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CNN reports that the Japanese company Nikkei has withdrawn as a media partner for the event.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

 

The old tensions between China and Japan are being resolved

 

 

 

 

Looking through recent newspaper archives about Japan, I found this chilling headline: Is World War Three about to start by accident?

It was the title of a piece by an eminent historian called Max Hastings in the British tabloid newspaper, the Daily Mail.

“The tensions between Tokyo, Washington and Beijing have been increasing for years,” wrote Mr Hastings.

He warned that “many wars have been triggered by miscalculations” and said that there was “a profound fear in Washington, in Tokyo, and maybe also in Beijing, that one day something unspeakably ghastly could happen by mistake.”

I am pleased to say that since the piece was published in January 2014, the relationship between China and Japan has improved significantly, and although America is playing a new role in Asia, it is not stoking up a fear of war.

Human relations

In Osaka, Tokyo and Nara, Chinese tourists appreciate Japan’s famous hospitality, known as the generous spirit of omotenashi. Some Japanese shopkeepers greet their customers in Chinese. Chinese tourists pose for pictures wearing kimonos.

Japan and China have cultural connections which pre-date recent differences over ideology and territory.

Mr Hastings was right to observe in the Daily Mail that until recently there was a poor relationship on the diplomatic level. So in 2014, the idea that Japan, of all places, would sign up to support China’s international expansion would have seemed quite implausible.

Cooperation

Yet this September, a meeting will be held in Beijing at which senior representatives from China and Japan will decide how to cooperate on projects which are part of China’s One Belt One Road Initiative, such as a railway in Thailand.

China and Japan have different visions for the world. Projects associated with the Belt and Road initiative are based on the idea of Socialism with Chinese characteristics. Japan has another system. But I sense appreciation for projects which would benefit for Asia and the wider world.

Yasukuni visit

It was significant that neither Prime Minister, nor any other Japanese cabinet ministers, visited the Yasukuni Shrine in Tokyo this month to mark the anniversary of the end of the War.

The shrine commemorates people who died in battle but this includes soldiers who were convicted of war crimes in Asia. In the past, visits by Japanese politicians to Yasukuni shrine have provoked resentment in the Chinese media. Such unpleasantness has been avoided for a few years now.

Clause Nine reform

Also, there has been very little mention of Mr Abe’s plan to reform Clause Nine of the Japanese constitution. A change to that clause would open the way for Japan to significantly expand the role of its military – changing it from a Self Defence Force into an army with the capacity to fight internationally.

I don’t believe the goal has been abandoned. However, Japan, like China, knows when to soft pedal on sensitive matters. In particular, the Japanese would prefer to avoid any confrontations ahead of the Tokyo Olympic Games in 2020.

Tensions over territory

There remains worry about the flashpoint the Daily Mail mentioned in 2014 – the Senkaku islands, claimed by China as the Diaoyu. Yet most people go about their lives without worrying too much about uninhabited rocks which are barely specks on the map.

A lasting settlement over that contentious issue would be a big step forward in improving Sino-Japanese relations and make the threat of an accidental war still more remote.

Japan’s enthusiastic mature people empower the world of work[:]

 

How can companies in Japan make the most of their experienced, older workers?

Half of Japan’s population is aged over 50 and 27% of people are older than 65, the official retirement age.

That often leads to negative headlines in the international media about a “demographic time-bomb” – a phrase I dislike.

However thoughtful reporters – like the Financial Times’ Tokyo correspondent, Leo Lewis – take a more balanced view.

Opportunity knocks

I liked his excellent analysis in the FT on August 9th, which suggests that changes in demographics bring with them opportunity.

He draws on research by the Japanese Cabinet Office which suggests that most people would rather like to carry on working until at least the age of seventy – or longer if their health permits them to do so.

On my visits to Japan, I’ve seen many examples of older people contributing to the workforce in positive ways. I fondly remember meeting people who are in their sixties and seventies who work at the Yamaha musical instrument factory in Hamamatsu.

Many of them enjoy passing on their own knowledge – and also learning new skills. This is a good example of the kind of balanced working environment which is being encouraged by the Japanese government, employers and unions.

Pension pot

Currently, Japanese people can choose to start receiving the state pension anytime between 65 and 70, with bigger monthly payments on offer to those willing to delay.

Under Japan’s mandatory retirement system, people currently usually leave the payroll at 60, although this is set to rise to 65 in 2020.

Lessons for Britain

It’s interesting to compare the situation in Japan with that in the UK, which also has an ageing population.

In response to that challenge, the British government has decided to increase the state pension age to 68 and there is an ongoing debate as to what year that change should come into place.

But for people who want to work into their sixties, seventies and beyond, there are often frustrations.

Alistair McQueen the head of savings and retirement at the insurance firm Aviva says British companies have been poor at investing in training for workers over the age of 50 – even though they now make up one in three of the workforce.

He told the BBC he is also disappointed employers do not offer greater flexibility in the working hours of older people, especially those who have caring responsibilities.

Aviva, Co-op, Boots, Barclays and are among the businesses in the UK which have promised to increase the number of over-50s they employ.

“Our findings suggest that older employees have a lot to offer at work,” says Mr McQueen. In that many people in Japan will heartily agree with him.[:]

Should foreigners trust the Japanese to tell us about Japan?

 

 

 

 

 

 

“Just because a Japanese person tells you something about Japan does not necessarily make it true.”

That’s the advice of a business blogger I greatly admire, Steven Bleistein.

His blog is always insightful and often amusing. He recently warned about taking advice from self-appointed experts.

“Being Japanese does not make a person an expert on business in Japan. Take advice from such people with a massive grain of salt,” wrote Steve.

Understanding leadership

Steve Bleistein from Relensa has the inside track on how Japanese organisations work because he advises many of their leaders. I’ve also been fortunate enough to meet many Japanese CEOs, including the bosses of big companies like Toyota, Nissan and Sony. (These leaders speak to the foreign press directly. They especially like TV and my background is in broadcasting.)

The problem comes, I think, when Japanese people make statements about their culture which are presented as “facts” that are “universally true.”

Although it’s possible to make generalisations, there are often many exceptions. So although it might be said that in general, Japanese businesses are led by people who are averse to risk, Steve Bleistein makes the good point that many successful businesses in Japan buck the system.

He cites the examples of Fast Retailing, the Japanese owner of Uniqlo and my favourite company, Softbank which has made a series of daring business deals worldwide under its remarkable CEO, Masayoshi Son.

So what makes a good leader?

This is Steven’s guidance to international companies looking to establish a subsidiary in Japan: “A superlative leader for the business is crucial for success. A Japanese guy with industry contacts is not enough.

The conventional wisdom is often to hire an older Japanese man with industry experience and connections to lead your business. I have never seen a successful case using this approach. Industry experience does not necessarily translate into business acumen and leadership capability.”

That idea challenges the approach that some traditional Japanese companies take towards leadership. Senior people are often elevated to the board due to their age, experience and loyalty.

According to this way of thinking, Japanese managers deserve promotions because they have been diligently learning about the business from the inside for many years. The hope is that this provides them with a long-term vision and a deep insight into the organisation’s strategic objectives.

When it comes to money, though, key decisions about expenditure are rarely thrown open to group discussion. They are made at the top and cannot be challenged by those who sit further lower down the managerial ladder. It is assumed that those who set the budget will have insight into the company’s whole financial situation. Expenditure is regarded as investment, so the watchword is prudence. Money is rarely splurged. A good Chief Financial Officer sees himself as a steward of his team’s resources.

Hierarchy and Trust

In this hierarchical culture, successful business relationships depend on personal trust. Several managers have told me that although it takes time to build this trust, once it is achieved, decisions, even those with significant financial consequences, can be taken quickly, without having to go through a lot of time-consuming consultations.

Steve Bleistein has prioritised building trusting relationships with the Japanese. He also refreshingly open-minded about how the Japanese think and he often challenges the idea that there’s a universal Japanese mindset.

I look forward to sharing ideas with him in Tokyo (and of course through LinkedIn) and I’m grateful for the time and care he takes over his thoughtful and engaging blog.