Week of November 2, 2015
- As expected the first top meting between China, Japan and South Korea in three years focused at economic issues and security, rather than addressing the real subjects where South Korea and China differ with Japan, incl. the treatment of comfort women (Korea) and territorial disputes (China). Nevertheless, there was a joint statement and "a good atmosphere" (Bloomberg).
- The same source, Bloomberg, produced a “quick take” on Japan’s military role in the past and present. Most remarkable, at least for me, was the willingness by the Japanese to fight for their country. Look to the stats: only 10% of the Japanese would go to battle, whereas 70% of the Chinese and 40% of the South Koreans would do.
- Meanwhile, Japan and the EU are looking to conclude a Free Trade Agreement, but a couple of thorny questions remain, incl. import duties on Japanese cars and duties on EU agricultural products (Nikkei).
- PM Abe is determined to grow the Japanese economy by 20% in 2020. That’s a big challenge, as its growth rate is now apr. 0 - 1%.
- There are 4 kinds of countries in the world, The Economist quotes Nobel laureate Simon Kuznets: developed and undeveloped countries, then there are Argentina and Japan. The magazine focuses at Japan’s debt to GDP ratio. "The only way out is higher inflation. Had NGDP grown at even 2% a year since 1992, its debt-to-GDP ratio would be just 82%—close to America’s.” However reaching inflation is very hard, also with a rapidly ageing population. But there is an option that sounds mad but may prove not that bad in the long run: if the Bank of Japan would raise its own annual bond buying program from the current JPY 80 trillion to 100 trillion, it would own by 2026 nearly all its own debt. You remember Baron von Munchhausen, who escaped from a swamp by pulling himself out by his own boot straps?
- Bloomberg produced a series of graphs on the Japanese economy. Industrial output is volatile, GDP forecast is down, but a 1.2% growth of Japan’s GDP is expected by March 2016.
- Japan Post’s November 4 IPO , or rather that of the holding, the banking and the insurance unit was an outright success, for the early investors at least. Trading in the first days saw shares rise with 25% - 77%. Now the euphoria wears off a little (Financial Times).
- Germany may have its diesel gate , but also some of the Japanese automotive suppliers are in trouble. Takata, a major airbag maker, cheated on its products and is suffering heavily: Toyota even boycots Takata (Financial Times). Another Japanese auto parts supplier, Akebono, cooked its books.
- Toyota reacted on Tesla's, Apple’s and other high-tech companies’ inroad in the automotive sector by establishing a USD 1 billion research center in Palo Alto, California. Aim: to develop robotics and AI (Financial Times).
- Why is high-tech Japan still using cassette tapes and faxes?, wonders the BBC. "Japanese companies generally lag foreign companies by roughly five-to-10 years in adoption of modern IT practices, particularly those specific to the software industry,” says an American CEO active in Tokyo and Chicago. Major reason? Over 99% of Japanese companies are SME’s, and here the adaption to new technologies is low.
- With a growing population of elderly people in day care centers, there is a big demand for caretakers - and these are in short supply in Japan. So the alternative is that the elderly entertain themselves - and gambling is promoted, albeit with faux money and even that can be earned only by gymnastics. Before a single chip is bet, everyone has their blood pressure and temperature checked … (Financial Times).
- To finish: an article on Japan's “kawaii” (cute) culture: the Victory & Albert Museum in London organised a big exhibition on this theme (Financial Times). The word kawaii emerged in the 1970s, at a time of economic prosperity in Japan when consumer goods and services expanded rapidly. It is an aesthetic that is eye-catching and infantile — pastel colours, rounded edges, cartoon baby animals, frills and ruffles are all hallmarks. Looks like a great show.