Tue, 27 Oct 2020

Yoshihide Suga, Japan's new prime minister, speaks during a press conference in Tokyo, Japan, Sept. 16, 2020. (Carl Court/Pool via Xinhua)

Since announcing his candidacy for LDP president, Suga has reiterated that he will carry forward the "Abenomics," continue to fight the COVID-19 epidemic and promote economic recovery, and also safeguard employment and promote recovery.

TOKYO, Sept. 18 (Xinhua) -- As Japan remains in deep economic recession, whether the country's new Prime Minister Yoshihide Suga's administration can provide a new prescription for the country's economic recovery has come under spotlight.

Suga, president of the Liberal Democratic Party (LDP), was elected Japan's new prime minister on Wednesday to succeed Shinzo Abe.

Since announcing his candidacy for LDP president, Suga has reiterated that he will carry forward the "Abenomics," continue to fight the COVID-19 epidemic and promote economic recovery, and also safeguard employment and promote recovery.

He also said while doing his best to overcome the immediate crisis, he will continue to challenge structural problems such as the issues of aging population and falling birthrate.

However, "Abenomics," a mix of measures including monetary easing and fiscal stimulus aimed at easing deflation and stimulating growth in the Japanese economy, has been running for nearly eight years.

Although it led Japan's economy to recover quickly, the ultra-long and low-speed recovery cycle brought by the policy ended in October 2018. "Abenomics" has already become a spent force and left too many unanswered questions for Abe's successor.

Electronic screens show that Japanese Prime Minister Shinzo Abe speaks at a press conference in Tokyo, Japan, on Aug. 28, 2020. (Xinhua/Du Xiaoyi)

To pull Japan out of its deep recession and restart recovery, inheriting "Abenomics" is clearly not enough.

On Sept. 8, the Cabinet Office decreased Japan's real economic growth in the second quarter to an annualized rate of minus 28.1 percent from minus 27.8 percent, as the latest statistics showed a sharp fall in the contribution of equipment investment to growth.

On the same day, a report from the Ministry of Internal Affairs and Communications also showed that Japanese household consumption fell again in July after picking up in June, showing negative growth both on a monthly basis and year-on-year basis.

Japan's economy is facing a severe situation of internal and external difficulties, on the one hand, equipment investment was sluggish and household consumption has been decreasing for 10 consecutive months on a year-on-year basis, on the other hand, exports have been falling for 21 consecutive months on a year-on-year basis, while inbound tourism is difficult to recover.

Economists here have said the economy is expected to grow at an annual rate of more than 10 percent in the third quarter, but the rebound will not be strong enough to pull the economy out of recession, and recovery may slow sharply after the third quarter.

People wearing face masks walk on the street in Shinjuku, Tokyo, Japan, on July 9, 2020. (Xinhua/Du Xiaoyi)

At the same time, the Japanese economy still faces the threat of a wider COVID-19 epidemic, and the possibility of a "double dip" in the autumn remains. It could take three to four years for Japan's economy to recover to pre-epidemic levels.

In addition to inheriting "Abenomics" to revive the economy, Suga has expressed determination to reform the rigid rules and bureaucratic sectionalism to improve Japan's competitiveness and lead the country back to recovery.

He has said that Japan's underdeveloped e-government has been highlighted in the epidemic, however, the lag in digital administration will become a restricting factor of economic development.

In order to promote the development of digital administration, Suga said he will devote himself to breaking bureaucratic sectionalism and studying the establishment of a "digital ministry", which will be considered as a top priority.

Therefore, Suga, a former minister for Internal Affairs and Communications, said he would continue to push for competition among telecom operators.

People wearing face masks walk on the street at Shibuya in Tokyo, Japan, on Aug. 20, 2020. (Xinhua/Du Xiaoyi)

Japan's three largest telecom operators now dominate about 90 percent of the market and constitute 20 percent of operating profits. The high level of communication expense of mobile phones in Japan will not only become a heavy burden on household expenditure, but also an obstacle to the development of digital economy.

Suga said Japan's labor productivity is among the lowest in the nations of the Group of Seven. Against the background of the falling population of children and aging population, it is an inevitable choice to improve labor productivity.

There are also high expectations that Suga's cabinet will push forward reforms.

However, it remains to be seen whether Suga will be able to make a difference in his limited term as LDP president, with only a year left in office. ■

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