Kishida promises 'Japan-style capitalism'

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Japan should strive for a new form of capitalism to reduce income disparity that has worsened under the coronavirus pandemic, says former foreign minister Fumio Kishida who hopes to become the next prime minister.

Kishida is the only Liberal Democratic Party (LDP) member to announce his candidacy in a leadership vote on September 29, after Prime Minister Yoshihide Suga last Friday said he would step down.

The winner of the vote is all but assured to be Japan's next prime minister.

Popular COVID-19 vaccination minister Taro Kono and former internal minister Sanae Takaichi have signalled their ambition to run.

Takaichi, 60, is expected to announce her candidacy and if successful would become Japan's first female leader.

Kishida said deregulation during the reform era in the early 2000s widened the gap between the haves and have-nots and that former prime minister Shinzo Abe's "Abenomics", that sought to fix tattered finances by achieving high growth and boosting tax revenues, did not see benefits trickle down.

"Without distribution of wealth there won't be a rise in consumption and demand ... there won't be further growth if distribution of wealth is lost," Kishida said at a presentation of his economic proposals in Tokyo on Wednesday.

"I'll aim to build new Japan-style capitalism. The biggest challenge in macroeconomic policy is to end deflation. I'll stick to three-pronged steps of bold monetary policy, flexible fiscal spending and growth strategy," he said.

"There's no doubt Abenomics has brought a major achievement on growth but in terms of distribution of wealth, trickle-down has not yet happened."

Kishida repeated a call for an economic stimulus package worth "tens of trillions of yen" to combat the coronavirus pandemic. He said he would use fiscal spending for achieving economic stability while not giving up on fiscal consolidation.

Kishida also called for setting up a 10 trillion yen university fund to stimulate science and promotion of renewable energy, while retaining nuclear power technology, which he said should be considered as a clean energy option.

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