Kyodo News survey revealed on Thursday that major Japanese companies are becoming more pessimistic about the economy as a result of concerns about long-standing US-China trade and consumption tax hikes last year.
For 113 firms, including Toyota Motor Corp., NTT Docomo Inc., and Sony Corp., 19% recorded that demand in Japan rose slowly, down from 23% in last summer’s poll, while none announced strong growth for the world-wide third-largest economy.
About 61% said the economy was flat, and 19% considered it to be in a gradual recession. According to the survey conducted between early November and the beginning of December, 26% of them picked a trade slowdown” triggered by the rise of protectionism, and 14% agreed on the “economic slowdown in China.”
Last month after a tit-for-tat trade conflict over more than one year, China and the United States achieved a step one resolution. But many experts are skeptical of strengthening the partnership between the two world’s top economies.
Notwithstanding economic impacts, the 63% rise in consumption tax was proclaimed by the government to be an “appropriate decision” to rehabilitate taxes, opposed to 2% to the raise, by the polled firms.
In terms of Japan-South Korea ties, which have plummeted to the lowest level over the decades in 2019, 42% have urged the government to “reinstate the normal situation from the broadest viewpoint,” because of disagreements regarding wartime, forced labor payments, and trade problems.
At their first meeting in 15 months in late December, Prime Minister Shinzo Abe and President Moon Jae-in of South Korea agreed to continue the dialog to bridge the gaps that remain, with the fresh indication that the conflict will begin to break up.
Only 7 percent embraced this proposal while discussing improving IT laws such as Amazon. com Inc., Apple Inc., Facebook Inc., and Google LLC.
Some 29 percent have expressed their hope that the government will have a “careful” debate because tighter rules can harm technological innovations.
In several countries, digital behemoths have been scrutinized for allegedly abusing their dominant positions to favor smaller companies that operate in their markets.
To ensure openness in contracts with those digital companies, the government should present a draft next year.