pain for setting up a new stage towards the 21st century. I believe without a doubt that if we are able to survive this turmoil, the 21st century will be the century of new prosperity for the Asia-Pacific region.
Here, I would like to talk about the long-term prospects of Asia, that is the word "future" of this forum's English title.
Firstly, how is Asia going to promote its industry? As mentioned previously, as a short-term period, Japan should abolish its system of regulations and completely open its markets. I think this is one of the very important directions we should be heading for. One outcome to prove this would be the fact that the local production has highly advanced and the quality has also improved. The market which is most difficult is Japan. There are no other customers like them who are so strict in product quality, cost performance, reliance, and repair service. We have successfully grown to be able to import products to this strict market. Recently, the re-importation to Japan is highly increasing. We are very happy about this and also consider it as a promising field. In addition to this, we handle not only mature products such as audio equipment and refrigerators, but have made a technical transfer to a more broad field, the high technology field, in other words, computers, semiconductors and video cassette recorders. As you may already know, Korea has completed its extremely powerful manufacturing lineup and took up the position after America and Europe in DRAM, the semiconductor memory field. Then last year, Taiwan became the largest production base for DRAM. An investment of approximately 1.5 trillion yen was made in last year alone, and a mass production of 64-mega DRAM is expected to be starting this year. This has seriously affected the Japanese industry. This is the reason that major companies of our industry have ended up postponing or even stopping their production.
It is important to realize that the latest semiconductor business is being transferred to the Asian region moment by moment.
I hope we can take a lead in this area when considering the future direction of Asia. Needless to say Asia is an extremely important region for us, the Japanese manufacturing industry.
The ranking for the countries where manufacturing plants have been founded is Asia 56.8%, North America 21.6% and Europe 14.3%. A very high standard of 443 companies have their manufacturing plants in Asia, of which approximately 80% are mainly located in the East Asia region. In addition to this, more than half , approximately 184 companies, have advanced to China. I ask you to understand that these aspects will make a tremendous impact to our business, whether short-term or long-term.
There is one point I wish to emphasize. I have traveled to many Asian countries in the past and have frequently been invited by many executives to come to their country as a supporting industry. The situation was also the same in Korea, Indonesia, China, Thailand and Malaysia. When considering the reinforcement of the local foundation or the recipient of the technology transmittal, such advancement as a supporting industry is an extremely important point. In response to this invitation, many Japanese companies, especially medium and small sized companies, have made advances to these countries. I think that this is the reason why the locals have become able to manage, even if the production of high4cchnical products has been transferred to their county.
However, due to the occurrence of the currency crisis, the supporting industry is now in a very difficult spot, The same can be said inside Japan, but it is important to understand the position of the companies which have made advance overseas. This morning, they were saying in the news that it has been decided at the G7 to offer special support for such supporting industries. I am very happy to say that this will mean that one of the requests I have been kept making to the Federation of Economic Organizations (Keidanren) through the Kansai Economic Federation (Kankeiren) has been finally realized.
The next important point is the Japan's domestic response.
Presently, overseas development is moving ahead. Moreover, according to the Asian countries, requests and America's expectations, if we completely open our markets and accept the products of such countries, what will become of the Japanese industry? There is a great concern of the response to the hollowing situation, It is extremely hard to make test calculations of this hollowing phenomenon.
According to the test calculation of 1995, there would have been a layoff of 110,000 people. A lot of patience over a long period would be necessary to cope with this situation.
Needless to say that the only answer would be to create new businesses and bring up venture enterprises. The Japanese government shows a profound understanding of this issue and the Scientific Technique Fundamental Law was established in November 1995. Also, in July 1996, the Scientific Technique Basic Plan was decided on and Japan is heading to be a scientific technology oriented nation.
Despite the present tight budget, the Japanese government
