Japan to unveil new reforms to boost economy

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Japanese Prime Minister Shinzo Abe is expected on Tuesday to unveil a fresh round of reforms to boost a nascent growth recovery, reports said, his second attempt at launching the “third arrow” of his economic action plan.

In a package that has already been heavily trailed, he will promise to slash Japan’s corporate tax rate — one of the world’s highest — and tackle other sectors long protected by government help, according to local media.
The prime minister and his economic and financial ministers are expected to formally adopt the plans before an official announcement is made in the afternoon.

Company taxes, including a rate of 35.6 per cent in Tokyo, are the second-highest in the Organisation for Economic Cooperation and Development (OECD) behind the United States, a factor some critics say is holding back the economy.

Abe is facing calls to make good on the final tranche of his growth action plan, dubbed “Abenomics”, which started in early 2013 with a huge public spending spree and an unprecedented monetary easing campaign by the Bank of Japan.

That gave the economy a shot in the arm and set off a stock market rally as firms’ profitability grew on the back of a sharply weaker yen.

But there are growing complaints that as the sugar rush of cheap money wears off, the lack of real structural reform could prove problematic block for an economy that has stumbled through more than two decades of disappointment.

Local reports say the package to be announced later in the day will include deregulation of sectors including medicare and agriculture, which are both heavily protected at present.

There will also be proposals to revise an out-dated law prohibiting dancing after midnight, Japan’s public broadcaster NHK said.

Abe’s much-touted first attempt at a package of structural reforms fell flat last summer, with critics saying they were too timid at taking on Japan’s many vested interests.

This year, the premier also faces a delicate balancing act as ordinary citizens struggle with lacklustre wage growth and rising prices for everyday goods — the result of Tokyo’s bid to stoke long-absent inflation as well as April’s consumption tax hike to 8.0 per cent from 5.0 per cent.

 

 

 

 

 

Source : Channel News Asia | June 24, 2014

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Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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