MOVE BY JAPAN Direct Foreign Investment

Press, Volume CX, Issue 32379, 19 August 1970, Page 15

MOVE BY JAPAN Direct Foreign Investment

(N.Z.P.A.-Reuter—Copyright)

TOKYO, August 17. Japan moved yesterday to free a large part of its industry for direct foreign investment—but left up enough barriers to annoy its business critics abroad.

A list of 323 industrial sectors were submitted to the Government by its Foreign Investment Council for approval at a Cabinet meeting on August 25. The measures, Japan’s third round of trade and capital liberalisation, will go into effect on September 1. The Finance Minister (Mr Takeo Fukuda) hailed the recommendations as “epoch making and historic,” but general foreign opinion was they fell far short of requirements.

The council failed to make any change in Japan’s basic stand of preferring 50-50

joint ventures to whollyowned foreign concerns. , And in many freed industries administrative and legal barriers remain to make liberalisation virtually meaningless for foreigners. But the council did recommend that the fourth and at present final round of liberalisation should be brought forward six months to October, 1971, and freeing of the highly attractive automobile industry be opened to foreign investment about next April. With the latest easing of restrictions a total of 524 Japanese industrial sectors have now been opened, but only 77 of them for 100 per cent foreign investment. The rest are restricted to 50-50 with a stipulation that the Japanese partner must already be engaged in the particular industrial field. Official United States sources in Japan were critical of the council’s recommendations which, they said, failed to meet international requirements.