Japanese Prime Minister Shigeru Ishiba's economic advisory panel called on Thursday for "bold policy steps" to promote domestic investments as the United States and other global powers scramble to rebuild industrial supply chains.
The panel, tasked to compile key economic policies for the government, made the call in line with Japan's target of doubling annual capital expenditure to 200 trillion yen ($1.34 trillion) by 2040.
After decades of deflation, annual capital spending in the world's fourth largest economy recovered the 100 trillion yen threshold in the year ended last March for the first time in 32 years.
"As the United States, China and Europe are likely to continue their own bold policy drives to promote investments in their countries, ... Japan should also consider bold steps to maintain its industrial base and boost competitiveness," the panel said.
Specifically, the panel called on the government to ensure the execution of its planned subsidies and other financial incentives for green energy, semiconductors and artificial intelligence to lure investments from companies.
It said various obstacles to building new plants and facilities should be removed, through steps such as deregulation of land use and better cooperation with local universities and high schools.
The panel also suggested ways to spur exports, beefing up efforts to grow new export pillars including food, agricultural products, entertainment content and tourism, as well as expanding exports to emerging countries.
The panel was launched by former Prime Minister Fumio Kishida in 2021 to work out a strategy to tackle wealth disparities and redistribute wealth to households in a "new capitalism" programme.
Ishiba has upheld his predecessor's new capitalism policy drive, focusing on getting the economy to fully shake off the deflation that has weighed it down for the last three decades.
($1 = 149.1400 yen)
