JPRS ID: 9100 JAPAN REPORT

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000200080037-1
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• Document Creation Date: November 1, 2016
• Sequence Number: 37
• Content Type: REPORTS

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JPRS L/9100
20 May 1980 -
~
, a a~n Re ort
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CFOUO 13/80)
FBIS FOREIGN BROADCAS~ INFORMATION SERVICE
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JPR5 L/9100
20 May 1980
JAPA~( REPORT
(FOUO 13%80)ti -
CONTENTS
POLITICAL AND SOCIOLOGICAL
Communi,st Party Issues May Day Appeal
(JPS, 1 May 80) 1
Opposition 'Cooperates~ in Upper Houee Elections
(Editorial; THE JAPAN TIMES, 5 May 80) 3
_ Communiat Party Affiounces Election Slogane
(JPS, 5 May 80) 4
Change in Nakasone's Factional Position Analyzed
(Raisuke Honda; THE DAILY YOMIURI, 3 May 80) 7
'ASAHI' on Oppoaition M~ove for Coalition To Replace
LDP Government -
(Editorial; THE ASAHI EVEI~IING NEWS, 5 May 80) 9
MILITARY
Defense Agency Chief Seeks SDF Moderaization
(TI~ JAPAN TIMES, 1 May 80) 11 ~
ECONOMIC
'NIHON KEIZAI' Predicts Business Slump in Fall
(NIHON KEIZAI SHII~UN, 31 Mar 80) 13
- a - [III - ASIA - 111 FOUO]
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CONT~,NTS (Continued) Page
Coal Liquefaction Pro,jects Selectec? for Funding
(THE JAPAN TIMES, 7 May 80) ................o......... 19
, SCIENCE AND TECHNOLOGY
Development Bank Urges Large Rise ia R&D Outlays
(NIKKAN KOGYO SHIAffiUN, 7 Feb 80) 21
Large Scale Robot Development
fNIKKAN KOGYO SHII~UN, 5 Feb 80) 25
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POLITICAL AND SOCIOLOGICAL
COMMUNIST PARTY ISSUES MAY DAY APPEAL
OW011033 Tokyo JPS in English 0918 GMT 1 May 80
[TextJ Tokyo, May 1, JPS--On the occasion of the Slst May Day, the Central
Committee of the Japanese Communiat Party iasued a May Day appeal, the giat -
of the appeal follows:
The appeal first emphasizes "the important significance of the establiah-
ment of a clasa-oriented and democratic national center of trade unions."
It says, "This year's spring labor offensi.ve indicated that there will be
no advances i n bhe atruggle to defend the w~orkers' living and rights with-
out fighting squarely against the outrages of big buainess. To stabilize
- and improve the people's liv ing is the key point to rectify bias in the
economic structure, to break free of the criais of the Japaneae economy,
and to promote its democratic reconstruction."
The appeal says that it is also an important characteriatic that t'he estab- -
lfshed national centers of t~ade unions have shifted to the line to defend
- the establistunent, the appeal says:
"The results of the wage-hike struggle, which cannot even cover up the price
increases, was caused mainly by the established national centers' rightwing
line, with an as low as 8 perc.ent wage hike demand, in submission to mono-
poly capital's wage restraint policy.
The appeal says "for a complete recovery of the spring struggle, too, it
is essential to establiah a class-oriented and democratic national center
of trade unions." -
The appeal calls for "opposition to all hegemonism, and disaolvanent of
all military blocs." The appeal calls for "opposition to the Soviet mili-
tary intervention in Afghanistan, and strongly demands that the Soviet
troops withdraw fr~ there rapidly." "The JCP, at the same time, demands
that all sorts of interventionist acts, including those of the United
States and China," the appeal says, "and calls for international 'sanctions'
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against Iran. It is totally un~ustif iable to pose a military threat to -
Iran, and force other countries to cooperate in 'sanctions.
The appeal points out that "the Ohira administration's subordination to
the United States is dangerous for the national interesta and peace of
the world." It goes on to eay: "On the occasion of May Day, the day of
international solidarity of the workere and the oppresaed people of the
worZd, the JCP calls on the working class of Japan to oppose all sorts of
hegemonism, to rise up in the struggle to dissolve all military blocs, and
to defend the complete national sovereignty of all nations."
The appeal points out that the "The Chinese war of aggression against
Vietnam, and the Sov iet military intervention in Afghanistan have deeply
in~ured the heart of the working class which regards the socialist future
as the ideal of mankind. None can deny the institutional superiority of
socialism that has so far achieved up till now, by phenomena ste~ming
from immaturity of the present socialist states. Nor can one erase the
prospects that socialism and com~uniaq,based on scientif ic recognition,
will build a society in which mankind is truly 'equal and free in human
relationship.
The appeal concludes by stressing: "The House of Councillors election to
be proclaimed one month later is an important political battle to make it
the new starting point for an en~ to the reactionary Ohira government
and the Liberal-Democratic Party politics, and to make the 1980's the era
of progress and successes of the progressive forces.
"In this election, we must say resolutely three no's--to hegemonism of all
countries, to LDP politics, and to the conservative supplementing line of
the Socialist, Komei and Democratic Socialist parties-- and to choose
definitely the party which struggles for a progressive change in the
national adminiatra tion, baeed on the three ob~ectives of the progresaive
movement, to open the way for new perspectives for building a progressive _
. Japan." _
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POLITICAL AND SOCIOLOGICAL
OPPOSITION 'COOPERATES' IN UPPER HOUSE ELECTIONS
OW060213 Tokyo THE JAPAN TIMES in English 5 May 80 p 12
~ [Editorial: "Teamw~ork for June Poll"J
[Excerpts] With the date of the Upper House election having been set for
29 June, political parties have already named their candidates and drafted
campaign platforms. Leaders of three ma~or opposition parties, the Japan
Socialist Party (JSP), Komeito aad the Daaocratic Socialist Party (DSP),
all atarted stumping thp country last week. Although the officisl per~od
of campaigning doea not atart before 6 June when the holding of the elec-
tion ia announced, the battle has been virtually under way.
As with the last triennial event to renew half of the 252-aeat chamber,
interest is also focused this time on whether the Liberal-aemocratic Party _
(LDP) can return a sufficiently large number of candidates and maintain a
ma~ority over the combined opposition strength. The opposition camp ie in-
tent on putiting a decisive end to the LDP's al~eady tenuous control in the
Upper Houae. `
How the battle will turn out depends crucially on the election cooperation
, planned by the JSP, Komeito and DSP. T~e three parties have formed an
indirect alliance, with Komeito serving as the 13nk between the two rival
socialist groupa. The JSP entered an agreement with Komeito in January on
the broad policy orientation of a coalition government, following a similar
pact aigned last Dec enber between Komeito and the DSP.
Twa obaervations may be made at thia stage of the developing "cooperation"
- among the JSP, Ko~eito and the DSP. Unleas they bury their differences in
matters of basic policy and also work cloaely with one another in the elec-
tions, they cannot hope to bring the decadea-long LDP monopoly on govern-
ment to an end. Secon~ly, if their ~eamwork cannot eurvive the June poll,
- or the current talk of ~ r~alition goverimnent proves nothing more than a
deal of expediency for just t~i~ coming election, they might as well be
charged for being less than honest with Japanese votera. -
COPYRIGHT: THE JAPAN TIMES 1980
CSO: 4120
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POLiTICAL AND SOCIOLOGICAL
.
COMMUNIST PARTY ANNOUNCES ELECTION SLOGANS
OW050949 Tokyo JPS in English 0922 (~IT 5 May 80 -
[Text] Tokyo May 5 JPS--The Japanese Cammunist Party on 5 May announced
sl~gans for the House of Councillors election. The full te~tt of the basic
and policy slogans follow:
Basic Slogans
1. [numbers as received] Build new Japan in service to the people in the
1980's.
1. Oppose all manifestations of hegemonism, and def end the national right
of self-determination. -
1. For international disarmament and complete ban on nuclear weapons.
End the vicious circle of military'~blocs.
1. Bring people's 3u~dgment to money-power and corrupt LDP politics in E
subordination to the U.S. and in aervice to big business.
1. Break off from the money-power politics giving priority to big business,
to take steps for reconstruction of the economy for the service to the _
people.
1. For considerate administration in defense of the happiness of mothers
and children. Give future to youth with life wortihwhile living.
1. Oppose malrevision of the public officea election law, the emergency
legislation, malrevision of the cons~titution, the revival of the conacrip-
tion, to defend freedom of the people and democracy.
1. Bring people's ~udga?ent on anticommunist opposition parties alliance,
assisting the misgovertmaent of the LDP.
1. Anticommunist coalition government plan is the way to the alliance
with the LDP. Let us promote the Progreasive United Front by advan.:e of -
. the JCP. -
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,
_ 1. The JCP ie the progreesive party at all timea and all places. The party
of t~+ue patriots. Give your vetes ~ to the JCP.
1. The Japan-U.S. military,alliance is the way to war and intervention.
Abrogate the Japan-U.S. Sec~anity Treaty, and build a nonaligned neutral
and self-defending Japan.
"Three No's and One Choice"
No to the all hegemonism, no to the misgovernment of the LDP, no to the '
~ Socialist-Komei-DSP alliance assisting the LD. Open the way for the ~
futur~ of the progressive unity by the advance of the JCP.
"Policy Slogans"
1. Oppose the U.S. policy of strength. Do not follow the Carter admin-
istration's operation on Iran.
1. Soviet Union, withdraw troops from ~'~i`ghanistan. The U.S. and China
- stop intervention in Afghanistan.
1. Do not make Japan the U.S. base for intervention in the Mideast.
Oppoae Japan-U.S. ~oint training, and reinforcement of war potentials of
the SDF.
1. Return Habomai and Shikotan islands immediately. Conclude a Japan-
Soviet peace treaty, for the return of all Chiahima islande. -
1. Freeze the public utility charges,and reatrain prof iteering price
hikes, to prevent a re-emergence of the cra~~~ price spiral.
1. Oppose tax increases on the people. Change the tax sys~em favor~.ng
big businesa, and tas reductions for the working people and emall busi-
ness operators.
_ 1. Do not let them cut welfare. For tre advance of the people's living
by big reductions in military spendings. .
1. By wage increases to repel the high prices, to expand the people's -
purchasing power. Opposition to the working force reducing rationalization.
Control the overcrowding work, sharten the working hour, and by public
investments on the living basis, to increase employment.
1. Agriculture is the pillar of the people's living, make agriculture
payable by guaranteeing prices of product. Do not let them expand
"liberalization" which will ruin agriculture. ~
1. For democratic reconstruction of the fishery, to def end the ~ob and
living of small and medium fishermen.
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~ 1. Restrain the high-handedness of big b~~ainesa operators and subcontractors.
1. Break free of energy crisis by ~~dependent diplomacy, giving height
to the oil producing cour.tries.
1. For caneiderate politice to the handicapped. Make the year of the
international handicapped worthy next year.
1. Ban the industrial political donations, the hotbed of the corrupt poli- -
tics. All parties must make public the truth of suspicions on their party
members of the Diet.
- 1. The sexual equality in employment, and expand the maternity protection.
For an early ratification of the United Nations "Agreement on Abol~tion
of Discrimination on Women."
1. Effect 40-pupil classes in five years. Let us develop pupils' high
scholarship, strong bodies, and wholesome sentiment.
1. O~pose the glorificatton of the imperial inetructione to soldiers and
the imperials rescript on education. For education loving peace, democracy
and liie.
1. For complete implementation of the peaceful ai:d democratic claus~s of -
the conatitution. Let us defend through freedom an~l democracy.
' 1. Oppose company managed and goverrunent managed election eerings. Defend
freedom of thought and belief of the workers and traders.
1. For the establishment of a national center of trade uniona, independent
of cap.ital and political parties, to def end the interests and solidarity
of the workers.
CSQ: 4i20
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POLITICAL AND SOCIOLOGICAL
CHANGE IN NAKASONE'S FACTIONAL POSITION ANALYZID
QW051027 Tokyo THE DATLY YOMIURI in English 3 May 80 p 3
[Article by Raisuke Honda: "Nakasone Sits on the Fence"]
[Text] The Liberal-Democratic Party's (LDP) former aecretary-general
Yasuhiro Nakasone, so f ar known as one of the party's antileadership -
bosaes, recently appears intent on deserting the intraparty struggle
against Prime Minister Ohira. Along with former premiers Takeo Fukuda
ax~d Takeo Miki, Nakasone has often been identified as one of the LDP
seniors in opposition to the leadership factions led by Ohira and his .
ally Kakuei Tanaka.
~ These days, however, Nakasone has stopped aiaking any remarks critical
of Premier Ohira. At a reception held in late April at a Tokyo hotel
to mark the publication of his book "in quest of harmonious urban devel-
opment," Nakasone delivered an hour-long speech but he seemed to refrain
deliberately from making anti-Ohira remarks all the while.
Nakasone's "volte-face" has, of course, come as a 3oy for the Hora and
Tanaka factions, while those in the antileaderehip camp are frowning at.
his "opportunism." According to sourc�ea close to Nakasone, it goes _
against his grain to have been outwardly linked hgnd in hand with Fulaida
and Miki since the intraparty power atruggle last autumn, after tha LDP
setback in the ~eneral election. ~
- Prior to the 1979 gensral election, Nakasone had been in close contact _
with aide to Ohira, co~itting himself to cooperate with the premier af ter
the election, the sources saya However, ~iakasone was obliged to side with
the antileadershfp forces, at ~east temporarily, because Ohira came
severely under f ire for the LDY's ma~or setback in the last election, accord-
ing to the sources.
~ Nakasone hi~self recently said: "I'm of course ready to have talks with
Mr Fukuda and Mr Miki, if they invite me to do so. I have to work in
concert with them to one extent or another. However,"Nakasone ~dded, -
"my poaitioir~~.s sheerly diffe~ent from their~."
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What did he mean by "difference fn.positions"? -
A senior member of the Nakasone faction explained: "Both Mr Fukuda and '
Mr Miki have already served terms as LDP executivea and prem~ers. In
this senae, they are politicians past tneir prime."
Nakasone, on the contrary, is an aspirant for the highest post, and he
should be careful enough not *_o be exploited by that too, lest he jeopar-
dize his own chances," the Nakasane supporter said.
- Indications are thus that Nakasone is trying to phase out of his anti-
- leadership stance, so that he can forsake the Fukuda-Miki camp for the
leadership factions at any desirable time. Since tlie Ohirz adminiatra-
tion is expected to continue for at least another two-year period, Nakasone
may well have thought it adverse to his own goal of succeeding Ohira to
remain at odds with him. Nakasone may have felt t~e need of improving rela-
tions with Ohira all the more keenly because the next LDP presidential
primaries is expected to end in Nakasone being outranked by another
would-be successor to Ohira, Tosh3o Komoto.
a Should the LDP suffer another setback in the coming upper-house election,
however, Ohira would certainly b e obliged to step down. Bearing that `
possibility in mind, Nakasor~e apgears fntient to remain uncommitted on
his pro-0hira stand, enabling him to f inalize his posture depending on
the outcome of the upper house election.
COPYRIGHT: The Daily Yomiuri 1980
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POLITICAL AND SOCIOLOGICAL
'ASAHI' ON OPPOSITION MOVE FOR COALITION TO REPLACE LDP GOVERNMENT
OW051130 Tokyo THE ASAHIEVENING NEWS in English 5 May 80 p 5 `
~ [ASAHI SHIMBUN 1 May editorial: "On Coalition Gavernment"]
,
[Text] While the focus of political intereat has been shifting to the
29 June House of Councillors election, the opposition camp has been -
busily preparing a platform for a coalition government. The aim is to
draft an outline of the policies which will be pursued if a coalition
government replaces the single-party government of the Liberal-Democratic
Party. The result may well influence the outcome of the U.pper House
election.
Since late last year, two coalition government plans have been agreed
~ upon by the opposition parties--one between the Japan Socialist Party
and the Clean Government Party (Komeito), and the other b etween the
Komeito and the Democratic Socialist Party. By making various compromises
in the process of formulating these plans, Yhe opposition parties have
been hurriedly making prepar~tions to take over the reins of government.
Their efforts have been directed principally at narrowing the differences .
in their policies, rather than at making a direct appea]~ to the people.
= Presumably, the latest move of the JSP, Komeito and the DSP, which is -
_ being made on the basis of the two co~lition government plans, is designed
to gain the favor of the people.
Generally speaking, it is an important duty of the opposition parties to
act ~ointly in connection with urgently needed policies which concern the -
people's livelihood aud to press the government and the LDP. This is par-
ticularly so when thE number of Diet seats held by the ruling party and
the opposition parties are almost on a par. Since the Upper House elec- -
tion is approaching, the ruling and opposition parties ahould make clear -
what the policy issues are so that the people will be enabled to make a
~udgment.
We should be well aware of the policy discussions among the various parties
since an age of coalition government is inevitable, and it is only right
that the various parties should move from making policy ad~ustments at the
party level and try to be more attentive to the needa of the p eople.
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- How will these parties go about doing this? The three parties can hardly
escape the charge of being unprincipled if they mechanically combine the
two coalition government plans into one. For example, the basic policies _
of the three parties in connection with the Japan-U.S. Security Treaty,
defense and nuclear power generation are very different, and it will be
diff icult to eliminate these differences at one stroke. Even on the ques-
- tion of administrative reform, the DSP is greatly at varianr_e with the
JSP.
. A proper coalition government should consist of parties which ~oin to deal
with problems of popular concern, and which, at the same time, respect
one another's basic doctrines and policies. In conn~ction with the
people's standard of living, there are numerous problems which need govern-
mental attention, such as commodity prices, inflation, welfare, medicare
and education. There is also the problem of stamping out political corrup-
tion, which will have to be done if the abovementioned problems are to be
solved.
The opposition parties still ha~~e much they can do in the current Diet
session in connection with these problems. In preparing their platform,
the three parties should criticize themselves for their lack of zeal in
- connection with these issues and aim at agreement by determining what they
urgently need to do and what they are in a position to do.
Since a coalition government formed by the opposition parties is not i~ni- -
nent, the parties should, at the present stage, give priority to the un-
dramatic work of reaching agreement on policies in co~inection with ques-
tions that require immediate attention. If the parties should conspire
_ to make compromises to the extent of di~torting their respective princi-
ples, the people will consider it a mere device to win votes in the House
of Councillors election. The parties will have only exposed the fragility
- of a coalition that has no substance.
In grappling with the task of creating a coalition government, the opposi- `
tion parties should spend more time in diacussion. In fact, it might
have been better if the two coalition government plans had been produced
after agreement had been reached on a platform. The reverse procedure
has created bewilderment and misgivings among the supporters of the par-
ties concerned.
The DSP has produced a draft of a platform for a coalition government, as
has the Komeito, and these are the bases on which subsequent discussions
among the opposition parties should be undertaken. It remains to be seen
- how the JSP, which is, after all, the main opposition party, will react to
these proposals and reconcile its principles with reality.
It is also important that the three parties discuss theae matters in a way -
which is easily comprehensible to the people in the consultations that are
expected to get under way after Golden Week.
COPYRIGHT: Asahi Evening News 1980
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~
MILITARY
I)EFENSE AGENCY CHIEF S~EKS SDF MODERNIZATION
OW020345 Tokyo THE JAPAN TIMES in English 1 May 80 pp 1, 4
[Text] Kichizo Hosoda, director general of the Def ense Agency, Wednesday
instructed top uniformed leaders of the agency to work~our details of pro-
grams for fiscal 1981, starting next April, to modernize ma~or equipment
of the tri-service self-defense forces (SDF) and improve the nation's de-
fense capabilities.
The instruction was made to Gen Goro Takeda, chairman of the Joint Staff
Council, and the chiefs of staff of the three branches of the SDF, the
air, ground and maritime self-defense forces, an agency spokesman said. ~
The Def ense Agency chief cited, as the ma3or goals for the agency's efforts
to beef up the SDF within a relatively short span of time, several steps
that call for streamlining of the command setup in the SDF's three branches,
and.enhancing "operation-wise resili.ence and ~ustainability" of air bases
and other defense facilities against an armed attack, among others. Par- �
tiaular emphasis was placed on the step to cut headquarters staff as much .
as possible at variou~ stages of the SDF's chain of command in a bid to
produce a surplus of manpower for the first-line units and operational
ends of the armed forces which have been perenially suff ering from a man-
power shortage.
Also emphasized are measures to improve the Air Self-Defense Forces (ASDF)
airlift capabilities to procuring a fleet of large transport aircraft.
Being proposed is the C-130 Hercules cargo plane, which is one of the main-
stay transport aircraft currently in service with the U.S. Air Force and
other countries' and forces. The C-130 is capable of laying mines besidea
carrying paratroopers and heavy cargoes.
These measures are designed to be linked with the agency's recent decision
to revise the so-called "medium-term operational estimate" adopted by the
agency in 1979. The estimate is to give a guideline for the three branches
of the SDF to modernize their ma~or equipment and enhance their combat-
worthiness during the period between fiscal 1980 and 1984. But the agency -
hop es to implement the proposed plans by fiscal 1983, instead of 1984.
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On the basis of the review of the original estimate, the Defense Agency
is expected to come out with an interim budgetary request for fiscal
1981 by mid-August. The agency leaders hope to seek a defense b~dget
amounting to some 2.5 trillion yen, up 15 percent over the current f is-
c.al year's level, in spite of the government's austerity policy, informed
sources said.
Defense Agency Chief Hosoda assured the chiefs of the air, ground and
maritime staff that he would persuade the Finance Ministry to allot
enough funds to realize the agency's plan to purchase 12 Karl Gustav
recoi]less anti.-tank rocket launchers, eight 155-mm sel.f-prupelled howit-
zers, one destroyer and two F-1 ground support tactical fighter bombers in
the next fiscal year. The funds required by the agency to purchase these
weapon systems during fiscal 1980 were all slashed by the Finance Ministry.
Hosoda also instructed the SDF brass to work out plans to extend the span
of serviceability of major equipment, including warships and combat air-
craft, to reduce the number of first-line weapon systems being work out
and outdated in view of the difficulty in securing enough budgetary appro-
priations to purchase brand new.equipment to replace obsolete ones, accord-
ing to agency off icials.
COPYRIGHT: THE JAPAN TIMES 1980
CSO: 4120
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ECONOMIC
'NIHON KEIZAI' PREDICTS BUSINESS SLUMP IN FALL
- Tokyo NIHON KEIZAI SHINlBUN in Japanese 31 Mar 80 p g
~Text] Braced by strong exports and equipment investments, the economy
has advanced beyond prediction, especially in the past Jsnuary-March
period. But Japan~s economy is about to enter a period of second-stage
ad~ustment in the face of the "$30.00 oil," led by a huge hike in electric
and gas rates. While the industries enjoy favorable times because of the
price economy, increasing prices have begun to hurt the household economy.
The econoury is expected to move under momentum from the Preceding period
until this suIImuer, but a turning point may come in the July-SepCember -
period, with a mild decline sett3ng in from autumn. The spread auwng
buainesses and by industrial types will probably widen, depending on the
efficacy of countermeasures. Yet, despite times of high interest ratea,
equipment investments have increased and exports are favorable pa~Cly
because of cheap yen. Should U.S. interest rates peak out within a few
months and the OPEC general meeting decides against a huge crude oil price
hike, the adjustment period for Japan's economy should be shorter than
during the first oil crisis. And the econamic valleys should not be as
prof ound .
Equipment Investments Riding on Wave
Conanented a Ministry of Finance bureaucrat who had been involved in Diet
deliberaCions of the new fiscal year budget since January: "This year has
been extraordinary in that the president of the Bank of Japan has been
suimnoned more frequently than representatives from the 5ma11 and Medium ~
Enterprises Agency."
, Whenever financi~l controls are tightened, Che most frequently asked
question in the Diet is "whether the small and medium enterprises are
safe." But in the current session, the legislators have all joined in
a chorus of "elimi.nating inflation rather than stressing the economic
condi~tions." Hence, it was the currency watchdog, President Maekawa of
the Bank of Japan, rather than the Small and Medium Enterprises Agency
director, who has been summoned almost daily to the Met. A Ministry of
_ Finance bureaucrat had this to say, "It is an indication of the economy
improving to the extent where there is no longer need for concern over
small and medium enterprises."
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With respect to integrate3 circuits (IC's), known as the new "staple food
of industry " replacing steel, massive equipment investments are being made -
in the semi-conductor industry. Even Nippon Electric, the largest in the
field, has been unable to meet the demand. It has been expanding its
Kumamoto plant (Kyushu Nippon Electric) since last year.-end at a cost of
about 6 billion yen. The plant is shipping the semi-conductor laden
containers on All Japan Airway's daily passenger flights to Tokyo's Haneda -
Airport where the buyers are waiting and scrambling for them. Upon comple-
tion of expansion, the production capacity will increase by around 20
percent. But Masau Suzuki, executive director of Kyushu Nippon Electric,
says, "Even then, it should have little impact on the current supply and -
demand situation.
Due to rising domestic demands and exports, increased equipment investments
have been noted in virtually all kinds of industries, not limited to the semi-
conductor ~ield. A recent survey by NIHON KEIZAI SHUI~BUNSHA found that
~ among businesses that reduced equigment investments (construction base) in
fiscal 1979, none were in the manufacturing business. In fiscal 1980, the
- equipment investment programs of total industries should show a 14.9 percent
increase over the preceding year (11.9 percent). A Japan Development Bank
survey also gives a glowing picture--after 8 years--of increased investments
in manufacturing capacity in fiscal 1980.
Chief Director Hisao Kanamori of Japan Economic Research Center, optimisti-
cally predicting fiscal 1980 real econom~c growth at around 6 percent,
claims, "Equipment investments are riding on an intermediate rising current. ~
There will be no disintegration barring a major development."
Along with the restored equipment investments, exports are also spurring
the "civilian consumption ecoaomy." The U.S. economy has been stronger
than expected, and Middle East oil producing countries have greatly profited
from crude oil price boosts. Abetted also by cheap yen, exports have risen
sharply, accounting for a bulk of the real economic growth rate (5.3 percent
annual rate) posted in the October-December period of last year. I.ast
year's expor~s of steel and electrical consumer goods such as vehicles and
video tape recorders posted a record high, and they are also doing well
this year. In February, exports cleared through customs (dollar base) grew
more than 20 percent over last year. And because of cheap yen, the amount
of yen netted by export firms have increased, contributing to a great
increase in profitability of exports. As a result, the cheap yen kept
businesses fram having to boost export prices in terms of dollars and
compared with American and European nations suffering from a higher infla-
tion, strengthened Japan's competitive position and increased exporta.
"Now, it seems that Japanese products have captured a dominant place
throughout the world," boasts a trading fir m(Survey divi~sion, Mitsui & Co,
Ltd).
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lhere is the example of a machine tool manufacturer wh~!ch until recently ~
had been forced to discharge its workers or selt off its property, but -
stag~d a comeback as a result of the recent favorable export conditions
and is now even acquiring other manufacturers through merger.
- The firm involvPd is Oaumi Iron Works, a major manufacturer of NC (numer-
- icr~l c~ntrol) latlie, with main offices in Nagoya City. It renamed thc
company which it acquired on 1 April as "Oswai Howa Machinery" and plans -
, to expand its operation. It says with com~osure that it has "received
enough orders for a 2-year period," consisting mostly of exports to the -
United States.
The operating rate of the manu~acturing industry has surged because of
increased exports coupled with accelerated production to beat the electric
rate hike taking effect from April. According to a Mitsubishi Bank
estimate, most plants were in full operation, attaining an operating rate
of 91 or 92 percent in the January-March period and nearing the peak (about
95 percent) achieved just before the fir~~t oil crisis.
Impact :on Household Economy
In contrast to businesses enjoying an upswing brought on by the "price
econotuy" combining inflation and cheap yen, the household sector has
become stagna.r_t, having been dealt a direct blow by inflation.
A saleslady in the wearing apparel counter of an outlet of Ito-Yokado--
which posted the second highest sales volume in the retail industry--and
located in a mammoth Tokyo housing complex lamented, "Lately, underwear
has not been selling. There are no buyers, even with sharply marked down
prices."
Until recently, people would purchase ma.tchi~ag underwear when buying fashion
apParel, but no longer. This phenomenon is known in the trade as "clearing -
out the supply in the dresser," in reference to the growing trend to cut
back on underwear purchases until those tucked away in the dresser are used
up.
The consumers~ posture to protect their livelihood is also demonstrated -
with regard to durable consumer goods. Board Chairman Kiyoshi Tsuyuki -
of Isetan Department Store says dejectedly, "Lately, the customers make
up their minds on how much they are willing to spend and buy only quality
products iaithin that range.. Durable goods sold well in Ma.rch becauae of
school admissions or preparations for new employment, but sales may lag
from Apri1 due to price hikes."
. Re~idential investments are stagnant because of b.igher interests on ~ome
� loans aCtributable to the higher official rate, curtailment of the money
supply, and high costs of land and construction materials. Unlike the
days of the first oil crisis, wages are not keeping up wi.th prices.
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"This year, th~= wage hike ratio in the spring struggle will be about 7
percent at best. More people will put off home construction, concerned
over the rate of increase of income." (Sanwa Bankj
Nationally, department stores during this January and February were able
to recover ttie two-digit sales figures of the preceding year. Although
consumption was up during the January-March period due to strong pitches,
the picture in April and coming months will depend on the movement of
prices.
The climb of wholesale prices symbolizing the latest "oil inflation"
subsided in the middle of March because of falling prices of imports. -
The direct impact of high prices for oil and foreign goods have peaked
for the time being. In late March, foreign quotations for nonferrous
metals and other products showed a decline and Nikkei's major co~dity
price index for 17 daily listings (1970=100)--a preliminary indicator of
wholesale price hikes--reflected on the 28th, last weekend, a 0.79 percent
drop from the day before. Provided there is no surge of foreign quotations
or acceleration of cheap yen, wholesale prices should gradually decline.
However, the sharp wholesale price hikes will be reflected in consumer
prices hereafter, The cons~er prices for March (Tokyo) rose 7.2 percent
over the corresponding month of the preceding year. Further, electric and
gas rates wi11 be hiked sharply from 1 April, followed by a similar boost
in public rates as National railroad f~res and cigarettes. Many businesses
are contemplating passing on the full increase in high crude oil prices to
their products. In the crucial yen exchange, the cheap yen mood has not
been eliminated from the market, with weak trading persisting even after
implementation of a yen defense policy or official rate hike for the fifth
time. _
Irrespective of slowdown`in wholesale price hikes, consumption should
dwindle quickly if consumer prices climb at a faster rate. And if there
_ is a prolonged period of high interest rates as a result of inflation and
cheap yen, residential investments will have no opportunity to rebound.
As the deficit in the ordinary balance of payments is unlikely to decrease
any time soon, the Bank of Japan would probably have to intercede and sell
the dollars for a while to stem the decline of the yen. Ia such a case,
foreign currency reserves may even fall short of the $20 billion mark and
spawn some anxieties over the stability of yen in the ma.rket. Should the
Bank of Japan be forced to raise the official rate oace again to break such
a bad cycle, an excessive burden will fall on financial policies, thus
dealing a heavy blow to businesses.
Even without this, a cooling-off of consumption will affect the iavestment
decisions of businesses, and even exports, currently favorable, will encoun-
ter a great bazrier known as the renewal of "trade friction." Even if
exports grow further, it is possible for economic balance to crumble by
reason of wider divergences among export type and domestic demand dependence
type businesses or industrial fields.
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Already, divergences among businesses and industrial fields have become
prominent relative to sales and funding, with the number of bankruptcies
showing a gradual increase from this year~ Though large-scale bankruptcies
have been few, there have been "small-scale, multiple" failurea centered
around textiles and construction industries. In the textile sector, numer-
ous bankruptcies have occurred in the apparel industry, due to sluggish
sales because of warm winter rather than financial tightening. The
construction industry wuuld suffer a major setback from government efforts
to cut back on 1980 public projects as part of its anti-inflation measures.
There are increasing fears of "more bankruptcies in textile and construction-
related industries" (private credit investigdtive agency).
Judging from such a situation, the economy in the April-June period should
somehow sustain itself through momentum from the January-March period, but
it may see a gradual decline in the autumtl. Even DTIHON KEIZAI SHIMBUNSHA's
analog model, NEEDS TS II, predict a gradual decline of the real economic
growth rate from 5,4 percent in the April-June period to 3.2 percent in
July-September, 3.2 in October-December, and 2.5 in January-March next year.
However, the economic slump is not expected to be so acute. A moderate
climb should recur from April-June period of 1981. This point decisively
differs from the days of minus growth and extended adjustment period during
- the first oil crisis.
~ Of course, whether there will be a light symptom as "mini-recession" as
called for in the scenario will depend on the development of the economy
hereafter, especially as it pertains to equipmeat investment and exports.
Will there be a stagnation of investments in the non-manufacturing industry
with a high rate of bank loans owing to the effects of financial tightening?
Or will "the strong base of equipment investment rema.in unchanged despite
some braking applied by high interest rates," as Kazuo Takeaaka, board
chaixman of National Economic Research Association says. Or, in the end,
will we be forced to depend on exports because of the cooling-off of
domestic demands?
Most of the answers will probably surface during the coming April-June
period. If the short term prime rate (interest charged to most favored
custaners) and the abnormal, nearly 20 percent, high interest rates in
the United States do not induce a credit crunch (excessive financial
tightening), a sudden cool-off of the U.S. economy or a huge crude oil
price hike by oil-producing nations or other extreme deterioration of the
- overseas environment, the adjustment of Japan's economy should not be so
difficult. Further, if the shift of inflation from overseas to the
domestic scene can be halted, the second oil crisis should be manageable
and Japan's econmtty may be able to regain a balance through a relatively
Iight sacrifice known as mini-recession. But if businesses should take
advanCage of the rampant inf lation p~ychology and simply boost their
prices, it may lead to the worst case of stag-flation (ecomm~ic recession
and inflation running in parallel).
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The demand for oil has declined, and o~ie view is that U.S. interest rates
will hit the peak in the mid-year. Provided there is no less of confidence
by entrepreneural management in Japan's economy this April-June, a major
change of scenario should not be necessary even in the fact of a few dis-
turhing forei~n factors.
- Economic Forecast Through NEEDS-TS II
(Comparison to corresponding period of preceding year in percentage)
N E E DS-T S n ~~x ~aI~~~I .
. )O A~ (~I~WJqit.'K)
�
t5 2) r~ c~f~~ (1 Key:
~ 1. Exports (actual)
lo 2, Forecast
~ r`~rr~
% � 3. Personal consumption (actual)
o ~3 ~^~*~~x~ 4. Private equipment investments (actual)
p~ ~ 5. Forecast
ct~~ aro~tA+~~t c 1p 6. Wholesale prices
^o
~ (6) ~ 7. Consumer prices
15 ~5~ 8. Forecast
~o I 9. Real GNP
~�.~M~~ ~NN.
5 ' ~
~ :A~#M17
o I~~~ ~3~
8 I 1F1tGNP ~ ~
6 ^ 9
? ii ~~S'n ' n ,
~
* I
~ ~-e - ~ t- ~ - in-i - ~
-5r~--~ ~--~----55 ' ~---56
1979 1980 1981
Note: Forecast using macro-analog model of NEEDS-TS II (NIHON SHIMBUNSHA's
macro-economic analysis system thru computer timesharing)
COPRYRIGHT: Nihon Keizai Shimbunsha 1980
9097
CSO: 4105
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ECONOMIC
COAL LIQUEFACTION PROJECTS SELECTBD FOR FUNDING
OW080218 Tokqo THE JAPAN TIMES in Engliah 7 May 80 p 5 ~
[Text]: Energy authorities have aelected three pro~ects for coal liquefaction
research and development out of many scattered and competitive pro~ects
' being pushed by Japaneee companies in order to apeed up such pro~ecta wirh
governmental backing, government eourcea eaid Tueadaq.
The sources close to the Agency of Natural Resourcea and Energy said that
the agency had worked out a"long-term, basic plaa" under which all the coal
lique~action pro~ecta would be screened and onlq the three most eligible
would receive gover~ental asais~:ance.
The plan, however, ia expected to draw protests from the enterprises whose
coetly coal liquefaction pro~ects have not been choaea for goveramental
backing.
All of the oil-from-coal pro~ects aim at commercial produ~ction ia the next
five to 10 years.
The agency's plan calls for the followe:
1. Governmental "financial support" (in subsidies, investments or loane),
totaling about 10 billion yen a year, will be given atarting in fiacal 1981
to the "Rominic" (process) brown coal liquefaction pro~ect to be launched
shortly in AuBtralia's Victoria State by a group o� three Japanese com-
panies and the Auatralian Government.
Under a governmental agreement reached laet year between Tolcyo sud Canberra,
the pro~ect is to be realized by the Japanese trio of Kobe Steel Ltd.,
- Mitsubiehi Chemical Industries Ltd. and Nisaho-Iwai Co. They are acheduled
to create a joint iavestment company in Japan �or the veature during this
month and then start preparations to build in Victoria a teat plant capable
of proceseing 50 tons of browa coal a day.
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2. Under the government's sunahine pro~ect top priority will be given to
a domeatic coal liquefaction pro~ect being pus~ed by a group of 21 Japanese
companies led by Sumitomo *~etal Induetries Ltd. The group ie now building
a denwnstration plant and will ehortiy create a joint invesmtment company.
3. Another group of Japaneae companies, led by Mitaui Mining Co., to
join a current U.S.-West German-Japanese coal liquefaction pro~ect will be
advised to form a more multiinterest group. This would be done by the
participation of Nippon Steel Chemical Co. and some oil refining and engi-
neering enterprises in ownerahip of the group's Mitsui Coal Liquefaction Co.
The world's most ambitious of its kind, the project launched last year by
U.~. and West Germany interests in the form of a pilot plant construction
in Weat Virginia, is to attain a daily output of 20,000 tons by 1985.
COPYFtIGHT: The Japan Times 1980
CSO: 4120
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SCIENCE AND TECHNOLOGY
DEVELOPMENT BANK URGES LARGE RISE IN R&D OUTLAYS
Tokyo NIKKAN KOGYO SHIMBUN in Japanese 7 Feb 80 p 3
[Text) The Japan Development Bank (Takatomo Watanabe, president) has
released the results of its research in a survey report entitled, "New
Reaponse Desired in Private Research and Development Investment." The
~ report argues that in order to maintain the postulated average annual
. growth of 5.5 percent (after ad~ustmenta) through JFY 1985, the last year
of the new economic seven-year plan, it will be necessary to increase
i R~D investment from the current leve~ of about 2.1 percent of national
: income to 3.1 percent (2.5 percent of GNP). The report pointed out that
~ outlays for private research and development have a greater effect in -
evoking demand than public works investment, in both the short and the
long term, and further atressed that the role of R&D investment is even
more s3griificant in furthering reform of the industrial and economic
~ structure. In recent years there has been a continuing clamor about the
i
~ importance of R&D investment, but research on the question using a macro-
i economic approach of view ia unusual. Taken as a whole, the report is
~ expected to create quite a stir wherever there is discuasion on how the
j creation of Japan's own independent technology has become a requirement -
~ of the timea, and wherever fiscal reconstruction through large~-scale
isaues of government bonds is under consideraCion. ~
, The Development Bank stated that the three purposee of its research were
to determine (1) the characteristics and current state of R&D investment;
; (2) why increased R&D investment is necessary and effective; and (3) issues
in promoting R&D investment. Ttie report analyzed such questions as Japan's
poatwar technological level, reached as it was principally through the
~ introduction of foreign techno?~ogy, and what kind of effect technological
development has on the earninds of businesa enterprises. It further dis-
cussed the necessity of establishing our own development technology, and
dealt with the place that R&D investment should have in future economic
policy.
~ The three elements which go to make up the economic growth rate are capital,
labor and technology. In order to attain an average annual growth rate
of 5.5 percent, as is stipulated in the new economic seven-year plan to
be necessary for stable growth, about 2.5 percent of GNP (or 3.1 percent
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of national income) has to be devoted to R&D. But in recent years Japan's
RbD investment has lagged at *_he level of 2.1 percent of national income,
and the welfare of the national economy requires increased R&D outlays.
. Until now the mainspring of policies based on Keynesian economics has been i
fiscal expenditure, particularly public works investment. But when the ~
eame funde are turned into private R&D investment by some such means as ~
subsidies, the effect on demand creation is much greater. For example,
if we asaume that the government spends 10 billion yen to develop new elec- I
tronic computers, this induatry being on the leading edge of technology,
and that the same amount is used for public investment, then using the ;
input-output table to arrive at final figures for demand and production ~
as induced by these investments, we find that R&D investment has a much ~
greater effect than do outlays for public enterprises or railroad construc-
tion, even bearing comparison with electric power investment, itself the
' broadest in its effect on the economy.
- So far as the breadth of the influence on the economy is concerned, invest-
ment in public works stimulates raw materials industries like steel, cement,
and especially construction and civil engineering, while the influence
of R&D investment spreads markedly to information-intensive industries
like electrical machinery, general machinery and services. Such invest-
ment becomes then a requirement of the times, as we confront a more educated
- society, and our nation is pressed to absorb an increasingly educated work
force. Moreover, while the effects of public investment are comparatively -
short-term, in contrast R&D investment not only takes effect over both
the short and the long term, but also strongly influences social structure,
and ia further desirable from the standpoint of reforming the industrial
and economic structures.
The technology now used in Japan was introduced from those European and
American countries which have today become our export markets. Since we
bore neither the cost nor the risk of technological development, but
simply harvested the results, the ~udgment that we have been getting a
' free ride has been gaining in force. Moreover, the introduction of foreign
technology has come to depend on arrangements like cross-licensing contracts,
with one-way reguisition more difficult than before. For these reasons
~ too, it is necessary to enhance technological development and establish
independent development of technology.
That technological development contributes to the growth of enterpriaes ~
can be understood intuitively, but it is difficult to prove. However, ~
if we look at the evidence in the American case, then excluding the steel I
and petroleum industries, there is a difference in growth rate of up to
10 percent between those enterprises innovating in technology and those I
not. It is also possible to prove the assertion by looking at our own
country and comparing other companies in the same industry with companies
like Sony, whose Trinitron TV met with such success, or Honda, whose re-
search developed the CVCC engine. It is clear that technological change
is a guarantee of an enterprises' earnings.
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According to the results af a 1980 study involving a questionnaire directed
to specialists ia the area of manufacCured goods, industries whose average
level is today below that of Europe and America, and will remain so after
5 years, include airplane manufacture and crude oil and natural gas pro-
_ duction. On the other hand, industries which are today equal to the highest
world standard but are expected to decline over the next 5 years include
automobiles, ordinary merchant ships, railroad cars and system, and ceramics.
But cameras, watches and aluminum products are expected to maintain their
preeminence even after 5 years. Finally, those industries whose level is
expected to rise over the next 5 years include electric power equipment,
synthetic resins, film, natural fibers, motors, boilers, industrial chemicals,
dyes and cosmetics.
Thus Japan's technological level is rising somewhat above that of Europe
- and America, a situation which derives in great part from the importation
of technology from zhese same advanced nations. If we 1ook~then at our
technology exports, we see that in JFY 1977 we exported an amount worth
6 billion yen to Indonesia, 6 billion yen to South Rorea, 4.8 billion yen
to Taiwan, and 6.2 billion yen to Brazil. As regards the technological -
portion of our foreign trade balance, in 1975 our steel industry moved
- into the black and thereafter continued to improve its position. And if -
we consider only new contracts, [the technology--trade balance of] the
whole of Japanese industry has been in the black since JFY 1972. However -
overseas customers for our technological exports are principally semi-
daveloped nations, and it cannot be said that our level of innovative tech-
nological development has caught up with that of Europe and the United
- States.
In Japan it is tha large and medium-size enterprises which bear the burden
of technological development. Many of these have sales in excess of 10
billion yen, which contrasts with the tendency in such nations as the
United States, Canada and France. The reason for this is tha~ our first-
_ class engineers choose to work in 7~arge companies, while for their part
large companies have a greater ability than sma11 ones to diversify into
many areas. However there was not a single case of an innovative technical
advance in J$pan before 1958, and only since 1962 has our share finally
reache~l the modest level of 10 percent. -
In JFY 1977 Japan's expenditures on. research and development were at the
level of 2.1 percent of nation~l income, a low figure 3ust below France's
- 2.02 percen~. If we include expenditures on defense research, the figures
_ for the United States and the Soviet Union are respectively 2.53 and
4.52 percent. If we exclude defense research, Japan's figure becomes the ~
aecond highest, after West Germany. Yet if we compare the government's
portion of R&D funding to that of other nations, Japan's is extrem~ly
_ low; 27.4 percent as opposed to 50.5 percent in the United States, 51.7
percent in the United Kingdom, 48.5 percent in West Germany, and 56.7
percent in France. Added to this is the fact that accord3ng to the JFY
_ . 1977 budget, a little over 90 percent of govez`nment R&D expenditures were
~
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directed to universities, quasi-government corporations and research
inatitutes, with very little left over to subsfdize R&D in private enter-
prise. In the 1979 general budget only 0.3 percent of all subsidies went
to subsidize private R&D.
COPYRIGHT: Nikkan Kogyo Shimbunsha 1980
9532
CSO: 4105
~
~
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- SCIENCE AND TECHNOLOGY _
~d
~
I LARGE SCALE ROBOT DEVELOPMENT
Tokyo NIKKAN KOGYO SHIMBUN in Japanese 5 Feb 80 p 8
[Article: "Toyota to Acquire 720 Units"]
[Text] According to an informed source, it has become clear that Toyota
Motor Company, Ltd. (President Eijiro Toyota) will obtain the very large
number of 720 robots over the next 2-3 years from robot makers such as
Kawasaki Heavy Industries in order to conserve labor. -
- Toyota plans are for a 3~5 million automobile a year capacity, and it is
presently constructing a second passenger automobile plant in the form of
the Tahara Plant at Tahara-cho, Akumi-gun, SY?izuoka-ken. It is said that
- the greater part of these new robots to be acquired will be utilized in
this new plant according to the source. At the same time, this plant is
considered to be the test case for the production system in which manpower ~
is suppressed to the extreme and which will be used in the event of entry
into American territory. This second plant scheduled to be completed in
1981 will bear watching as Toyota's strategic plant for the world sma11 car
war of the 1980s.
This new plant on which Toyota has initiated construction is an integrated
assembly plant which employs a facility which performs pressing, painting,
welding, and assembling, and its initial capacity will be 10,000 cars per
month.
Toyota will nat limit these new lines simply for the production of specific
car types but has designed these lines to accomodate the production of any
type of automobile when the occasion requires.
- In the design of this new plant, the large automated machines which have been
used in the past were found not to have the flexibility to accomodate model
changes as a result of which it was decided to use small type machines which
are more readily adaptible to changes.
This company has embarked on an all out drive to conserve manpower requirements
_ as much as possible, and this seems to be the rationale for their large volume
order of robots at this time.
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According to informed sources, Toyota plans to use this second plant as a
teat case for Toyota's plan to locate a plant in the Un~ted States. Since
the quality of American labor is lower than that of Japanese labor, there
is need to plan for expanded production with the minimum of labor, and an
integrated assembly line will be necessary to this end.
Becausa of this background, Toyota is planning to use robots in all the
processes including pressing, painting, welding, and assembling, and this
present order for 720 robots is undoubtedly preparation for Toyota to open
a plant in the United States.
COPYRIGHT: Nikkan Kogyo Shimbunsha 1980
2267
CSO: 8129/0747
END
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