Japan regional governments push for fair pricing for SMEs

Japanese regional governments are intensifying efforts to ensure small and medium-sized enterprises (SMEs) can appropriately pass on costs to larger clients.

In Kyoto, the prefecture and city have jointly issued requests to 85 major ordering companies to optimize subcontracting transactions. This initiative aims to prevent payment delays and ensure fair pricing, following the implementation of laws regarding the optimization of SME subcontracting transactions. The target companies include listed manufacturers headquartered in the prefecture and large unlisted companies with major factories in the region.

In Kanagawa, authorities are promoting the ‘Partnership Construction Declaration,’ a system where ordering companies publicly commit to fair trade practices and coexistence with SMEs. To encourage participation, Kanagawa offers various incentives, including preferential treatment for national subsidies, local productivity improvement grants, and specialized low-interest loans for registered companies.