Am I too optimistic? Well, the Economist is upbeat, too!


This week, I was asked whether I’m too optimistic about Japan.

Podcast host Ziv Nakajima Magen has been reading through my recent blog posts on Japan Story and noticed that they are often upbeat.

Quite reasonably, he asked me: “Where do you get this optimism? Is it 100% authentic, or are you maybe just playing devil’s advocate a little bit to the sensationalist, over-dramatic tendency of international media, as far as it comes to Japan and some of the issues it faces?”

I told Ziv that I sometimes feel it’s my duty to highlight the positive aspects of Japan as the media, quite understandably, tends to concentrate on the bad news. But I also said that as a journalist, I try to keep an open mind. I reminded him that I’m entirely independent – I’m not paid by anyone in Japan to sing the country’s praises in a blog.

Sunrise in Tokyo

Apparently, I’m not alone in keeping an eye out for the good news.

This week, I read a very optimistic analysis of Japan in the Economist magazine. It was in the Finance and Economics section under the byline Buttonwood, which suggests it was written by Philip Coggan. The headline was “Sunrise in Tokyo.”

The piece praised Japan’s “healthy” economy and was positive in its view of the Abenomics programme of Prime Minister Shinzo Abe.

It said: “Deflation has ended. Nominal GDP has been growing steadily. And the job market is buoyant. Unemployment has fallen to 2.3%. The ratio of vacancies on job seekers is the highest since the early 1970s.”

Womenomics

It also looked at the policy of Womenomics, designed to bring more women into positions of senior responsibility. That usually provokes a sceptical response in the international press.

For example, the New York Times magazine recently asked “Why does Japan make it so hard for working women to succeed?” The author of that piece, Brook Larmer, said Japan “has remained stubbornly regressive”. He wrote: “Japanese women, to a degree that is striking even by the lamentable standards of the United States and much of the rest of the world, have been kept on the margins of business and politics.”

Yet the Economist article states that: “More women than ever are in the workforce. The female participation rate is higher than in America and above average for the OECD.”

Rising productivity

Japan is often said to have an inefficient working culture. For example, Reuters said this week that it has “the lowest productivity among Group of Seven countries.”

The article in the Economist does not challenge that claim directly but it counters that: “Output per hour has recently grown faster in Japan than in other G7 country, according to the Conference board, a research group.”

Challenges remain

The Economist does not ignore the challenges facing Japan, such as its shortage of labour and its ageing population. But it says that companies are responding to these issues by expanding into foreign markets and improving their productivity.

The Economist loves to hand out advice, telling governments and business leaders what to do. Yet on this occasion, it is quite restrained, apart from its implied praise for Abenomics. The piece suggests that Japan is quietly solving its problems by itself.

So, my optimistic view of Japan is not quite as esoteric as it sometimes seems. Others see it as a land of opportunity, too.

Growing Chinese power is changing Japan’s strategy in Asia

One article I read this week profoundly challenged my thinking about the relationship between China and Japan.

It claimed that: “The idea that Beijing suddenly warmed up to closer relations with Japan as a result of China’s weakening economy and a trade dispute with the U.S. is arrant nonsense.”

The piece was written by Dr Michael Ivanovich and published on CNBC to tie in with Prime Minister Shinzo Abe’s trip to China last week. It suggests most of the media has misunderstood the background to the visit.

The mainstream view, expressed on outlets such as the BBC, is that “trade tensions with Washington have driven Japan and China into an unlikely friendship.”

But Dr Ivanovich says that China’s economy is not weak and that “China does not need Japan for the steady growth of its huge and rapidly expanding domestic market.”

“China does not need Japan” Dr Michael Ivanovich

Who needs who?

He also claims that it is “ridiculous to think that China needs Japan as an ally in its trade dispute with the U.S.” He says it is far more likely that Japan needs China to keep its economy on track.

In his clever and provocative piece, Dr Armstrong says Shinzo Abe’s friendly policy towards China has turned him into “a supplicant for contact and attention with an aloof, hostile and indifferent Chinese leadership.”

Mr Abe is also chided for being too friendly to China by the Japanese daily newspaper, the Mainichi. It says Japan could be forced to accept the position of being a “peripheral country next to the great nation of China.”

Belt and Road

Nevertheless, the Mainichi – along with many other media outlets – sees value for Japan in cooperating with China in the economic sphere.

It says that in June last year, Prime Minister Abe announced that Japan would support China on some parts of the One Belt One Road initiative, promoted by China as a means of developing global trade.

Another person who believes that BRI is a pragmatic way for Japan to engage China is Shiro Armstrong, who has presented a very good piece of analysis on East Asia Forum which has been picked up by many outlets.

He writes: “As Chinese policymakers search for ways to better deploy the country’s vast sums of capital abroad, Japan has experience of doing just that dating back to the 1970s – including of geopolitical pushback.

“Understanding that the Belt and Road is here to stay, Japanese engagement can shape the massive investments and get more business for its companies. It’s also a part of a broader hedge against an increasingly uncertain Japan–US relationship.”

Tensions with Trump

The tensions in the US relationship with Japan were analysed in This Week In Asia published by the South China Morning Post. It says pressure from the US has forced Japan to start talks aimed at narrowing its trade gap with America. It had a $69 billion surplus last year.

The thoughtful article by Crystal Tai quotes Yves Tiberghien, director emeritus of the Institute of Asian Research at the University of British Columbia. He suggests that Donald Trump has taken an old trade war to a bigger level.

“But there’s something more toxic about this round,” says Mr Tiberghien. “The current approach by the US is actually one that abuses, bullies and threatens, which affects trust and confidence. It could affect the global trading system, it may not even help the US in the end.”

 

Abe’s summit with Xi marks a new chapter in their relationship

Mr Abe can expect to be treated with the greatest of respect as he enters the Great Hall of the People in Beijing in the company of President Xi Jinping this week. The leaders are celebrating their first full-scale summit since 2011.

Remarkably, the stage is now set for President Xi to make his first official visit to Tokyo next year, including a meeting with Japan’s Emperor.

Five years ago, it would have been almost inconceivable that Mr Abe would be warmly welcomed in China. At that time, China’s state media portrayed Mr Abe as a revisionist, who had make light of Japan’s invasion and occupation of China and other Asian countries in the mid-20th Century. The Chinese were scathing of his version of history and his nationalist politics. They also derided him for presiding over a stagnant economy, while theirs was booming.

Money matters

Economics play a crucial role in the Sino-Japanese relationship. Mr Abe is accompanied on his trip to China by representatives of hundreds of Japanese companies, which would appreciate a share of the vast resources which China offers its partners, especially those countries which lie in the path of its ambitious Belt and Road initiative.

Those trade routes take a western path, from China to Europe, while Japan lies to China’s South East. Logistically, though, Japan could support Belt and Road if it wished to do so; although so far, its involvement is limited, especially at a governmental level. Mr Abe rightly questions whether the plan is genuinely designed to deliver international benefits, or if it is primarily aimed at serving China’s national interest.

The new normal

Mr Abe has spoken of the relationship between China and Japan returning to normal. That means that Japanese companies often try to overlook the political and ideological differences between Japan and China, which are profound. In the past three years, under President Xi, China has placed special emphasis on the need for businesses to consult with the Communist party at every stage of the decision-making process.

Official figures this week suggest that China’s economy is still growing at a striking pace – six and a half percent, although most economists warn the official data nearly always falls in line with government targets.

The Trump factor

Nevertheless, the trade war between China and the United States is causing disruption. It is also having a knock-on impact on Japan, which has been hit by tariffs on some of its exports to America. China is therefore encouraging Japan to consider where its allegiances lie.

Although China has overtaken Japan as the world’s second largest economy, it remains clumsy in its diplomacy, with few friends or allies. It has recently risked further censure through an intolerance of democracy and international law. That should make Mr Abe wary of publicly supporting Sino-centric schemes – especially if the Chinese seek to present him as a subordinate.

Different visions

Mr Abe has said that the key goals of his premiership are to revive Japan’s economy, to nurture its national pride and to restore its global reputation. China has a different dream, in which it plays a globally centrally role, with its ruling Communist party controlling its destiny. Given these two contrasting visions, ideological clashes are inevitable.

Yet the Beijing summit has serves as a reminder that China and Japan can also respect each other as equals with common interests. They have much to offer the rest of the world when they collaborate, not compete.

Softbank is tainted by Saudi Arabia’s notorious image


The disappearance of Saudi Arabian journalist in Turkey, amid strong indications that he may have been murdered, has created a crisis for one of Japan’s richest and most successful businessmen.

Masayoshi Son, the founder of Softbank, is trusted with looking after the vast fortune of the Saudi Arabian government.

CNN reports that Saudi Arabia has pumped $45 billion into the SoftBank Vision Fund, which in turn has invested billions of dollars into tech startups around the world.

For example, last year Softbank invested $4.4 billion in WeWork, which has provided many co-working spaces in cities around the world, including China and Japan.

Murder investigation

However, the image of Saudi Arabia has been severely tarnished by the disappearance of the journalist Jamal Khashoggi, who writes a column for the Washington Post, which is often critical of the Saudi authorities.

“What we’re talking about here is a reporter who was allegedly murdered and dismembered in an embassy so this cannot be allowed to stand – it’s so egregious,” the independent technology analyst Stephanie Hare told the BBC.

She said that Saudi Arabia put a further 45 billion into Softbank’s Vision Fund last week. “The Saudis know that oil is not going to be a cash cow for ever so they are investing in tech and buying companies through Softbank,” explained Ms Hare. “But everyone know about the poor record Saudi Arabia has on human rights.”

There is no official statement on the situation on Softbank’s website but the big question is whether the partnership with Saudi Arabia has become too toxic to continue.

Davos in the desert

One way to judge how foreign companies view the situation is to watch if they attend a big investment conference in Saudi Arabia next week, dubbed by the media as Davos In the Desert.

CNN reports that the Japanese company Nikkei has withdrawn as a media partner for the event.

JP Morgan CEO Jamie Dimon and the heads of America’s top investment firms Blackrock and Blackstone are among the leading figures who have decided to stay away. But there has been no announcement from Softbank yet.

Political element

One of the goals of Softbank and other Japanese companies which do business internationally is to steer clear of politics as far as possible.

That is also why the Japanese government rarely initiates sanctions, with the notable exception of its tough stand on North Korea.

However, in this instance it will be difficult for Japan and Softbank to ignore the international outcry over Mr Khashoggi’s disappearance and the major implications for all those organisations which do business with the Saudi government.

Mr Trump has pushed Japan down an unwelcome road

Donald Trump has forced Japan into making a huge concession in terms of its trade relationship with the United States, according to the Financial Times.

The newspaper says that Japan has agreed to hold bilateral talks with America on trade. That’s significant – because up to now Japan has had a policy of negotiating as part of an international multilateral group.

In many ways, a bilateral – country-to-country – negotiation makes Japan’s position weaker.

So why has the Japanese Prime Minister Shinzo Abe, a supporter of multilateral negotiations, capitulated on this point?

Too big to battle

America is Japan’s largest trade partner. It is a crucial market for Japanese companies like Sony (owner of Colombia), Toyota and Softbank.

Japanese people have strong affection for American brands like Starbucks, McDonalds and Disneyland. So for Japan, talking to America directly makes sense, rather than as part of a group which includes other countries with different relationships with the United States.

Trump’s preference

Donald Trump much prefers bilateral deals and negotiations. It’s been his preference since he worked in business before he became president. It is clear that it makes it easier for him to press his American First agenda if the talks are bilateral rather than multilateral.

The Financial Times says the goal for Mr Trump’s is to “remake the world’s trading system”. The paper implies that countries which have “buckled under pressure” to the United States – like Japan – are likely to escape sanctions on their imports into the US.

Alan Beattie, the FT’s reporter, wrote: “Tokyo therefore finds itself pushed down the bilateral route.”

What is bilateral?

Japan has a much valued free trade deal with the European Union.

It’s often referred to as a bilateral arrangement although that is a slightly strange term to use about a deal with the European Union, which is a trading block made up of 28 members.

Negotiating with it, or them, is not easy – as Britain has learned from its extremely complex Brexit process to leave the EU.

China factor

Japan’s trade deal with the US comes in the context of a huge and escalating trade war between the US and China. Japan has already been caught in the crossfire, suffering heavy tariffs on its iron and steel exports to the US, with negative implications for its automotive industry.

Alan Beattie says Japan wants to “usher Washington down a more collaborative road” which I think neatly sums its up Japan’s diplomatic approach.

Why would it wish to fight with its ally over trade if there’s a chance of a better arrangement which suits both countries?

Unlike Japan, which is a fundamentally very pragmatic country, China appears to be in no such mood for collaboration or compromise.

The ideology which drives the Chinese government is inherently hostile to that of Donald Trump’s America First agenda. And Mr Trump’s advisors are taking a tough approach to China which is causing trouble to both sides.

Japan’s goal is to keep as friendly as possible in terms of business and diplomacy with both America and China. That’s an enormous challenge given Mr Trump’s disruptive approach, the rapid economic growth of China and the ideological divide between the nations. It leaves no simple choices for Japan’s hard-pressed diplomats.

It’s wrong to sideline Japan in the North Korean talks

Why isn’t the Japanese Prime Minister Shinzo Abe at the centre of the discussions aimed at reaching a peaceful solution on the Korean peninsula?

The New York Times says that Mr Abe is being sidelined. It quotes Terry Ito, a commentator on Nippon Television, from Tokyo, that “the possibility of the US thinking about Japan is zero.”

Mr Abe will encourage President Trump to bring Japan to mind when they meet at the United Nations this week.

Skilled diplomat

Mr Abe is one of the most skilled diplomats in Asia and a person who has spent much of his political career considering the North Korean crisis. He can be expected to keep a cool head during complex discussions and to ensure the most important issues are addressed.

But I think there are two reasons why his presence might not be welcomed at the peace talks, particularly if the North Koreans themselves are taking part.

The first is that an issue which is crucially important to Mr Abe, the return of Japanese citizens who were abducted by North Korea in the 1970s and 1980s, is not so important to other countries such as the United States and South Korea.

Prime Minister Abe believes the abduction issue must be resolved as part of the peace process. He has offered to meet the North Koreans directly to discuss it but they have refused.

Nevertheless, there are signs negotiations are taking place behind the scenes. The Washington Post reported a secret meeting between Japanese and North Korean officials in Vietnam in July.

Tough questions

The second reason Mr Abe might not be welcomed is that he has some very tough questions aimed at ensuring the North Koreans don’t renege on their promises, as they often do.

His goal remains exactly the same as he outlined in September 2017.

“We must make North Korea abandon all nuclear and ballistic missile use in a complete, verifiable and irreversible manner. If North Korea does not accept that, then I am convinced there is no way forward other than to continue maximum pressure on it using every possible means,” Mr Abe said in his election victory speech.

Prime Minister Abe demands proof that North Korea is ready to change from a path of aggression to one of peace. He wants more than rhetoric and photo-opportunities.

Angry response

This stirs anger in North Korea. Its official propaganda outlet, the Rodong Sinmun newspaper recently wrote: “Japan has been left alone in the region, as a country of pigmy politicians ­engaged in an abnormal view on things and phenomena, anachronistic thought and stupid and unbecoming conduct.”

The North Koreans appear to be lashing out at the Japanese because they are trying to prevent them from making empty promises. That should be a signal to the other participants in the negotiations that Japan has a crucial role to play.

Record collector heads to the dark side of the moon

 

The world’s media have been delighted by the news that a Japanese billionaire is heading on a trip around the Moon, in a rocket built by the Tesla boss Elon Musk.

Because my hobby is collecting old records, I am particularly impressed that Yusaku Maezawa started his life in business as a record and CD collector.

Collecting mania

According to Metro Mr Maezawa was in band when he was young and instead of going to college, decided to head off to the United States with his girlfriend to collect records which he sold back to Japanese people through a mail order business.

According to Forbes, his net worth as of May 2017 was $3.6 billion. Which is pretty paltry compared to Elon Musk’s reported $20.7 billion.

I am also rather disappointed that my record collecting has not helped me take the first rungs on the ladder up to the super-rich league.

Fashion icon

Maezawa San is still in the mail order business and he now focuses on fashion. His website Zozotown offers a range of clothes which cost less than 100 dollars.

One way of ensuring you get the right size is to send off for a “Zozo Suit”.

Fashion United informs its readers us that these “dotted bodysuits allow a smartphone camera connected to a Zozo app to take precise measurements of the customer so that a suit can be sent to them which will be a perfect fit.”

Although few people know of this service until recently, Mr Maezawa’s rocket adventure should ensure it gets massive publicity.

“Unfortunately up until now, our business has been domestic. We haven’t been able to do anything globally,” he said. “I am happy that we now have the chance to bring this service to 72 countries.”

The art of space

Mr Maezawa, is now more of an art collector than a record collector. He has said that he will be inviting artists to join him on his 2023 trip around the Moon.
They will have plenty of time to discuss ideas. According to Mr Musk the rocket trip will last around six days. It won’t land on the moon’s surface but should fly right around it before bringing the passengers back to earth.

Musk remember

There are of course a number of risks associated with the project in general and with Elon Musk in particular – and the media have been keen to highlight some of his recent eccentric behaviour.

Another warning came from Mr Musk himself. Before he introduced Maezawa, he warned of the impending “end of civilization” adding “we should take action and become a multi-planet civilization as soon as possible.”

Naomi Osaka’s success reflects well on mixed race people

 

 

 

 

 

 

“How do you say it was difficult?”

That was the English question Naomi Osaka asked when talking to a reporter from Japan about her victory in the final of the US Open tennis championship.

“Muzukashii” replied the reporter. “Yes, it was muzukashii,” replied Naomi.

Legendary victory

It was something of an understatement. To beat the legendary Serena Williams in straight sets at one of the most important sports events in the world was a huge achievement.

Prime Minister Shinzo Abe praised Naomi for raising the spirits of a country plagued by severe weather events this summer, including typhoons and an earthquake.

Double heritage

The media is curious about her background.

Naomi Osaka was born in Japan to a Japanese mother and a father from Haiti. Some Japanese media reports said her mixed race identity made it hard for her to be accepted as a young child and that was one of the reasons the family moved to America when she was three years old.

She now holds dual Japanese and American citizenships.

The South China Morning Post says that people of mixed descent or from ethnic minorities “often face discrimination in Japan”. It suggests that people with Japanese and Caucasian parents have typically been welcomed but people of African or other Asian descent encounter prejudice.

Discrimination is hard to measure but perhaps sometimes it creeps into the language which people use to talk about race in Japan.

Not half but double

One of the words which sometimes irritates people who have international parents is the word hafu, which comes from the English word “half”. Some people feel is implies that mixed race people are not “whole”.

I remember a discussion about this on Japan Today in which a mixed race person took issue with the phrase “hafu”. He said: “I am not half: I am double – one scoop of vanilla, one scoop of green tea.”

Perhaps Naomi Osaka’s great tennis victory will help to counter any negative perceptions of people who have a mixed racial heritage.

Does Japan undervalue women?

This week, the Financial Times – which is usually very balanced in its coverage of Japan – ran a piece with a headline condemning “Japan’s culture of discrimination” against women.

Gender roles in Japan often provoke negative reporting in the international media.

For example, the Diplomat recently ran an article about Japan’s “embarrassing ranking” in the latest global gender gap index. Apparently, it  ranked 111th out of 144 countries, just behind Ethiopia and Nepal.

Womenomics

Actually – as is often the case on the website version of newspaper pieces – the headline in the FT suggested more drama than the actual article.

The piece was by the Tokyo Bureau Chief, Robin Harding and Kana Inagaki, a female correspondent who was brought up in the US. They explained that there has been slow progress in the number of high level managerial jobs obtained by women in Japan, despite a push by Prime Minister Shinzo Abe to open up the boardrooms of large organisations to women.

This policy is known as Womenomics. Everyone in Japan is familiar with the term.

Although women may not be making the board very often, they are working more. The FT article also makes the point that a sharp increase in the rate of female employment has been an important factor in terms of the country’s recent strong economic growth.

Family or job?

That reminded me that until fairly recently, most women in Japan would have regarded it as crucially important that they were able to marry and have a family before considering what they might do as a job.

I was discussing this issue with friends the other day when a Japanese woman asked me whether I, as a foreigner, thought that Japanese women “look unhappy” about their work situation.

A glance around the table suggested no such thing.

We were having lunch with a family in which the mother has a full-time role caring for two young children and the father has a stimulating and well paid job at a university.

All four of them looked extremely happy and close.

Who’s happy?

My friend’s question left me wondering about the most helpful way to think about gender in a country like Japan. Is it appropriate to judge Japanese women harshly for being less “successful” than women in other countries?

I often hear women in Japan say that they have little wish to be burdened with the heavy obligations, long hours and boring meetings which go with senior roles in big companies.

That’s not to say that they don’t want to work hard or to be leaders: it’s more that the idea of being a “salaryman” of a different gender doesn’t sound particularly appealing.

Ask women if they’d like a well paid exciting job, though, and most of them say yes – provided they also have the freedom to pursue their own interests and, in many cases, have time for a rewarding family life.

Outside perspective

Women’s roles are going through profound change.

I think the best way for an outsider to understand the role of women – and men – is to try to gain a feel for the value system which guides Japanese society.

Otherwise, there’s a danger that foreigners will go seeking signs of discrimination – whereas in fact most women are asking themselves how they can best find happiness, in accord with their personal values and social expectations.

 

The British Museum’s Love Letter To Japan

When people from Japan and China come to London, nearly all of them try to pay a visit to the British Museum.

It is the leading tourist attraction in the UK, attracting nearly seven million visitors each year, many of them from East Asia.

The Asian visitors are able to see some remarkable collections of treasures from their own countries and from around the world. This autumn, the Mitsubishi Corporation Japanese Galleries will re-open at the museum, including some lovely objects which haven’t been displayed there before.

A refreshed gallery

The gallery’s curator, Tim Clark, says he is particularly proud to show some “sublime works of art of the highest quality” including a picture entitled Courtesan Reading a Letter, which was made in about 1806 by Kitagawa Utamoro.

It depicts a lady wearing sumptuous robes and hair ornaments, signs of her high status, while she stands reading a letter. The letter’s contents are illegible, leaving the viewer to guess at its contents and the identity of its author.

There are also some striking new modern pieces in the gallery, such as a new contemporary acquisition called Time Waterfall created in 2017 by Miyajima Tatsuo. Mr Clark explains that it shows “digitally generated, differently sized random numbers, which tumble endlessly down an LED panel, in a mesmerizing kinetic performance. ‘Keep Changing; Connect with Everything; Continue Forever’ – these are three basic principles of Miyajima’s art, reflecting his Buddhist worldview,” he says.

Art or craft?

There is often a debate in Japan about the distinction between art and craft.

Many everyday objects, such as ceramic pots or tobacco pouches, have been regarded as precious – sometimes even more so than the exquisite statues to be found in ancient temples.

I have a theory that the Japanese tend to treat material things with rather more respect than people often do in the West. If you look at the objects in museums from pre-modern Japan, even the most utilitarian of them are often characterised by high stands of workmanship and an elegant simplicity of design. These qualities are still upheld today as models for Japanese designers to follow and there is a connection between this aesthetic and the philosophy of minimalism, which runs through Zen Buddhism.

Historically speaking, Japan has had limited natural resources. This appears to have inspired its craftsmen to be especially creative and careful when working with rare materials – such as ivory, gold or even paper.

Of course, I have observed that in contemporary Japan, there is a tendency towards consumerism, which is rather wasteful – just as there is in most places.

But if you look around, you’ll see plenty of examples of the old values of craftsmanship – including in shops like Muji, which often pays respect to the traditional crafts of Japan.