A former top Japanese official says Japan is undertaking needed financial sector reforms to pull its economy out of recession.
Noboru Hatakeyama, chairman of the Japan External Trade Organization, or JETRO, said his main priority is building a free trade in services agreement with the United States.
During remarks at Wednesaday Washington's Institute for International Economics, the former trade official acknowledged that Japan's economic problems make it unlikely that any significant trade initiative will be launched soon. Mr. Hatakeyama downplayed concern that Japan is trapped in a deflationary spiral that precludes any significant economic growth this year. He said more than in China, Japan is undertaking important market based reform.
"Japan, although this might not be visible, Japan has been making very sustained efforts to implement reform, as you know well," he said. "And of course China is said to be restructuring but they have a long way to go."
Mr. Hatakeyama called attention to China's economy still being largely state run and that because of hidden budgetary support from the government, the finances of Chinese enterprises are not as transparent as Japanese firms.
Arthur Alexander, a Georgetown University professor who specializes in the Japanese economy, is likewise is not worried about the apparent downward spiral in Japanese economic activity. "Rich countries have institutions and politics that solve problems," he said. "Japan has not solved its most pressing problem, a banking problem, in ten years. But it is slowly working on other ones. So I think we have this problem as an analytical problem of looking at the big picture and see terrible things happening. But if we look closely at the situation on the street in Japan things are going along quite well."
Japan's economy, according to the government's own account, is continuing to deteriorate with private consumption weakening, unemployment rising, business investment decreasing, and exports still declining.