By Tetsushi Kajimoto

TOKYO, Reuters – Japanese companies want their government to create an additional budget of $90 billion to alleviate the COVID-19 pain, a Reuters poll revealed. This supports Fumio Kishida, the new prime minister.

These monthly Corporate Survey results are the result of Kishida’s premiership over Yoshihide Sauga. He ordered his cabinet last week to create an economic package that would target households and businesses hardest hit by the pandemic.

Kishida pledged economic measures in the amount of “tens to trillions of Japanese yen,” to revitalize Japan’s third largest economy. The country is already burdened by the highest level of industrial debt. Japan’s annual GDP is twice as large as its debt.

An anonymous manager at a retailer said that “all we need” is pro-active fiscal spending, which will help to offset the adverse effects of the pandemic. The pandemic was particularly hard on retailers and service-sector businesses.

In a written response, some other managers sounded cautious about the spectre of politically-motivated spending as Oct. 31 elections draw near, while others voiced scepticism about effects of stimulus in boosting the economy.

The manager at a chemical company wrote that “We are in agreement about the necessity of measures to revitalize the COVID-hit economic, but we do not want pork-barrel expenditure.”

According to the Corporate Survey, 87% of companies pled for a larger budget in order to finance stimulus. 40% demanded a spending of between 10 and 20 trillion yen while 23% called for 20 billion-30 trillion yen.

The survey found that COVID antimeasures were the most popular spending items. Half the companies selected them. 15% requested support for restaurants or tourism. 12% called for steps to improve the environment and 10% demanded digital transformation.

A manager at a manufacturer of transport equipment wrote that while industries in difficulty must be saved, it doesn’t necessarily mean prolonging their lives. We want to see proactive investment in the areas that are needed for Japan’s competitive advantage.

To encourage Japanese manufacturing to return home, companies called for stronger supply chains to support chip production and to promote automation in factories.

Between Sept. 29 and Oct. 8, the survey surveyed approximately 500 Japanese large-sized and medium-sized non-financial companies. Some 267 of these firms participated in the survey.

A majority of Japanese businesses expressed concerns about the impact on overseas economies. This is despite marketjitters surrounding Evergrande in China and real estate issues.

Two thirds of respondents expect China’s economy will manage moderately slowdown while it is under state control. A further 13% stated that a temporary slowdown was possible as stimulus is expected to be given by the authorities to stimulate the second-largest economy in the world.

Around 10% predicted the Chinese economy would bottom out by next spring. Only 11% anticipated the slowdown turning into a financial crisis.

A service company manager stated that although it depends on the way in which coronavirus is contained, we can’t avoid its impact if demand for Chinese tourists (inbound) returns.

($1 = 112.3200 yen)