/

Abe talks economy, not diplomatic rifts, at Diet opener

by Reiji Yoshida

Staff Writer

Prime Minister Shinzo Abe opened the 150-day ordinary Diet session Friday with a policy speech that reaffirmed his vow to push up wages and expand consumption to make his “Abenomics” economic policy sustainable.

Abe devoted most of the 33-page speech to his domestic economic agenda, referring little to the deteriorating relations with China and South Korea or his long-held ambition to revise the pacifist Constitution.

Instead, Abe stressed that the government and the Diet must focus on creating “a virtuous cycle” that can sustain an economic recovery, including getting profitable companies to increase wages.

Higher pay would expand consumption and thereby benefit businesses, he told the lawmakers in the plenary session hall of the Lower House.

“Without this virtuous cycle, there won’t be a breakaway from deflation,” he said.

Abe pledged to create new tax breaks for firms that up wages, but without going into detail.

He also pointed out that the ratio of job offers to job seekers has exceeded 1 for the first time in six years from the nadir of 0.42 in 2009, and consumption has increased in all regions from Hokkaido to Okinawa compared with a year ago.

Otherwise, he didn’t explain specific measures to get businesses to raise their wages and create his virtuous cycle.

Abe’s advocacy of aggressive money-easing policy has helped push up stock prices and push down the yen against other currencies, which has benefited stock investors and major export-driven companies.

But many middle- to low-income households, in particular in rural areas, have yet to see much benefit from Abenomics, the reason Abe is now trying to focus on wages and consumption.

Abe pledged to beef up practical English education in high schools and more than double the number of foreign students coming to Japan to 300,000 by 2020.

The government also will try to double the number of Japanese students studying abroad by 2020 and that of foreign teachers at eight state-run universities over the next three years, Abe said. “We will educate young people full of potentiality so that they can play active roles in a global environment,” Abe said.

On diplomacy, Abe described Japan’s ties with China as “inseparable,” and said the two countries should maintain a “mutually beneficial strategic relationship.” Japan’s ties with China were further strained when Abe visited the war-related Yasukuni Shrine in December. Abe didn’t refer to his visit and instead reiterated his earlier approach calling for a summit.

“My door of dialogue is always left open,” Abe said, repeating his pet phrase to stress his willingness to meet the top Chinese leaders.

On the dispute with China over the Senkaku Islands, Abe said he “would never accept an attempt by force to change the status quo,” adding, “We’d like to keep handling (the situation) calmly and decisively at the same time.”