Tokyo's lack of progress in making it easier for foreign companies to acquire Japanese firms is "disappointing," U.S. Ambassador Thomas Schieffer said Wednesday.
Japan is set to lift its ban on so-called triangular mergers -- in which a Japanese subsidiary of a foreign company uses shares in its parent to acquire a Japanese firm -- under new mergers and acquisition rules that go into effect this spring.
However, under pressure from domestic businesses, authorities have been reconsidering how much to loosen the rules.
The debate "highlights the ongoing resistance to cross-border mergers and acquisitions that would increase the flow of foreign investment in Japan," Schieffer said in a speech to the American Chamber of Commerce of Japan in Tokyo.
"In light of Japan's growing burden of an aging population, rejecting the benefits of foreign investment that would increase productivity does not appear to be a realistic option," Schieffer said.
"It is disappointing that mergers and acquisitions were not made easier by the (new rules)," he said.
Japan's ratio of foreign direct investment to gross domestic product is the lowest among the 30-member countries of the Organization for Economic Cooperation and Development, he said.
Japan's cumulative base of foreign direct investment was 2.2 percent of GDP at the end of 2005, compared with 13 percent for the U.S. and 33.5 percent for the European Union, according to the ACCJ.
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