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Japan's Economic Reforms A Guide for Other Nations

Japan's Economic Reforms "A Guide for Other Nations," Snow Says

U.S. treasury secretary says reforms have reduced unemployment in Japan

The economic reforms Japan Prime Minister Junichiro Koizumi and Finance Minister Sadakazu Tanigaki have initiated are showing results and "should serve as a guide to other nations," says Treasury Secretary John Snow.

"The improvement in the banking sector with the resolution of nonperforming loans, the reduction in unemployment and the improving of health in the corporate sector are evidence of a strengthening economy," Snow said October 11 in remarks at the U.S. Embassy in Tokyo.

"Implementing economic reforms is never easy in any country, but the fruits of reform are only available to those willing to take risks and implement sound policy," he said. "Japan will continue to succeed if it stays on this path."

The secretary's visit to Tokyo is part of a six-day trip to Japan and China for high-level meetings and consultations. Following visits to the Chinese cities of Shanghai and Chengdu October 11-13, Snow will travel to Grand Epoch City, just outside Beijing, October 14 for a meeting of the finance ministers and central bank governors of the Group of 20 (G-20) major industrial and emerging-market nations.

The G-20 is an informal forum that seeks to promote dialogue between industrial nations and emerging-market countries on key international monetary issues. Its 19 member countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States.

For more information on U.S. policy, see Trade and Economics.

Following is the text of Snow's remarks:

(begin text)

U.S. Department of the Treasury
Statement by Treasury Secretary John Snow
October 11, 2005
Embassy of the United States
Tokyo, Japan

Good morning. I'd like to thank Ambassador Schieffer for his exceptional advice and counsel and for the first-rate assistance of his staff here at Embassy Tokyo.

I also want to thank my good friend and colleague, Minister Tanigaki, for making time to meet with me during this very busy time. As always, we had an excellent and engaging discussion about economic developments in Japan, the region and in the global economy. I always look forward to our visits. We are in frequent contact and have worked closely together on important issues in meetings of the G7 finance ministers and central bank governors where Minister Tanigaki is recognized as a forceful and effective leader. Japan is fortunate to have Minister Tanigaki leading its economic policy.

During our dinner last night, we discussed the earthquake, which hit Pakistan this weekend, and the tragic loss of life there, including the loss of a Japanese aid worker and his son. I took the opportunity to express my sympathy to the Minister for Japan's loss. America's thoughts and prayers are with all of the victims of this disaster. President Bush is committed to assisting in recovery efforts in that nation.

I have visited Japan many times, especially in my previous career in business, so I have long had a special interest in relations between our two nations. It is my view that the relationship between Japan and the United has never been stronger than today. We are inextricably linked by trade and financial exchanges, by our shared democratic values, by mutual security responsibilities, and by the vitality of our growing cultural ties.

As the two largest national economies in the world today, it is vitally important that we have such a strong, cooperative relationship, and it is equally important for our citizens and for the global economy, that we generate strong economic growth.

The U.S. economy, in spite of the devastating hurricanes which hit the Gulf Coast region last month, and high-energy prices, continues to demonstrate strong economic growth. Although we will see slightly slower economic growth during this quarter as a result of the storms, I expect robust economic growth to return during the first quarter of 2006 and beyond. It is a testament to the flexibility and resiliency of the U.S. economy that it can withstand the forces of economic shocks. Our ability to do so is a direct result of our commitment to good economic policy, resulting in strong growth, a corresponding increase in tax receipts, and a sharply reduced fiscal deficit this year.

I am very pleased to see that the Japanese economy is also responding to sound policy and demonstrating economic strength. The reform program of Prime Minister Koizumi and Minister Tanigaki is clearly showing results. The improvement in the banking sector with the resolution of non-performing loans, the reduction in unemployment, and the improving health of the corporate sector, for example, are evidence of a strengthening economy. These results -- and the statement of popular support evident from the recent elections -- should serve as a guide to other nations. Implementing economic reforms is never easy in any country, but the fruits of reform are only available to those willing to take risks and implement sound policy. Japan will continue to succeed if it stays on this path.

I was also able to renew my acquaintances with business leaders in Japan - including my good friend Dr. Toyoda. I have developed extensive relationships with Japanese business leaders throughout my career, so it was good to hear their candid assessments of the Japanese economy.

The United States welcomes a vibrant, rejuvenated Japanese economy. A growing, prosperous Japan is in our mutual interest. By sustaining and strengthening our economic relationship, together America and Japan will continue to contribute to global growth and security.

Thank you.

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