January 1, 2022

• Introduction
• Support for businesses and citizens affected by the pandemic and preparation for the next crisis
• Realizing the new form of capitalism
• Energy and environmental policies
• Foreign economic policies
• Reconstructing Fukushima and measures for decommissioning, contaminated water, and treated water
• Closing Remarks

Introduction

I would like to wish you all a Happy New Year.

Last year, we fought a hard battle against COVID-19. Although the number of infected individuals in Japan has stabilized recently, the fight against COVID-19 continues as the newly reported Omicron variant has been confirmed in many countries. We must make every effort to support the businesses and citizens that have been affected by the pandemic and also prepare for the next crisis.

However, there is no winter without a spring. Now is the time to look toward a new society beyond the COVID-19 crisis and work on fostering new growth. The key to that is: companies and the government must both make bold investments and encourage innovation to solve social issues. In the United States and Europe, among others, governments are already moving ahead and strongly supporting such efforts on large scales; Japan is also expected to respond actively.

Large challenges also surround the economy, trade, and industry administration such as the following: achieving carbon neutrality by 2050 and reducing greenhouse gas emissions to the new targets by FY2030; finding a way to also secure a stable yet inexpensive energy supply; responding to concerns about international order (such as US-China conflicts and the principle of prioritizing the home country); reconstructing Fukushima and setting measures for decommissioning, contaminated water, and treated water at the TEPCO Fukushima Daiichi Nuclear Power Station.

METI will firmly advance its policies, one by one, in response to these challenges.

Support for businesses and citizens affected by the pandemic and preparation for the next crisis

Our utmost priority is to deliver economic measures for the businesses and citizens that have been affected by the pandemic. For all businesses that have been heavily affected by COVID-19, we will provide a business revival support grant that should help allow them look ahead to spring.

In addition, we will extend substantially interest-free loans with no collateral from government-affiliated financial institutions until the end of the fiscal year, and we will also support the continuity and growth of SMEs by addressing changes in the business environment caused by the pandemic. We will do so through accelerating green and digital investment by expanding the "Business Restructuring Subsidy" and the "Project for Encouraging SMEs to Advance the Productivity Revolution" as well as providing accompanying support.

We will also take temporary and emergency measures to respond to any sudden fluctuations in fuel oil prices so that the soaring crude oil prices do not burden economic recovery from the pandemic.

To prepare for the next crisis, we will support constructing dual-use facilities that will manufacture biopharmaceuticals in ordinary times and be able to switch to manufacturing vaccines when necessary, which will enable rapid production of vaccines in the event of another pandemic. This initiative is a project symbolizing the new form of capitalism, in the sense that private facilities can be utilized at the request of the government in an emergency.

Realizing the new form of capitalism

In order to realize the new form of capitalism, we must first realize strong growth which will provide the source of distribution. METI will also formulate "new direction of economic and industrial policies," which deal with how to actively implement policies to address social issues including transitioning to a green and digital society and achieving economic security.

The first step will be to strongly promote securing Japan's independence and technological competitiveness through initiatives such as strengthening important production and technical bases. This will address vulnerabilities in the supply chains that have been revealed by the growing US-China conflicts and the impact of COVID-19. In particular, with regard to semiconductors—also known as the "brains of industry"—we will provide bold support comparable to that of other countries through the "emergency package to strengthen the semiconductor industry infrastructure", which includes the development of domestic manufacturing bases and next-generation technologies. We will also support developing regional data center bases from the viewpoint of ensuring resilience.

It is important to pay wages based on growth in order to achieve a virtuous cycle of growth and distribution. While taking into account the K-shaped recovery structure, companies are expected to increase wages to their maximum based on their ability to pay. We will fundamentally strengthen salary increase tax credits to support companies that have raised salaries.

The rise in costs of raw materials, energy, and labor for SMEs damaged by the pandemic will have to be appropriately passed on to the clients. In order to ensure their ability to pay salaries, we will double the number of staff to monitor the fairness of contracts for SMEs and strongly promote the "Declaration of Partnership Building" initiative.

Energy and environmental policies

The Cabinet approved the Sixth Strategic Energy Plan in October last year, and with S+3E as its fundamental premise, it showed the path for energy policies toward achieving the new GHG emission reduction targets for FY2030 and carbon neutrality by 2050.

We are working on thorough energy efficiency improvement, introducing maximum renewable energy, and restarting nuclear power generation with safety as the top priority. At the same time, we are also progressing with phasing out inefficient coal-fired power plants and replacing them with decarbonized thermal power utilizing hydrogen, ammonia, and CCUS. We will continue to implement energy policies like these—based on the Strategic Energy Plan—with all our effort.

In addition to the Green Innovation Fund's ambitious technological development and social implementation, we will promote capital investment such as developing manufacturing bases for storage batteries, and the spread of electric vehicles as ways to move toward carbon neutrality by 2050.

Furthermore, it is important to secure a stable, inexpensive energy supply for the future and ensure it contributes to further economic growth. We will formulate a clean energy strategy that involves discussing energy transition measures in various fields on the demand side, such as industries, in addition to the supply side. It will provide new developments in important conversion technologies such as hydrogen, ammonia, nuclear power, and storage batteries, and a concrete market scale outlook for each field for the future in order to evoke corporate investment.

Foreign economic policies

As the standard-bearer of free trade, we will lead the international economic order based on free and fair rules.

We will work on forming a new international order that specifically includes building a free, fair economic order using WTO, CPTPP, RCEP and other economic partnership agreements; promoting international rule-making regarding the digital economy; addressing market-distorting measures that obstruct fair international competition between companies.

At the same time, we will further strengthen our cooperation with the United States, Europe, ASEAN and others to work toward the realization of a free and open Indo-Pacific while also developing high-quality infrastructure, encouraging mutual investment, and carrying out energy transition support through AETI.

Eliminating forced labor in supply chains is another international challenge. Japan will exert its leadership to move toward achieving international cooperation that would raise the predictability of each country's measures, so that companies can actively address respecting human rights on a level playing field.

Reconstructing Fukushima and measures for decommissioning, contaminated water, and treated water

The most important issues for the Ministry of Economy, Trade and Industry are reconstructing Fukushima and setting measures for decommissioning, contaminated water, and treated water at TEPCO’s Fukushima Daiichi Nuclear Power Station.

With a strong determination to allow no delays or stagnation in reconstructing Fukushima, we will make every effort to implement reliable and safe decommissioning, develop understanding of the safety of ALPS treated water, and lift evacuation orders in Restricted Areas. In those areas, our efforts will go toward rebuilding businesses and livelihoods, creating new industries, and setting measures against reputational damage.

Closing Remarks

Expo 2025 Osaka, Kansai, Japan will be held in 2025. Within the theme of "Designing Future Society for Our Lives," we will deliver to the world not only the latest technologies but also a collection of various issues solved by using them. The government will work in solidarity with local governments and the business community to create a legacy as an Expo that help to solve both Japan and the world's issues.

2022 is the year of the Water Tiger. This seems to mean: the harsher the winter, the more full of life and brilliant the buds of spring will be. There is no winter without a spring. Especially now, as the harsh situation we are in continues, all METI staff will make a concerted effort to ensure that the future beyond this crisis will be even brighter.

This year, I would appreciate your continued understanding and support once again.

HAGIUDA Koichi
Minister of Economy, Trade and Industry