China state assets regulator says debt reduction, curbing risks still key

China’s Finance Minister Xiao Jie has tried to defuse concern over the country’s rising debt, saying government borrowing is below danger levels. (AP)
Updated 10 March 2018

China state assets regulator says debt reduction, curbing risks still key

BEIJING: Reducing debt and curbing risks remain priorities for China’s state-owned firms, the head of the country’s state assets regulator said on Saturday, as Beijing continues its restructuring and deleveraging efforts.
State-owned firms would be pushed to improve their asset quality and boost their equity capital, Xiao Yaqing, chairman of the State Assets Supervision and Administration Commission, told reporters on the sidelines of China’s annual meeting of parliament.
The regulator also would seek to use debt-for-equity swaps to further reduce debt at state-owned companies, he added.
In 2015, Beijing introduced reforms to its state-owned industrial sector aimed at strengthening central government-owned enterprises, while introducing more professional management systems such as the adoption of boards of directors.
Xiao said those reforms would quicken.
The sector reported a rebound last year, with enterprises owned by China’s central government showing profit growth of 15.2 percent, to 1.4 trillion yuan ($221.2 billion), the fastest in five years.
Total profit from China’s central government-owned firms for the first two months of 2018 rose 22.6 percent from a year earlier to 266.7 billion yuan ($42.1 billion), Xiao said.


Japan’s ‘Suganomics’ will target quick wins, not grand visions

Japan’s Prime Minister Yoshihide Suga, center, with cabinet ministers this week. Suga’s plans for structural reforms will focus more on spurring competition, rather than deeper social change. (AP)
Updated 19 September 2020

Japan’s ‘Suganomics’ will target quick wins, not grand visions

  • New prime minister to build political capital in lead-up to introducing tougher reforms, officials say

TOKYO: Japan’s new prime minister will pursue economic structural reforms through a mixed bag of policies that target specific industries, rather than a grand strategy to reshape society and boost long-term growth.

Armed with a strong grip on Japan’s bureaucracy, Yoshihide Suga knows which levers to pull to get results, say government and ruling party officials who know him or have worked with him.
But an initial need to consolidate popular support means he will first target quick policy wins that will later give him the political capital to pursue tougher reforms, they said.
“He isn’t after visions. He’s someone who wants to accomplish small goals one by one,” said political analyst Atsuo Ito, a former ruling party staffer. “He’ll initially focus on pragmatic goals that directly affect people’s livelihood.”
Suga has said he will continue his predecessor Shinzo Abe’s pro-growth “Abenomics” strategy aimed at pulling Japan out of deflation with heavy monetary and fiscal stimulus coupled with structural reforms.
But unlike Abe, Suga’s plans for structural reforms will focus more on spurring competition, rather than deeper social change.
For Suga, economic reform will be a political priority in its own right, unlike Abe, whose reforms were wrapped up in a broader political agenda that included the thorny challenge of revising Japan’s pacifist constitution.
Suga must act quickly as his current term lasts for only for a year unless he calls a snap election to win the public’s mandate to run a full, three-year term.

HIGHLIGHTS

• Reform mix of ideas rather than grand strategy.

• Suga armed with strong grip on bureaucracy.

• Targets “quick-hit” reforms appealing to voters.

• Plans include consolidating small firms, lenders.

That means he will first seek “quick-hit” achievements that directly channel money to households. Among the sweeteners would be to slash cellphone charges by about 40 per cent, raise the minimum wage and increase payouts to cushion the blow from the pandemic.
“At this moment, he has to focus on very short-term issues like how to stimulate economy,” said Heizo Takenaka, who served in the cabinet of reformist former premier Junichiro Koizumi.
Removing protections in industry will be one such objective, even if that riles some parts of corporate Japan.
“Introducing competition among mobile phone carriers could be a very symbolic policy for Suga because he loves competition,” said Takenaka, who retains close contact with Suga. “He hates people with vested interests.”
If successful, Suga could pursue bolder reforms such as liberalising the heavily protected medical sector, consolidating weak regional banks and breaking barriers that hamper competition among small- and mid-sized firms.
Having served as Abe’s top spokesman, Suga already knows his way around Japan’s massive bureaucracy.
Suga relaxed visa requirements to boost inbound tourism, overcoming push-back from the justice ministry. He also cut through bureaucratic opposition and expanded a scheme that gave tax breaks for donations to Japan’s regional areas.
“Suga may not be charismatic, but he gets things done,” said Taimei Yamaguchi, a ruling party lawmaker close to Suga. “Some of the best advice I got from him was to make the most of the expertise the bureaucrats have.”
Some government officials say Suga’s focus on deregulation makes his policies closer to those of Koizumi, who consolidated big banks and deregulated the labor market in the early 2000s.
Suga’s slogan urging the public to “look after yourself before seeking government help” reflects his background as a self-made politician who made his way up from a son of a strawberry farmer to Japan’s leader, people who know him say.