Recently, the Japanese Cabinet Office published GDP statistics for July-September, showing that the nominal GDP annual growth rate was 1.2%, higher than the 0.9% predicted by the International Monetary Fund (IMF), and higher than the forecasted average of Japanese private institutions (1.0%). ).
Since the success of Shinzo Abe, the public opinion on “Abenomics” has always been mixed, and criticism is more than affirmation. The reason is that the three policies of “Abenomics” have not been ignited at the same time, but are over-reliant on financial policies. The goal of financial policy is to achieve an inflation rate of 2%. In the case that Japan’s personal consumption is basically unchanged, domestic demand is not ignited, and consumer prices are hard to pick up.
The outside question is not unreasonable, but today we will review “Abenomics” and we should also see some of the things that can be found.
As early as Abe’s first administration in 2006, Gee had summed up the old “Abenomics”. The focus is on imitating “Reagan Economics” to engage in “conservative reform.” But unfortunately, at that time, Abe was in power for less than a year, and the economic policy was not evenly effective. The “conservative reform” was only “conservative.”
After the second ruling, Abe summed up the lessons, dispatched troops, and organized the organization to ensure that the policies were in place. For example, the president of the Asian Development Bank, Kuroda, is the central bank governor and promotes the quantitative easing of different dimensions. After Kuroda took office, he implemented the bold financial policy and engaged in the “helicopter money” and “rocket artillery” policy. At the highest level, he purchased 80 trillion yen of national debt every year, plus equity funds, and fully released the foundation. Total amount of money. We will implement a negative interest rate policy and use financial policies to suppress the yen exchange rate and promote the depreciation of the yen. From April 2013 to May 2015, the yen depreciated by about 37% against the US dollar. This measure helped Japanese companies to resume exports, their book performance improved, market confidence boosted, and stock prices rebounded. From December 2012 to November 22, 2019, the Nikkei Stock Average rose by 147%. The rise in stock prices has led companies to increase equipment investment, increase employee wages, increase wages, promote personal consumption, and support the recovery of the economy.
In addition to the above three pillars, Abenomics has adopted many micro-policies to improve the economic growth environment and market psychology. For tax reductions for corporate entities, the corporate tax rate has dropped from 38.5% to 27%. Individual corporate tax rates that are good at capital operation and equity restructuring have even fallen to single digits. At the same time, in order to stimulate the recovery of business vitality, the Japanese government has also reduced the “communication costs” for various enterprises. For example, half of the large-scale business communication fee (receiving food and beverage) is tax-free, and the SMEs’ full communication fee is exempt from tax, which stimulates the enterprise to move and actively operate. This has not only boosted the stock price, but also promoted the expansion of major cities such as Tokyo, developing high-end dining and entertainment facilities, and stimulating demand. Abe himself also used various occasions to promote Japanese cuisine and enhance the soft power of Japanese cuisine culture.
Actively bid for the Tokyo Olympics, the Rugby World Cup and the Osaka World Expo, promote related investments, and attract private capital to promote urban transformation.
In response to the aging population structure of the younger generation, the Japanese government has proposed a “life-threatening era” and launched a series of social reform measures. It promises to still have job opportunities at the age of 70, promote the employment of the elderly and women, and allow foreigners to take up jobs to solve the shortage of personnel and supply. Restricted issues. Promote the “labor mode revolution”, use Internet technology, encourage home work, mobile work, and flexible work; diversify life for social diversification needs, encourage, default individuals to engage in sideline business, and engage in second career. In response to social security system restrictions, insufficient financial resources, and the lack of population, empty houses, vacant land, and unintended inheritance of the population, the tax system will be reformed to encourage individuals to invest in assets such as houses, stocks, and funds, and to use value-added assets to ensure that they are old and worry-free.
Advance the productivity revolution. Under the harsh reality of a 1% annual reduction in the workforce, maintaining total growth rates requires an increase in total factor productivity. Although the “creation plan” and the free education plan for early childhood education have not achieved significant results, the policy direction has made the Japanese see hope. These policies have also enriched “Abenomics.”
In the context of the overall economic downturn in the world economy, “Abenomics” will face more severe tests in the future. Whether the uncertainty brought about by the quantitative policy will adversely affect the future of the Japanese economy remains to be seen. However, a careful examination of this “Abenomics”, which has faced many suspicions from the beginning, is worthy of reference for adapting to Japan’s national conditions and the characteristics of the times and inspiring the vitality of the people.