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Japan should share manufacturing roles with China and the Association of Southeast Asian Nations by capitalizing on the advantages of each region, the government said in a white paper on foundations for production released Friday.

It is important that Japan’s manufacturing industry ensures access to growing Asian markets while taking advantage of the cost effectiveness of China and the ASEAN region, including their cheap labor, the fiscal 2002 paper says.

The paper was jointly compiled by the Ministry of Economy, Trade and Industry, the Health, Labor and Welfare Ministry and the Education, Culture, Sports, Science and Technology Ministry.

The paper stresses it is vital that Japan’s manufacturing industry maintain and strengthen competitiveness in the domestic market through the development of technologies.

Technological development is key to increasing the international competitiveness of manufacturers, it says, adding that Japan should boost private-sector research and development with special incentives, including tax breaks.

Research and development expenditures have been increasing despite sluggish industrial shipments, it says.

However, the gap in such expenditures between manufacturers in Japan and the United States has widened recently, it adds.

The government should expand its research and development in line with its basic plan on scientific technologies, in which about 17 trillion yen was allocated between fiscal 1996 and 2000 and about 24 trillion yen has been earmarked for fiscal 2001 to 2005.

Four sectors will probably help expand demand and create new industries: life science, information and communications, the environment and energies, and nanotechnology.

Referring to technological development and the use of information technology, the paper proposes Japan acquire and control intellectual property and take a tough stance on infringement of intellectual property rights.

The number of new graduates finding jobs in the manufacturing sector has been on a decline since peaking in 1992.

To maintain a certain inflow of new graduates into the manufacturing sector, it is important to develop youths’ interest in manufacturing and foster their basic capabilities by offering measures such as internships at industrial high schools and technical junior colleges, the paper says.

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