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Speeches and Statements by the Prime Minister

"Asia's Dream: Linking the Pacific and Eurasia" - Speech by Prime Minister Shinzo Abe at the Banquet of the 23rd International Conference on The Future of Asia

Monday, June 5, 2017

[Provisional translation]

    Thank you very much for the kind introduction.

    It is truly an honor to see gathered here leaders I respect from all around Asia. I wish to thank the organizers for inviting me to join you.

(A virtuous cycle between growth and distribution)

    At the G7 Taormina Summit, it was our discussions on trade and climate change that were in the spotlight. However, a common issue of interest for the leaders was what kind of society we should build going forward.

    How should we respond to people who wonder if disparities in society will become more pronounced as a result of globalization and innovation, or worry they will be unable to keep up with such changes?

    We need to face up to such apprehension squarely and respond to it, and make it possible for our citizens as a whole to feel, in a tangible manner, that they are enjoying greater prosperity.

    Only then will we be able to maintain public support for free trade.

    After I conveyed this point of view to my colleagues at the summit, the G7 was able to agree to keep our markets open and to fight protectionism.

    In order to restore vitality to the economy, over the past four years, Japan has reduced corporate taxes, strengthened corporate governance, and undertaken reforms to regulations that had been as stubbornly unyielding as bedrock.

    We have at the same time been working to bring about a society in which all citizens have a chance to fulfil their potential. This is a Japanese-style "inclusive society", in which anyone-old and young and men and women alike-can take advantage of opportunities, and regain their footing should they stumble along the way.

    In order to ensure the fruits of growth are shared throughout the economy, I have called on large companies to make certain that all of their dealings with small- and medium-sized enterprises are made in a fair and proper manner. I have also called directly on companies to raise their workers' salaries.

    Recent economic indicators are improving.

    Even as the population is decreasing, our GDP has hit record levels.

    Employment has expanded by 1.85 million people since my administration took office, with more than 80% of that being women entering the workplace.

    The unemployment rate stands at 2.8%. Almost all young people newly graduating from university or high school are finding jobs.

    We have come this far by aiming to create a virtuous cycle between growth and distribution.

    It was in that context that we concluded negotiations on the Trans-Pacific Partnership Agreement, or TPP, and won Diet approval for the pact.

    We succeeded in gaining public support for something the world had thought Japan could never do- high-level trade liberalization.

(A free and fair economic zone)

    But it is not only Japan.

    Viet Nam also undertook a major decision.

    State-owned enterprises have played an important role within the Vietnamese economy.

    The TPP was the very first multilateral trade agreement with rules formulated for such state-owned enterprises.

    Many must have thought that surely Viet Nam would not accept rules governing its state-owned enterprises. Yet Viet Nam turned such thinking on its head and instead chose a path of promoting reform by leveraging the TPP.

    I wish to express my respect to Prime Minister Phuc for the leadership he has shown.

    Unfortunately, the TPP has yet to come to fruition.

    However, I have not given up.

    Japan achieved its historic economic growth through free trade.

    When people engage in commerce and travel freely across national borders, a wide range of knowledge and experience is exchanged and new ideas spring up. It is this dynamism that will surely form the cornerstone for peace and prosperity around the globe.

    In addition, it must be something open to all and something fair, in which those who work hard reap rewards.

    So what would constitute rules for free and fair trade that are necessary for the Asia-Pacific region to develop? What kind of rules would enable not only major corporations but also SMEs and farmers to pursue overseas expansion without undue anxiety, protect originality and ingenuity, and ensure that added value is properly respected?

    It was exactly those questions that the TPP negotiating countries spent countless hours discussing in earnest, finally culminating in the  TPP agreement.

    Just the other day, ministers from the TPP member countries came together in Hanoi.

    With the leadership of Viet Nam, which chaired the meeting, the 11 countries-which we might call  "Ocean's Eleven"-reached agreement to move the TPP forward.

    Japan and the United States have launched a bilateral economic dialogue. We intend to create a rules-oriented framework between us that will serve as a model for Asia and the Pacific.

    The Regional Comprehensive Economic Partnership, or "RCEP," which is our future goal, can become a high-quality agreement by building on the rules that came to fruition under the TPP.

    Now, we are at a critical juncture.

    Will we be able to expand a free, open, and fair economic zone going forward? Or will we make no progress for the time being? I believe we find ourselves at just such a watershed moment.

    If we move forward, what we will see is a world in which high-quality rules cover an area from the Pacific to the Indian Oceans.

    But wait, we can go even further.

    I say this because Japan is negotiating a Free Trade Agreement with the EU as well. I want to see an agreement reached at an early time.

    Let us move forward in order to advance free and fair trade. Together with all of you here who share this ambition, I intend to hold this flag high going forward.

    I very much hope for your support.

(Asia' dream)

    Asia is diverse in its cultures, its peoples, and its religions. We will advance economic integration while respecting diversity, from which our dynamism arises.

    That is Asia's historic challenge.

    It is precisely because we respect each other that we should uphold common rules and create a free and fair economic zone.

    Asia's dynamism will link the Pacific and Eurasia. I believe this will become a dream shared in common by all the countries of Asia.

    In order to make that dream a reality, we will concentrate Japan's assistance on building high-quality infrastructure and fostering highly skilled human resources.

    Our financial cooperation amounting to some US$200 billion will come into motion this year.

(One Belt, One Road)

    This year a landmark change occurred on the map of the Eurasian continent.

    This year marked the first time that the city of Yiwu, China and the United Kingdom were connected by a freight train, which crossed the English Channel.

    The "One Belt, One Road" initiative holds the potential to connect East and West as well as the diverse regions found in between.

    Regarding infrastructure, there is a frame of thinking that is widely shared across the international community.

    First of all, it is critical for infrastructure to be open to use by all, and to be developed through procurement that is transparent and fair.

    I furthermore consider it essential for projects to be economically viable and to be financed by debt that can be repaid, and not to harm the soundness of the debtor nation's finances.

    I would expect that the "One Belt, One Road" initiative will fully incorporate such a common frame of thinking, and come into harmony with the free and fair Trans Pacific economic zone, and contribute to the peace and prosperity of the region and the world.

    Japan is ready to extend cooperation from this perspective.

 

(Contributions to be made through a "High Quality Infrastructure Partnership")

    Japan is promoting its "High Quality Infrastructure Partnership."

    We Japanese are very particular about some aspects of infrastructure.

    It must be safe and it must be environmentally friendly.

    The diligent and sincere people who work on the ground are solving problems and making sure these qualities are not compromised, day in and day out.

    Prime Minister Modi said that, "Bringing in a Japanese bullet train"-the Shinkansen-"will not just realize high-speed rail but serve as a major catalyst for the modernization of India's rail system overall."

    Mr. Modi was well aware that Japan's cooperation does not stop until technologies and skills, including those for maintenance, take root in the area where the infrastructure is being developed.

(Infrastructure cooperation in Lao PDR)

    In 1963, the Kurobe River No. 4 Hydropower Plant of Kansai Electric Power Company, better known as "Kuro-yon," was completed. Taking seven years and an investment of 10 million worker-days due to the challenges posed by the precipitous terrain, the plant was called "the most difficult engineering project of the century."

    The Nam Ngiep 1 Hydropower Plant in Lao PDR is referred to as the "second Kuro-yon."

    Kansai Electric Power Company, which handled the construction of the original Kuro-yon plant, is now working with counterparts in Lao PDR and Thailand towards the start of commercial operations in 2019.

    One thousand local jobs have been created.

    Moreover, the company is about to begin the transfer of operating technology over the long term, to assist in the plant's operations.

    Prime Minister Thongloun, please look forward to the plant's completion.

 

(Infrastructure cooperation in Viet Nam)

    Hanoi City Urban Railway lines 1 and 2 will relieve some of the traffic jams and air pollution resulting from Hanoi's rapid urbanization.

    But that is not all.

    Ladies and gentlemen, have you ever ridden the subways in Tokyo?

    The trains run on time.

    Operations are controlled electronically. Collision accidents do not occur.

    You don't even need a ticket. You can go anywhere by using a single card. But don't forget to charge your card with some money before you set out.

    Stations are no longer merely stations-you can use the charged card that serves as your ticket to go shopping or buy a meal.

    That very same card will allow you to transfer to a bus or a taxi.

    Stations are also connected to the buildings around them, so you can visit those surrounding buildings without getting wet when it's raining.

    How convenient and comfortable can we make the travel experience? The entire experience is permeated with the Japanese approach of uncompromising dedication to detail, together with ingenious Japanese ideas.

    Now we're passing on this combination of "uncompromising and ingenious" work.

    As a first step, I hear that not only the design of the Hanoi City Urban Railway but also the nearby operating bus routes and the layouts of the areas immediately surrounding the stations were formulated together with partners in Hanoi.

    How the streets of Hanoi will change going forward is something to really look forward to.

(Society 5.0)

    The speed at which innovation occurs is truly remarkable.

    Changes have reached the front lines of manufacturing in Asia.

    Consider machine tools operating in the factories of Thailand.

    Rotating lights are attached to the tops of machines to indicate the state of operations.

    If a breakdown occurs, that rotating light switches on. A signal reacts to that light, and through the Internet, a message arrives at the company's headquarters in Japan.

    The headquarters would use the experience it has accumulated over the years to deduce possible causes of the breakdown and devise a response and then swiftly send back instructions.

    As a result, the time needed to deal with the issue in the plant and the downtime for the manufacturing line drops dramatically.

    Such innovations have already become run of the mill.

    Data that has been collected via sensors linked through the Internet of Things, or "IoT," is accumulated in great quantities to become "big data," which artificial intelligence will analyze, giving rise to new wisdom.

    The future holds unlimited possibilities.

    One example is the unravelling of intractable illnesses.

    By keeping watch over patients across an extended period, data will accumulate, enabling us to see the mechanisms behind the causes of the occurrence or worsening of the illness. Beyond that, we expect to find clues for medical treatment.

    Self-driving vehicles are another example. Detecting what's happening on the road, how pedestrians are moving and where obstacles exist, these vehicles will become able to avoid dangerous situations automatically.

    There are high hopes that in an increasingly aging society such as Japan, this will let people move about without hesitation even after getting older and losing confidence in one's ability to drive.

    Yet another example is found in agriculture.

    If the experience and intuition of master farmers are captured as data and combined with data such as how plants ate growing and what the weather has been like, farmers without much experience will also be able to harvest farm products that are delicious and safe.

    However, the cultivation methods derived from such data may not be perfect.

    When we encounter unknown circumstances, the wisdom of people with an abundance of experience may surpass artificial intelligence. However, that wisdom will in time also be captured as data and artificial intelligence will become smarter still.

    We might consider this the "aufheben of intellect and technical skills."

    We call the new society into which we are about to set foot "Society 5.0." It will be the fifth society, brought about by the fourth Industrial Revolution, hence "Society 5.0."

    The essence of Society 5.0 is that it will become possible to elicit quickly the most suitable solution that meets the needs of each individual.

    We will become able to solve challenges that have defied resolution until now.

    Japan hopes to take advantage of AI and big data to overcome the challenges posed by its low birthrate and aging society and increase its dynamism going forward.

    I do not fear that the spread of AI will deprive people of jobs; instead, I view it as an opportunity for people to shift into more creative jobs.

    Japan aims to be "exhibit number one" proving that growth can be achieved through innovation, even if the population decreases.

    In order to achieve this, we will develop systems for cultivating human resources so people can continue to learn new things throughout their lives and take up new jobs in growing fields.

(Calling Asia's youth to Japan)

    "I want to go to Japan to see what it's like."

    "I want to help create Society 5.0."

    This April, Japan created a new process making it possible for young people and professionals who think this way to come to Japan from all around the world without hesitation.

    People who surpass a certain number of points and have worked in Japan for just a single year will be able to apply at once for a "green card"-that is, permanent residency. This is among the fastest speeds in the world.

    Wait times for visa applications will also be short. As a rule, the applicant will hear the result within ten business days.

    We want to borrow more of the energy of young people from all around the world.

    We will clear a path and point the way forward for young people who are even slightly interested in Japan, from the study of the Japanese language to jobs related to Japan.

    We will choose three locations in Asia to nurture Japanese language teachers.

    We will provide opportunities for Asian high school students studying Japanese to live in Japan for ten months. This will be at a scale of 1,000 students over the next five years.

    We will also set up a window at Japanese diplomatic offices abroad and at JETRO offices so that people who want to work in Japan can readily make inquiries. I would be very pleased if you make use of this.

    I would like to ask Dr. Sommawan Khumpuang, if you are here today, to please stand up.

    Dr. Sommawan is developing a "minimal fab" at the National Institute of Advanced Industrial Science and Technology (AIST), one of Japan's largest public research institutions.

    As the name implies, minimal fabrication, or "minimal fab," produces semiconductors on very small wafers having a diameter of little more than a centimeter.

    This is ground breaking technology that can reduce capital investment to one-one thousandth of what is normally needed.

    And Dr. Sommawan Khumpuang was absolutely critical to its development.

    I wish to make Japan a country friendly to people like her where they find it easy to live and pursue truly rewarding work. Now that I see her in person, I have renewed my commitment to making this come about.

(Conclusion)

    Today I have spoken about a wide variety of policies I have been undertaking: a society in which all citizens have a chance to fulfil their potential; a free and fair economic zone that is open to all, in which people who work hard reap rewards; high-quality infrastructure supported by the people in the field; and Society 5.0, which derives the most suitable solutions meeting each individual's needs.

    Although these policies address different areas, there is one thing they all have in common. They are all geared towards valuing each and every individual. This is the thinking that lies at the foundation of everything.

    If we were to unleash the abilities of every single person in Asia and let them fulfil their potential, the resulting force would be truly tremendous.

    Linking the Pacific and Eurasia.

    Ladies and gentlemen, going forward, let us together make "Asia's dream" come true.

    Thank you very much for your kind attention.

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