummary of the entire configuration of human genes in June
2000, we entered a new stage and competition at the international level is intensifying for both R&D and industrialization.
Aiming at swift industrialization, the Japanese governmenthas been promoting a millennium project in cooperation withindustrial, academic and governmental circles since 1999 concerning genome analysis, analysis of the functions of protein,etc. In addition, we plan to appropriate a development budget
for technology to replace existing industrial processing with
bio-processing that has a lower environmental load from 2001
and will strive to expand activities in this field. Furthermore,since 2000, this Ministry, in cooperation with other governmental offices, in the process of improving the environment for R&D
by preparing ethical guidelines has been relative to research
and analysis of genes, etc. Inclusive of such measures, we intend to continually pursue measures to ensure the rapid development of the biotechnology industry.
Material nanotechnology including information technology(IT), biotechnology, etc. will lead to the future development of
the social economy in the extensive industrial sector and isfundamental vanguard technology for technological reform, atechnological field in which Japan has commanded a leadingrole to date. The Japanese government has positioned material technology as one of the most vital sectors along with IT,
bio and environmental technology in its next Scientific Technology Basic Plan and, by concentrating industrial, academic
and governmental efforts, intends to actively push R&D in thisfield.
Furthermore, in addition to the promotion of a Digital
Meister Project targeting developments and improving on thestrength of the manufacturing industry to create things, andto develop high-level processing technology required for nextgeneration semiconductors, we also intend to strive for globalization of standardized parts/ machine systems. In addition, todeal with the rapid approach of an aging society and the evolution of an information driven society, a millennium project for
the elderly and an IT barrier-free project will be pursued inorder to improve on the international competitiveness of a wide
range of products and, simultaneously, improve the environment to contribute towards creating things from the viewpointof citizens.
As regards aeronautics and space industry sectors, in order to promote relevant advanced technologies and in an attempt to take the lead in fuselage development at an earlystage on the initiative of the Japanese government, technological ability in high-tech sectors including engines for supersonic aircraft, composite materials, etc. will be strengthened
with the target being to establish technical standards domestically, which can be applied worldwide. In the industrial sectors, which involve the development of large-scale systems suchas the rocket industry, etc., system design and R&D for hightech integration will be pursued to enable trustworthy, lowcost and short-term development.
III. Environmental Measures
Global environment problems and the global warming issue in particular, are important issues which may exert a major influence on the economic activities of the manufacturingindustry. At the COP6 scheduled to be resumed this year, we
hope to proceed with negotiations so as to enable ratificationof the Kyoto Protocol based on the development of the November 2000 negotiations. We shall also undertake to study thepracticability and nature of highly efficient measures so as tobe able to resolve the global warming issue domestically without imposing undue restrictions on either the economy or thepopulation.
Again, it is recognized that hastening measures to recycle
houses/building materials, paper, PET (polyethylene terephthalate) bottles, fiber, petroleum gas equipment, etc. is also
important. In particular, regarding the recycling of automobiles and based on the reacquisition of scrapped vehicles, investigations are in progress, including the possible enactmentof legislation, with the aim of improving the standard of recycling and securing appropriate disposal and, a draft of suchfundamental framework system and basic way of thinking including the necessity to come up with a system is scheduled tobe formulated by the end of the current fiscal year.
Concerning measures to protect the ozone layer, together
with the promotion of measures for the smooth and total abolition of hydrochlorofluorocarbons (HCFC), etc., a chlorofluorocarbon (CFC) control strategy of comprehensive measures tocope with CFCs will be finalized by the end of the current fiscal year on the basis of the Montreal Protocol. Furthermore, inaddition to enforcing the collection of Freon from electrical appliances in accordance with the Electrical Appliances Recycle
Law, the Freon contained in air conditioning units installed inautomobiles resulting from vehicle disposal, will be collected
as a link in the recycling of cars, and Freon collection fromdiscarded air conditioning and freezer units used in businessinstallations will be promoted. Again, fiscal 2001 will see theintroduction of a new system to control chemical substances.
Based on the Chemical Substances Control Promotion Law, theMSDS (chemical substances, etc. safety data sheet) system will
be put into effect from January this year, the PRTR (measuresrelative to grasping emission volumes, etc. of specific chemicalsubstances to the environment) from April this year and, efforts will be made to improve on the voluntary control of chemical substances by businesses. To date the industrial world has
been taking a positive attitude towards environmental conservation measures, but with the recent increase in concerns overenvironmental pollution by chemical substances, it is expectedthat further corporate efforts will be exerted with the enforcement of relevant legislation.
IV. Measures Concerning Regional Industry
Promotion of industries, which support employment andlocal economies, is another vital issue. The situation confronting the textile industry in particular is extremely grave as aresult of the sudden increase in imports from China and othercountries. To cope with such circumstances, efforts will be exerted to revitalize textile producing areas by comprehensively
promoting measures for imports coupled with domestic measures aimed at energizing domestic production centers.
On the other hand, influenced by the changes in the life
styles of the domestic population in recent years, etc., demandfor products turned out by traditional arts and crafts has declined and problems such as securing such successors, etc. havecome to the fore as a result. To overcome such problems andpromote independent development of production areas, a review of existing systems (legislation, etc. relative to promoting
traditional arts and crafts industry) will take place to correspond with changes in the times and the status quo while fulfilling and providing indirect support to various efforts madeat relevant producing areas.
V. Trade Issues
Anti-dumping measures are on the increase in the U.S. andother nations on a whole range of iron and steel products imported from Japan in recent years. To address these problems,measures such as filing suits, etc. to settle disputes on themeasures that are not consistent with the rules of the WTO
are being implemented in conjunction with concerted efforts toresolve the issue at various levels including multilateral andbilateral consultations. The Japanese government will continue
to powerfully promote such efforts hereafter, strive to maintain and develop a fair and free trade environment concerning
issues involving bilateral or regional issues and the Fair Trade
Agreement (FTA) by taking up matters in multiple stages.
As regards the automobile issue that has arisen between
Japan and the U.S., since the measures drawn up in 1995 aredue to expire consultations have taken place regarding thenature of the relationship between the two countries and how
it should be developed in the years after 2001. In consequence,
the Japanese government made a new proposal at a conference which took place in San Francisco in December 2000 regarding a dialogue between the two countries. Although theU.S. government did not respond to this proposal, we hope todeal with the matter in a proper manner whilst taking note of
the possibility of reorganization in the automobile industry on
an international scale so as to arrive at a mutually satisfactory conclusion.
VI. Conclusion
As of January 6, 2001, the Ministry of International Tradeand Industry became the Ministry of Economy, Trade and Industry. The former Basic Industries Bureau together with asection of the Machinery and Information Industries Bureau
and Consumer Goods Industries Bureau joined forces to form
the Manufacturing Industries Bureau.
In the past we endeavored to make governmental policies
reflect requirements of various industries as the point of contact between various industries and the administration. Thestance of the Manufacturing Industries Bureau will remain
consistent with this. We intend to expand the point of contact
with industries and continue to energetically promote measures
based on the realities of the manufacturing sector from a muchbroader perspective. All of you in the manufacturing sector are
requested and expected to be aware of the fact that the manufacturing sector is the origin of the economic power of Japan at
a time when pessimistic elements are conspicuous regarding
Japan’s economic prospects and to continue working to cometo grips with technological developments, redistribution of management resources and the furtherance of alliances, etc. in order to maintain and strengthen the power of the manufacturing sector. Again, I would like to request that the consequencesand details of such efforts be made known positively to thepeople of Japan. By doing so and in line with the progress inthe series of reforms, the confidence of the people in the economyof this country is sure to be recovered and I believe we shall beable to share a bright outlook towards economic revival.
Lastly, I wish all of you happiness and further prosperityin the New Year.

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