The Journal The Authority on Global Business in Japan

Ministry of Economy, Trade and Industry

China proposes classifying bicycles as “environmental products”

The World Trade Organization has been trying to reach a general consensus on an Environmental Goods Agreement (EGA), according to which solar panels and other environment-related products will be accorded tariff-free status.

China came up with the surprising proposal, advocating that bicycles be included in the list of tariff-free items. Japan’s domestic market faces a saturation crisis, and various countries have reacted negatively to the proposal, which is viewed as a coercive stance reflecting China’s desire to expand exports.

Beijing’s position is that bicycles “are a form of transportation that does not produce exhaust gases, nor do bicycles consume energy. Ergo, they should be treated as environmental products.”

China has also proposed that its bamboo products (such as flooring panels) be designated environmental products, since “bamboo grows quickly, is easy to use in a variety of ways, and requires less thermal energy in production than does concrete.”

The EU’s strong opposition to dropping tariffs reflects its position as a producer of such world-famous bicycle brands as Italy’s Bianchi and Germany’s Canyon. In 2011, the EU accused China of dumping bicycles and countered with an import duty of 48.5% for a five-year period, and other measures. In fact, 22 of the 28 EU member nations are opposed to elimination of the tariffs.

The previous round of EGA negotiations, which began in 2014, dropped tariffs on 54 items in the APEC region in 2012. The agreement is in the process of expanding to incorporate other items. They currently include electric generators powered by sources including biomass boilers, heavy-duty gas turbine generators, wind generators and their components, solar panels, and environment measurement instruments.

Considering the basis according to which such products are assessed, the EU believes that, “recognizing bicycles as an environmental product would represent a strained interpretation.”

Ministry of Land, Infrastructure, Transport and Tourism (MLIT)

Expanded distribution database to discourage rise in vacant residences

The Ministry of Land, Infrastructure, Transport and Tourism had decided to develop a database that will enable lateral exchanges of information on properties to be registered in a vacant-residence bank, containing information on empty homes and vacant lots. The system is expected to cover some 70 percent of the nation’s municipalities.

A growing number of houses and apartments are being left unattended or abandoned. To help curb disasters and crime, as well as avoid eyesores that downgrade neighborhoods, the scheme is aimed at putting properties back on the market and promoting their utilization by the private sector.

Property owners will be encouraged to donate empty residences to local governments or other bodies. An official in charge remarked, “We have already studied similar systems, set up by Nagasaki City and Okutama Town [in western Tokyo].”

Until now, those in the market for a vacant property have had to obtain data from local governments on a piecemeal basis, since there has been no property bank to put potential buyers in touch with property owners.

Currently Japan is estimated to have some 8.2 million vacant residences, a 1.8-fold increase over the past 20 years. The 3.18 million properties that are being rented out or on the market aside, the ministry plans to reduce the number of vacant residences to 4 million by fiscal 2025.

Halting increases in vacancies, however, will not be easy. While the rate of home ownership among the postwar baby boomer generation is about 80 percent, the figure for the dankai junior (children of the baby boomers) generation is about 60 percent.

Recently, there have been instances of second-generation family members living in urban areas having neglected or abandoned homes they have inherited in rural areas, due to their inability to shoulder related costs.

To deal with the problem, the ministry’s plan is to encourage donation of properties to local governments. The ministry expects that setting up the proposed new system to expand commercialization in the marketplace will make it easier for local governments to accept properties.”

Keizaikai magazine
Currently Japan is estimated to have some 8.2 million vacant residences, a 1.8-fold increase over the past 20 years.