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Speeches and Statements by the Prime Minister

Speech by Prime Minister Shinzo Abe at the Worldwide Officers Meeting of the Boston Consulting Group

Monday, May 22, 2017

[Provisional Translation]

Good evening everyone. Welcome to Tokyo. My name is Shinzo Abe.

I heard that close to 1,000 officers of the Boston Consulting Group (BCG), who advise business leaders all over the world, would be in attendance this evening, together with their families, and so I decided to come and offer my sincere welcome to you all.

The evening in Tokyo is rather bright, is it not? And yet Japan's CO2 emissions are not increasing. This is because Japan is a world leader in the use of LEDs. Furthermore, it is above all due to the many stars that shine above the city streets. I am referring of course to the fact that Tokyo is home to 227 Michelin-starred restaurants, more than any other city in the world.

Under the Abe administration, Japan has undergone great changes. I believe that today you discussed the opportunities and appeals in Japan's regional areas. Japan's regions are full of hidden resources and assets, and I hope that you will learn more about them.

Abenomics sets out two major targets for inbound demand. These are to increase the number of visitors to Japan, and also to increase foreign direct investment (FDI) in Japan.

Under the previous Cabinet, the annual number of inbound visitors stood at 8 million. Immediately after the inauguration of the Abe administration, with great determination, we boldly introduced waivers or relaxation of visa conditions, and also improved the duty-free system. Momentum among the Japanese people to provide omotenashi, or hospitality, is also increasing. As a result, last year, the annual number of overseas visitors to Japan reached 24 million, thus tripling over the course of four years. Wonderful scenery and flavors from all over Japan, some of which even the Japanese people themselves have not noticed, are gaining publicity throughout the world. We are aiming for 40 million inbound visitors to Japan in 2020.

FDI in Japan, on the other hand, is showing little signs of growth. Our target is 35 trillion yen in net investment by 2020 but as of the end of 2015 the amount stands at 24 trillion yen, which is two-thirds of our target. Low FDI in Japan has continued to be a challenge for many years.

Japan may be seen as distant, closed, and expensive.

However, I believe that Japan cannot develop further unless business conditions are attractive to foreign businesses, and that the Japanese system must take into account the perspective of foreign businesses. I therefore highly welcome any views you may have in this regard.

Under Abenomics, we have reduced the effective corporate tax rate over the past four years. Last April it reached the 20%-29% range. In the coming fiscal year we will reduce the effective corporate tax rate to a level similar to that of Germany.

Japan is also advancing negotiations of the Japan-EU Economic Partnership Agreement (EPA) with the EU. If the agreement is reached, it will further improve the environment for European companies to invest in Japan.

If you take a look at the actual conditions in Japan, you will find that it is full of sources of innovation. For example, Japan has many small- and medium-sized enterprises equipped with outstanding materials and technologies. They produce prototypes in a short period of time, while still paying maximum attention to detail. In addition, when the Japanese companies produce parts, they take the initiative and come up with ways to further improve the functions of the parts as they process them. The depth and strength of Japan's supporting industries is not something that can be found in any other country.

Furthermore, Japanese users are rigorously exacting. Combining all these elements with excellent resources from abroad has given rise to many revolutionary products.

For example, cosmetics company L’Oréal has applied the technologies of a Japanese pigment manufacturer to produce brightly-colored lipsticks and foundations that were previously not possible. The company also developed BB cream for Asian consumers based on research it conducted on Japanese people's skin. I have been told that the product is highly popular throughout Asia.

New developments are also occurring in the tourism sector. Hong Kong-based Mingly Corporation acquired the rights to operate Chikusenso, a hot spring resort in Zao that had gone bankrupt, and introduced the knowhow that it has built up from operating spa resorts in Thailand and Singapore. As a result, it has successfully assimilated itself into Japan's traditional culture, and visitors from all over Japan and the world are flocking to stay at Chikusenso.

I will break down all the barriers that prevent people from taking on challenges and build an environment that is innovation-friendly. Recently, Apple opened a development center in Yokohama. In the field of regenerative medicine and gene therapy as well, there are a number of American venture companies opening cutting-edge R&D centers in Japan, as a result of our efforts to speed up the product approval process.

"Made in Japan" has long been a synonym for outstanding quality. Now, with the help of foreign companies who have accumulated a wealth of experience around the world, it has evolved to become "Created in Japan," and is well-received around the world.

Is Japan really so distant? Regardless of whether or not it is physically distant from Europe and the United States, Japan is the closest gateway to Asian markets, the growth center of the world. I hope you will change your view of Japan, and see that it is full of opportunities for innovation that leads to new products and services.

Is Japan really so closed to the outside world? I am changing this aspect of Japan. It is now possible for highly-skilled professionals to receive a work visa within 10 days. There is also no limit to how many people can receive such visas. I have also created a Japanese-style green card for highly-skilled foreign workers, which will make it possible to apply for permanent residency in Japan after only one year of living in Japan.

Finally, is Japan really so expensive? Please compare the prices of hotels in Japan and those in Europe and the United States. Or take a look at the cost of renting an office in Hong Kong or Beijing. If you go from Tokyo to the regions, prices are significantly lower. The amount of greenery is also significantly higher and the air cleaner. I am sure you are also well aware of the high levels of public safety and infrastructural reliability in Japan.

I hope you will experience for yourselves the fact that, in Japan, there are many opportunities, not only in Tokyo but also in the regions. I hope you will share that experience with business leaders around the world.

Allow me to make one last point. I understand that the last time this meeting was held in Japan was 34 years ago. It pains me to think that it could be another 34 years before the next meeting here. The thought saddens me. I hope that you will once again hold the BCG Worldwide Officers Meeting right here in Japan. We will welcome you with open arms.

Thank you for your kind attention.

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