January 18 2016

Week of January 18, 2016

Politics:

One of PM Abe’s strongman in the government, Minister for Economic and Fiscal Policy Akira Amari can’t remember clearly if he received donations from a private Japanese company or not, and that is trouble, for him as well as for Shinzo Abe. Amari was the man who brought the Trans Pacific Partnership Agreement / TPP to a good end, and now he is grilled over possible bribery (Nikkei).
Since the Financial Times has been acquired by the Nikkei Newspaper, both papers team up for interviews, here with PM Abe. With Japan chairing the G7, Shinzo Abe elaborates in this interview on Japan’s role in the world. Also China’s activities in the South China Sea are discussed. Abe: "Japan harbors very strong concerns over China's unilateral attempt to change the status quo in the South China Sea, and also the unilateral development of resources in the East China Sea. Such a unilateral challenge against the international order cannot be tolerated, and the international community should raise its voice against this."
I looked for some recent articles in the Chinese press on Japan, and selected this one from the South China Morning Post. This newspaper is published in Hong Kong, and will be acquired by Alibaba’s Jack Ma, the Chinese e-commerce company’s founder. With as heading "The tragedy of Shinzo Abe’s narrow-minded nationalism”, the newspaper complains of Japan’s modest role in world finances and has also has some remarkable statements, including this advise: "Before he embarks on global adventures, Abe should urgently consult some wise advisers to understand Japan’s culture and traditions and its place in the world, in history, today and tomorrow.”

Economy:

In his turn Haruhiko Kuroda, Bank of Japan’s governor, had this week some free advise for China. In Davos Kuroda said that China should impose capital controls to defend the yuan rather than keep burning through currency reserves. He got some support from Christine Lagarde, IMF’s President (Bloomberg). For your information: capital outflow from China in 2015 was no less than USD 700 billion.
The Nikkei reported that Mr. Kuroda also had some welcome advise for the Japanese Trade Union Confederation: they should seek big pay hikes, obviously as the Bank of Japan seeks inflation. I am not sure if Dutch Central Bank’s President Klaas Knot would ever make such a statement.
In 2015 Japanese investment in China dropped 25.2% to USD 3.21 billion and that is remarkable as there is an increase of 6.4% in overall foreign investment in China, from EU and Asian countries. However, the drop in investment is less than in 2014, when it was 38.8%. There are political issues between both countries, but rising labour costs in China will be a main reason (Nikkei).

Corporate:

Bloomberg wrote about Japan's zombie companies including failing corporation Sharp. This company is in trouble, received an offer from Taiwanese company Foxconn that is looking to diversify its portfolio, but in the end Sharp might be saved by the Innovative Network Corp. of Japan, INCJ. This institution is backed up by 19 major Japanese corporation, in their turn backed up by the Japanese government. INCJ has invested in apr. 30 companies. Unfair competition, says Bloomberg News.
Farm live will have to modernise rapidly in Japan in order to compete with American, Australian and obviously Dutch companies. Drones, self-driving tractors, satellite data for harvesting, it is all being developed in Japan. Let’s hope that these new applications will not only be export products but will also be applied in Japan itself (Nikkei).
5 bidders, incl. Asahi Beer and Thai Beverage for Dutch Grolsch and Italian Peroni beer, to be divested by AB Inbev. With a target price of EUR 3 billion, the buyer has to be prepared to pay 15 times EBITDA. Final bids expected to be in by mid-February. Japanese companies are not known to be avid bidders in auctions, so I wouldn’t be surprised when Asahi comes up with a knock-out bid. I keep you updated (Reuters).

Society:

Japan and immigration: it isn’t an easy combination, even when it comes to refugees. 7586 people applied for asylum status, 27 were approved in 2015. That is a low number by all standards. 6 Afghans were lucky, followed by 3 from Syria, Ethiopia and Sri Lanka. So far 6 Syrians have now been granted asylum since 2011.
Back to the future: rather than living immigrants, mechanical robots are preferred. At this week’s Davos summit the role of robots was high on the agenda. Japan seems to have the lead in this field, in particular when it comes to humanoids like Pepper, the brainchild of Softbank. 2 years ago DUJAT invited for its Update symposium professor Toshio Fukuda of Nagoya university, one of Japan’s foremost robot scientists. It was an impressive presentation and it convinced me once more that Japan’s above all practical approach will result in a pole position in the market for robots. This article links the push for robots and the lack of immigration in Japan.
… and back to the past: this week the Pope decided that Takayama Ukon, a 16th century catholic samurai and local ruler (daimiyo) was granted martyrdom, the first step to sainthood. Takayama, in the future perhaps “Saint Takayama”, had to leave Japan and died in the Philippines in 1615 (Catholic News Agency).