The Journal The Authority on Global Business in Japan

Ministry of Land,
Infrastructure,
transport, and Tourism

PROMOTION OF INFRASTRUCTURE EXPORTS

At the end of March, the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) made public its action plan for the promotion of infrastructure exports backed by the Japanese government. The MLIT-related items in the guidelines seek to realize the government’s Infrastructure Export Strategy, by which Japan—through aggressive competition—will seek a winning strategy against China and other countries that have been promoting their own expanded overseas infrastructure investments.

The action plan incorporates guidelines for some 60 projects that Japan will be pushing in foreign countries and regions over the next three to four years. In addition to a high-speed rail line linking the Malaysian capital of Kuala Lumpur, to Singapore, other plans include the already inked building of a Shinkansen-type railway—India’s first—between the cities of Mumbai and Ahmedabad, and the construction of a superconductive linear railway between Baltimore and Washington, DC.

In addition to the hard aspects, such as the rolling stock and railway infrastructure, the guidelines call for pushing projects through comprehensive support that will also emphasize such soft aspects as environmental measures and human resources training. Along with effective promotion of sales through efforts by Prime Minister Shinzo Abe and others, the fiscal conditions of newly developed economies will be considered. Optimal efforts will be made to harness the system of assistance through measures such as reducing the time required to set up international yen loans, waiving foreign government guarantees, and so on.

As stated, however, the plan’s overall contents do not appear to extend beyond the government’s existing “infrastructure strategy.” And the media, expecting that more information would be forthcoming, fired off questions along the lines of “Aren’t there any new projects?” But the government maintained that the contents “are already well known.” In addition to handing out 35 pages of material, officials arranged for a press meet; but the day after it was held, none of the major newspapers accorded it significant coverage.

The government has set a target of expanding foreign infrastructure orders to around ¥30 trillion by 2020, aiming for a figure roughly threefold that of 2010. This unmistakably makes such exports one of the main pillars of the Abenomics growth strategy. The perceived need to revamp the plan leaves the impression that, up to now, the progress of growth strategies has been sluggish.

Ministry of Internal Affairs
and Communications

DietDailies

SOFTBANK RESISTS INTERIOR MINISTRY’S “GUIDANCE”

A game of hide-and-seek over the reduction of the prices of smartphones—which are being reported by the media as “essentially free of charge”—continues to play out between the Ministry of Internal Affairs and Communications and major mobile operators.

On April 1, the ministry, in response to statements by Abe, issued a revised advisory to be applied to sales of smart phones. NTT DoCoMo and SoftBank quickly raised objections. Four days later, the two companies found themselves on the receiving end of “administrative guidance” (a Japanese euphemism for an official dressing-down that falls short of fines or other penalties). SoftBank’s public comments—to the effect that the company “would proceed quickly to adjust plans for subsidizing the purchase of terminals”—appeared bent on picking a fight with the ministry. SoftBank’s presumed conditions for falling into line would be “that the entire industry makes progress along the same lines,” indicating the company would determine its own position in response to rivals for top share (a reference to NTT DoCoMo), we have strong fears that this will wipe out competition in the marketplace and create disadvantages for consumers.”

When changing from another provider or changing the terminal (device), DoCoMo subsidizes the purchase, charging only ¥648 for a unit that effectively costs several tens of thousands of yen. SoftBank, on the other hand, charges nothing at all to move from a rival provider, and the sale price for nearly all device models has effectively been reduced to zero. In addition, from April 1, SoftBank initiated a campaign in which user fees are discounted by approximately ¥21,000.

The ministry views SoftBank’s commencement of a campaign beginning the same day that its guidelines went into effect as “problematic,” with one high-ranking bureaucrat unable to conceal his anger, saying, “It’s akin to an act of rebellion against us.” NTT DoCoMo’s reaction has been to request clarification from the ministry and to provide written notification of any results.

Another high-ranking member of the ministry, however, was quoted as saying, “Even by seeking to halt the ‘effectively zero yen’ policy, the game of hide-and-seek just gets repeated. We need a means of forcing them to sweep out their profits [which are said to be excessive].” He emphasized the long-running argument favoring revisions to the user rate structure, such as discounts for existing customers.

Keizaikai magazine
The government has set a target of expanding foreign infrastructure orders to around ¥30 trillion by 2020.