Press Conference by the Press Secretary 7 July, 1998

1. Visit by Minister for Foreign Affairs Keizo Obuchi to the People's Republic of China from 15 to 19 July
2. Visit by Secretary of State Madeleine K. Albright of the United States of America to Japan
3. Status of Japanese tax regime
4. Assistance from Japan to the People's Republic of Bangladesh
5. Visit of Prime Minister Sergei Kiriyenko of the Russian Federation to Japan from 13 to 14 July
6. Relations between Japan and the Republic of the Philippines
7. Accession of the People's Republic of China to the World Trade Organization
8. Elections in Australia
9. Assistance by the Government of Japan to Association of Southeast Asian Nations (ASEAN) members
10. The state of Japanese foreign policy

1. Visit by Minister for Foreign Affairs Keizo Obuchi to the People's Republic of China from 15 to 19 July

   Good afternoon. Seems we have a full house this afternoon. I have one announcement and one comment to make, both of which have to do with the People's Republic of China. Minister for Foreign Affairs Keizo Obuchi will visit China from Wednesday, 15 July to Sunday, 19 July and in the course of his stay, he is expected to have talks with his counterpart, Foreign Minister Tang Jiaxuan of the People's Republic of China, and is also expected to meet with other Chinese leaders. We have started a process of trying to arrange appointments with other Chinese leaders as well. In addition to Beijing, he will be traveling to Chengdu, Chongqing and Shanghai. As you know, there have been high-level contacts between Japan and China, over the past year especially. Last year was the 25th anniversary of the normalization of relations between Japan and China and Prime Minister Ryutaro Hashimoto visited China in September last year and then-Prime Minister Li Peng of the People's Republic of China came to Japan in November. This happens to be the 20th anniversary of the conclusion of the Peace and Friendship Treaty between Japan and China. And in April, Vice President Hu Jintao of the People's Republic of China came to Japan. We expect to have the visit of President Jiang Zemin of the People's Republic of China some time this autumn. So Foreign Minister Obuchi is going to China partly to prepare the ground for this big event in autumn.

2. Visit by Secretary of State Madeleine K. Albright of the United States of America to Japan

   My next announcement or rather, comment, is with respect to the visit by Secretary of State Madeleine K. Albright of the United States of America last Saturday. She came to Japan on her way back home from China. She was accompanying President William Jefferson Clinton of the United States of America through President Clinton's nine-day visit to China. Secretary of State Albright met Prime Minister Hashimoto and also Foreign Minister Obuchi and briefed us on the outcome of President Clinton's visit. I think the important points which emerged from the meetings between Secretary of State Albright and Prime Minister Hashimoto and Foreign Minister Obuchi are as follows. Firstly, the importance of the Japan-U.S. alliance which was emphasized by Secretary of State Albright in the course of her conversations and the very fact that Secretary of State Albright came to Japan to brief us on President Clinton's visit to China immediately after the presidential visit, is in itself an indication of the importance the United States of America attaches to its relationship with Japan, and we appreciate that. Secondly, Secretary of State Albright has told us that the visit by President Clinton to China was very successful, and we concur in that judgment. Secretary Albright also said that this successful visit by President Clinton to China was not only in the interests of the United States and China, but also in the interest of Japan and other countries and in describing the significance of the visit in this context, she referred to the trilateral relationship between Japan, the United States and China as a win-win-win situation, as opposed to a zero-sum game. I have said on several occasions in the past in this press conference that we consider this trilateral relationship to be a positive-sum game. That sort of assessment was echoed by Secretary of State Albright. Foreign Minister Obuchi told Secretary of State Albright that we did feel that this further development of the U.S.-China relationship through President Clinton's visit to China was indeed in the interest of peace and stability in the Asia-Pacific region. Thirdly, the forthcoming visit by Prime Minister Hashimoto to the United States, which is going to be an official visit, was discussed between Secretary of State Albright and Prime Minister Hashimoto and Foreign Minister Obuchi. Both sides agreed that in this forthcoming visit, there should be a focus, not only on the bilateral relationship between Japan and the United States or the bilateral economic relationship between Japan and the United States, but also on the whole broad range of cooperative relations that exists between Japan and the United States with respect to a host of regional as well as global issues. The fourth point is that there is the question of the Japanese economy; the desirability of the recovery of the Japanese economy was also discussed. We do feel that for us to tackle the problems before us in order to put our economy back on the track to recovery, for growth, is not only in Japan's interest but also in the interests of Asia and the world, and that sentiment was echoed by Secretary of State Albright. She said that the United States was encouraged that the Total Plan for the revitalization of the financial system was announced last week, somewhat earlier than had originally been expected. She repeated the points made by President Clinton in his press conference in Hong Kong, that the United States considered it important for Japan to take concrete actions promptly, and that is what we are working very hard towards.

3. Status of Japanese tax regime

   Q: It seems that there are some contradictions between the statements of Japanese officials concerning tax cuts. Prime Minister Hashimoto said something and Foreign Minister Obuchi during his joint press conference in his reply said that he promised to cut taxes and the next day, Mr. Koichi Kato said that there was a misunderstanding and that the Prime Minister did not say that. So where is the truth in all of these statements?

   A: Well, I wonder to what extent this may be a case of the message being somewhat garbled in the process of being transmitted. The key message from Prime Minister Hashimoto, to begin with, is that he feels that we need to take a comprehensive look at our whole tax system. In doing so, we should not rule out possibilities from the beginning, so there should be no sort of sanctuaries to begin with in the process of reviewing our tax system. The review will have to go through the required processes, that is, the review will have to be looked at by the relevant Council within the Government as well as within the Liberal Democratic Party (LDP). So we cannot prejudge what may be emerging from that process but Prime Minister Hashimoto expressed his expectation that the outcome of that review, which is that package of reform which might be arrived at as a result of that review, should be something that would be put in place on a permanent basis rather than on a temporary basis. That is basically the message. That review will cover corporate taxes and Prime Minister Hashimoto has already stated that our intention is to reduce the rate of corporate taxes to a level which is common internationally and that review is also to cover the whole structure of personal income taxes. And I repeat that what is being contemplated is to conduct this review with a view to arriving at a reform of the whole system, which would be on a permanent basis.

4. Assistance from Japan to the People's Republic of Bangladesh

   Q: I come from Bangladesh, so my question might be a little bit impertinent to your regular press briefing presentation.

   A: Nothing is impertinent.

   Q: As you know, Bangladesh is undergoing major economic reforms. Development in South Asia has been changed after the nuclear tests by India and Pakistan because following the tests, Japan declared economic measures suspending economic assistance to India and Pakistan. So my question is, whether the Japanese Government is thinking of increasing Official Development Assistance to Bangladesh in view of the economic measures, the reforms taken by Bangladesh, as well as the development in South Asia.

   A: I think the short answer to your question is that there is no sort of direct linkage in the sense of swapping aid to one country with aid to another. I would also add that the distribution of our aid and the question of how much aid and what sort of aid we will extend to a particular country, is taken in the light of a variety of factors: in particular, the stage of development of that particular country and the efforts which that recipient country itself is making towards achieving these goals, and of course the actual requirements for development and the economic situation and a host of other factors. So the decisions of that kind will be made on the merit of each case. Having said that, I would say two things. One is that we are in a period of considerable fiscal stringency because of mounting budget deficits and so forth but at that same time, we are working very hard to maintain our Official Development Assistance (ODA) as much possible. We have been the number one donor to the People's Republic of Bangladesh in terms of ODA, and I think it is fair to say that we expect to remain the number one donor to Bangladesh for quite some time to come. I have talked earlier about taking into account the stages of development and the efforts made by that particular country in terms of achieving developmental goals. We are very much aware that Bangladesh is tackling very seriously this task of economic reform and is achieving some results. For example, as I understand it, your growth rate has exceeded 5% and your grain production has reached a level of about 20 million tons. We do hope that your economy will continue to develop smoothly and we would like to continue to help Bangladesh proceed further along that path.

   Q: There is a report in the press that the Japanese Government is contemplating the recruitment of new workers from Bangladesh after imparting to them required training for development work in Japan.

   A: I am not quite sure whether that report is correct. Firstly, in terms of our training, or in terms rather, more broadly, of our technical cooperation with Bangladesh, we are engaged in technical cooperation programs of various kinds to Bangladesh, but its main objective is to help the human resources development in Bangladesh. Our motive is not really to train the people in Bangladesh so that they can come to Japan to work for the Japanese economy. So in that sense I do not think that report is quite correct. I might also add that our technical cooperation to Bangladesh takes various forms. For example, we do receive trainees from Bangladesh who will learn about various vocational skills and so forth. We send our technical experts to Bangladesh. We will also send survey missions to Bangladesh to identify projects. We also send our Japan Overseas Volunteers (JOV), a sort of Japanese peace corps, with people who live in various parts of Bangladesh to help the people in the local communities and that is a rather direct form of transferring technology and other knowhow to the people of Bangladesh. So there are these various means of technical cooperation but I emphasize that the emphasis is on helping the human resources development in Bangladesh.

5. Visit of Prime Minister Sergei Kiriyenko of the Russian Federation to Japan from 13 to 14 July

   Q: Could you comment on the upcoming visit of Sergei Kiriyenko to Japan?

   A: Earlier, the plan was for Prime Minister Sergei Kiriyenko of the Russian Federation to visit Japan from Sunday, 12 July to Tuesday, 14 July, but it has been changed. He will be visiting from Monday, 13 July to Tuesday, 14 July, but the substance of the program has not really changed in the sense that he will of course be meeting Prime Minister Hashimoto, Foreign Minister Obuchi, some business leaders and possibly other members of the Government of Japan. I understand that Mrs. Mariia Kiriyenko is going to accompany him. I also understand that Prime Minister Kiriyenko is quite an expert in some Japanese martial arts like aikido and kendo. What I do not know is whether he will have an opportunity to exhibit his skillsin the couse of his stay in Tokyo.

   Q: What about his trip to Kansai?

   A: I do not think he will have the time to go to Kansai now that the schedule has been somewhat abridged.

   Q: Has there been any indication why Prime Minister Kiriyenko's visit has been abridged?

   A: I think it is basically just a question of his coordinating his very busy schedule, and I repeat that the substance of the visit is not really affected in terms of his programs in Japan.

6. Relations between Japan and the Republic of the Philippines

   Q: Does the Government of Japan foresee any major changes in the relations between Japan and the Philippines since President Estrada, who recently took his oath of office, appears to be more focused on domestic affairs, especially in anti-crime activities and pursuing regional international relations.

   A: I do not think we foresee any major change in our relationship with the Republic of the Philippines. We have enjoyed a relationship of close friendship for quite some time and I think we do have a very solid basis on which to develop our relationship further. You mentioned the interest of President Joseph Estrada of the Republic of the Philippines in domestic affairs. Any leader has a considerable degree of interest in his domestic affairs, so I think it is only natural. We do hope that we will be able to continue to help the Philippines with the task of reforms in its economy and other areas. This happens to be a time of considerable challenge for all of us in Asia, and I think it is very important for us to continue to work together.

7. Accession of the People's Republic of China to the World Trade Organization

   Q: Coming back to the trilateral relationship. During his visit, President Clinton raised China's entry into WTO. Since the Japanese administration is keen on this trilateral relationship, what is the stand of the Japanese administration on the entry of China into the WTO?

   A: Firstly, one point which both Japan and the United States attach importance to is to engage China in the international community in poltical, strategic and economic terms and when you look at the question of trade specifically, China is now the number ten trading nation in the world and we cannot realistically expect to strengthen the internatioanl trading system without having China in it. We do feel that it is essential for China's economic development for China to go forward with its economic reform and to be engaged in the international economic community by abiding by its rules and that I think is also the desire on the part of the internatinal community. For these reasons, we are supportive of China's early entry into the World Trade Organization (WTO) and we have been carrying out our bilateral access negotiations with China. In fact, we came to a sort of substantive agreement with China in September last year with respect to the access negotiations on goods. We are in the process of carrying out our access negotiations with China on services and there has been some considerable progress. The United States on its part is carrying out its bilateral negotiations with China on this and it seems that some progress is being made so we look forward to a successful conclusion of these negotiations. Without going into too much technical detail as to how accession to WTO is handled in Geneva, there are two factors. One is the bilateral access negotiations which will be conducted by China and each of its trading partners and there is also the multilateral negotiation in Geneva regarding the accession protocol. So there is still some way to go, but we do hope the day will come when China will join the WTO.

8. Elections in Australia

   Q: I realize the Pauline Hanson phenomena is not new news. I understand that it is being reported in a rather factual way in Japan, not in an emotional way. However there is great concern that Japanese investment in Australia is under some threat as a result of this. Is that concern misplaced? Could you comment on that?

   A: Yes. I would be happy to comment. I might mention that I may take off my hat as a spokesman for a moment and say that I was number two in Australia between 1989 to 1991. I think the points that you mentioned that the reports in Japan on this have been rather factual and not emotional, I think that in itelf may be a rather important factor. We are talking about the election results in Queensland and that is very much a matter of Australian internal politics and as such I do not think we should really put ourselves in the position of offering comments on that. At the same time I think the general feeling, if I may talk about the general feeling on the part of the Japanese people, is that I do not think they are sort of very much exercised about the effect of this on Japan-Austalia relations in general. I may add one more point which is that the Australia that I knew when I was in Canberra was an international, multicultural Australia and the question of whether or not there would be any change or not in that sort of Australia, is something that is for the Australian people and it is not something on which I would offer any comment.

9. Assistance by the Government of Japan to Association of Southeast Asian Nations (ASEAN) members

   Q: As you know, the level of economic development varies among ASEAN countries. Will Japan provide assistance that fits the level of development of each ASEAN country? Is there any particular policy as regards Japan's level of assistance to ASEAN countries with less economic development?

   A: Yes, when we extend our aid, especially ODA, to various developing countries, we do take into acount the fact that there are a variety of levels of economic development reached by the recipient countries and that is certainly a factor. There are other factors as well though, because when you talk about Southeast Asia today, there are some acute difficulties experienced by some of our Asian friends. So we take these factors into account as well. Exactly how we decide on our aid policy to that particular country--what we do normally is to engage in a policy dialogue with the recipient government and we conduct our surveys in which our Ministry and the Japan International Cooperation Agency (JICA) and the Overseas Economic Cooperation Fund (OECF) and others participate and we look into the actual economic situation as well as the developmental situation of each government. And on the basis of that sort of dialogue and surveys, we try to identify the needs and priorities on the part of each government. You referred in particular to some of the less developed countries in Southeast Asia or among the members of the Association of Southeast Asian Nations (ASEAN) and if you use, for example, the criterion of per capita gross national product (GNP), there are some countries which would fit that description--the Socialist Republic of Viet Nam, the Kingdom of Cambodia and the Lao People's Democratic Republic, for example. I think it will be generally true to say with respect to these countries, that their priorities and needs tend to be concentrated on what you call the basic human needs areas and social sectors such as health and medical care, as well as human resources development. Those are the priority areas generally speaking and the forms of assistance that we extend to these countries tend to be in the areas of grant assistance as well as technical cooperation. But I might also add that I referred earlier to the current difficulties experienced by our Asian friends, and one of the areas which the current difficulties have highlighted is the need to provide for what you might call the social safety net to help alleviate the plight of the poor and the socially disadvantaged in each country who do suffer when that particular country tries to implement very rigorous economic restructuring programs and we have keenly felt the need to help our friends in that regard. The Republic of Indonesia is one example and that is why we are placing considerable emphasis on, for example, extending food aid because of the rice shortage and just a few weeks ago we made the decision to extend 550 tons of rice to Indonesia. We have also been extending emergency grant assistance to Indonesia of pharmaceutical goods such as dialysis equipment, dialysis tubes, syringes and so forth, as well as powdered milk for children and other medical and pharmecutical products. Also, we have been extending very concessional sector program loans to Indonesia and these are also designed to help the plight of the poor and the socially disadvantaged.

   Q: You have mentioned Vietnam, Cambodia and Laos earlier in relation to Southeast Asia. What about the other ASEAN economies, especially since the regional coalition is looking towards Japan to right the economy?

   A: When we look at the question of Japan's role in Southeast Asia, especially against the background of the economic and financial turmoil, I think there are a couple of ways in which we see our role in that regard. One is through our contribution and support in the context of the efforts led by the International Monetary Fund (IMF), and I am referring specifically to the Kingdom of Thailand, the Republic of Korea and Indonesia. In fact, we have extended support amounting to US $19 billion in the IMF-led efforts to these three countries, which is by far the largest. We have been extending our support and assistance through other bilateral efforts and I was giving you some details with respect to Indonesia. If you count direct bilateral assistance to these countries, our total contribution to these Asian countries amount by now, to US $42 billion. If you had to look for some comparable figures from other countries, the second is the United States, and that is about US $10 billion. That is one way. The second way is, of course, for us to try to mobilize the international community in support of our Asian friends and we have been doing that in the context of the ASEAN meeting in London, in April, and also in the context of the Group of Eight (G8) Summit Meeting in Birmingham, in May. One of the points that we have been emphasizing in that context is the point I mentioned earlier--the importance of social safety nets. I think that that point is beginning to have some echo on the part of the international community. Third, as I was saying earlier in response to another question, is for us to put our economy back on the track to sustained growth. It is not only in our interest, but also in the interest of our Asian neighbors as well as other partners, and that is something that we are grappling with very seriously. In that effort, we are putting priority on three areas--the immediate priority at the moment is the restructuring and revitalization of our financial market. I think that in the course of your trip you may have heard a lot about removing the overhang of bad assets from the books of the financial institutions and the bridge banks and so forth. I would not dare try to explain all the details to you, but that is very important and that is something we are working very hard on. I think we have the tools for that and we are determined to make these tools work. The second priority--it has been a consistent priority--is to achieve growth on the basis of domestic demand and we announced this package amounting to more than 16 trillion yen in April. We worked out the supplementary budget to implement it. The supplementary budget has been passed, so the package is in place and we hope that there will be tangible effects coming out of that package in the coming months or possibly weeks. And the third priority is somewhat more longer term, but it is to further open and deregulate the markets in Japan and one important aspect of that is the so-called "Big Bang." The Japanese Big Bang is the liberalization of the financial market. So we are pursuing these goals at the same time, and it is not easy to pursue all these goals at the same time but we are determined to do as much as we can.

10. The state of Japanese foreign policy

    Q: I heard that in some statement by Foreign Minister Obuchi, he said that Japan should place more importance on international diplomacy rather than domestic issues. Does this mean a shift in Japanese foreign policy?

    A: Not from my viewpoint. And obviously, I speak as somebody who works at the Ministry of Foreign Affairs. I think I find that statement by Foreign Minister Obuchi to be very encouraging. As I recall, he was talking in the context of the demands put on the Foreign Minister and the foreign policy establishment in general, and the need for us to respond to these demands. In order for Japan to be able to play its appropriate part in the international community, I think that, I may be somewhat biased in this regard, but I think that that is a very natural sort of priority and I hope we will be able to live up to his expectations.