“Adorably mad” Japan delights the motoring press

The view that Japan is a weird place full of “adorably mad” machines is strongly reinforced by international press coverage of this year’s Tokyo Motor Show.
“Stay strange, Tokyo” began an article by the journalist Jeremy Korzeniewski, who compiled a comprehensive report on the event on Autoblog. He explains that “the Tokyo Motor Show never fails to show off the weird, wacky, and wild side of the automotive industry.”

The biennial show is focused on concept cars, so most vehicles are not designed for daily use but are offered as ideas for the future. The website of the popular BBC motoring show Top Gear has many pages of pictures and reports about delightfully eccentric machines. Top Gear heaps special praise on the “adorably mad” concepts of Suzuki. Other websites such as Jalopnic reckon Mazda “stole the show.”

Pretty models

The Daily Telegraph said that that “the planet is receiving its biennial boost of Japanese weirdness, from crazy concept cars through to the most implausible mobility technology.” This stereotype of the Japanese as strange, wacky, weird and crazy is reinforced by the photographs on many websites which include pretty female models posing beside the cars. Some sites, such as Autoguide, baited their readers with pictures of “the weirdest and wildest cars” including a big slideshow by the photographer Dino Dalle Carbonare.

Friendly cars

The PR people from the Japanese car makers have plenty of stories to feed the foreign journalists at the show. Toyota has claimed its new concept vehicle can “understand” drivers so that the machines and users can “bond as partners.”

According to AFP “Concept-i is a futuristic four-wheel model that reviews the person’s behaviour patterns, as well as latest news and social media activity, to assess what the driver needs or wants to hear in a given situation, like offering comforting words to a parent after a fight with a teenage daughter inside the vehicle.”
Positive news

The carmakers hope the positive coverage of the motor show will counterbalance the recent negative publicity about safety scandals including problems at Nissan and Kobe Steel.

Concept cars are fun to write about but Japan also wants to be trusted. So manufacturers should be pleased with a report on the performance of their ordinary cars in What Car magazine. It said that half the most reliable cars sold in the UK are Japanese.

Conservatives relish Abe’s election success

Japan makes a good conservative role model for other countries, according to a political journalist reacting to the general election.

Through a coalition of his party and supporters, Shinzo Abe has the support of around 80% of parliamentarians.

 
Conservative ideal

Stephen Bush wrote in the New Statesman’s blog that “Japan is in many ways offers the ideal target for meeting Conservative aspirations”. He notes the resounding success of Mr Abe’s right-wing Liberal Democratic Party, bolstered by the prime minister’s tough talk on defence, his emphasis on economic stability and his low immigration approach. Stephen Bush also says that Japan is “politically free of the destabilising movements that threaten the right in the UK and elsewhere.”

Koike’s challenge

Japanese voters’ inclination towards stability helps explain why the LDP nearly always wins elections. However, there was an attempt to destabilise the political status quo recently, when the Tokyo governor Yuriko Koike launched a new party. The challenge fizzled out when she decided not to run for parliament herself.

Populism

Analysing the election result on the BBC, Professor Seijiro Takeshita from the University of Shizuoka said opposition parties lacked credibility and were “full of short-term populism”. He also said that politicians in Japan balk at saying “harsh things that voters don’t want to hear”, such as raising tax to tackle the national debt.

North Korea

Other issues in the media are Japan’s relations with North Korea, Mr Abe’s efforts to reform the constitution and the state of the Japanese economy. Mr Abe has said that he will “firmly deal with North Korea using strong diplomacy”. The BBC’s Tokyo Correspondent Rupert Wingfield-Hayes said that “Mr Abe’s approach so far is to talk tough, request more missile defence for Japan and to stick close to President Trump.” But he said that Japan does not have much leverage. “It has no relations with North Korea, it has no trade and it has a poor relationship with China, so it’s hard to see what other options are available,” he said.

Constitutional reform

The Financial Times suggests that Mr Abe’s remaining years in office will focus on amending the constitution’s so-called peace clause, in which Japan renounces the threat or use of force in settling international disputes. Mr Abe’s election success has built him enough support in parliament to propose a re-write of the constitution.
Abenomics

The Prime Minister will also want to continue his programme of Abenomics. There has been some measurable success, with Japan’s GDP now growing at its best rate for a decade. The unemployment rate has also fallen but inflation is stuck at zero and there remains the unresolved issue of rising national debt. Professor Takashita believes the third arrow of economics, one targetted at structural reform, “is still floating through the air”.

Third Arrow Graded D

The Nikkei Asian Review is harsher: it believes the third arrow is completely off course and it gives a “D” grade to the structural reform aspect of Abenomics. “There has been progress in improving the business environment including lowering corporate tax rates, promoting corporate governance and enhancing overseas economic partnerships. But efforts to boost labour productivity, leverage foreign workers and deregulation the medical, nursing care and other sectors have borne little fruit,” says the Nikkei.

Cheating scandals mar Japan’s reputation

Kobe Steel CEO Hiroya Kawasaki. Photo: Getty Images

This week, the international media has been filled with articles condemning Japanese business culture after another high profile scandal.

Kobe Steel has admitted it falsified safety records for products supplied to more than five hundred companies, including Japan’s biggest automotive firms and train manufacturers.

Decades of cheating

The Nikkei newspaper reported that the cheating went on for decades, with the knowledge of some of Kobe Steel’s senior managers.

Several journalists noted alarming similarities between the scandal at Kobe Steel and one at Nissan, which has had to recall every new car it sold in Japan in the last three years after it falsified safety checks.

Suzuki and Mitsubishi Motors have faced scandals over fuel economy tests on their vehicles. In addition, there was recently a major scandal at Toshiba, which tried to hide the extent of the financial problems within its nuclear power division.

Crisis in Japan Inc

The Financial Times says that “after a concentrated two year outbreak of corporate scandals… (there is) a crisis in Japan Inc.”

The FT quoted Shin Ushijima, a lawyer and corporate governance expert. “Did we not learn anything from Toshiba? What was Kobe Steel’s board doing?” he asked.

It was a theme picked up in an analysis of Japan by the BBC’s Ashleigh Nghiem in Singapore.

He suggests that Japan’s reputation as “a shining example of integrity, assured quality and reliable products” has been severely undermined by the scandals.

The BBC quoted the opinion of Takuji Okubo of Japan Macro Advisors, in Tokyo.

“Large corporations used to live in a stable, predictable and growing market, but things have changed and some companies may have resorted to cutting corners,” said Mr Okubo.

Lower Standards

Reuters also takes the view that a shrinking domestic market and increased global competition is tempting some Japanese manufacturers to lower their standards. The agency quotes Professor Thomas Clarke who warned that Japan runs the risk it will “lose out as other Asian economies, including China, progressively raise their standards of quality and reliability.”

However, Reuters also suggests that some of the scandals have come to light because of greater scrutiny of companies’ behaviour. “It may be a sign that the government’s push to improve corporate governance is seeing greater disclosure of wrongdoing,” says Reuters.

Yet the stock market booms

Despite the headlines of shame and scandal, investors appear optimistic about the Japanese corporate sector. The stock market in Tokyo has been booming, along with other major world bourses.

The Wall Street Journal says that if you look at the numbers corporate Japan seems “alive and well”. The WSJ says “business confidence is booming, exports are recovering and industrial production picked up last month. Japanese corporate profits hit their highest ever level in the second quarter. All that is fueling this year’s stock-market rally.”

“We work hard but we’re not productive enough”

Pulling Japan out of a trap of low productivity is “the number one goal” of the central bank, according to one of its most senior figures.

The Deputy Governor of the Bank of Japan Mr Hiroshi Nakaso told a gathering in London that Japan continues to lag behind most developed countries in terms of productivity and that this is a major concern to the bank and to the government.

Golden opportunity

The Bank of Japan regards productivity as as an important of way of assessing the efficiency of businesses.

It therefore measures the hours people work and tries to judge the economic value of their efforts.

The labour shortage, which is caused by an ageing and shrinking population, has created a very low unemployment rate in Japan of only about two percent. As a result, companies often struggle to find enough candidates to fill their job vacancies.

But Mr Nakaso claimed that “the current serious labour shortage could be a catalyst for improved productivity” and that therefore there “we have a golden opportunity to upgrade Japan’s economy.”

“We have a golden opportunity to upgrade Japan’s economy.” Hiroshi Nakaso, Deputy Governor, Bank of Japan

Inflation hope

Mr Nakaso hopes employers will respond by offering higher wages and will adopt a more efficient and productive approach to work.

He cited the example of a trucking company which has recently raised wages and put up prices for its customers. He said such measures would help nudge inflation towards the Bank of Japan’s target of two percent.

But he acknowledged that such situations were relatively rare, even though “improving productivity is precisely what the third arrow of Abenomics is aiming for.”

White collar challenge

Speaking to an event hosted by the Japan Society at the Guildhall in the City of London, Mr Nakaso claimed that Japanese factories are among the most efficient in the world, so the productivity challenge is most acute in the non-manufacturing sector “which employs white collar workers like me.”

Some economists have suggested that Japan’s productivity would rise if if brought more women and older people into the workforce, or opened the door to more immigrant labour. However, Mr Nakaso said that it is “unrealistic” to see those measures as a complete solution to the problem. “Even if we did all those things, we would not be able to achieve the 2.9% increase in productivity we need to achieve our goal of two percent GDP growth,” he said.

Jobs for life

He said another challenge is the lack of mobility within Japan’s workforce, which makes many people reluctant to change their jobs. This is a legacy of the jobs-for- life culture which developed during Japan’s post-war boom years.

“Long term contracts between companies and workers prevent mobility,” said Mr Nakaso. He noted that greater labour mobility leads to greater productivity in many developed countries and it can help with the spread of new ideas, working practices and technology.

He said companies respond to the labour shortage in a variety of ways, such as reducing their opening hours, automating payment systems or being less generous in providing benefits to customers which are not profitable.

A new dawn

Mr Nakaso finished with offered an upbeat view of contemporary Japan which he said runs counter to the gloomy impression often left by the media. He cited the current tourist boom, an increase in leisure time and the rise in life expentancy.

He also said that that there are now more than 200 Michelin starred restaurants in Tokyo.

“The public perception is based on old statistics,” said Mr Nakaso. “I admit that there have been false dawns in the past but this time we believe that after a long night, the new dawn is near,” he said.

Political storm sweeps through Tokyo

A former TV presenter who was heralded as Japan’s first potential female prime minister has announced she is not yet ready to do battle for the top job.

Yuriko Koike is promising a populist approach, challenging the vested interests of Japan’s male-dominated establishment.

However, she has decided that she is not yet prepared to quit her powerful position as governor of Tokyo in order to stand for the national parliament. She cannot become the country’s prime minister unless she first becomes an MP. The general election will take place on October 22nd.

Party of Hope

Ms Koike recently established a new party Kibo no To, or Party of Hope. Its is designed to upset Mr Abe and his ruling coalition, which was struggling to enthuse voters after a series of corruption scandals.

Nevertheless, Mr Abe calculated that a victory for his Liberal Democratic Party (LDP) is all but assured in the forthcoming election – partly because it nearly always wins and also because the main opposition party – the Democratic Party (DP) – appeared too weak to put up a fight.

Mr Abe appeared to be proved right when the DP imploded after Ms Koike mounted a challenge. It announced it would field no candidates for the election. Some of its members then defected to Ms Koike’s Party of Hope.

Opposition weakness

The Democratic Party’s collapse leaves voters with a narrower range of political choices. Normally, the Democratic Party offers a more left-wing set of policies than the LDP and is regarded by Japan’s neighbours, such as South Korea and China, as less nationalistic and more cooperative than the LDP.

The Party of Hope’s policies are significantly further to the right than the Democratic Party and Ms Koike’s own political roots lie in the LDP. She says she is committed to “reform conservatism” – including a reform of the clause in Japan’s constitution which commits the country to a form of pacifism. That irks some politicians on the left of the Democratic Party, who claim that constitutional reform runs against public opinion and will create further problems with China.

North Korea threat

Stephen R. Nagy – a politics professor at the International Christian University in Tokyo – used an opinion piece in the Japan Times to suggest that many voters support Mr Abe’s tough position on defence and security because of North Korea’s recent belligerence as well as Chinese behavior in the East China Sea and South China Sea.

Mr Abe claimed that he called the election to deal with a “national crisis”. Yet although the escalating threat from North Korea could be regarded as a “crisis,” domestically, the situation is calm. Its economy is growing at the fastest rate for two years. Unemployment is very low and by many measures, it remains one of the richest and most peaceful countries in Asia.

Populism and women

In response to Ms Koike’s populism and in particular her appeal to female voters, Mr Abe has responded with what he hopes will be popular policies of his own. These include a push to provide free childcare for three-to-five-year-olds, paid for partly by a rise in consumption tax in 2019. Although this might win him favour among some younger voters and women, it creates additional expenditure which will hamper him from achieving his stated goal of achieving a budget surplus by 2020.

The decision to raise spending was described as “extremely regrettable” by Yoshimitsu Kobayashi, the chairman of the Japan Association of Corporate Executives. It also emphasises the temptation to be profligate facing a leader who has become used to lavish spending in a wealthy economy supported by enormous debt.