2017年8月14日

Date	Monday, October 2 - Thursday, October 5, 2006
Venue	Washington D.C., Chicago and Los Angeles, U.S.A.
Co-hosted	Japan Economic Foundation Chicago Council on Global Affairs (Former Chicago Council on Foreign Relations) Pacific Council on International Policy(PCIP)

• Program
• Participants
• Summary

ProgramA BINATIONAL STUDY (U.S. RELEASE EVENTS)
A BINATIONAL STUDY GROUP REPORT "ENGAGING CHINA AND INDIA:
AN ECONOMIC AGENDA FOR JAPAN AND THE UNITED STATES"

AGENDA FOR U.S. RELEASE EVENTS

EVENTS IN WASHINGTON, D.C.

Monday, October 2, 20061030-1130 Multi-bureau State Department BriefingLocation: U.S. Department of State

Study Group Participants:
•Marshall M. Bouton, President
•Kenneth Dam
•Noboru Hatakeyama
•Sakutaro Tanino

Attendees:
Staff from regional and functional bureaus of the U.S. Department of State

1345-1415 Briefing at Department of Energy with the Secretary and staffLocation: U.S. Department of Energy

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Noboru Hatakeyama
•Sakutaro Tanino

Attendees:
Samuel W. Bodman, U.S. Secretary of Energy
Karen Harbert, Assistant Secretary of Energy for Policy and International Affairs

1600-1700 Briefing at Federal Reserve BankLocation: Federal Reserve Bank

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Noboru Hatakeyama
•Sakutaro Tanino
•Marina v.N. Whitman

Attendees:
Ms. Karen Johnson, Director of the Division of International Finance
Senior staff from the division of International Finance

Tuesday, October 3, 20060930-1000 Briefing with USTR Susan SchwabLocation: USTR

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Geoffrey Garrett
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino
•Marina v.N. Whitman

Attendees:
Ambassador Susan Schwab, USTR
USTR office staff

1115-1145 Briefing at Chinese EmbassyLocation: Embassy of the People's Republic of China in the United States

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Geoffrey Garrett
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino
•Marina v.N. Whitman

Attendees:
Zhou Wenzhong, Chinese Ambassador to the United States
Chinese Embassy staff

1230-1330 Luncheon for the official release of reportLocation: Willard InterContinental, Pierce Room

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Geoffrey Garrett
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino
•Marina v.N. Whitman

Attendees:
Key thinkers in international economics and Asia affairs, media and scholars

1400-1430 Briefing with Senate Foreign Relations Committee staffersLocation: 450 Dirksen SOB

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Geoffrey Garrett
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino
•Marina v.N. Whitman

Attendees:
Keith Luce, Senior Professional Staff Member

1500- 1630 Congressional staffer briefing convened by California Institute in conjunction with Senator Durbin's officeLocation: 2261 Rayburn HOB

Study Group Participants:
•Marshall M. Bouton
•Kenneth Dam
•Geoffrey Garrett
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino
•Marina v.N. Whitman

Audience:
•Congressional staffers

Wednesday, October 4, 2006845 depart from Washington, D.C. on United Airlines flight #607
950 arrive in Chicago, IL
(flight was delayed for 5 hours due to the ground weather in Chicago)

EVENTS IN CHICAGO, IL

1830-1600 Dinner program cosponsored by The Chicago Council and the JapanAmerica Society of Chicago
Location: Metropolitan Club of Chicago, Sears Tower

Study Group Participants:
•Kenneth Dam
•Noboru Hatakeyama
•Akira Kojima
•Sakutaro Tanino

Audience:
Key Chicago Council members
Board Members of the Japan America Society

Thursday, October 5, 2006800 depart Chicago on United Airlines flight #103

EVENTS IN LOS ANGELES, CA
1026 arrive in Los Angeles, CA
(flight was delayed for 3 hours due to mechanical trouble by the UA)

1400-1600 Afternoon reception and public release eventLocation: Omni Hotel

A Conversation with Mayor Antonio Villaraigosa and Release of a Joint U.S.-Japan Study Group Report

Keynote Speaker:
Hon. Antonio R. Villaraigosa, Mayor, Ciry of Los Angeles

Program Chair:
Mr. John Andrews, West Coast Editor/Los Angeles Bureau Chief, The Economist

Study Group Cochairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American & Foreign Law, The Law School, University of Chicago

Special Introductions by:
Mr. Warren Christopher, Senior Partner, O'Melveny & Myers LLP
Dr. Geoffrey Garrett
Presiden, Pacific Councio on International Policy

Study Group Participants:
•Noboru Hatakeyama
•Kenneth Dam
•Geoffrey Garrett
•Akira Kojima
•Sakutaro Tanino

Attendees:
•Pacific Council members
•Los Angeles business leaders
•Los Angeles-based media

1800 Private dinner hosted by the Japan America SocietyLocation: Omni Hotel

Study Group Participants:
•Noboru Hatakeyama
•Geoffrey Garrett
•Akira Kojima
•Sakutaro Tanino

Attendees:
JAS board members

Links to relevant documents:

ParticipantsMonday, October 2 - Thursday, October 5, 2006List

SummaryA Binational Study Group Report (English)A Binational Study Group Report (Japanese)

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Study Group Participants

Marshall M. Bouton	President, The Chicago Council on Global Affairs
Kenneth Dam	Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School
Geoffrey Garrett	President, Pacific Council on International Policy
Noboru Hatakeyama	Chairman and CEO, Japan Economic Foundation
Akira Kojima	Chairman, Japan Center for Economic Research
Sakutaro Tanino	Director, Toshiba Corporation; Visiting Professor of Waseda University
Marina v.N. Whitman	Professor of Business Administration and Public Policy, Gerald R. Ford School of Public Policy and Ross School of Business, University of Michigan

Date	Thursday, July 6 - Monday, July 10, 2006
Venue	ANA Hotel Tokyo, Japan: 12-33 Akasaka 1-chome Minato-ku Tokyo 107-0052 Tel: +81-3-3505-1111
Co-hosted	Japan Economic Foundation Chicago Council on Foreign Relations (CCFR) Pacific Council on International Policy (PCIP)

• Program
• Participants
• Summary

ProgramA BINATIONAL STUDY (The Second Study Group Meetings in July 2006)
Binational Study on the Impact of the Rise of China and India, and the U.S.-Japan Economic Relationship

Agenda for the Second Study Group Meetings in Tokyo

Thursday, July 6, 200618:30-20:30 Welcoming Dinner hosted by JEFGuest Speaker:
Kazumasa Iwata, Deputy Governor, Bank of Japan

Guests:
Kunihiko Matsuo, Chairman, INPEX CORPORATION
Zembei Mizoguchi, President, Japan Center for International Finance

Participants:
Japanese study group members
US study group members

Friday, July 7, 200608:00-08:50 Breakfast SessionCo-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Participants:
Japanese study group members
US study group members

-To discuss the overall report structure, findings and recommendations.

09:00-12:30 Morning Session - Session 1Key topic 1:
Policies designed to facilitate sustained growth and development in India and China (including structural/market reforms, investments, infrastructure development, stable property rights, etc.)

Co-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Speaker:
Taizo Nishimuro, President and CEO, Tokyo Stock Exchange, Inc, Adviser to the Board, Toshiba Corporation

Participants:
Japanese study group members
US study group members

Discussants:
James Jin Du, Professor of economics, Faculty of Asian-Pacific Studies, Department of International Development, Takushoku University
Hideki Esho, Dean and Professor, Faculty of Economics, Hosei University

-To discuss the key topic on the final report
-To agree on the key topic including policy implications and recommendations

12:30-14:00 Luncheon and discussionParticipants:
Japanese study group team members
US study group team members

14:00-17:00 Afternoon Session - Session 2Key topic 2:
Technology sharing and its relationship to innovation

Co-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Speaker:
Fujio Cho, Chairman, Toyota Motor Corporation

Participants:
Japanese study group members
US study group members

Discussants:
Tomoo Marukawa, Associate Professor, Institute of Social Science, University of Tokyo
Hiroyuki Oba, Professor, International Economics Department, Reitaku University

-To discuss the key topic on the final report
-To agree on the key topic including policy implications and recommendations

18:30-20:30 Dinner hosted by JEFParticipants:
Japanese study group members
US study group members

Saturday, July 8, 200609:00-12:30 Morning Session - Session 3Key topic 3:
Meeting the energy challenges faced by the four countries

Co-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Speaker:
Kunihiko Matsuo, Chairman, INPEX CORPORATION

Participants:
Japanese study group members
US study group members

Discussants:
Tsutomu Toichi, Senior Managing Director & COO, The Institute of Energy Economics, Japan
Shigeru Sudo, Director, Energy and Environment Program, International Development Center of Japan

-To discuss the key topic on the final report
-To agree on the key topic including policy implications and recommendations

12:30-14:00 Luncheon and discussionParticipants:
Japanese study group members
US study group members

14:00-17:00 Afternoon Session - Session 4Key topic 4:
Trade relationship issues, including the WTO, protectionism, and examining ways to avoid politicization of trade and exchange rate disputes, and Evolution of East Asia as an economic region and how it relates to the United States and Japan

Co-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Speakers:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Zembei Mizoguchi, President, Japan Center for International Finance

Participants:
Japanese study group members
US study group members

Discussants:
Sayuri Shirai, Professor of Economics, Keio University
Shujiro Urata, Professor of Economics at Graduate School of Asia-Pacific Studies, Waseda University

-To discuss the key topic on the final report
-To agree on the key topic including policy implications and recommendations

18:30-20:30 Dinner hosted by JEFGuest Speaker:
Masakazu Toyoda, Director-General, Commerce and Information Policy Bureau, Ministry of Economy, Trade and Industry

Participants:
Japanese study group members
US study group members

Sunday, July 9, 2006 - free day

Monday, July 10, 200609:00-12:00 Concluding Session - A closed session of study group members

09:00-09:10 Guest Speaker:Yasuhisa Shiozaki, Senior Vice-Minister for Foreign Affairs

09:10-12:00 Concluding SessionCo-Chairs:
Noboru Hatakeyama, Chairman and CEO, Japan Economic Foundation
Kenneth Dam, Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School

Participants:
Japanese study group members
US study group members

-To confirm the final report based on each discussion on the respective key topics.
-To discuss the dissemination seminars in both the US (in the first week of October 2006) and Japan (in late January 2007)

12:00-13:30 Luncheon and discussion hosted by JEFParticipants:
Japanese study group members
US study group members

ParticipantsThursday, July 6 - Monday, July 10, 2006List

SummaryMinutes of July 7Minutes of July 8

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Participants List
(Listed alphabetically by last name)

Guest Speakers

Fujio Cho	Chairman, Toyota Motor Corporation
Kazumasa Iwata	Deputy Governor, Bank of Japan
Kunihiko Matsuo	Chairman, INPEX CORPORATION
Zembei Mizoguchi	President, Japan Center for International Finance
Taizo Nishimuro	President and CEO, Tokyo Stock Exchange, Inc., Adviser to the Board, Toshiba Corporation
Yasuhisa Shiozaki	Senior Vice-Minister for Foreign Affairs
Masakazu Toyoda	Director-General, Commerce and Information Policy Bureau, Ministry of Economy, Trade and Industry

Japanese Team

Noboru Hatakeyama	Chairman and CEO, Japan Economic Foundation
Akira Kojima	Chairman, Japan Center for Economic Research
Makoto Kojima	Professor, Faculty of International Development, Takushoku University
Ryosei Kokubun	Director, Institute of East Asian Studies, Keio University
Sakutaro Tanino	Former Ambassador Extraordinary and Plenipotentiary to India and People's Republic of China, Director of Toshiba Corporation

U.S. Team

Kenneth Dam	Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School; former Deputy Secretary of the Treasury; former Deputy Secretary of State
Marvin Gottlieb	President, M. Gottlieb Associates
Mikkal Herberg	Director, Globalization and Asian Energy Security Program, The National Bureau of Asian Research
Robert Madsen	Senior Fellow, Center for International Studies, Massachusetts Institute of Technology
Michael Moskow	President and CEO, Federal Reserve Bank of Chicago
William H. Overholt	Director, Center for Asia Pacific Policy, RAND
Marina v.N. Whitman	Professor of Business Administration and Public Policy, Gerald R. Ford School of Public Policy and Ross School of Business, University of Michigan Janet Yellen, President and CEO, Federal Reserve Bank of San Francisco

Discussants

James Jin Du	Professor of Economics, Faculty of Asian-Pacific Studies, Department of International Development, Takushoku University
Hideki Esho	Dean and Professor, Faculty of Economics, Hosei University
Tomoo Marukawa	Associate Professor, Institute of Social Science, University of Tokyo
Hiroyuki Oba	Professor, Reitaku University
Sayuri Shirai	Professor of Economics, Keio University
Shigeru Sudo	Director, Energy and Environment Program, International Development Center of Japan
Tsutomu Toichi	Senior Managing Director & COO, Chief Executive Economist, Institute of Energy Economics, Japan
Shujiro Urata	Professor of Economics at Graduate School of Asia-Pacific Studies, Waseda University

Cosponsoring Organizations

Marshall M. Bouton	President, Chicago Council on Foreign Relations
Geoffrey Garrett	President, Pacific Council on International Policy
Christopher Whitney	Executive Director for Studies, Chicago Council on Foreign Relations
Jennifer Faust	Director of Programs, Pacific Council on International Policy
Hiroshi Tsuchiya	Executive Managing Director, Japan Economic Foundation
Masaru Inoue	Director, International Affairs, Japan Economic Foundation
Masako Watanabe	Chief, International Programs Section, International Affairs, Japan Economic Foundation
Aiko Ozaki	International Programs Section, International Affairs, Japan Economic Foundation
Asuka Niwa	International Programs Section, International Affairs, Japan Economic Foundation

Project Consultant

Leonard Schoppa	Professor of Politics, University of Virginia

Observers

Junichi Chano	Managing Director, The Japan Foundation, Center for Global Partnership
Kenji Fujita	Secretaries Division, Secretariat of the Policy Board, Bank of Japan
Ai Goto	Intellectual Exchange Division, The Japan Foundation, Center for Global Partnership
Iwao Kimura	General Manager, Global External Affairs Division, Toyota Motor Corporation
Akira Tagaya	Chief Secretary to the President, Tokyo Stock Exchange, Inc.
Hidetaro Muroi	Senior Economist, Asian Research Department, Japan Center for Economic Research
Yukio Nishikawa	Senior Economist, Asian Research Department, Japan Center for Economic Research

Date	Monday, September 19 - Wednesday, September 21, 2005
Venue	San Francisco and Chicago, U.S.A.
Sponsors	Japan Economic Foundation (JEF) Chicago Council on Foreign Relations (CCFR) Pacific Council on International Policy (PCIP)
Program	A BINATIONAL STUDY (The First Study Group Meetings in September 2005) Binational Study on the Impact of the Rise of China and India, and the U.S.-Japan Economic Relationship
Chairman's Speech

• Participants
• Summary

ParticipantsMonday, September 19 - Wednesday, September 21, 2005List

SummarySummary

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Japanese Study Group Team Member

Noboru Hatakeyama	Chairman and CEO, Japan Economic Foundation
Akira Kojima	Chairman, Japan Center for Economic Research
Makoto Kojima	Professor, Faculty of International Development, Takushoku University
Sakutaro Tanino	Former Ambassador Extraordinary and Plenipotentiary to India and People's Republic of China, Director of Toshiba Corporation, Visiting Professor of Waseda University

U.S. Study Group Team Member

Kenneth Dam	Max Pam Professor Emeritus of American and Foreign Law, University of Chicago Law School; former Deputy Secretary of the Treasury; former Deputy Secretary of State
Marvin Gottlieb	President, M. Gottlieb Associates
Robert Madsen	Senior Fellow, Center for International Studies, Massachusetts Institute of Technology
Michael Moskow	President and CEO, Federal Reserve Bank of Chicago
Jeffrey Neal	Retired Chairman, Global Investment Banking Group, Merrill Lynch & Co. William H. Overholt, Director, Center for Asia Pacific Policy, RAND
Marina v.N	Whitman, Professor of Business Administration and Public Policy, Gerald R. Ford School of Public Policy and Ross School of Business, University of Michigan; former Vice President and Group Executive, Public Affairs Staffs, General Motors Corporation.
Janet Yellen	President and CEO, Federal Reserve Bank of San Francisco

Cosponsoring Organizations

Marshall M. Bouton	President, The Chicago Council on Foreign Relations
Jennifer Faust	Assistant Director of Studies, Pacific Council on International Policy
Geoffrey Garrett	President, Pacific Council on International Policy
Masaru Inoue	Director, Operations Department, Japan Economic Foundation
Asuka Niwa	Japan Economic Foundation
Nozomu Oriuchi	Conference Manager, Zom International, Inc.
Christopher Whitney	Director for Studies, The Chicago Council on Foreign Relations

Other Participants

Joydeep Mukherji	Director, Sovereign Ratings Group, Standard & Poor's
Lyric Hughes Hale	Publisher and Chief Executive Officer, China Online Inc.
Leonard Schoppa	Associate Professor, Department of Politics, University of Virginia

Date	May 26, 2004
Venue	Center for Strategic and International Studies (CSIS) 1800 K Street, NW, Washington, D.C. 20006 TEL 202-457-8748 FAX202-835-3899
Sponsors	Japan Economic Foundation (JEF) Center for Strategic and International Studies (CSIS)
Topics	Session 1: Evolving U.S.-Japan Relationship Session 2: Political and Security Challenges in Iraq Session 3: Challenge for Economic Reform and Development

• Participants
• Summary

Chairman's SpeechNoboru Hatakeyama Chairman and CEO Japan Economic Foundation

I'd like to express my heartfelt gratitude to Dr. Hamre and CSIS for co-organizing this conference entitled Reconstruction of Iraq, U.S.-Japan Cooperation and the Implications for Future Bilateral Relations with the Japan Economic Foundation, JEF.

Also I'd like to extend my gratitude to the participants and audience in this conference. Participants include, for example, Ambassador Samadi [ph] from Indonesia to Washington, D.C. He used to be the Ambassador to Japan. I enjoyed a very good friendship with him.

Also, Ambassador McCormick is here. He has been a long-time friend of mine and our relationship started from a common experience at not CSIS but SII -- Structure Impediment Initiative.

So I'd like to extend my gratitude to them.

JEF is a non-profit organization whose mission is to disseminate information regarding Japan. For this purpose JEF has been publishing a bi-monthly English magazine by the name of Japan Spotlight since 1980 and co-organizing international conferences like this with other organizations of foreign countries.

Today the conference is one of them, and this is the second such conference co-organized by CSIS and JEF in Washington, D.C.. The first one was held last October to discuss the Chinese economy including the issue of the Renminbi.

To reconstruct Iraq Japan has been and will be implementing three measures. Firstly, the GOJ has committed to give ODA, official development assistance, to Iraq. The amount of ODA will total $5 billion between 2003 and 2006, with $1.5 billion in grants and $3.5 billion in very low interest rate loans. Roughly two-thirds of the grants have already been implemented.

The second measures is debt forgiveness, debt relief Japan will offer to Iraq. Among developed countries that have outstanding official credits to Iraq, Japan has the biggest arrear the amount of which is $4.1 billion, excluding compensation claims for delayed repayments. If we include that amount the amount will double.

Prime Minister Koizumi told Mr. James Baker, Special Envoy to the President of the U.S., that Japan would commit to substantially curtailing its official credits to Iraq in the Paris Club creditors meeting if other countries like Russia and France are prepared to do the same.

The third measure is the dispatch of JDF to Iraq.

The fact that Japan has engaged in the three issues is itself clear evidence that Japan is cooperating with the U.S. in the Iraqi war.

The purpose of this conference is to find how we can cooperate with each other in implementing these measures and what else Japan and the U.S. can do to rebuild Iraq.

For example, if the U.S. can improve the security situation in Iraq Japanese companies will be able to help reconstruct Iraq and may be able to bid as subcontractors for U.S. projects. Likewise there may be scope for American companies to participate in Japanese projects.

If we can come up with some specific ideas like this through our discussion today it would be highly appreciated.

Once again, thank you very much indeed for co-organizing and participating in this conference, and especially my gratitude goes to Ambassador Yanai who has come all the way from Tokyo with me yesterday and he is now a professor at the Chuo University. Thank you very much indeed.

ParticipantsMay 26, 2004List

SummarySummary

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(In alphabetical order by last name)

JAPAN

Mr. Noboru Hatakeyama	Chairman and CEO, JEF
Mr. Kazuhiro Morimoto	Former Director, Middle East-Africa Office, Trade Policy Bureau, Ministry of Economy, Trade and Industry (METI)
Ms. Keiko Sakai	Director, Area Studies Center, Institute of Developing Economics, Japan External Trade Organization (IDE-JETRO)
Mr. Hideshi Takesada	Director of the Archives and Library, Professor, The National Institute for Defense Studies (NIDS)
Amb. Shunji Yanai	former Japanese Ambassador to the United States

U.S.

Dr. Jon Alterman	Director, Middle East Program, CSIS
Mr. William Breer	Japan Chair, CSIS
Dr. Patrick Cronin	Senior Vice President and Director of Studies, CSIS
Amb. Rust Deming	Distinguished Visiting Fellow, National Defense University
Mr. Robert Ebel	Chairman, Energy Program, CSIS
Amb. Richard Fairbanks	Counselor, CSIS
Dr. John Hamre	President and CEO, CSIS
Hon. Alan P. Larson	Under Secretary of State for Economic, Business, and Agricultural Affairs

Date	October 15, 2003
Venue	Center for Strategic and International Studies (CSIS) 1800 K Street, NW, Washington, D.C. 20006 TEL 202-457-8748 FAX202-835-3899
Sponsors	Japan Economic Foundation (JEF) Center for Strategic and International Studies (CSIS)
Topics	Session 1: Impact of China's Rapid Economic Development Session 2: Political, Economic and Social Challenges facing China: Implications for China's Mid-term Development Session 3: Influence of Chinese and Other Asian Foreign Exchange Systems on Industrial Competitiveness and the Macro Economy Session 4: Summary and Conclusions

• Participants
• Summary

Chairman's SpeechNoboru Hatakeyama Chairman and CEO Japan Economic Foundation

Chinese challenges the currency issues. And regarding the development of Chinese economy, I think everybody agreed that, for the time being, Chinese economy would continue to grow. There was a kind of consensus on this point.
However, there are many challenges China is going to face. There are so many challenges that I cannot remember every one of them, so I came up with an easy way to remember. This is an alphabetical order. A is appreciation of the Renminbi. B is bad loans. C is corruption, although it was not mentioned. D is deflation, which seems to be almost over, but as well as democratization necessity. And E is environmental issues, including the necessity of water, and the avoiding of desertification. Enterprises owned by state might also be a challenge. And F is fiscal deficit. G is gap between city and rural areas. And H is Household Registration Act, which was not necessarily mentioned, but this is important issue. As you know well, in China, there is a special law called the "Household Registration Act". This law prohibits, in principle, the movement of people from rural areas to urban areas, or vice versa, unless they have jobs and houses in their destination. Because of this law, factory managers in the coastal areas, such as Shenzhen do not allow workers from rural areas to work for more than three years in general. Therefore, those workers have to quit and return to their homes in rural areas.
The factory managers then hire new workers from rural areas at the same wages as they were paying to the former workers. This mechanism explains why wages have remained so low in the Chinese economy. However, because of the low productivity of agriculture due to the excessive farmer population, as the result of this law, and because of the Chinese people's desire for more freedom, this law has started to be relaxed in some cities, and in such cities, the wages have started going up. This is another challenge. China might lose one of the most attractive points - low wage rate in the near future. I is Islam power in the west of China. There is an Islam group working there. And J is justice system, which was mentioned by Mr. Nishimuro. And this is number 10, so I can go on like this, but I will stop here.
And regarding currency issues, there are interesting discussions. But I think everybody agreed with the idea, with the necessity of stopping or abandoning a fixed rate system, fixed rate exchange rate system. However, what matters turned out to be the timing. And if we abandon fixed exchange rate system, then we have to either float, or theoretically speaking, they have to adopt a floating system.
However, as Mr. Meyer pointed out, the Chinese people are saying now, of course we will go to floating system in the future, not now, not soon. And because they are just fighting against deflation, so they don't want to invite another deflationary element into their economy, which is floating system.
And in addition to this, they are very busy to be trying to comply with the WTO obligation, so it is not the time for them to change their currency system.
In addition to this, as Mr. Kuroda pointed out, leads and lags might be there if they keep fixed rate system, but if they go to a floating system, all of a sudden then shock wave might come by overshooting.
Then what should they do? The other alternative would be just to revalue, one-time appreciation. But if fixed system, pegging system is wrong, then how about another pegging system? Is it okay? If, theoretically speaking, pegging system is wrong because of Chinese necessity to depend upon the American monetary policy, depend upon FED policy, or Chinese unilateral decision, judgment, it's no good to keep fixed rate system. Then another pegging system, which is the result of revaluation, should also be no good theoretically. So where should we go?
However, although theoretically speaking, revaluation might not be good, in the practical world, this might be okay to head-off the protectionistic sentiment, especially in the congress. There was such an opinion. However, more practical opinion would be that a crawling pegging system might be better than just a simple revaluation, because simple revaluation would invite further revaluation. So there were different opinions as to the measures to change this system after the abandoning fixed rate system.
However, the direction of changing this system was agreed almost unanimously, and they agreed about -- almost agreed that now is the timing for China to change. And maybe some broader band system, including possible crawling peg system might be necessary to be considered.
Now last point I want to mention is the market opening, which was mentioned also. Someone wrote in FT the other day that China does not have to rush to go to floating system. Before then, China should open their markets more. But in the practical world, they are committed to WTO, and their schedule for liberalization is incorporated in their schedule for the WTO up until the year 2005. So they are busy to comply with this schedule already, so that's why they were not too enthusiastic in the Cancun negotiation. They happen to be one of the 22 or 21 developing countries group, and this was the group who ruined this Cancun meeting. And so China was not too enthusiastic to come up with the agreement coming out of the Cancun meeting, because they are too busy to be trying to comply with the obligation with WTO.
So before 2005, it is not too realistic for us to ask China to open their market further. After 2005, it will depend upon the development of argument in Cancun and the other meeting for our Doha development agenda. Thank you very much.

ParticipantsOctober 15, 2003List

SummarySummary

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Participant List (Listed in alphabetical order)

Michael Armacost	Stanford University
Shai Bernstein	Stanford Univeristy
Nick Bloom	Stanford Univeristy
Richard Dasher	Stanford University
Brad DeLong	University of California, Berkeley
Karl Eikenberry	Stanford University
Francis Fukuyama	Stanford University
Naoyuki Haraoka	Japan Economic Foundation (JEF)
Robert Hodrick	Stanford University
Takeo Hoshi	Stanford Univeristy
Gen Isayama	WiL
Takeshi Isayama
Takatoshi Ito	Columbia University
Shinnosuke Kameyama	NEDO
Eita Kitani	SV Branch
Keiichiro Kobayashi	Keio University
Kazumasa Kusaka	Japan Economic Foundation (JEF)
Kenji Kushida	Stanford University
Yong Lee	Stanford University
Phillip Lipscy	Stanford University
Prashant Loyalka	Stanford University
Hideichi Okada	Japan Petroleum Exploration Co., Ltd
Kathryn Shaw	Stanford University
Hirokazu Shimoda	JETRO San Francisco
Ken Singleton	Stanford Univeristy
Dan Sneider	Stanford University
Kathleen Stephens	Stanford University
Masaaki Tanaka	Pricewaterhouse Coopers International
Ryoichi Togashi	Komatsu Ltd.
Yoshiaki Tojo	JETRO San Francisco
Tsunehiko Yanagihara	Mitsubishi Corporation
Yu Jin Woo	Stanford University