Now Abe prepares to battle Trump over steel

Japan is preparing to take legal action at the World Trade Organisation against its ally and key trade partner, the United States.

The move is in response to Donald Trump’s decision to impose tariffs on Japanese steel imports into America. The US is the number one destination for Japanese exports and Japan sends around $2 billion worth of steel to America annually.

In March, the Trump administration applied a 25% tariff on imported steel and 10% on imported aluminum. Shinzo Abe personally asked Mr Trump to
relax the tariffs when he visited him in Florida recently but he refused to give way.

Retaliation

As a result, Japan is now formally threatening retaliation. It is reserving the right under WTO rules to impose retaliatory tariffs of more than $400 million on American goods imported into Japan. But as the Wall Street Journal notes, the filing at the WTO doesn’t say whether Japan has actually decided to do so.

The newspaper also reminds its leaders that Japan has filed cases against the US at the WTO eight times and three involved steel trade.
China’s battle

The Guardian says that Japan has been caught up in a trade war between the US and China. Earlier this year, Donald Trump threatened $150 billion in tariffs and penalties on Chinese imports – including imports of aluminum and steel. Japan, Canada and the EU – which also import steel into America – faced similar penalties.

China told the WTO that it would retaliate but there was also an attempt to reconcile the dispute through talks when China’s Vice Premier Liu He visited Washington last week.

He spoke of China’s willingness to “appropriately handle and resolve trade issues felt by both sides on a basis of mutual benefit.”

Mr Trump sent a Tweet which seemed to suggest the meeting would do little to end the trade war. “Will that be successful? I tend to doubt it. The reason I doubt it is because China’s become very spoiled.”

“China has become very spoiled” Donald Trump

Split allegiance

The dispute over steel has left Prime Minister Shinzo Abe in the awkward position of siding with China against the US. From China’s point of view, a weaker US-Japan alliance would be a welcome development in terms of economics. It could also lead to tension between the US and Japan on other sensitive issues such as security and defence.

The US and Japan also differ on what basis they should agree a trade deal. Donald Trump would like to sign a bilateral deal with Japan but Mr Abe has said Japan prefers a broad trade pact involving eleven countries, known as the Trans-Pacific Partnership or TPP.

Japan’s parliament ratified the TPP last week, even though Mr Trump withdrew the United States from the deal during his first week in office. The New York Times says Mr Abe is still hoping Mr Trump can be persuaded to change his mind.

#MeToo Japan challenges old gender assumptions

A politician from Japan’s ruling party has been accused of sexism after he said women should have more children.

Kanji Kato suggested young women should have at least three children because childless women have become a burden on the state.

His comments were made at a meeting of the LDP, the ruling political party to which the prime minister belongs. They have been picked up by the national newspaper Asahi Shimbun and the international press.

I have found versions of the story translated online into Russian, French and Czech. His comments were also widely shared on social media.
Wedding speech

The English language version of the Asahi provides some context for the remarks. The paper tells its readers that Mr Kato is 72 and has six children of his own. His comments on childbirth were made at a meeting of the Hosoda faction of the Liberal Democratic Party.

“I always tell brides and grooms at wedding parties that I would like them to have three or more children,” he is reported as saying. “We need three or more children from those people to make up for couples who cannot bear a child no matter what they do.”

He also implied that it would be unfair if women with no children were cared for at nursing homes funded by other people’s taxes.

After the meeting, reporters asked Kato if he intended to amend or retract his “advice” to women. Apparently, Mr Kato was unapologetic. “Improving the birthrate is the most important issue facing our nation. That is all,” he said.

“Improving the birthrate is the most important issue facing our nation” Kanji Kato, LDP Politician

Sensitive issue

The birthrate of Japan is an issue that many people have strong feelings about. The BBC reports that last year, the percentage of children in Japan fell to its lowest level since records began more than 100 years ago.

Another issue which affects the debate is that women in Japan are typically more educated than their male counterparts but they are still faced with traditional expectations of motherhood.

For that reason, the media tends to report women’s cries of protest when they are lectured by elderly men on their family choices.
Ongoing battle

The Japan Times says Mr Kato’s remarks are among a number of apparently insensitive comments made by male politicians recently.

There have also been several sexual harassment scandals involving public figures in Japan this year and the #MeToo movement has galvanised women to challenge harassment and discrimination.

Earlier this month after a top-ranking Finance Ministry official was accused by a female reporter of sexual harassment asking her “Can I kiss you?” and “Can I hug you?” and “Can I touch your breasts?” during an interview.

This was one of the issue on the minds of 300 protesters who descended outside Tokyo’s busy Shinjuku station recently for a protest rally.

PRI’s reporter Thisanka Siripala spoke to one of the women who took part who said she joined the movement after seeing women in other countries speaking up. “The power of social media has inspired Japanese women to raise our voices and express that we’re not prepared to tolerate this,” she said.

North Korea tops the agenda at Tokyo’s Trilateral Summit

 

 

 

 

 

 

 

Prime Minister Shinzo Abe showed his skill as a diplomat by giving a cake to the South Korean President Moon Jae-in when he visited Tokyo this week.

The cake was to celebrate the first anniversary since Mr Moon took office last year.

The Chinese premier Li Keqiang also attended the trilateral summit. It was first time leaders of the three countries have met as a group since 2015.  

He invited Mr Abe to visit China later this year and Mr Abe willingly accepted the offer – although he must still overcome some serious political problems at home if he’s to stay in office.

The Diplomat points out that the summit came as Mr Abe remains besieged domestically by scandals, so hosting the other Asian leaders was an opportunity for him to present himself as a leader with regional influence and that could boost his public approval ratings.

Korean discussion

The issue of North Korea dominated media coverage of the trilateral summit.

China, Japan and South Korea all agreed to work together to get North Korea to give up its nuclear weapons.

Mr Abe reiterated Japan’s position that it would normalize ties with North Korea only if the latter took concrete steps toward abandoning its nuclear and missile programs and also resolved the issue of Japanese abducted by North Korean agents.

For Mr Abe, words alone are not enough: he wants proof the whole weapons programme is being shut down. Japan has therefore offered to pay 300 million yen ($2.75 million) to cover the cost of an inspection of North Korean nuclear facilities by the International Atomic Energy Agency (IAEA).

The two Koreas

Korea’s president Moon met the North Korean leader Kim Jong-un, which was held two weeks ago Panmunjom.

Korea’s KBS says the trilateral summit in Tokyo was a good opportunity for Mr Moon to gather support for the Panmunjom declaration. It says close cooperation between the three Asian countries is indispensable to achieve the common goals of peace and denuclearisation.

China has applied pressure on North Korea through sanctions and clearly wishes to be closely involved in the next stage of the process. Kim Jong-Un made two surprise trips to China, where he met President Xi.

The Trump card

This is the point at which the United States takes centre stage. Donald Trump is preparing for talks with Mr Kim, probably in Singapore in June. Before then, Mr Moon will hold a meeting with Mr Trump in Washington on May 22nd at which the two leaders plan to have close consultations on North Korea issues.

 

The Talent Trap

In the West, the word talent has become a popular way to refer to staff. There are many guides for managers on how to recruit and retain talent. When the labour market is competitive, companies often complain of “a talent shortage.” This strikes me as a rather grand phrase to use for all the humble workers within an organisation. Are they all really blessed with special abilities?

In Japan, the English word talent is used very differently. A person who is a talento is normally a television celebrity who is famous primarily for being famous. They might have been a model or a comedian originally – now they are just a talking head on the box. So, to be called a talento is to be damned with faint praise.

Finger Dance

One talented group I have enjoyed watching though are called XTRAP (pictured above) and you can see their amazing finger dance on YouTube. It made them famous but I am not sure if it brought them great riches. However, if you want a top job in a prestigious company, you don’t want to be seen as talento, even if you can finger dance. Japanese companies prefer to describe the people who work for them as “associates”.

Humble pay

Traditionally in Japan, a rather modest approach has been reflected in people’s salaries. On the whole, people accept lower pay than they do in other countries in exchange for secure employment. There is also a smaller pay gap between top executives and ordinary workers than there is the United States. In fact on average, CEOs in Japan are paid about one tenth of the American counterparts

More money

But there is one area where salaries are soaring and that is for IT professionals, with particularly high pay on offer to top software engineers. Bloomberg reports that Start Today Co which operates a popular online fashion shopping site called Zozotown is seeking seven “genius” tech experts to work in Tokyo and is offering annual salaries of as much as 100 million yen ($944,000). It is looking for workers in fields ranging from artificial intelligence to cryptography and robotics, according to a blog post.

This is an unusual type of business, where a small number of people with particularly special skills can find well paid work anywhere in the world. This means Japanese companies feel they need to pay salaries which look competitive in comparison to China and the U.S.

But for those without those rare skills, there’s still some good news. The Nikkei reports that Japanese workers are headed for their biggest wage increase in two decades. It says businesses lifted wages by an average of 2.4% this year, and it is apparently companies in the logistics and retail sectors which have been most generous in their increases.

So if you notice an extra bright smile next time you walk into a Japanese shop, perhaps it’s because the assistant has become a little richer thanks to her hard work and commitment.

 

If Abe resigns, it won’t solve Japan’s problems

Everyone I meet these days asks me the same question: “Is Shinzo Abe going to resign as Prime Minister of Japan?”

My answer is “I hope not.” However, I wouldn’t be surprised if he does. I base my reply on conversations I am having with experienced journalists and by looking through the huge number of stories in the Japanese newspapers and on websites about Mr Mr Abe’s declining popularity. It now looks difficult for him to win a third, three-year term as the leader of the ruling Liberal Democratic Party (LDP).

The LDP is due to hold a vote to elect a party leader in September. Mr Abe may have to announce he is not standing before then. Effectively, that means he could resign at any moment.

The problem with surveys of public opinion is that they tend to reinforce whatever the dominant view is in the media. The press have a negative assessment of Mr Abe’s domestic performance – and this, unsurprisingly, is shared by their readers. However, opinion polls are a poor way to judge a leader’s diplomatic skills or his international standing.

I am not qualified to know whether there is any real substance to the allegations of suspected cronyism which are being reported in the press. But I was struck by an article published this week on LinkedIn by Edo Naito, who wrote that the scandal in Japan is not about politics but actually reflects a crisis in its bureaucracy. He says that if any commercial bank in Japan made the kind of mistakes we are now seeing across all sections of the government, they would have been run out of business.

“If any commercial bank in Japan made the kind of mistakes we are now seeing across all sections of the government, they would have been run out of business” – Edo Naito

Mr Naito also observes that while the media and the opposition obsess over the Prime Minister’s “accountability” they overlook serious failings within national and local government. He argues that political resignations cannot solve such systemic problems.

Reputation at stake

In my latest article for the Japanese newspaper Sankei, I make the argument that if Mr Abe goes, it will damage Japan’s international reputation.

He has been a skilled diplomat, particularly this year, gaining unexpected concessions from President Trump and winning trust with China. Following his trip to Florida, it would be a great shame if he was unable to take up the tentative offer of an official visit to Beijing – a diplomatic milestone.

At a talk about China I attended this week, I was told that President Xi has made this rule: “You should not externalise internal party conflicts”. In the rigidly controlled Chinese Communist Party there is little scope for that. In a lively democracy, with a free press, like Japan, there is always space for rivalry, gossip and criticism.

Unfortunately, the domestic Japanese media’s relentless interest in activities in local government in Ehime and Osaka tends to add to the overall impression that Japan is inward-looking, rather than a player on the world stage.

I believe that if Mr Abe’s term in office is cut short because of domestic political scandal, Japan will lose a leader who has won much respect internationally. Its status both in China and America is at risk of being diminished.[:]

As China’s envoy visits, Japan continues its preparations for war

Around a million Chinese tourists visit Japan annually and most are unaware that the Japanese Self Defence Force is practicing for a war with their country.

Chinese people receive a warm welcome and enjoy their holidays. They spend generously and their tourism helps build good international relationships and a thriving trade for Japan’s hotels, restaurants and souvenir shops.

Southern war games

However, on the southern Japanese island of Kyushu, Japan is training its forces to respond to China’s growing military power. Around 1,500 members of the newly formed Amphibious Rapid Deployment Brigade – Japan’s version of the American marines – recently took part in an exercise in which they pretended to recapture land from invaders; that meant practicing for a war with China.

The drill was to prepare for a situation in which one of Japan’s uninhabited islands in the Senkaku chain is captured by China in a territorial dispute. China calls the islands in the South China Sea the Diaoyu islands – and claims them as its own.

Chinese military activities around the islands have soared in recent years in terms of the volume and frequency of both military aircraft and naval vessels, a development that has alerted not only Japan but also Taiwan, which is situated even closer to the Senkaku Islands than Japan.

Meeting Colonel Zhou Bo

This week, I discussed the islands with a Chinese senior colonel, Zhou Bo. He began by stating that the Chinese People’s Liberation Army plans to become a first class military force by the middle of the 21st Century.

Colonel Zhou Bo said: “The Japanese have complained that the frequent exercises by the Chinese PLA in the South China Sea have made them very much exhausted. That is because we have more ships and more aircraft than the Japanese. If the Japanese scramble their aircraft whenever we move beyond the first chain of islands, they will become exhausted. But I say, why should Japan become exhausted? The Chinese ships and aircraft are moving within the Miyako Strait, in line with international law.”

“China is operating in line with international law”

Senior Colonel Zhou Bo

A different kind of army

This contentious border issue has been a diplomatic problem between Japan and China for decades. Japan regards China as a persistent threat in the region and this is part of the reason that prime minister Shinzo Abe hopes to hold a referendum which could transform the Self Defence Force into a full army, authorised to fight abroad in support of its allies. In order to make that change, he would need support in a referendum to revise the constitution – a step he may well take following the 2020 Olympic Games.

Diplomatic opportunity

Before then, there is a chance to calm things down during friendly talks with China. This week, Wang Yi has become the first Chinese foreign minister to visit Tokyo in more than eight years. He will attend the Japan-China High-Level Economic Dialogue, alongside Japan’s foreign minister, Taro Kono.

Then early next month, the Chinese Premier Li Keqiang is expected to attend a trilateral summit in Tokyo with Shinzo Abe and his South Korean counterpart Moon Jae-In and there are provisional plans for Mr Abe to visit China in the autumn.

No doubt Japan will extend gracious hospitality to its Chinese guests. One hopes this creates the goodwill to ensure constructive talks, aimed at resolving the dangerous disagreement that festers in Japan’s deep south.

Abe demands meeting with North Korea’s Kim

The Japanese Prime Minister, Shinzo Abe, has announced that he wants to take part in a meeting between Donald Trump and the North Korean leader Kim Jong-Un, which is due to take place this summer.

Mr Abe told the Diet in Tokyo that Japanese diplomats have been communicating with the North Koreans via an intermediary in China. His comments came just as Kim Jong-Un was visiting Beijing, according to Bloomberg News. It was Mr Kim’s first foreign trip since taking power in 2011.

Mr Abe hopes to raise the issue of abducted Japanese citizens with Mr Kim, either directly, or through Mr Trump. Mr Abe will make his case to the US president when he flies to Washington for talks next month. He has also asked the South Korean President, Moon Jae-in, to raise the abduction issue with Mr Kim during the inter-Korean summit, which is scheduled to take place in late April.

However, it seems improbable that the North Koreans will allow Mr Abe to attend their meeting with Mr Trump. Nor are they likely to take any steps to release the Japanese people who were abducted in the 1970s and 1980s.

Japan’s dilemma

Japan faces a dilemma on how to accommodate the North Koreans. Hawkish politicians say talks and diplomacy are ineffective and they claim the best response is to press for regime change through force. These conservatives find an ally in Donald Trump’s ultra-hawkish new national security advisor, John Bolton, who has advocated the use of a pre-emptive strike against North Korea.

Expert insight

This week, I discussed North Korea with the former British ambassador to Pyongyang, John Everard. He said there is no clear agenda for the Kim-Trump meeting and noted that there is currently no serving US Ambassador to South Korea.

“We keep talking about the summit between the US and the North Korea as a done deal. But is it?” he asked.

Mr Everard suggested that the meeting could be cancelled if Mr Trump comes under pressure from from his hawkish advisors or if there is a poor outcome to the inter-Korean summit, which is due to take place before the Trump-Kim meeting.

Serious threat 

Mr Everard said: “The North Koreans believe they are on a roll. They think they have a winning hand and now is the time to play it. Of course, everyone likes the idea of dialogue – but we need to be clear-sighted because North Korea is a very serious threat.”

Mr Everard believes that if Mr Trump or Mr Kim sense they are losing face they might walk out and the summit may fail. “If either party storms out that would put us in a far worse position – a broken summit would be a disaster,” he warned.

Many thanks to the Commonwealth Journalists Association for the invitation to the meeting about the Korean situation at the House of Lords.

 

Shinzo Abe loses trust amid scandal allegations

Japan’s prime minister, Shinzo Abe, is trying to shake off a scandal which has also tainted his wife and one of his most trusted political allies.

This week he appeared before members of parliament in Tokyo to defend himself but protests continue and the Japanese media are full of the story.

However, as a long-serving and shrewd politician, Mr Abe has often escaped from problems in the past. So far, he remains in power – while the people around him are taking some of the blame.

Favouritism

There are several aspects to the current scandal. The first is a paper trail which seems to link the prime minister and his wife to an act of favouritism. The allegation is that Mr Abe’s wife, Akie, arranged the sale of land to an associate at a price that was “too good to be fair,” as Bloomberg Businessweek put it.

Then there are allegations of a cover-up – with somebody deleting Mr Abe’s name and the name of his wife from the official records. The Ministry of Finance says that was the fault of one of its bureaucrats, who has subsequently resigned.

So far, the Finance Minister, Taro Aso, has not quit his job but he did cancel a trip to Buenos Aires to join other finance ministers from the G20 this week.

Right wing agenda

Another concern is that the land deal was with a right-wing group, which has a harsh, nationalist agenda.

The Economist says the land was for a school to be run by Moritomo Gakuen, an educational group whose curriculum includes daily bowing to pictures of the emperor, patriotic chanting and “disdain for China and South Korea.”

That has inflamed Mr Abe’s opponents on the left, who see him as a nationalist and a liability.

Reuters reports that two thousand people protested on the streets outside the prime minister’s office on Friday, calling for Mr Abe and Mr Aso to resign.

Such protests are relatively rare in Japan and are highly effective for keeping the story in the headlines.

Democracy and resignations

One of the unusual characteristics of Japanese politics is that the same political party, the LDP, nearly always wins elections.

So when people feel fed up with the LDP, they tend to criticise its leadership. It is then relatively easy for the press to whip up any small scandal or even sense of discontent into a resignation issue.

In the past, this has led the LDP party to replace its leaders frequently – which explains why Japan often had a new prime minister every year or two.

Mr Abe’s different. He’s been in his job since 2012 and intends to hang on until after the Olympic Games in 2020.

For those outside Japan, it seems curious that a relatively minor scandal threatens such a long-serving and successful leader.

But as the Asahi Shimbun newspaper points out, Mr Abe did say that if there was proof that he or his wife had caused misconduct by the Ministry of Finance, he would quit.

That has left his opponents eager to link him to the suspicious land sale.

It also leaves the press seeking more allegations about this matter, which undermines Mr Abe’s credibility as leader.

Daddy dog and Mr Son’s 300 year vision for Softbank

This week, I have been thinking about a famous white dog and his company’s plan for the next 300 years.

The dog has an unusual name: Otosan, which means “father.” He’s the mascot of Softbank, founded by the hugely ambitious Masayoshi Son. He is Japan’s richest man and its best communicator.

The dog is a fluent Japanese speaker, too and can also play baseball and golf. He frequently wears sunglasses.
I am delighted to be invited to speak about Mr Son and Otosan the dog at a big event in London this June called the Internet of Manufacturing conference.

If you would like to come along and hear the talk, please send me a message.

Softbank is not a bank

The first thing to say about Mr Son’s company, Softbank, is that it is not a bank – it’s a technology conglomerate which is rapidly expanding into many fields, including insurance and financial services.

I am grateful to a reporter called Landon Thomas Jr. for his article in the New York Times in which he draws attention to a presentation slide deck used by Mr Son in 2010. It’s a splendid deck of images – brimming with emotion and bright pictures – and it reveals that Mr Son has a growth strategy designed to carry Softbank forward for 300 years.

Like all the best slide decks, it uses clear images and simple words to help people connect with the key points. It shows that Mr Son sees himself as harnessing the digital revolution based on artificial intelligence and big data.

Mr Son’s philosophy is written on one of the slides: “Endeavouring to benefit society and the economy and maximise enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution.”

That reminds me of many mission statements in Japan, where companies put their social goals ahead of their duties towards customers, staff or shareholders.

Shareholder joy

Nevertheless, shareholders have done well. Softbank Corporation’s shares are listed on the Tokyo Stock Exchange and the New York Times points out that a 10-year investment in those shares would have outperformed the Nikkei index by yielding a return of around 300%. There are reports that Softbank may now be preparing to list parts of the company in London.

London is where Rajeev Misra, who heads the Vision Fund which handles Softbank’s investments, is based. He’s a top Wall Street financier who used to work for Deutsche Bank.

The fund is ready to invest $100 billion dollars. “Our desire is to see more deals in Europe,” Mr Misra told CNBC earlier this year. While the Vision Fund has invested heavily in the US, India and Asia, Europe remains something of a blank spot.

Having said that, when it does splash out in Europe, it has plenty of money to spend and it sometimes ends up investing in organisations which you might find surprising. Last year it led a $500 million investment in a virtual-reality startup called Improbable Worlds, based in London.

Since then, Mr Son has been on an investment spree globally and SoftBank was involved in more than half of the ten biggest venture capital deals around the world last year.

Despite Brexit, Japan sticks to Britain

Toyota has pledged to increase its investment in the UK, despite concerns among Japanese businesses about the implications of Brexit.

The announcement follows a meeting between Toyota’s European president, Johan van Zyl, and Prime Minister Theresa May at Downing Street.

Toyota will build the next-generation Auris hatchback at its Derbyshire plant. Engines for the model will be made in Wales and the company said the latest announcement will help to secure 3,000 jobs across the two UK sites.

Nissan and Honda have also agreed to build new models in Britain.

Mr van Zyl said: “Toyota has been here for 25 years. We are a long-term investor.” However, he warned that will keep its approach towards the UK under review, post Brexit: “If the environment – not just for the UK but in general – is not conducive for doing business, we will not invest.”

Downing Street talks

His comments echoed those of the Japanese ambassador to London, Koji Tsuruoka, who led a delegation of Japanese companies to Downing Street last month.

Mr Tsuruoka said: “If there is no profitability of continuing operations in the UK, no private company, not only Japanese, can continue operations. It is as simple as that.”

Nissan, Toyota and Honda use Britain as a manufacturing base and export to Europe. In addition, a number of Japanese-owned firms operate in the automotive supply chain.

Special Treatment

Prime Minister May has suggested that car manufacturers should receive special treatment from the EU.

She also wants special arrangements for the financial sector, which includes many foreign banks based in the City of London, such as Nomura, Mizuho and Mitsubishi-UFJ.

However, European negotiators are cool towards the proposals.

At a meeting I attended this week, Britain’s ambassador to Japan Paul Madden said: “It’s well known that the Japanese government and companies were caught by surprise by the Brexit, as were many other people. They are concerned about tariffs and customs issues, regulatory issues and continued access to the workforce that they need. But my impression is that the atmosphere is calmer now than it was after the referendum, as individual companies work through their contingency plans during the inevitable uncertainty of the negotiation process.”

Opportunity continues

Despite the uncertainty posed by Brexit, the continued investment by Toyota, Nissan and Honda shows that Japanese companies are not departing the UK – and this is true for many sectors.

Firms which do not depend heavily upon cross-border trade between Britain and the EU see scope for business expansion.

Britain’s domestic market is receptive to Japanese goods and services and its economy has not slumped into a post-Brexit recession, as many economists claimed it would, even though the pound has fallen sharply.

Ambassador Madden said: “We are a large rich, sophisticated economy, with low corporate taxation and a business-friendly environment. We have a world class R&D base and some of the best universities in the world. Also, the City of London is a world class financial hub, with a world class talent pool, which we do not see changing.”