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.”