MAKING CHINA GREAT – WITH GAFFES, PLATITUDES AND BULLYING
Said it would be interesting to follow how the rest of Trump's Grand Tour of Asia goes after Japan. Disappointing, disheartening, depressing, alarming, bumbling and bordering comical are words that come to mind when looking back at the spectacle. His erratic ramblings reinforced the feeling around the region that this self centered, self loving man cannot be trusted by anyone, no matter whether friends or foes. Can't recall a visiting statesman deliver so many clumsy, out-of-place statements and never before has an American president been so simply played around by his hosts. Instead of "making America great", Trump managed to make China look great – or at least a passable, civilized alternative despite all its thorns and barbs.
Trump's performance got worse every step of the way. In Korea, he used his rare opportunity to speak to the nation's parliament - first in 25 years given to a US president - to promote his private golf club and demand his host accept to change their still fresh US trade deal to favor more the other side. He also embarrased Korean president by leaving him to wait in vain at DMZ when he insisted and failed to fly there by helicopter instead of driving by car together. The self-improvised sudden idea to travel there, after all, was intended as his "surprise" for the US media.
In Beijing, Trump was so overwhelmed by all the pomp and spectacle organized for him that he forgot to even mention US objections to China's occupation and militarization of South China Sea, something he had solemnly sworn to do back at home and again in Japan. The long list of half-baked business promises with tweetably high headline was similarly enough to pass taking up the endless trade barriers, unreasonable local business rules and state-sponsored exports that make it difficult for others to compete in/with China. In a moment of madness, he even offered that the whole gigantic trade gap, which he's been fuming about ever since his campaign, was not at all China's fault, but USA's own fault under previous governments. Chinese hosts must have almost fallen off their chairs hearing that from a US president.
On North Korea, the guest kept repeating his worn-out demand that "China should do more" and the hosts kept repeating their mantra that China will follow whatever is unanimously decided in UN Security Council. Trump called that "deep discussion with valuable results".
As one commentator put it, following good Chinese tradition a barbarian was once again sent back home happy with nice parties and shiny trinkets instead of getting any real concessions.
If Trump fell under China's power spell in Beijing, he took that back next day in Vietnam by bullying the ASEAN minnows: They would get better trade access only by accepting bilateral treats to buy as much US products. What a contrast to China president's suave speech that followed it with sweet promises of free trade, plenty imports and limitless development aid! He also offered "harmonious solutions" - on China's terms, of course - to the South China Sea feud after Trump left out the much awaited reconfirmation of earlier promises to stand on the small countries' side in the feud. Instead he offered to "mediate" in the issue between Vietnam and China, i.e. implicitly accepting that the latter has a legitimate claim to the vast area despite UN maritime court's ruling it has not. It seemed enough that US Navy can sail there in reciprocal agreement with China – whatever Washington then might give in return for it. Stop defend Senkaku islands, too?
In fact, the word "reciprocal" crept into Trump's speeches every time he mentioned trade substituing the earlier "free and fair". Fuming about bilateral trade balance sound so old fashioned, but "reciprocal" smells outright mercantilism and manipulation - like barter trade that Finland used to have with Soviet Union. Sure enough, US Commerce Secretary came up with proposal that Japan should exercise "voluntary restraint" on its auto exports to USA, just like back in the 80's. What's next? A new "Plaza Accord" to force Japan revalue?
While US is isolating itself, the other countries must build global networks on their own and hopefully not only led by China. It's good to see Japan stepping up to lead the way: EU-Japan EPA was its first strike and last week it managed to bring the TPP 11 talks of Pacific nations without USA – and without China - to happy end. In line with the EU deal, a basic framework without details, was concluded in Vietnam in negotiations running parallel with the top leaders' meeting. Remarkably, through the process, Japan was playing the leader's role, something new in its foreign politics. TPP 11 is not as big as it was when initiated by USA – 40% of world GDP – nor as deep as human rights and IP rights insisted by USA were left out, but nevertheless offers a wide range of tariff cuts and rule changes beneficial to all Pacific partners. Most of all, it is an expression of political will that the countries in this region agree they must move forward in development by themselves, not only led by USA or China.
It is clear to all that China's importance will now grow and political co-operation is now even more important between the others. As well, China is changing its tune friendlier even with Japan - Mr. Xi can afford to do that now that he has reinforced his grip on power.
The change in the mood was in evidence in Vietnam when he met Abe-san: first time ever in their six one-on-one's so far, both leaders smiled and "King of China" accepted to look Japan Prime Minister in eyes. It was reported that Xi told Abe this meeting would mark "a new start" in the two countries bilateral ties and that Abe invited him to soon visit Japan. It is rumored that the "King" would like to meet Emperor before the latter retires to follow the Imperial audience he managed to get once before when he was not yet Party Leader, President, Commander-In-Chief etc as now. It seems prestige is important also for this powerful leader of a big nation. One commentator already proposed Abe-san to start prepare new set of "Make Alliance Great" golf caps for Mr. Xi – if only he accepted to play the "bourgoise" sport.
Japan Salesman No.1 also met with Prime Minister Li Keqiang almost next day in Manilla. Top meeting so quickly again is a sure sign that political relations are warming up to match the booming business relations. It looks like expected big changes in China policies are really taking place following last month's party conference where Xi got his undisputed leadership confirmed for next 5 years to come. We'll see...
ABE'S NEXT MOVES?
Back home from Vietnam and Phillipines, Prime Minister finally has time to get down to the domestic politics. As said in last column, it will be interesting to see what new he will come up with after he, too, reconfirmed his rule for 4 years ahead. Obviously he should focus on economic reforms, but we'll see - old-fashioned public spending has so far been his main tool. The GDP growth slowed down to 1.4% annual speed in July-September according to fresh figures as consumer demand slipped back 0.5% from 0.7% growth in April-June. That left exports as the main driver for the quarter. Yet, it was already the 7th quarter of continuous growth, something very rare in Japan's up-and-down economy, and ensuring continuation to this must be, indeed, the No.1 priority for the government.
We all know by now that with big companies making record profits and huge overseas funds flowing in to push the stock values higher and higher, the missing link to feed the consumer demand remains a decent increase in wages. The latest data shows non-financial sector companies sit now on JPY 406 trillion (almost USD 4 trillion) cash, so you would think they could share some of that with their personnel.
Prime Minister himself has been asking that again – at least 3% base salary rise for all next spring, please, he told Keidanren – as well as asking companies to share costs for the improved child care he promised to use the VAT tax rise for. In his mind, companies should pay JPY 300 billion (USD 3 billion) if government bids in JPY 2,7 trillion (USD 25 billion). Can't think of any other country where political leader would just "ask" companies to spend that big money on child care without any law or any return benefit.
Yet surveys show companies remain stubbornly resistant with only 4% saying they plan to use their funds for raising wages. Instead, 23% consider using their cash for mergers, both domestic and overseas, according to Nikkei Research. Guess the rest are happy just sitting on their piles of cash. It's so hard to make decisions.
KOIKE CALLS HERSELF BACK
No problem for quick decisions by Yuriko Koike. Without any prior info again to her party members, she suddenly announced that she will give up as party leader and concentrate on her job as Tokyo Governor. Similar quick decision of her own to exclude DP interlopers not swearing to support the Constitution change caused Kibo to lose voters one week before the election and resulted to just 50 seats for party's 235 approved candidates. Now Kibo polls in surveys just 3% versus 9% for Edano's new CDP and 37% for LDP. It won't be easy for Koike-san to run even Tokyo anymore: her abrupt rejection of non-believers to Constitution change also led to her losing the newly gained support from Buddhist Komeito in Tokyo City Council. Without majority there now, it will be hard for the Governor to get her plans and budgets accepted.
Koike lost her bid to become big in national politics, now she might fail even in local politics. It will be interesting to hear how she will explain it all to us foreign business people in her speech set for all Chambers Wednesday this week.
FINLAND NEWS AND VIEWS
Some comment on news from Finland. Big celebrations are waiting on December 6 for Finland's 100th anniversary from Declaration of Independence, yet the political focus is already on President Election that is held every sixth year on January 16.
Not big surprise is expected as sitting President Sauli Niinisto enjoys 70% support to be re-elected, the polls say. There will be counter candidates set up by various parties, but Niinisto is so popular that the whole set-up is called "King Saul and 6 Dwars". Niinisto can manage to mingle with the world leaders – including The Difficult One in our Big Neighbor - yet he is suitably down-to-earth for every Pekka and Liisa. It only adds to the popularity of the 69-year old widow president that his 40-year old second wife is now expecting a child in February. Following normal Finnish practice, Niinisto is naturally planning to take "father leave" from his job after election. Probably he would take time off even middle of campaign if the baby was due in January. This is Finland!
The Finnish traditions in baby rearing are long: the Mother Package that every family gets containing all kind of essentials for the newly born from the Health Ministry turned 80 years last week. With Japan paying close attention to Nordic countries how to improve the family care, the idea of Baby Box has started to spread even here with several communities now providing similar package to young mothers in their area. Yet, believe few here are using the corrugated box as provisionary baby cot as it is intended to do in Finland.
The novel Tuntematon Sotilas (Unknown Soldier) was the first realistic post-war description of Finnish soldiers's experience in WW2 with all blood and gore when it was published in 1954. It was taken by the nation with open arms and was made into a highly succcesful film already following year. Almost 3 million Finns have seen that original version in theater and millions more in television where it is shown regularily, often on Dec 6. We all Finns remember the classic actors and have read the book – recall reading it myself in middle school at 13. The film was remade in 1985 with new young actors and now it's been done again – with incredible success once more. Over half a million spectators have already seen the film since its premiere just a month ago. That's same as a similar film – or any film – would have 12 million audience within a few weeks in Japan!
It's hard to think young Japanese movie audience rushing here to see a film about "ojisan's war". There's still deep cultural differences between our two countries whatever the superficial similarities look like.
Tokyo, November 20, 2017
10 November 2017
"Good news week: Finland business grows, EU trade deal gets cleared, Nikkei hits new heights and Trump visit goes smoothly"
1 November 2017
"Japan: Endless Discovery"
21 October 2017
"Power play in Japan and elsewhere - some potentially serious, some not"
10 October 2017
"Abe's useless snap election sparks big changes he did not count on"
26 September 2017
"North Korea boost Abe popularity - opportunity to extend his rule"
7 September 2017
"Kims'allah, Japan is OK and doing well"
28 August 2017
"From North Korea's missiles to Turku Terror and US Navy Mishaps"
17 August 2017
"Raining cats and dogs, missiles and threats, but strong sunshine in economy"
27 July 2017
"Forests, floods, fish and consumer prices -
stories too good and data too bad to be true"
21 July 2017
"From Cool Finland to Hot Tokyo:
A Round-Up of Recent Happenings"
26 June 2017
"Anniversaries and Memories: Finland, Japan, USA."
19 June 2017
"Rainy Season in Japan, Political Storms in Europe"
8 June 2017
"Trump impact spreads - Japan struggles with workforce issues"
30 May 2017
"Taormina to Tokyo:
Heavyweights and fashionable ladies"
"New Missiles, Diet Debates, Yet Big Business in Big Profits - Down on Ground Challenges Remain Basic and Simple"
9 May 2017
"Golden Week, Special Trains, Luxury Spending,
Even North Worries Makes for Good Business"
20 April 2017
"North Korea, USA both worry Japan - Koike worry Abe and LDP even more"
5 April 2017
"Spring, Sakura and New Year Start in Japan - Commotion, Tensions Rise Around the World"
27 March 2017
"Questions Unanswered, Unasked – Lifestyle and Surveys Bring Light"
21 March 2017
"Finland in Focus: Friendship, Dictionary, Music, Food - Even Elevators?"
13 March 2017
"Uncertainty Increases Around Japan - At Home Rebuilding Uncompleted in 6 Years - Abe Popularity Takes a Hit."
3 March 2017
"Book Readers, Police Jokes, Nerdy Napoleon and Poison Scare"
24 February 2017
"Populism, Ignorance and Isolationism Leads to Mayhem and Mess"
16 February 2017
"Golf Diplomacy, Chocolate Festa and Hokkaido Deams-Come-True"
9 February 2017
"Tokyo overcoming winter, business changes, political battle and Trump threats "
2 February 2017
"Warm Feelings in Japan, Wild Winds from USA"
20 January 2017
"Ready for Rooster?
It will be a wild ride!"
The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.