How much has Japan INC invested in the US? A 4-day workweek in Japan? Amakudari and PM Abe’s investigation in this practice, Nikkei up? Japan and China … and Trump
Whatever you would like to call Donald Trump ascension to the presidential throne in the USA – a political earthquake, a recipe for disaster, a blessing in disguise – it is the major event in the last 14 days. So, so part of this J-NEWS will focus on the reactions in Japan on the Trump presidency and the ramifications of his policy. This news also looks at less work hours in Japan, descent from heaven, Toshiba’s troubles and ends with a great video clip, from 2016 but anticipating Trump’s win about a Japanese girl in love with Donald.
- Politics:
- “How Trump Could Push China and Japan Together” asks The Diplomat, an online Tokyo based magazine that focuses on Asia matters. “Even if aimed at China, American protectionism would hit Japan hard given the nature of global, and especially Asian, supply chains and cross-border investments. Both Tokyo and Beijing have an incentive to figure out a way to survive the Trump era. The challenge will be for them to devise some sort of informal agreement. “The Trump presidency could thus be bad for both Japan and China. One country would turn out to be marginally worse off. But it’s a good bet that neither Xi nor Abe would be too pleased if their country’s economy went down 50 percent, even if their adversary’s collapsed by 75 percent. Moreover, neither Xi nor Abe know which of them would end up the bigger loser. This provides an opportunity for some imaginative diplomacy for Beijing and Tokyo to agree to a sort of cease- ire in their undeclared hostilities. The leaders of China and Japan should get together soon. They will both survey the most unpredictable and potentially catastrophic environment of their lifetimes …” Alas, I am not sure if diplomacy works that way, but it is a thought.
- I came across an article in the China Daily reporting that the Chinese Ministry of Education earlier this year urged education departments across the country to revise textbooks for primary and secondary schools by extending the official period of the war between Japan and China from eight to 14 years. In previous textbooks, the Chinese War of Resistance Against Japanese Aggression lasted for eight years beginning on July 7, 1937, after Japanese troops bombed Lugou Bridge and Wanping county in southwest Beijing, and ending on Aug 15, 1945, when Japan declared its unconditional surrender. “The revision shifted the starting point of the conflict from a battle on July 7, 1937 at the Marco Polo Bridge near Beijing to the Mukden Incident on September 18, 1931, which preceded the Japanese invasion of Manchuria.” One reason for this new interpretation seems to be the view by some Chinese that the Nationalist Party (i.e. the Kuomintang lead by anti-communist Chain Kai-shek) played a bigger role in defeating Japan the Communist Party. Anyhow, an ominous sign how Chinese – Japanese relations are developing.
- Amakudari is a Japanese word that gradually sips into main stream English. It means “descent from heaven” and it refers to preferred treatment of retired government officials and make them descent into – often – well paid jobs in big companies, sector organisations and universities. For decades this was part of Japan’s economic policy where the government bureaucracy, business and academia were intertwined. Last week PM Shinzo Abe ordered a government-wide inquiry into preferential treatment in the hiring of former public servants after an independent panel found that the Education, Culture, Sports, Science and Technology Ministry was involved in 10 such “amakudari” cases in violation of the National Civil Service Law. The law bans government ministries and agencies from being involved in the job hunting of retiring officials, in order to prevent amakudari, in which retired bureaucrats land lucrative jobs at organisations they used to oversee at the ministry (The Japan News / Yomiuri).
- Economy:
- “Buy American, hire American”, Trump proclaimed at his inauguration speech on January 20. The Nikkei analysed the consequences of Trump’s protectionist stance and referred to his brief stint in professional wrestling. In a 2007 match billed by World Wrestling Entertainment as the “Battle of the Billionaires”, he was knocked down by the referee, as scripted. “Trump seems focused on traditional industrial sectors, such as automobiles and steel. His old-fashioned emphasis on physical exports is out of step with today’s world: Global trade is shifting away from physical goods toward service-related and internet-driven commerce, which crosses borders much more easily. As a businessman, Trump will eventually face a dilemma. The Trans-Pacific Partnership trade agreement, pursued by the Obama administration, was not aimed merely at liberalising exports and imports of goods. It also includes more important but less conspicuous rules for services and for trade centred on the digital sector. If the U.S. kills the TPP, it will affect not only Asian nations but also American tech companies vital to the future of the country’s economy. As we know, Trump killed the TTP as one of his first acts as president, while some hours before Trump’s inauguration the Japanese cabinet ratified the TPP …
- And are the US – Japan economic relations so much to American disadvantage? Here a graph with Japan’s contribution to the US economy: over USD 400 billion invested by Japanese companies in the US, a rapidly decreasing trade deficit of now 9% and 839,000 people directly employed by Japanese companies, second only to Britain (and above the 38,000 employed by Chinese businesses). Japanese investments in the USA include the manufacturing of cars, construction equipment, forklift trucks, motorbikes, electronics, chemicals; Japanese companies are investors in US insurance industry, leasing, banking etc. “Japan is not China”, wrote the Nikkei.
- “Trump’s fiscal policies may turn bulls loose in Japan”, headed the Nikkei. It quoted a number of analysts who predict a boost for Japanese stocks because of Trump’s plan to invest UD 1 trillion in infrastructure; rising interest rates in the USA result in downward pressure on the Japanese yen and a corporate tax rate in the USA expected going down from 35% to 15% is also good for Japanese companies in the USA. Well, let’s wait and see but for sure, the Nikkei index has outperformed the Dow Jones Industrial Average since the U.S. presidential election in November last.
- Corporate:
- I can’t remember that CEO’s of large companies were vying to meet with president-elect Obama in 2008, but Mr. Trump has seen quite a few, incl. Softbank’s Masayoshi Son who tries to buy American telecom Sprint while promising to invest USD 50 billion in the USA and create 50,000 jobs. The Nikkei described how this meeting was arranged, and it also shows how Trump acts: “Trump’s foreign policy is going to look more Chinese,” Ian Bremmer, president of the Eurasia Group, told the Nikkei. “It’s unilateral. It’s transactional. It focuses narrowly on American national interests. Allies are useful as long as they’re giving you something that works.”
- Japanese carbon fiber manufacturers, controlling a 60% global market share, are already in the USA to supply Boeing, the car and wind blade industry. DUJAT member Teijin stopped its carbon fiber production in the country in 2013, but recently bought a lot in South Carolina for a new factory.
- Bad luck never comes alone. Toshiba, until recently a true blue-chip company, is in triple trouble. The company reported a net loss of 460 billion yen last fiscal year after an accounting scandal came to light in the spring of 2015. At the start of 2017 news surfaced that the company’s troubled US nuclear unit could post larger-than-expected losses. Then other trouble popped-up last week: the company had signed in 2013 a 20 year contract to process gas at Freeport LNG Development LP’s plant in Texas, as Bloomberg reported. But there are no legal contracts with buyers while the conditions for the LNG market are by now very different from 2013, possibly resulting in another substantial loss or write-off up to USD 8.5 bln. Various venture funds are looking to buy assets from Toshiba such as its semiconductor business. Its medical division has already been sod to Canon.
- Society:
- Japan seems one of the most unlikely countries to potentially embrace the four-day week. You would expect it in Sweden or Denmark, but surely not in a country that coined the word “karoshi” or “death by overwork”. But: it may happen after all. First there was the news about “Premium Friday”, proposed by the government and employers organisation Keidanren. By allowing employees to leave on the last Friday of each month at 15:00, a better work-life balance was strived for. Interestingly enough, there is also an economic component to it: Dai-ichi Life Research Institute in Tokyo calculated that, if most workers, including those at small and medium-size firms participate, private consumption could rise by about JPY 124 billion (EUR 1 bln) on each Premium Friday (Japan Times).
Then there was an article in the Nikkei “Japan Inc. moving toward 4-day work week”. It was a surprise to learn that there are already some major companies that offer or are planning to provide 3 days free in a row, incl. Uniqlo, KFC, Yahoo Japan. Nice example of the rice-polishing equipment maker Satake, based in Hiroshima: it will offer three days off to 1,200 or so staffers who work for the head office and two affiliates, starting this summer. The company plans to step the change up to full scale in 2018, cutting hours by about 20% to 32 per week. But most interestingly: inefficiencies like unnecessary meetings and documents have to be eliminated to realize the shorter work hours, may result in more internal productivity. That would be good news indeed. - Any plans to visit Japan around March? Plan your trip according to this Cherry Blossom forecast: in Tokyo around March 22, in Osaka March 28 (Rocket News 24).
- To finish this edition: watch this video by American artist Mike Diva about Trump and a Japanese girl in love with The Donald: https://www.youtube.com/watch?v=ZbM6WbUw7Bs. For the world the story does not have a very happy ending through …
- Japan seems one of the most unlikely countries to potentially embrace the four-day week. You would expect it in Sweden or Denmark, but surely not in a country that coined the word “karoshi” or “death by overwork”. But: it may happen after all. First there was the news about “Premium Friday”, proposed by the government and employers organisation Keidanren. By allowing employees to leave on the last Friday of each month at 15:00, a better work-life balance was strived for. Interestingly enough, there is also an economic component to it: Dai-ichi Life Research Institute in Tokyo calculated that, if most workers, including those at small and medium-size firms participate, private consumption could rise by about JPY 124 billion (EUR 1 bln) on each Premium Friday (Japan Times).
Best regards,
Radboud Molijn