Japan in the Asian Century

Japan was the first “Asian miracle” economy. It rose from the ashes of World War 2 to become the world’s second largest economy. Its development was led by exports from Japanese enterprises which conquered world markets, especially in the automobile and electronics sectors.

A financial crisis in the early 1990s led to two “lost decades” of weak economic performance. During the same period, Japan’s manufacturing industry was “hollowed out” as Japanese enterprises invested substantially in both Western and Asian countries. The total GDP of the Chinese economy has now overtaken Japan.

Today, Japan faces a vast array of challenges like its aging population, large public debt, and sluggish economy, as well as the effects of the current global financial crisis and of Japan’s “triple crisis” (earthquake, tsunami and nuclear meltdown). The Japanese experience provides many lessons to other countries, which are now confronting some similar problems, or will do so in the foreseeable future.

Japan’s leading electronics companies (like Sharp, Sony and Panasonic), which once dominated world markets, are now struggling in the face of competition from companies from America (like Apple), Korea (Samsung), Taiwan and China. But Japan’s automobile companies are still successful, with Toyota leading the world’s automobile market. A new generation of Japanese enterprises is achieving great success, such as Softbank, Uniqlo and Rakuten. And Japan has become an important exporter of “cultural products” like anime, manga and computer games.

The arrival of the “Asian Century” presents Japan with many challenges, especially competition from Asia’s rising giants of China, India and Korea. But the Asian Century also offers Japan many new opportunities in emerging Asia’s fast growing markets, including tourism from Asia’s rising middle class.

1. Introduction to Japanese business and economy.


1. One paper -- 2000 words. Worth 60% of total evaluation. No final exam.

Topic. Please analyse three solutions to Japan's challenges. Due midnight Thursday 30 January.

2. Class presentation worth 20% of total evaluation. On each of 21, 22, 23 and 27 January, ten students will each make a 6 minute presentation on one of 4 solutions to Japan's challenges -- womenomics, immigration, robotics and new technologies, cultural and creative industries.

3. Class participation, especially final class debate, worth 20% of total evaluation.

Topic of first class -- Japan's relevant geography and history.

Identify Japan's main cities and islands -- map without labels.

Japan -- out of Africa. Last major immigration over 2000 years ago through Korea. Implication -- Japan has aboriginal people, Ainu and Ryukyu who predate this immigration, who are still disadvantaged.

Japan topography. Japan is a set of mountains in sea.

This means it is poor in agricultural and other natural resources, which it must import. So Japan had to become an exporting nation to pay for imports.

This also means that Japan's population is highly clustered in two main regions -- Kanto, area around Tokyo, and Kansai, area around Osaka. Tokyo is world's largest city.

Japan is located on "ring of fire", an area where most of world's earthquakes take place. Earthquakes and tsunamis have big impacts on economy. Japan also has much experience in managing natural disasters. But reliant on nuclear energy.

Japan is part of Asia, but isolated from Asia. Like what other country?

Japan also isolated itself ("sakoku") from rest of world in early 1600s to resist Western colonialism.

Isolation and unique culture.

But Japan was forced to open up by Commodore Perry's back ships around 1850.

"Meiji Restoration", a political coup in 1868, brought down Tokugawa Shogunate, nominally restored Emperor Meiji to throne. Meiji period heralded beginning of major political, social and economic modernisation and Westernisation.

Japan developed rapidly following Meiji Restoration. Iwakura mission.

Japan always a borrowing culture. Much borrowing from China -- writing, Buddhism, Confucianism, architecture, arts, etc.

But Japan followed the West in colonising Asian countries, and competed with the West. Japan colonised Korea and China, and still has bad relations with both. Japan has free trade agreements with many countries, but not these two.

Japan was ultimately defeated in World War 2. Japan was then remade by US as a peaceful democratic country. Very close relations with US. Trump?

Following the war, Japan recovered dramatically to become Asia's leading economy. But since a financial crisis in 1990s, Japan has been stagnating. In 2010, China overtook Japan to become Asia's biggest economy, world's second biggest.

- Japan map without labels
- Japan -- out of Africa
- Japan -- topographic map
- Ring of fire
- Map of Eurasia
- Commodore Perry and the black ships
- Iwakura mission
- READ -- In search of Japan's roots. ACI.
- Hiroshi Mikitani on Englishnization and Diversity at Rakuten
- Marketplace 3.0: The Future of E-Commerce

2. Japan's postwar resurgence

Japan was virtually destroyed by World War 2. Amazing resurgence. Benefit of backwardness.

1950-73 -- averaged 8.1% economic growth (like China more recently).
1973-90 -- solid growth of 3.0% (a slowdown, like China now).

By 1990, Japan’s GDP per capita reached 80% of US level. But Japan also transformed from low tech to high-tech, from agricultural to manufacturing to service based economy, and from rural to urban society.

Explaining Japan’s resurgence.

How do economies grow? Investment. Labour (workers). Productivity (efficiency). Governments can help foster that by creating a business friendly environment, and investing in education and infrastructure. An open and growing world economy can help too by providing markets for exports.

Role of demography. Japan had growing work force until 1995, thanks to postwar baby boom. But fertility rates declined below replacement rate of 2.1 children per woman. Since 1995, Japan has declining working age population, and ageing population which are dragging down economy.

Role of education -- PISA data. Japan strong education performance. But rote learning, memorisation and training for tests. Insufficient emphasis on critical thinking. Night schools.
Poor English language skills.

Role of infrastructure. Japan has excellent infrastructure. But also wasted spending for political purposes. Also infrastructure spending associated with political corruption -- the "construction state".

Ease of doing business. Japan scores poorly due bureaucratic culture.

US support through financing postwar reconstruction, democratising Japan, open US market. US defence support relieved defence burden of Japanese government.

Societal and political motivation for postwar reconstruction.

- Angus Maddison. The World Economy : A Millennial Perspective (data), page 133
- OECD. Programme foir International Student Assessment.
- Juku or cram school in Japan
- World Economic Forum. The Global Competitiveness Report 2018.
- Bridges to nowhere in Japan
- Japan's working age population. United Nations. World Population Prospects 2017. Volume II Demographic Profiles. Page 414.
- Doing Business -- economy rankings
- READ Japan almost made it! Asian Century ... on a Knife-edge
- Doing business in Japan
- The world's largest ranking of countries and regions by English skills

3. Japan's post-war resurgence continued

Free and open trade offers many benefits:

(i) specialisation in what you are best at -- comparative advantage.
(ii) economies of scale -- production is more efficient with higher production volumes.
(iii) companies can also learn global best practices by producing for world markets.
(iv) for a country like Japan, exports finance imports of natural resources that Japan lacks.

In 1945 was a low-tech country, but wanted to become a high-tech country. So it protected its infant industries to give them the breathing space to climb the development and technology ladder.

Protection took form of restrictions on Imports and foreign investment, subsidies and privileged access to bank finance. The exchange rate was kept artificially low (manipulated).

Japan also copied Western technologies, did reverse engineering, bought technology and at time practised intellectual property theft.

Japan's policies were successful for the manufacturing sector, which became competitive on global markets, especially in motor vehicle and electronics industries. Companies like Toyota, Nissan, Honda, Sony, Panasonic.

Not only did Japan catch up to Western companies, it developed new management ideas like kaizen, just-in-time inventory management and lean manufacturing.

But Japan was not successful for its services and agricultural sectors which remained focussed on the domestic market.

This development strategy was engineered by the "iron triangle" of business, bureaucrats and politicians.

Japanese companies have their own "style", and played important role in Japan's rise after 1945.

Students recruited directly from university. Personality and social activities more important than grades. Companies offer in-house training to form "company men". Sempai trains kohai. Team work important.

High degree of job security, with lifetime employment common in big companies. Seniority-based pay. Regular job rotations. Relationship of loyalty between worker and company. Family-like atmosphere. “Salarymen” -- white-collar worker. Little place for professional women. Mainly “OL” doing “pink-collar” tasks. Sexual harassment (seku-hara) a problem.

Japanese business meetings ceremonial. Everything pre-cooked through "nemawashi". Work long hours, demonstration of loyalty. Japanese productivity low by Western standards.
Karoshi. Drinking with colleagues after work for team-building. Nomunication. Arranged marriages.

Retirement a drama for Japanese men. Find their family again after 30-40 years of marriage to the company. His wife calls him “industrial waste”.

Role of amakudari in iron triangle. Many corporate corruption scandals.

Overall, Japanese companies were outstanding in high-growth, catchup period. But now changing. Irregular work. Womenomics. More international and flexible. But most Japanese companies remain very Japanese.

- Japan Almost Made It
- Toyota’s kaizen
- Just-in-time
- Four Principles Lean Management - Get Lean in 90 Seconds
- Japan's business world -- READ
- Omotenashi: Hospitality in Japanese
- The Incredible Journey of Chef Nobu and His Restaurant Empire With Robert De Niro
- Donald Trump Meets With SoftBank Chairman Masayoshi Son
- High Heels at Work Are 'Necessary,' Says Japan's Labor Minister

4. Japan's bubble economy

Japan's economic renaissance after World War 2 a beautiful story.

By 1990, it almost caught up to world leaders in terms of GDP per capita.

It became world's second biggest economy in 1968.

What could go wrong?

What did go wrong?

Japan developed a bubble economy, bubble burst, destabilising the economy.

What is an economic bubble?

Dramatic price rise, followed by dramatic fall. Bubbles go "POP".

Often occurs in real estate or stock markets.

How do bubble economies occur?

Easy money fuels price rises. Often followed by irrational exuberance.

Can only be sure a price rise was a bubble after crash.

Examples US real estate in 2008. Trump stock market boom. Real estate in Australia and China.

Problems of bubble economy -- people lose lots of money when bubble pops. Balance sheet recession.

Japan bubble economy in late 1980s in stock and real estate markets.

From March 1986 to December 1989 stock prices rose by 130%, while land prices increased by 60% from March 1986 to September 1991.

How did it occur?

During 1980s, Japan's exports and economy became very strong. Japan built up a big trade surplus, partly because of protectionist policies, like a manipulated exchange rate.

US and other Western economies felt under threat. In 1985, G5 Plaza Accord pushed Japan to stop manipulating yen and increase exchange rate. Adversely affected Japanese exports and economy.

Japan responded with easy money policies, “QE”, this fuelled bubble. There was also irrational exuberance. Many thought Japan was overtaking US. Japan could be number 1! Value of Tokyo's Imperial Palace higher than the state of California.

By 1980s, Japan became a new global power. US seen as declining power. In US, genuine fears of rise of Japan, just as fears of rise of China today.

Japanese companies went on international spending spree. Mitsubishi bought Rockefeller Center in Manhattan. Sony bought Columbia Pictures. Japanese banks, biggest in world, seemed to be taking on the world, like manufacturers.

Late 1989, Bank of Japan worried about bubble, increased interest rates. Bubbles started bursting.

Japan's stock and land prices crashed, wiping out billions in wealth and leaving the nation's banks, enterprises and citizens with mountains of bad debt.

Japan thus entered a balance sheet recession. With debt exceeding assets for many companies and citizens, Japan started a long period of deleveraging, as debt was paid off and assets rebuilt.

Japanese government slow to react. Thought prices might recover. Also, suffered five stages of grief -- denial, anger, bargaining, depression and acceptance.

In such a situation, should save the financial system, save good banks and companies, let others go bankrupt. Japan very slow to react. Iron triangle resisted rapid change. Many "zombie" (insolvent) companies hanging round for years.

Took over ten years to solve problem. Different from US in 2008.

- Japan almost made it! Asian Century ... on a Knife-edge
- Banking Crises and "Japanization": Origins and Implications. Asian Development Bank Institute Working Paper No. 430 -- see page 8.
- Japan's economic bubble distant memory 20 years later
- Nintendo Switch is the fastest-selling console of the current generation — here's why Nintendo is dominating video games
- What Does Otaku Mean?
- Maid cafe @home cafe - Kawaii and fun in Tokyo | One Minute Japan Travel Guide
- Top 20 Country GDP (PPP) Ranking History (1980-2023)

5. Japan's lost decades

In early 1990s, Japan's bubble economy burst. But Japan also hit by: beginning of decline of working age population from 1995; new competition from Korean and Taiwanese companies; Kobe earthquake in 1995 in Kobe; 1995 Tokyo subway sarin attack; government corruption scandals; old protectionist model no longer effective.

Japan entered "lost decades" of 1990s and 2000s. Economic growth slows to around 1% a year, after previous fast growth. Per capita income falls relative to world leaders.

“Zombie firms”, unprofitable, unable to repay debt, but kept alive by banks/government. Waste of money. Prevents finance going to new startups.

Deflation, falling prices.

Working age population starts falling from 1995.

Now labour shortages. Increased immigration.

Increased female labour participation. But women still suffer discrimination.

Growth of non-regular employment, decline of life-time employment. Income inequality and poverty high.

Government debt now over 200% of GDP. Government spending to stimulate economy, also for ageing population. Weak economy reduces government revenues.

With slowing economy, outsourcing to US, Europe and Asia. But very little foreign investment in Japan -- so Japan is missing out on the benefits of foreign investment. Other countries like the US and Germany have large flows of inward and outward investment.

The 2011 triple crisis highlighted Japan's vulnerability to natural disasters.

Japan highly exposed to North Korea. It has fired intercontinental ballistic missiles over Japan.

But Japan's lost decades were not fully lost. Japan has been changing slowly.

Old Japan was motor vehicles and electronics -- Toyota, Nissan, Sony, Panasonic.
New Japan is modern services companies -- Softbank, Uniqlo, Muji, Nobu, Rakuten.

Japan now a leader in high-tech components for global value chains for electronics and aviation. Eg, Murata.

New cultural and creative industries -- like manga, anime and computer games. Nintendo.

Overall Japan's three big problems -- weak productivity and GDP per capita relative to world leaders, enormous government debt, and ageing population. Japan needs to bite the bullet!!

- OECD Economic Surveys: Japan 2019 -- pages 7, 10 and 16..
- OECD Economic Survey of Japan 2017, page 18
- Godzilla’s Origins Explained in 5 Minutes
- North Korea: ballistic missile launched over Japan – as it happened
- Level of Nonregular Employment Remains High in Japan at 37.3%
- OECD. FDI in figures, April 2019. page 10.
- Murata Corporate Video English
- Where the iPhone parts come from
- Chinese Smartphones Lift Japan’s Electronics Business
- Boeing's 787 Dreamliner Is Made Of Parts From All Over The World

6. Japan's demographic dilemmas Part 1

Japan’s working age population declining.

Weakens the economy. Weakens government budget and debt. Weakens the country in international relations at a moment when China is rising and US is erratic.

Japan’s working age population falling since 1995 -- from 87 million to 75 million today. Could fall to 43 million by year 2100.

Japan’s total population started falling in 2010. It could fall from 127 million today to 85 million in 2100.

Life expectancy risen from 63 in 1950 to 84 today, and could rise to 94 by end of century.

Old age dependency (people aged 65 and over, compared with people aged 15-64) risen from 8% in 1950 to 43% in 2015, and could rise to 69% in 2100.

Japan’s fertility is the major driver.

Fertility rate fell from 3 children per woman in 1950 to around 2 in 1970. Today, fertility is around 1.4, well below "replacement rate" of 2.1 children per woman.

Japan is often presented as strange case. But not so strange.

Japan has been merely leading the way in a worldwide trend. Today half the world’s population lives in countries with fertility rates less than 2.1.

Many Asian and other countries have low fertility.

Japan 1.4, China 1.6, Hong Kong 1.1, Korea 1.1, Taiwan 1.1, Singapore 1.2, Thailand 1.5. Australia 1.8, US 1.8, Germany 1.5.

Why is Japan’s fertility so low?

For economists: As Japanese women now better educated, more interested in working, despite discrimination in Japanese workplace.

But it is difficult for Japanese women to combine work and family life when corporate life is characterised by long working hours, compulsory overtime, evening socialising with colleagues, and transfers to offices far from home.

So some choosing work over family because in Japan. And even where women just postpone a family, they may settle for one child. The average woman's age for having the first child is 30.7. Japanese corporations should a family-friendly work culture and more efficient work practices.

Japan’s poor work-life balance also means that men have little time to contribute to family life, which would support women who wish to work and also to have a family. In Japan, women devote nearly four hours a day to housework and childcare, compared to less than one hour for men.

Japan minister's paternity leave challenges work pressure


More fundamentally, with education, women are now more in control of their lives, and are able to choose whether or not to have children.

The costs of housing and education (night school) also act as a deterrent to having a family.

The continuing move of people to high-cost Tokyo exacerbates this.

The lack of pre-school and day-care places is also a problem. Abe has promised more, but over 40,000 children are currently on waiting lists.

And with more Japanese boys have "irregular jobs", they are less attractive as potential husbands.

- World Population Prospects 2017. Volume II: Demographic Profiles -- pages 414-415.
- OECD. Economic Survey of Japan 2015. See pages 4 and 13.
- OECD Economic Survey of Japan, 2019.
- Birth Rate by Prefecture in Japan
- The Japanese Celibacy Syndrome
- Japan: Looking For Love - #AsiaLive -- from 2.30
- What Japanese Think of Herbivore Men | ASIAN BOSS
- East Asia's fading fertility

7. Japan's demographic dilemmas Part 2

Hypergamy by Japanese women.

Overwork, Japanese men are tired.

Many people argue that Japanese women rejecting traditional gender division of labor, and would prefer not to get married.

Sociologists talk of Japan's celibacy syndrome, decline of arranged marriages, womb strike, changes in Japan's younger generation.

The rise of Japan's 'super solo' culture


People debate Japan’s low fertility. But fertility varies greatly in Japan 1.2 in Tokyo to 1.9 in Okinawa!

Okinawan women marry younger, have children younger, workforce participation similar to Tokyo. But Okinanwans have better work/life balance, as work less hours. Tokyo, as world’s biggest city, and Japan’s most densely populated area is less conducive to raising a family.

Impact of declining working age population.

In 1990, Japan's potential economic growth over 3%.

Now below 1%. Today, Japan is experiencing labor shortages.

Share of elderly-related social spending is expected to keep rising.

Unless something is done, Japan's government debt could rise to 600% of GDP by 2060.

For evolutionary biologists, low fertility is strange. Normally natural selection produces individuals who are good at converting their resources into lots of fertile descendants.

Benefits of demographic decline.

Good for environment. Reduce crowding.

Silver economy.

Other economic challenges include: succession problem for family businesses; future of agriculture as average age of Japanese farmers in 67; abandoned houses and villages; rising car accidents caused by elderly drivers.

What to do?

Increase fertility rate. Many efforts in past, to little effect. Even if effective, that won't solve immediate economic effects of demographic decline. Abe set target fertility rate of 1.8 for year 2025, providing assistance -- child care, cheaper education.

Encourage marriage migration.

Encourage meetups at work, clubs etc

Main conclusions:

Japan is in demographic decline -- but not alone.

Costly for the economy. But may be good for environment.

- Japan's 1.2 million heirless businesses at risk of closure
- SME Succession Crisis in Japan
- Succession crisis stalks Japan’s family businesses
- Nature Taking Over an Abandoned House in Japan!
- Average age of Japanese Farmers is 65 years old.... who will rice farm in 10 years?
- Preventing elderly driver accidents

8. Abenomics


Shinzo Abe's LDP elected in December 2012.  Japan had suffered two lost decades.

Japan suffered from global financial crisis.

Japan was worried about its future against a strong China.

Japan faced three big problems -- weak economy, poor demography, enormous debt.

Abe determined to revitalise Japan's economy -- Abenomics.

Abenomics program. "Three arrows". Easy money to kill deflation.  Fiscal (budget) policy to get government debt under control.  "Structural reform" to revitalise economy.  

What structural reforms?  Womenomics. Trade and investment liberalisation. Robotics. Increase fertility.  Corporate governance.  Immigration.

1.  Monetary easing (easy money by Bank of Japan) to kill deflation. Bank of Japan's goal was 2% inflation within 2 years. Inflation has increased, but 2% goal not achieved.

Pushed down yen exchange rate. Improved profits for big exporting companies. Workers' incomes not increased very much.  But massive increase in foreign tourists

2.  Fiscal stimulus (more infrastructure!), to be followed by increased consumption taxes. Consumption tax increased from 5% to 8% in April 2014. But pushed economy into recession. Another increase to 10% scheduled for October 2015. But postponed until April 2017, and postponed again until October 2019.

But still no serious plan to bring debt under control. Public debt could equal 600% of GDP by 2060. Government has continued with stimulus packages.

3.  Some progress on third arrow -- Womenomics. Trade and investment liberalisation. Robotics. Increase fertility.  Corporate governance.  Immigration.
Overall, thanks to Abenomics, some increase in economic growth.  But Japan's fundamental problems not solved.

Inflation remains well below the 2% target. Public debt not yet under control. Household income stagnant.

Population and the economy will shrink by 25% over next 40 years.

Abenomics needs to be reinvigorated.

- IMF -- Japan: Staff Concluding Statement of the 2018 Article IV Mission -- from 3.00 to 12.00.

9. Japan’s trade and investment

During high growth period, Japan employed protectionist policies. To help infant industries become competitive. Very successful for manufacturing, which competed on world markets, but not for services and agriculture.

At time of bubble economy, it should have removed protection. Manufacturing didn't need it any longer. Agriculture and services needed to be opened up to international competition to become efficient.

But once protectionist policies are in place, they are difficult to remove. Beneficiaries fight to keep protection.

US and others pushed Japan to open markets. It did a little. Also pushed Japan to invest in their economies. It did a lot.

As part of Abenomics, Japan joined Trans Pacific Partnership trade talks, led by Obama. Brave and courageous decision.

TPP a vast enterprise. More than trade liberalization. Deals with services, electronic commerce, telecommunications, competition policy, state-owned enterprises, intellectual property, government procurement, transparency, anti-corruption, labor rights and the environment.

But Trump did not like TPP. So he withdrew. Seen as betrayal.

In remarkable leadership, Japan picked up TPP to lead a rapid renegotiation with remaining 11 members—now known as Comprehensive and Progressive Agreement for TPP— came into force on December 30, 2018.

Creates a bloc covering 500 million people, $11 trillion in GDP (around 14 percent of world’s total GDP). Remaining signatories following withdrawal of U.S.—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam—popularly known as “TPP-11.”

Japan welcomed UK’s interest in joining TPP-11 once it has left EU.

Following talks begun in 2013, EU-Japan Economic Partnership Agreement entered into force on February 1, 2019. Fear of Trump's protectionism, pushed Abe to conclude this deal. Also very important. Economic zone of 635 million people, 30% of world GDP, 40% of world trade.

Wide-ranging agreement -- trade in goods, services, bilateral investment. Increased access to European market for Japanese car manufacturers. European exporters benefit from dramatically reduced Japanese agricultural import tariffs. Brussels estimates savings for EU firms of 1 billion euros a year in duties. Overall, EU-Japan EPA removes 97 percent of tariffs that Japan applies to European goods and 99 percent of those applied by the EU.

An ASEAN Free-Trade Area?

Japan also a leading participant Regional Comprehensive Economic Partnership (RCEP) talks for FTA between ASEAN (Brunei Darussalam, Cambodia, Indonesia, Laos PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and six countries with FTAs with ASEAN—Australia, China, India, Japan, Korea and New Zealand.

- As Global Protectionism Rises, Japan Emerges as Asia’s Free Trade Champion
- Sales of Japanese autos in the US
- Japanese investment in Europe's auto industry
- What is the TPP 11?
- EU/Japan trade deal
- RCEP: ASEAN-driven free trade agreement

10. Japan and Trumpnomics

No world leader has invested so much in becoming friends with Donald Trump as Shinzo Abe. This relationship is of critical importance for Japanese business and economy, and politics and international relations.

From 1945 until Mr Trump, Japan and US closest of allies.

US financed Japan's postwar reconstruction. Made Japan a democracy. Open market for Japan's exports. Key allies in battle with communism. US/Japan military alliance. Japan hosts 50,000 US troops.

When US upset that Japan running a big trade surplus in 1980s, Japanese companies began motor vehicle production in US. Trump complains about Japanese autos in US. But most Japanese autos in US produced in North America.

During Obama presidency, US and Japan closest of allies. US/Japan Alliance necessary in light of North Korea, and China's challenge to US position in Asia.

Along comes Donald Trump. Critical of Japan during election campaign. Complained Japan not paying enough for Alliance. Japan spends 1% of GDP on military, US spends 3 1/2%. Suggested Japan could even develop nuclear weapons.

Now Trump seems supportive of US/Japan alliance, but trust has been hit. Japan becoming more independent

Trump's trade policy motivated by bilateral trade deficits. US trade deficit with Japan nearly $75 billion, third highest after China and Mexico. US still Japan's most important export destination, just ahead of China.

Trump argues for "free, fair and reciprocal" trade.

Japan hit by Trump's tariffs on steel and aluminium. Could not negotiate an exemption, despite Abe/Trump friendship.

Abe pushing Trump to join TPP. Trump refuses, wants bilateral free trade agreement with Japan. Wants more access to Japanese agricultural market. US farmers losing out to TPP countries which now have better access to Japanese market.

Now discussions underway for an FTA. Trump impatient. Japan also affected by Trump’s trade war with China, because of Japan’s components exports to China.

Japan worried Trump will do a deal with N. Korea, without consulting Japan, and leave Japan exposed. Also Japan worried about abductee issue.

Japan trying to stay friends with US. But trying strengthen other friendships, as it promotes a “free and open Indo-Pacific -- India, Australia, SE Asia.

Now that Trump has a trade war with China, China is becoming friendly with Japan. Can this last? Japan and China have long had “hot economics, cold politics”.

- Japan's Abe: First Global Leader to Meet With Trump
- Donald Trump meets with Japanese PM Shinzo Abe for first foreign meeting
- Japan’s PM falls into a golf bunker
- Burger Shop in Japan Releases New Trump Burger
- Trump to meet with Japanese prime minister, with North Korea summit a possibility
- North Korea: Abe and Trump meet amid peace talks
- North Korean abductions of Japanese citizens
- Trade in Goods with Japan
- Japan and U.S. at odds over auto and farm tariffs, but quotas not raised during talks
- Japan, China pledge to boost bilateral ties

11. Japan's migration solution

Long recognised immigrants can make an important contribution to solving Japan's demographic dilemmas.

How can immigration help Japan?

-- Fill labor market shortages.
-- Doing "3-D" work -- dirty, difficult and dangerous.
-- Migrant caregivers can support womenomics.
-- Filling other skill gaps, like IT workers.
-- Enterpreneurs.
-- Improve soft power with neighbours like SE Asia.
-- Accepting refugees can be a demonstration of global leadership.

What has been Japan's record in accepting migrants? Due to beliefs about its cultural homogeneity and uniqueness, Japan has been reluctant to accept many migrants. One reason Japan has escaped populism may be the low level of migration.

PM Abe once said, “... before accepting immigrants or refugees, we need to have more activities by women, elderly people and we must raise our birth rate. There are many things that we should do before accepting immigrants”. “In countries that have accepted immigration, there has been a lot of friction, a lot of unhappiness both for the newcomers and the people who already lived there”.

Economic pressures gradually forcing the migration door open over the past years. One element of Abenomics is utilising foreign human resources. It is not an immigration policy.

What have been the main trends?

-- From 1990, Japanese ethnic people from Latin America.
-- Marriage migration.
-- Skilled migrants have relatively easy access. Can gain permanent residency, and ultimately nationality. But Japan having trouble attracting skilled migrants -- language, culture, work-life balance, low pay. Many prefer Singapore.
-- A "Trainee" program officially enables foreign workers to learn about Japanese business practices and technology, and bring those insights back home. In reality, it is a de facto guest worker program -- contracts can now be extended from 3 to 5 years. (230,000+)
-- Foreign students can also work in Japan (280,000 foreign students in Japan).
-- When they graduate, foreign students well placed to find a permanent job.
-- But Japan accepts very few refugees. In 2017, received 19,628 asylum applications, but accepted only 20. Europe's experience with refugees is but one factor discouraging the acceptance of refugees.
-- Low number of illegals -- 65,000.

Japan's foreign-born population risen from 1 million or 1%, 2 1/2 million or 2% past couple of decades. Biggest sources -- China, Korea, Philippines, Vietnam, Brazil, Nepal. Over 700,000 from China, becoming very important group of skilled and entrepreneurial migrants.

Unfortunate dark side to Japan's immigration experience, as UN Human Rights Council has noted. There is "widespread racist discourse against members of minority groups, such as Koreans, Chinese or Burakumin, inciting hatred and discrimination against them". Foreign trainees and technical interns are the subject of "a large number of reports of sexual abuse, labour-related deaths and conditions that could amount to forced labour".

- Immigration Changes Are Imperative for Japan
- Being ‘hafu’ in Japan: Mixed-race people face ridicule, rejection
- "People don't believe I am Japanese" says Miss Japan
- How Tennis Star Naomi Osaka Is Redefining 'Japanese'
- Japan's experiment in ethnic immigration
- Polite Japan's dark underbelly
- The Worst Internship Ever: Japan’s Labor Pains
- Do Japanese Want Immigrants in Japan?
- Is Japan's Immigration Policy Really Strict?
- Migrant workers 'exploited' in Japan

12. Japan and populism

Could Japan be vulnerable to Trumpian populist revolution?
Populism is about supporting masses/people against privileged elites. Trump portrays himself as representative of forgotten, poor Americans against “liberal elites”.

At this stage, Japan seems not vulnerable to populism, even though victims of globalisation, technological change, financial crisis, badly managed natural disasters, and decline relative to China.

True? Why?

Low level of migration? Virtually no refugees? Low imports? Suicide? Passivity? Hierarchical society? Abe’s nationalism? Safe society? Government control of public opinion through press controls?

Although inequality is a problem, CEOs are not extremely rich as in US. No liberal, progressive, international elites, like US. Still conservative society.

Cultural factors may explain Japan's vulnerability to populism and other aspects of Japanese business and economy.

According to social psychologist Geert Hofstede, culture is defined as the collective mental programming of the human mind which distinguishes one group of people from another. He analyses six aspects of culture:

Power distance
At an intermediate score of 54, Japan is a borderline hierarchical society. Japanese are always conscious of their hierarchical position. But not as hierarchical as most of the other Asian cultures.

Japanese society shows many of the characteristics of a collectivistic society: such as putting harmony of group above the expression of individual opinions and people have a strong sense of shame for losing face. However, it is not as collectivistic as most of her Asian neighbours.

Japan is one of the most Masculine societies in the world.

Uncertainty avoidance
Japan is one of the most uncertainty avoiding countries on earth.

Long-term orientation
Japan is one of the most Long Term Orientation oriented societies.

Japan has a culture of Restraint. Societies with a low score in this dimension have a tendency to cynicism and pessimism.

- Hofstede Insights
- Japan’s firewall against populism
- A Brief History of Godzilla
- Why Masayoshi Son Invested $20 Million in a Young Jack Ma
- Softbank CEO Masayoshi Son is Warren Buffett of tech
- How Masayoshi Son is Shaking Up Silicon Valley
- Fast Retailing CEO: Go global if you want to succeed
- Pounding Mochi With the Fastest Mochi Maker in Japan

13. Japan and robotics

Japan's economic strength is in manufacturing (not services or agriculture). Technology, especially robotics important.

Japan began by copying, buying and even stealing technology.
Then Japan started developing technology.

Japan world leader in production, usage and export of industrial robotics. It produces half world's industrial robots. Main export markets US, China and Korea. Fear of China catching up.

Japan's motor vehicle and electronics industries most important buyers of robots. Japan's robotic industry supported by large government investments in R&D, as well as corporate and university research. (1).

Now robotics seen as important response to demographic problem. Robots can replace disappearing workers. And robots can provide services to ageing population, including nursing care. (2)

As part of Abenomics, Japan has adopted a new robot strategy. Abe wants to showcase robotics at 2020 Olympics.


Robotics can also revolutionise agricultural and services sectors which suffer from low productivity. (4), (5), (6), (7), (8).

Today's robotics are now part of the 4th industrial revolution (Industry 4.0). This refers to a set of highly disruptive technologies, such as artificial intelligence (AI), robotics, blockchain and 3D printing, that are transforming social, economic and political systems.

Industry 4.0 has the potential to improve productivity, lower production costs. But repetitive and routine tasks are increasingly replaced by robots, machines, and automation. Such technologies will also solve many problems facing countries like Japan, with its ageing and declining population. While new technologies will destroy many jobs, other new jobs will be created. There is much debate about the net balance. All countries will be challenged.

What is necessary is for governments to invest more seriously in education, skills and training, and lifelong learning, both to optimise the benefits of digitalisation, and to enable displaced workers to find new employment. They must also develop innovation policies to be part of this technological revolution.

- Robotics Improves the Fate of Demographic Decline in Japan
- Japanese robotics firm unveils 'world's strongest robot'
- Japan battles population decline with robots
- Here's why Japan is obsessed with robots
- Drones help ageing farmers
- World's first 'robot run' farm to open in Japan
- Aging Japan: Robots may have role in future of elder care
- What is the Fourth Industrial Revolution?
- The Fourth Industrial Revolution | At a glance

14. Youth and NEETs/ Karoshi and Work Style changes

At a time when Japan needs more workers, many youth are "NEETs", Not in Employment, Education or Training.

Some 1.7 million or 10% of Japanese youth aged 15 to 29 are NEETs. The number of Japanese NEETs has declined over past decade. And Japan's NEET problem is not as bad as some other OECD countries. In fact, it is lower than the OECD average of 14.7%, and the NEET problem is greater in countries like Italy, Greece, Spain, France, Korea, US and Canada. But it is a waste of human potential.

About two-thirds of NEETs are women, who may be looking after children. Many women NEETs cannot find or afford child care for their children.

An estimated 320 000 young people below the age of 30 years (about 1.8% of this age group) live in a state of acute social withdrawal – the so-called hikikomori (many argue that official statistics are wrong and that there are one million hikikomori). They are mainly boys. Hikikomori require intensive and better assistance.

Government, and families are already working to solve the NEET problem, and particularly hikikomoris. But there is much more that can be done to identify NEETs, and help them find a way back.


Nearly one quarter of Japanese companies require employees to work more than 80 hours of overtime a month, according to a 2016 government survey. Those extra hours are often unpaid.

In 2013, 31-year-old journalist Miwa Sado logged 159 hours of overtime in one month at the news network NHK, before dying of heart failure in July 2013. And in 2015, a 24-year-old employee of Japanese advertising behemoth Dentsu jumped to her death off a balcony in a company dorm room — where she lived — after working more than 100 hours in the month leading up to her suicide.

In 2018, Japan adopted “work style” reforms. 3 key elements:

Overtime work must be less than 100 hours per month and 720 per year. Companies will be punished if they exceed the limits. Applicable to large companies starting April, 2019, and to small and mid-sized companies starting April, 2020.

Highly skilled professionals exempt from regulations related to work hours. HSP is defined as one (i) whose work requires highly specialized knowledge, and the nature of such work is such that the amount of time worked and the work product are typically not highly correlated and (ii) earns annual compensation of JPY 10.75 million or more.

Equal pay for equal work to remove discrimination between regular and irregular workers -- applicable to large companies starting April, 2020, and to small and mid-sized companies starting April, 2021.

But work style reforms very modest. Interesting example of Microsoft.

Policy Speech by Prime Minister Shinzo Abe to the 196th Session of the Diet -- see section 2 on work style reform

- Investing in Youth: Japan. OECD
- Japanese men locked in their bedrooms for years
- Society at a Glance 2016. OECD
- Rent-a-sister: Coaxing Japan’s hikikomori men out of their bedrooms - BBC News. First 5 minutes.
- President of Japan's Dentsu Company Stepping Down After Employee's Suicide
- Japan has some of the longest working hours in the world.
- I Will Not Work Overtime, Period!
- Message from the Prime Minister (the Work Style Reform Bills)
- Work Style Reform showcase of Microsoft Japan
- Episode 17: Hikikomori — Japan's missing million

15. Japan's womenomics solution

In all traditional societies, there was a division of labor between men and women.

Japan has been quite unique in maintaining a strict division of labor. Men are the breadwinners, while women manage the family and household. But women still powerful -- ran the household finances.

But in modern, urban societies, such a strict division of labor makes no sense. Indeed, Japanese women are now highly educated and many would like to work. But traditional attitudes hold them back.

Japan ranks 110th (out of 149) in the world in the Global Gender Gap Index. Gap is large for Economic Participation and Opportunity, and enormous for Political Empowerment. Japan is well behind countries like UK (15th), Canada (16th), Lithuania (24th), Netherlands (27th), Australia (39th), Poland (42nd), US (51st), Singapore (67th), China (103rd).

Other signs: Enormous pay gap between men and women. Women under-represented in management positions, company boards, senior government management, and parliaments.

Traditionally Japanese women left work after child-bearing. Now more Japanese women do work. Labor force participation of Japanese women now above US and OECD average.

But the quality of women's jobs, often irregular, plus weak participation in politics, are problems.

Womenomics is about "family-friendly" policies that enable women to work and have children at same time. Good for economy, and society. Also a human rights issue.

Need comprehensive change in business, society and government. Government should lead in staffing, providing more childcare facilities, migration, and more neutral tax policies. Japanese companies need to adopt a family-friendly environment. In families, men need to become more active.

Womenomics on Japanese agenda since at least 1999. Some progress, especially since 2012, Womenomics part of Abenomcs, eg.

-- Targets for participation and advancement of women in workforce.
-- Increasing daycare and after-school care.
-- Encouraging private sector to promote more women and provide data on the advancement of women.
-- Recruiting and promoting women in government.
-- Expanding child care leave benefits.
-- Reviewing the tax and social security system.
-- Allow foreign housekeepers in special economic zones.

There has been some progress, but much greater efforts are required.

Fundamentally, we need: New mentalities and mindsets. Role models. Leadership. Fundamentally, women must fight for womenomics. Foreign investment can help, if foreign companies hire Japan's talented women.

Me 2 movement in Japan -- 5.00 - 7.00/8.00


Getting the word out on sexual consent to university students in Tokyo

- World Economic Forum. The Global Gender Gap Report 2018.
- Japan Is a Poor Performer on Gender Equality. Can the ‘Womenomics’ Initiative Help?
- Why male Japanese wage-earners have only 'pocket money'
- Trading Success Stories - Japan's Forex Trader housewives Mrs Watanabe
- Womenomics 4.0. Time to walk the talk.
- Womenomics in Japan explained
- How successful is womenomics?
- The New Japan Inc: One woman’s burden, another’s opportunity
- Japan's womenomics isn't working

17. Suicide in Japan

Japan has a suicide problem. But other advanced countries like Russia, Lithuania and Korea have higher rates of suicide, and countries like Slovenia, Hungary and Estonia are in the same ballpark.

After rising sharply in the late 1990s, Japan's suicide rate has been on a steady downward trend.

Apart from young people, for whom the suicide rate is very low, all age groups are affected by suicide.

- OECD Society at a Glance 2016 -- page 118
- Number of Suicides in Japan Declines for Eighth Consecutive Year
- Number of suicides per 100,000 inhabitants in Japan in 2017, by age group
- Suicide. Take time to listen: Rene Duignan at TEDxTokyo
- SAVING 10,000 - Winning a War on Suicide in Japan

18. Japan's corporate scandals

Corporate scandals occur everywhere. But Japan has special problems.

Recall iron triangle -- big business, politicians and government officials -- cosy, non-transparent relationships. One role of government, regulate business. But in Japan, government officials have close friendly relationship.

Corporate governance -- the way companies are governed and managed -- in Japan always different from other advanced countries, not up to international standards.

One aspect is corporate board, supposed to supervise company's management on behalf of shareholders. But in Japan, boards are stacked with insiders, like representatives from the main bank, and former corporate staff members. Results in cosy club, management weakly supervised, blocks mergers and acquisitions, especially from overseas. Corporate decisions on golf course, not boardroom. External auditors don’t always do serious job. Mainstream media often silent -- advertising revenues.

As part of Abenomics, government implementing corporate governance reforms. But change slow.

Olympus scandal. Big losses through bad investments over 20 years ago. Covered up by creative accounting, and shady deals, some involving organised crime. New CEO, Michael Woodford, discovers it. Launches investigation. Board members and senior staff obstruct. Woodford exposes to international media. Japanese domestic media silent. Woodford gets fired. Ultimately, government acted, and ex-chairman and others prosecuted.

Toshiba scandal. Toshiba guilty of accounting scandal of $1.2 billion in overstated profits. Improper accounting, over seven years, started following global financial crisis. Toshiba's corporate leadership handed down strict profit targets, "Challenges", to business unit presidents, often with implication failure unacceptable. Only way to achieve Challenges was cooking the books. Toshiba's corporate culture, obedience to superiors, an important factor enabling fraudulent accounting practices. Culture operated on every level of authority down to accountants who cooked the books. Investigation recommends robust whistleblower system.

Kobe Steel admitted data fraud for nearly five decades. Japan’s third-biggest steelmaker supplies steel parts to manufacturers of cars, planes and trains around world, admitted supplying products with falsified specifications to over 600 customers, , including 222 customers overseas, throwing global supply chains into turmoil. What caused Kobe's problems -- greed, insular corporate culture, dishonesty and negligence.

Yakuza members of organized crime syndicates originating in Japan. Traditionally, Japanese government tolerated yakusa, because crime is inevitable, better be organized. Yakuza acts like second police force, tolerating their existence helps keep petty crimes like theft and robberies to an absolute minimum. More recently, government been cracking down, and yakusa membership declining.

- Ex-CEO of Olympus blows the Whistle on Fraud and a Culture of Dysfunction in Japan. Start 1.50 -- 9.00.
- Toshiba scandal: Why did the boss resign? BBC
- Toshiba boss resigns over accounting scandal
- Toshiba scandal shakes corporate Japan
- New head of scandal-hit Kobe Steel may seek mergers for some business units
- Who are Japan's Yakuza? In 60 seconds - BBC News
- Japan's Yakuza: Inside the syndicate
- Japan calls its corporates to account

19. Japan and China parallels

Chinese President Xi Jinping is worried. China could be turning Japanese!

China shares Japan’s three big problems -- low productivity, poor demography, and big debt. China needs more reform and opening of economy to boost productivity, but Xi is worried about possible instability of reform. China fertility rate has been below 2.1 since 1993. China’s working age population has been falling since 2014. China is becoming old before it becomes rich! In contrast, Japan became rich before it became old.

China’s debt has exploded over past decade. Many are worried that China could have a debt crisis, or lost decades like Japan. How did China get into debt problem.

When US caused the global financial crisis in 2008, Chinese government became worried. Chinese economy had long been dependent on exports to US and other Western markets. And it was concerned about possible unemployment, and social and political stability.

So Chinese government launched a massive economic stimulus program. This program involved increasing spending on infrastructure and housing, encouraging companies to increase production, and easy money. It was largely financed by money from state-owned banks, which was loaned to state-owned enterprises and local governments.

This stimulus was very effective in maintaining growth in the Chinese economy. It was also very helpful to world economy, especially to China’s Asian neighbors, and natural resource exporters like Australia.

This stimulus program did, however, have adverse side effects:

-- not all infrastructure was efficient -- some white elephants, and ghost cities.

-- excess capacity in many industries like steel, cement and aluminium.

-- asset bubbles. Following a rise in stock prices, in 2015 there was a crash. In some cities, housing prices rose sharply, and today there are concerns about housing prices in China's large cities.

-- China's total debt has risen dramatically, from 150% of GDP to over 250%, and could rise over 300% in coming years. Much of this is corporate debt debt, not government debt. But it is still in the public sphere because much is state-owned enterprise debt owed to state-owned banks. Debt in shadow-banking sector also very high.

-- And much of this debt is held by inefficient zombie companies.

Some are worried that China is headed towards a debt crisis. IMF says China’s “credit growth is on a dangerous trajectory, with increasing risks of a disruptive adjustment and/or a marked growth slowdown”.

Others argue that China is safe. It has high foreign exchange reserves, low government debt, and the Communist government has a great capacity to control the economy. Against that, the government seems more concerned about preventing unemployment than its debt, and more concerned about achieving its economic growth targets.

One thing is certain now that China needs to improve its productivity, much of its debt and investment are increasingly inefficient, raising is spectre of stagnation

- Is China’s economy turning Japanese? Financial Times.
- The Vapors - Turning Japanese - 1.10
- Credit Booms—Is China Different? Sally Chen ; Joong Shik Kang. IMF Working Paper
- Resolving China's Zombies: Tackling Debt and Raising Productivity. W. Raphael Lam ; Alfred Schipke ; Yuyan Tan ; Zhibo Tan. IMF Working Paper.
- China's eerie ghost cities a 'symptom' of the country's economic troubles and housing bubble
- A look at China's debt issues
- China's Central Bank Chief Warns Corporate Debt Is Too High
- Xi Jinping, Barack Obama, Winnie the Pooh
- Xi Jinping, Shinzo Abe, Winnie the Pooh
- China’s Great Wall of Debt

20. Japan and China, peace and prosperity

Japan/US relationship. Very important. But now troubled with Trump. Japan/China relationship warming up.

Every relationship has ups and downs. First half of 20th century -- Japan/China was down. 1970s and 80s -- Japan/China was up.
1990s and 2000s -- down again. But hot economics/cold politics

Japan and China have complementary relationship. Japan is high-tech, China is medium tech. Japan is low-growth, China is high growth. Japan and China are neighbors.

Deng Xiaoping’s visit to Japan in 1978 started large Japanese investment in China.

The total stock of Japanese foreign direct investment in China stood at some $124 billion at the end of 2018, with about 23,000 Japanese companies now having operations in China.

In the early days, Japanese manufacturing companies in the motor vehicle, electronics and heavy industries were taking advantage of China's low cost structure. But today the buying power of China's emerging middle class is a growing attraction for Japanese companies.

China also become Japan's most important trading partner. Trade increased from $1 billion to $317 billion over past 45 years, and now is over 20% of Japan's total trade. Japan is also China’s third largest trading partner.

Japan now has boom in inbound tourists -- from 8 million in 2008 to over 31 million in 2018. Chinese tourists biggest group visiting Japan. In 2018 8.4 million Chinese tourists visited Japan, spent $13 billion, 34 per cent of all spending by foreign visitors.

Japan has boom in international students, 300,000 in 2018, up from 124,000 a decade earlier. China is leading the way, accounting for 115,000 of these students, way ahead of the second-placed Vietnam with 72,000.

Immigration. In 2018, 2.7 million foreign residents in Japan, an increase of 270% since 1990, 2.2% of national population. China jumped ahead of Korea as Japan’s biggest source of foreign residents, with close to 0.8 million. Many of these Chinese residents are skilled workers.

Japan’s economy made major shift to China. From 1945 until the 1970s, during Cold War, US held Japan back from doing business with China.

US-Japan Security Alliance gave US great sway over Japanese foreign policy. Japanese exports focused on US and Europe.

Economic relations drawing Japan and China closer together. So to is Donald Trump, especially his trade wars.

With Trump’s unreliability as political and economic partner, natural that Japan and China seek cooperation.

Both Japanese and Chinese leaders now speak positively of the new era of Sino-Japan relations.

Cannot say that Japan is switching away from US towards China. US/Japan long history. Japan/China many scars.

But Japan now more independent, and closer to China.

Could closer people-to-people contacts between Japan and China improve each country’s low public opinion of the other, and make them become friends?

- China bans Winnie the Pooh film after comparisons to President Xi
- Dend on Shinkansen
- Deng at Panasonic
- Japan FDI and Trade statistics
- Japan tourism statistics
- Japan student statistics
- Japan immigration statistics
- China Japan relations
- The China-Japan Economic Relationship Is Getting Stronger. John West. Brink Daily Newsletter, January 21, 2020.
- ‘Wise diplomacy’ embraced in China-Japan ties

21. Happiness in Japan

Japan is ranked the 54th most happy nation in the world, according to the World Happiness Report. In contrast, Japan's GDP per capita in PPP terms would be the 22nd highest in the world, according to the World Bank.

Taiwan, Singapore, Malaysia and Thailand are all ranked as happier nations than Japan.

The OECD's Better Life Index provides interesting insights into Japan's wellbeing. As the OECD says, there is more to life than the cold numbers of GDP and economic statistics. This Index allows you to compare well-being across countries, based on 11 topics the OECD has identified as essential, namely housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety, and work-life balance.

Japan scores quite well for income, education, very low unemployment rate, very low murder rate.

But Japan scores poorly for housing quality, civic engagement (very low voter turnout), self-reported health (despite high life expectancy), life satisfaction, work-life balance (working very long hours), and gender equality.

Suicide is a widely publicised phenomenon in Japan. In recent years, it has been falling. But it is still is the second highest among the OECD countries after South Korea.

Japan as No. 1: The 21st-century version

- World Happiness Report 2018
- List of countries by GDP per capita
- OECD Better Life Index, Japan
- Suicide in Japan is dropping.
- Suicides down, but Japan still second highest among major industrialized nations, report says
- what is well-being?
- Single mothers lead Japan's poor population
- One in three single working Japanese women living in poverty - Press TV News
- Working Poor In Japan
- Homeless in Japan

22. Opinions on Japan

Japanese Nobel Prize winning scientist Susumu Tonegawa

“Having spent a half century abroad since I went to the United States to study, I now regard Japan as a society rather dictated by rules. Within a fixed framework, the Japanese are able to produce things with extreme precision.” In making a comparison with the US, Tonegawa argues that “A climate that respects individualistic thinking—thinking not bound by conventional wisdom—will produce revolutionary discoveries that shatter the framework. Unlike the Japanese, Americans put their own ideas first, and what others think of them is secondary. It is essential to have education that respects individual abilities and preferences.”

Pascal Senkoff, president of Levi Strauss Japan K.K.

Japanese people ... are 100 percent devoted to what they do ... this is one of the keys to success and reasons Japan is successful and unique.

It would be good if they become more positive ... Japanese society is probably too negative, and they need to enjoy more, they need to be more optimistic about the future.

Japan is doing more of is to be more open to the rest of the world. I think [the Olympics] will be great, then we have the exposition in 2025.

You go anywhere in Japan you have tourists now, and I think it’s great for Japan to be more open, and they are more open for the rest of the world to recognize what Japan has to offer.

Could you give some advice to Japanese businesspeople in general? ... first of all to learn English ... When I was here in the ’80s, young people were more open to the rest of the world ... Today, sometimes I feel the young generation are not so open to the rest of the world ... if you look at the number of young Japanese studying overseas at American universities, whatever, it’s declining every year. That to me is kind of a bad thing because I think there is a lot of potential ,,, I think young people need to be more confident in their capabilities and more confident they can compete.

In Japan, it’s very difficult to have Japanese people take overseas assignments ... That’s because maybe because they feel not so comfortable in English ... I think you should take the risk to go overseas.

in Japan you trust people. When you do business, you can really trust the people. It’s a very safe society, it’s a very peaceful society, there is no violence, and that’s really something that changed my ways of working, living.

The BBC reports that "Japan is home to some of the most resilient buildings in the world - and their secret lies in their capacity to dance as the ground moves beneath them."

- Japanese Nobel Prize winning scientist Susumu Tonegawa
- My Japanlology / Strong brand traits allowed deeper connection to culture. The Japan News, January 13, 2019.
- How Japan's skyscrapers are built to survive earthquakes

23. Cybersecurity in Japan

Cybersecurity in Japan

Like all countries, Japan has cybersecurity vulnerabilities. High-tech country. Lack of public awareness. Ageing society. Seniors easy victims. N.Korea, Russia and China could cyber-adversaries. But US is a cyber-friend.

The 2020 Olympic Games and Rugby World Championships are special vulnerabilities.

But Yoshitaka Sakurada, a government minister, deputy chief of the government's cybersecurity strategy office, admitted that he does not use computers. His staff do that.

Last Japanese government launched a new cybersecurity strategy. Many press comments that Japan's corporate and government cyber defenses need improvement.

Japanese private sector lags behind its US and European counterparts. Business leaders lack cyber awareness. Need more cyberprofessionals.

24. Australia-Japan bilateral relationship

Australia–Japan partnership is our closest and most mature in Asia.

Underpinned by shared commitment to democracy, human rights and the rule of law, as well as common approaches to international security. In 2017, Japan was Australia's second-largest trading partner, second-largest export market, and second-largest source of foreign direct investment. In 2015, Japan-Australia Economic Partnership Agreement.

The transformation of Japan from enemy to friend after World War 2 a major achievement.

Australia and Japan work very closely in strategic alliance with the United States. Regularly participate in joint defence exercises and frequently consult on regional security issues.

Australia and Japan close partners in regional forums such as Asia Pacific Economic Cooperation (APEC) and the East Asia Summit (EAS).

Australia and Japan agreed not to let our differences over whaling affect our close relationship.

Australia-Japan economic relationship is underpinned by complementary strengths and needs. Australia a safe, secure and reliable supplier of food, energy and mineral resources. Japan became Australia's largest trading partner in early 1970s.

Japan was Australia's second-largest trading partner in 2017, and second-largest export market, 15% of total exports -- mainly LNG, coal , iron ore, beef , and copper. Japan Australia's fourth-largest source of goods imports, including passenger vehicles, refined petroleum, gold, and goods vehicles.

Japan Australia's largest source of investment from Asia and fourth-largest overall. Japanese investment essential in development of export industries like coal, iron ore and LNG.

- Australia-Japan bilateral relationship

25. Working Japan

ROCHELLE KOPP has some good advice on working in Japan. See article below. The Key points are:


Social contacts
Consensus in decision-making
Planning, process and details
Ability to execute
Lack of pigeonholing
Increased responsibility
Opportunity for learning


The language barrier
Indirect communication style
A need to read between the lines
Lack of positive feedback
Takes a long time to get anything done
Slow to change
Detail orientation
Unclear career path
Long working hours

Demand for non-Japanese engineers is growing, but know what you're in for before you apply

IT engineering is a field in which there are a lot of opportunities for non-Japanese who possess sufficient skills to work in Japan. There are 28,000 non-Japanese IT engineers working in Japan currently, comprising about 3 percent of all IT engineers in Japan, according to the Ministry of Economy, Trade and Industry. The ministry projects that Japan will face a deficit of 789,000 software engineers by 2030, a gap that non-Japanese engineers are well-positioned to help fill.

- Thinking of working in Japan? It's good to know what you're in for. ROCHELLE KOPP. Jan 30, 2019. Japan Times.
- Demand for non-Japanese engineers is growing, but know what you're in for before you apply. ROCHELLE KOPP. Jan 30, 2019. Japan Times.