Panel urges Japan to open up to foreign investment

TOKYO, May 19, 2008 (AFP) – An advisory panel called on Japan’s government Monday to help remove barriers to foreign investment amid calls overseas for the world’s second-largest economy to open up more. The panel of academics, business chiefs and other experts proposed Japan treat foreign and domestic investors equally and lower its corporate tax of around 40 percent, the highest among the world’s major industrial nations.

“Japan lags far behind in foreign direct investment in the midst of intensifying global competition,” said Chiba University of Commerce president Haruo Shimada, who heads the panel.

“We must take drastic steps,” he told a news conference.

The proposals, along with others on rules for mergers and acquisitions and investment restrictions, will be submitted to the government on Tuesday as it prepares to work out basic economic and fiscal policies.

The recommendations come amid concern overseas about the difficulty of investing in Japan, whose own companies have expanded around the globe.

Visiting European Union Trade Commissioner Peter Mandelson last month urged Japan to open up to foreign investment, saying it was the most closed of the developed economies.