Comment by Adamu

May 31, 2007 @ 3:47 pm

I was hoping you guys would talk something about the recently released labor statistics (in 9 years the % of non-regular employees has jumped from 1/4 to 1/3 of the entire workforce as wages have shrunk) or the recent suggestions of the Regulatory Reform Committee, which call for liberalizing airfares to allow for more discount carriers and a lowering of the firewall between banks and securities companies (and a surprising mention of JETRO as an agency whose activities such as the business Japanese test may either be eliminated or outsourced).

Personally, I think this Tokyo financial district idea (which I agree misses the point a bit) from the FSA has received a disporportionate share of attention since Minister Yamamoto decided to announce his bright idea in front of the American business community. But there are many concrete proposals being made, as least away from the FSA at the Council for Economic and Fiscal Policy, a cabinet-led committee that has input from some well-chosen private sector members. They include expanding the scope of financial instruments permitted in Japan, moving accounting standards closer to international norms, opening a deregulated capital market similar to London’s Alternative Investment Market, and indeed tax breaks and other incentives to lure foreign market players. Plus, there is a recognition of the need for real “substantive” infrastructure building such as language skills, better airport access, and increased productivity (a major major issue that has its own Abe-style committee working on it). But these suggestions are not what gets the attention. Perhaps the ridicule that this idea has been met with by commentators such as yourselves will force the government to focus attention on more important reforms.

I think it’s really hard to report on the many policy committees that the Abe administration has set up, at least in the English-language press. Mostly, these are only suggestions that might make it into bills approved by the cabinet. Unfortunately, the Abe administration is so distracted by pet projects and now embarrassing scandals that the only way financial reforms can make news is when someone says something especially strange.

Comment by ken

May 31, 2007 @ 5:29 pm

I didn’t think of the labor stats while we were talking, but those stats have been out for some time now, and I assume everyone’s aware of the trend. To tell the truth, we’d like to focus on the labor force as its own issue in the future, though whether that gets too much into economics and away from business is the question. But I think you’re right: the percentage of non-regular employees as part of the workforce is surely one of the largest contributing factors to the continual annual decline in real wages (except for last year, when there was a slight uptick).

As far as the CEFP goes, there we made the decision to not get into it’s activities in this release, since it really is beyond the purview of a general business discussion. Of course, I agree that some of what they’re doing is bound to have an impact on the business environment in Japan, but much is apt to circulate around as hot air.

That’s the difficult balance with the show being focused on business rather than economics, finance or policymaking - and only have a 30 minute slot every three weeks or so. We have to leave out things that aren’t easy to contextualize in such a short time. I suppose it would be good to give at least a passing mention to the activities of the CEFP et al. (and I guess that’s why I have that other blog), but this show needs to focus on what’s going on in the business world, announced and in the public eye.

I even thought my own comments here brush the line on business and politics, and hope to be able to keep them more separate, though that may be futile.

Perhaps the ridicule that this idea has been met with by commentators such as yourselves will force the government to focus attention on more important reforms.

Well, I’m not going to fool myself into thinking that anyone listens to me, but I hope that policymakers are in tune to the feedback that has been generated. I think the initial rumors of such a project may have been intended to generate feedback, though the foreign media didn’t bite until after Yamamoto’s announcement. Policy makers have said that they are listening to foreign executives on what they would like to see, which means one of three things is happening: 1) They’re lying about listening to anybody, or 2) They’re listening and ignoring, or 3) They’re being lied to.

Comment by Adamu

May 31, 2007 @ 6:21 pm

Indeed, talking about the general business climate in Japan is a delicate matter (I guess it depends on how strongly you believe that big business’ wholesale short-changing of the domestic labor force will end up costing Japan its standard of living), but considering for example how much a show like Marketplace spends talking about the environment, I think you guys have a pretty free hand to discuss what’s on your minds, if not mine.

Perhaps FSA only listens to building contractors, hotel managers, and English-only barber shops when making their decisions. And speaking of conflicts of interest, as an up-and-coming financial translator I have to say that plans to make Japan’s finance industry more English-friendly are very welcome as the demand for translators will almost certainly increase.

Comment by ken

May 31, 2007 @ 6:40 pm

I guess it depends on how strongly you believe that big business’ wholesale short-changing of the domestic labor force will end up costing Japan its standard of living.

I think that can be fixed by giving out shitloads of free, easy credit.

Comment by John S

June 2, 2007 @ 1:40 am

I know you’re kidding there, but if they really want that easy credit back, shouldn’t they just make things easier for the consumer loan firms?

But seriously, I have to say the Foreigner Business District plan is stupid to the point of being dangerous. I think they realize the underlying, true problems, and the fact that this is what’s being discused either means that they think the public is too dumb to get the real issues, or that they don’t plan on doing anything about them anyway. Or both.

Comment by Marc

June 5, 2007 @ 5:00 am

Overall, I really enjoyed the discussion (haven’t heard the others yet), but I think that’s a lot of time given to the issue of the “Foreigner District” that a lot of people look at and just say it’s dumb. There are a lot of underlying issues, and probably way more than can be brought up in 10 minutes, but isn’t it just banging your head on the wall after a while? I don’t think those in power are going to really get it, and even if they do, a real solution doesn’t seem like something they want. It’s as if being second fiddle to Hong Kong is part of their master plan.

Comment by CNote

June 7, 2007 @ 1:32 pm

According to Dow Jones Ford’s Lincoln division has bumped Toyota to now lead quality with 19 models also a survey of the world’s auto factories have placed the highest quality factories(?) in the US-not sure if this includes Japanese factories in the US or not. But apparently this is a leap frog move to get on par with Japanese firms.

Comment by Ken Worsley

June 7, 2007 @ 7:44 pm

Cnote, Have you seen any links?

Comment by CNote

June 7, 2007 @ 10:43 pm

I heard it on marketwatch.com’s Andrew O’day’s podcast

Comment by CNote

June 13, 2007 @ 10:49 am

Question. This morning’s Nikkei reported “3 Megabanks Lift Shareholdings To Protect Corporate Borrowers” [Combined shareholdings at Japan’s three megabanking groups rose 4% or ¥380bil. on the year to ¥9.76 tril as of March 31 as they began a new round of stock purchases in response to requests from corporate borrowers]

What exactly does this mean? Is this good or bad, for who?

Comment by ken

June 13, 2007 @ 1:24 pm

Cnote, This is something about to go up on Japan Economy News, but this is good for those who love the good old cross-holdings. The mega-banks aren’t in a position to be white knights, but they can buy up a good chunk of shares to prevent funds such as Steel Partners and companies such as Rakuten from being able to acquire the firms they loan money to.

In the end, this is better for the banks than anyone else, since they ensure that their customers remain “in debt” to them.

Pingback by BizCast Japan #3 Released: Airlines, Keidanren, Tourism and the Foreign Financial District : Japan Economy News & Blog

December 2, 2007 @ 10:39 pm

[…] BizCast Japan #3 has been released over at Trans-Pacific Radio. In this edition of the show, Albrecht Stahmer and I discuss the “Japan Brand” initiative, troubles at Japan’s airlines, Fujio Mitarai’s first year as Chairman of Keidanren, efforts to get more overseas tourists to Japan, the project to create a district for foreign financial firms and workers in Tokyo, and more. If it sounds like your sort of thing, the audio can be downloaded or streamed live from the TPR site. […]