(Provisional Translation)

Address by H.E. Mr. Taro Aso, Prime Minister of Japan
at the Gathering with the Japan-China Future Business Leaders

My Message to Inspire and Encourage the Japan-China Future Leaders

Hotel New Otani Chang Fu Gong, Beijing, China
April 30, 2009

Chinese [PDF] / Japanese

Many young people who will be determining the future of Japan-China relations have gathered here. I have joined you today very much looking forward to having the opportunity to speak to you.

I am visiting Beijing this time at the invitation of the Chinese government. I believe that there is close communication between President Hu Jintao and Premier Wen Jiabao and myself, as we have met four times each over the last half year, including my current visit.

"If you want to be called 'young,' you need to worry about how to realize your ideals and never casually chase after compromises."

This is what I said more than thirty years ago as the President of the Junior Chamber International Japan (JCI), or Japanese "Jaycees," and as I speak to you here today these words have come back to my mind.

Not merely in the current era, but indeed whatever the era, the younger generation moves forward making use of the experiences of the previous generation. I have no doubt that you will undertake your future activities with increasingly open creativity and sensitivities.

Today, I would like to "send up a cheer," as it were, in support of you -- a message to inspire and encourage you, the leaders who will shoulder the next generation of Japan and China. I am speaking to you today in that spirit.

Addressing the Economic Crisis

We are currently facing a global economic crisis, or indeed a global financial crisis, that is said to occur once in a century. I view this crisis as an extremely severe one, for which a surefire solution is nowhere to be found in any economics textbooks we've had until now. Things that have never happened before are now taking place. You won't find an economics book that is written from the premise that even with the interest rate on loans at virtually zero businesspeople won't borrow money to engage in capital investments. In other words, there are no books on economics able to explain the economic phenomena currently taking place. However, I believe we must approach this crisis constructively as a lesson, taking it as an opportunity through which we can forge a more robust economy and system of governance once we overcome these challenges.

In this crisis, I consider it absolutely critical that Japan and China, the second- and third-largest economies in the world with major influence over the world economy, move in coordination with each other.

Specifically, it is necessary to implement policies by which our countries, first, as measures to address the financial markets, ensure liquidity to maintain the integrity of the banking system, conduct capital injections into financial institutions, and dispose of non-performing loans; second, stimulate the economy by mobilizing large-scale fiscal outlays; and third, learning from the Great Depression of 1929, resolutely oppose protectionism.

It is in that context that we highly commend the fact that since the end of 2008 China has been steadily implementing economic measures at a scale of some four trillion yuan. Japan has thus far undertaken measures with a total project scale of 75 trillion yen, including 12 trillion yen of fresh fiscal outlays, and we are now moving towards implementing additional economic measures with a total project scale of 57 trillion yen, including 15 trillion yen in new fiscal expenditures, which was decided this past Monday, three days ago.

Economic Growth in Asia

Next I would like to address the issue of how to bring growth to the Asian economy and what kind of society we should create once we overcome this economic crisis. Asia is the 21st century's center of economic growth open to the world and has the greatest latent potential of anywhere in the world. It is imperative to prepare an environment in which that potential can be utilized sufficiently. The cooperation of Japan and China, which lead the economy of Asia, will in my view become the major premise in working to achieve that.

First of all, I consider it necessary to advance strongly both cooperation and frameworks for dialogue within the Asian region.

I will share three examples of this with you.

My first example is what is known as the Chiang Mai Initiative, a network of bilateral currency swap arrangements intended to prevent a currency crisis in the East Asia region. This framework has contributed greatly to the stabilization of the regional financial system. Japan and China now both have the same intention, namely, that in the future, we hope to change this from a bilateral framework to a multilateral one at an early time, expanding and implementing it so as to further increase its capacity.

A second example is promoting the development of regional infrastructure within Asia in order to accelerate the flow of people, goods, capital, and information. This has a substantial impact on both economies and societies. For example, it currently takes two weeks for goods to travel by land and sea routes from Ho Chi Minh City in Vietnam across the Indian Ocean to Chennai, India, using the Strait of Malacca. We will build a land route from Ho Chi Minh City to the Andaman Sea cutting through the three countries of Vietnam, Cambodia, and Thailand. We will develop a land route across these three countries, but currently crossing national borders takes a great deal of time owing to customs clearance, which involves an inordinately cumbersome set of technical procedures. If we can reduce the time involved, then it will be possible to transport goods from Ho Chi Minh City to Chennai in only about eight days.

My third example is that of the Japan-China-Republic of Korea Trilateral Summit. This summit meeting among our three countries, which was convened in Fukuoka in Kyushu this past December independently of other international meetings for the first time, was a historic one. As you are already perhaps aware, the scale of the combined economies of Japan, China, and the Republic of Korea actually surpasses that of the combined economies of the UK, Germany, and France. Consequently the world took note of the cooperation among our three countries. This year, we intend to ensure the success of the second such trilateral summit, which China will be hosting, and advance trilateral cooperation still further. I say this because until now we had never advanced the same project through the cooperation of Japan, China, and ROK.

Creating a New Society

I believe that as Japan and China bring about sustainable economic growth, in the future, it will also become impossible for them to ignore the issues facing both of their societies in common. A prime example of this is issues in the environment and energy conservation.

The other day, as a vision for Japan's growth to 2020, I announced that Japan should promote a low-carbon emission revolution as one pillar of a new growth strategy.

A low-carbon emission revolution would come about through new technologies and at the same time a transformation of the social system of the Japanese people. For that reason, Japan has launched efforts to popularize solar panels, solar batteries, electric cars, and energy-saving home appliances.

The key to these efforts will be strong political will -- and the message -- that new demand will be generated through policies. We have decided on a policy package for solar power generation composed of, first, subsidies for equipment, because a substantial amount of money is necessary to install solar panels on the roof of a home; second, a "buyback program" for the electricity generated in households, through which excess electricity generated in households can be sold to electric companies at a rate double the normal price of electricity; and third, the installation of solar panels at more than ten thousand elementary and junior high schools. For electric cars, we have eliminated vehicle excise taxes -- excise taxes apply whenever you buy a car -- and automobile weight taxes while also extending assistance of 100,000 yen to buyers of eco-cars and 250,000 yen to people who buy one while scrapping an old car more than 10 years old.

China has also set the period until 2020 as a "strategic opportunity period" for comprehensive improvements to China's overall national strength and is moving ahead with a growth strategy based on a "Scientific Development Perspective." Within these, environmental considerations constitute one of the elements of paramount importance.

Today I had the opportunity to visit Shoudu Iron and Steel Company, an ironworks where a Japan-China cooperation project is underway. There they have laudably achieved steel production in a way compatible with environmental improvements and enhanced energy efficiency. As you know, China is the largest producer of crude steel in the world, the absolute largest. Japan enjoys the highest level of environmental and energy saving technologies in the world. The integration of these would enable both Japan and China to dramatically advance still further. Today, my firm belief in this area has been bolstered even more.

In addition, a declining birthrate and an aging population are completely certain to occur in China, since China promotes a policy of one child per family. The issues of a declining birthrate and an aging population are ones which neither Japan nor China can avoid as we create a new society. Some analyses state that in China in 2015, the workforce will stop increasing while the elderly population will reach 200 million people. Analyses of demographic shifts are normally quite correct, so in 2015 the elderly population will be 200 million people. It is also estimated that Japan will have one in four of its population aged 65 or older in 2013. In response to this situation we must bring about a vibrant society of good health and longevity. We must create not a dark, impoverished aging society but rather a society of good health and longevity that is vibrant. To achieve this, it is essential that we develop medical and nursing care systems that enable the elderly to be active in society, and Japan is now launching efforts towards that end. I believe that in the future, Japan and China will be able to pursue considerable cooperative engagement in measures to address the declining birthrate and an aging population.

Cooperation towards World Peace

Thus far I have been speaking about issues for Japan and China to prosper sustainably. However, I believe we must remember that such an approach has meaning only when the international environment surrounding Japan and China is peaceful.

Since the end of the War Japan has firmly maintained the path of a peaceful nation, contributing to the prosperity and the stability of the world through peaceful means. According to a public opinion survey conducted by the British Broadcasting Corporation (BBC), Japan is highly evaluated, ranking two years in a row as the country anywhere in the world having the most positive influence, a rank it shares with Canada. As the Prime Minister of Japan, I pledge that in the future Japan will continue to walk the path of a peaceful country.

China has achieved rapid development in recent years. I believe that the economic development of China engenders opportunities for the international community, and it goes without saying that a good opportunity has emerged for Japan as well. However, it is also the case that some people are inclined towards harboring concerns that China's economic development will lead to it becoming a future military superpower. We are aware that in recent years China has been advocating a strategy of "peaceful development" and has resolved to contribute to building a world with a lasting peace and collective prosperity. In addition, we hope that China, by taking actions befitting such a decision, will ensure that anxieties and concerns do not emerge in the region and the world.

Japan and China must cooperate to bring about peaceful development, without becoming military superpowers or constituting threats to each other. I am of the firmest belief that this is what the international community expects of our two countries.

My Expectations of the Future Leaders

Future leaders and young businessmen and women who will determine the course of Japan-China relations, today I have given you my views on how to make even better the futures of Japan, China, Asia, and the world. However, in the 21st century it will be you who engage in various activities. For that reason, in preparation for the era to come, I very sincerely wish for you yourselves to think about what the future leaders of Japan and China together can do, and what you should do.

The eminent economist Joseph Schumpeter once pointed out the importance of innovation using the term "creative destruction." I urge you future leaders to pursue all types of possibilities without being fettered by stereotypical thinking. Let me share with you an example.

In the East Asia region, which accounts for more than a quarter of total world trade, Japan and China together comprise about half of that amount. Might it not be worth discussing the potential for further economic partnership between these two countries? And, depending on how things proceed, the potential for a Japan-China Economic Partnership Agreement (EPA) as well?

Moreover, in order to enjoy peace and prosperity into the future, would it not also be important for us to proactively consider the potential for Japan-China cooperation in the area of peacebuilding, such as disarmament and non-proliferation, peacekeeping operations (PKO), measures to counter piracy, and ensuring the security of sea lanes?

Based on this kind of thinking, yesterday I proposed to Premier Wen Jiabao the launch of a "Japan-China Future Leaders Dialogue" as a forum through which the generation that will determine the future of Japan and China can seek out and continually discuss dynamic initiatives. He agreed to the launching of this initiative.

"Neighbors into Perpetuity"

Japan and China both engage in foreign policy based on their individual national interests. In addition, each of our two countries has its own history, culture, and traditions. As a result, friction arises between our countries at times. Because our relations are close, I suspect it might be inevitable that various topics, issues, or problems emerge in the future as well.

However, I am extremely optimistic about the future of Japan-China relations. This is because I firmly believe that Japan and China bringing about their common interests in the months and years to come will support the development and the prosperity of our two countries and lead to the peace and prosperity of Asia and the world.

Japan and China, neighbors into perpetuity both geographically and historically, have chosen to create a "mutually beneficial relationship based on common strategic interests." It is my conviction that this is the correct path forward as Japan and China realize their common interests.

I hope that you, the younger generation, build up your frank discussions in business and indeed across the entire spectrum of fields, surpassing what has existed thus far, and generate a wealth of original ideas. I believe that it is not my generation but rather your generation that has the responsibility to generate creative ideas one after the other. Moreover, I am firmly convinced that you will build a bright future for both our countries, and by extension for the international community.

I would like to close with a message to encourage you, in my poor Mandarin.

日中年轻人, 加油!  (Young Japanese and Chinese, give it your all going forward!)

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