SPRING, SAKURA AND NEW YEAR START IN JAPAN –|
COMMOTION, TENSIONS RISE AROUND THE WORLD
After long cold spell, it's spring, sakura and start of new financial year. Analyst estimates of FY2016 corporates results and FY2017 expectations will fill up the business media even if official announcements from companies are still long time off. Same for economic data and future outlook for the nation.
890,000 new recruits started in their new companies on Monday in their
perfectly similar black suits and countless NGO's will hold annual meetings to review budgets and elect officials for the New Year. Our chamber already had its own and we have a new president now. Congratulations to Masaoki Fujita, our first Japanese president, and good luck to old president Pekka Laitinen in his new job as Trade Commissioner (Head of Finpro).
On national level, government budget for FY2017 passed the Diet last week, for once in good time before the new financial year start. New purse with JPY 97 trillion (EUR 800 billion) is now open for public spending: Abenomics, Tohoku rebuilding and Fukushima cleaning can continue, pensions will be paid, schools, hospitals and old people homes will remain open. As importantly for the Prime Minister, budget committee hearings with direct television broadcasts are over and the opposition cannot any more grill him live on TV about the Osaka schools scandal details. It will be now more difficult to keep up the media focus on the subject and Abe-san can even entertain hope it could be slowly forgotten.
Instead of just waiting out for his recovery, the PM will surely try every trick in the book to actively build it back.
The "statesman role" has been his favorite one recently when promises of economic rise have failed and it is in that mode that he will meet President Putin soon again. Even a new summit with China president is said to be under work. No new concrete result is likely to come out from the PR trip to Moscow and, on the other side, his newly-won "friend" in Washington, much more desperate for any popularity, has renewed his verbal attacks on Japan in trade front. Despite all vows of "valuable partnership" a month ago, Japan was again mapped together with China as the worst violator against "fair trade" with old snarl of import barriers in autos and food.
Unbelievably, it comes out that Trump government really is seeking balanced trade with each individual country separately, if not in each individual product, something economists rejected as lunacy 30 years ago. Then again, most that The Man says, sounds same as he did 30 years ago. In fact, I'm sure he would be pounding Corollas with sledgehammer in live-TV as they did back then, if it would help recover his low support.
Japan is waiting more worried to what comes out of Trump's meeting with China president this week. The indications are that despite all tough talk earlier and some insulting tweets again just before the important meeting, the US government has given up all resistance and is prepared to accept all China's demands on Taiwan, South China Sea and what-have-you against all promises to allies as well as suppress all tough talk of import tariffs and currency manipulation in order to build a "non-conflict, non-confrontation, mutual respect and win-winh co-operation between the "G-2" giants, something that China was always denied by Obama. The selected meeting place is Mar de Lago, same as with Abe-san "because Trump wants to offer the leader of world's largest autocracy the same hospitality that he extended to China's archrival and Asia's oldest democracy" as an Indian writer put it. It's sans golf, though, as Xi is a sworn opponent of such "capitalistic corruption". Probably his present would have been a fake brand club anyway.
In neighboring Korea, the court put the impeached president into prison while prosecutors continue her interrogation - up to 9 hours in day. It's not that they were afraid that Ms.Park would escape from the country: it's just a way to humiliate her. Changing her from the presidential palace to 6 sqm solitary cell, albeit own toilet and washing basin, and parading her next time in prison clothes in TV, possibly hand cuffed like the Samsung CEO, is effective media propaganda in line with what South's neighbors north and west do to their bad guys before their staged trials. For a lady, who has witnessed her own mother and father assassinated, yet spent life in comfortable luxury, always wore designer clothes and had her make-up done and hair coiffed every day to look perfect, such treatment from her own countrymen must feel devastating. And that, of course, is exactly the target. In Pyongyang, they are popping up champagne bottles watching this sad spectacle.
Over in Europe, nine months after the Brexit vote, Mrs. May summoned up her courage to finally write UK's official resignation letter to Brussels starting up a two year negotiation process that nobody knows how it will end. As Britain sails away from Europe again to unknown seas, 1200 Japanese companies there worry about their future together with thousands of others. While recent decline of GBP has helped factories in Britain to make better profits for their exports, the uncertainty what will happen in 2018 and beyond makes business planning impossible and dampens any investment ideas. Even those, who thought that travel to UK is now attractive as London is slightly less expensive, think twice after last week's "terror" attack. The madman was not a "Muslim extremist" or newly arrived immigrant, but a British-born pub brawler who had spent time in prison, a loser who simply bore a grudge against the society. As in USA, France or Belgium, no travel ban or "taking control of our borders" will prevent a recurrence with such characters.
Back in Japan, we have a long line of corporate business news.
As expected, Toshiba decided to put Westinghouse in the Chapter 11 credit protection - or bankruptcy proceedings as they used to be called. Despite this, it is said the Japanese owner company cannot isolate itself from billions of dollars of losses from construction delays in four nuclear plant projects in US South. As result, Toshiba's loss for past business year is now estimated to go up to JPY 1 trillion (EUR 8 billion). It's all due to poor building quality from unexperienced workers not meeting safety standards, something familiar to us Finns from Areva's delay in Olkiluoto 3 project.
Unlike Finnish owner companies there, Toshiba has a fallback position in selling its highly profitable flagship flash memory unit for big money. The cashing out is now proceeding as extraordinary shareholder meeting last week accepted the spin-out into a separate company and more than 10 bids are reportedly in some valuing "Toshiba Memory Co" at JPY 2 trillion. Same time, it is said Toshiba has secured from its two main banks new loans up to same value. The only remaining problem is that auditors are still in disagreement on Westinghouse accounts, so it looks like Toshiba will again fail to report its Oct-Dec result by the new deadline set for next Monday. This is already third failure, punishable by delisting according Tokyo Stock of Exchange rules, yet I bet my bottom dollar that such drastic move will be again put off.
Could Canon be the next Toshiba? With 90 percent of personal snapshots now taken on mobile phone, its camera sales have declined from JPY 970 billion (EUR 8 billion) in 2013 to JPY 667 billion last year. Canon's other main business, copy machines and printers is still good today, but does not hold much long term hopes either with documentation turning off paper to more and more digital. Like other technology companies, Canon has been trying to accommodate the change by participating into it. Last year it bought Lifecake, a British photo-sharing appli and last week added Kite, another similar British company, whose technology has been installed on more than 200 million mobile phones. We can't control technological changes, but good companies try adopt their business into them and not just hope for miracles. Canon, long time led by the legendary Mitarai-san, seem to be doing its best.
With USD 30 billion investment into another British future technology company now partly transferred to his USD 100 billion half-Arabian Vision Fund, Softbank's Son-san is rumored to be planning his next placement again elsewhere than USA despite promise to Mr. Trump.
This time, the target is China's Didi Chuxing, a start-up company that last year bested Uber at its home market and now wish to expand into other markets and in new fields. Valued today at USD 35 billion, the company already has Apple, Alibaba and Tencent among its investors, all close business allies of Son-san. It has started operations in India, SEA and America, but its higher ambitions target self-driving technology that unites global car makers and technology companies, something really to Son's liking. A sizeable investment from Softbank to Chuxing would put him close to China's political leaders, who are putting big money – and all kinds of other tricks - into making Chinese technology industry a world leader by 2020. That, too, would be to Son-san's liking: long time dejected by Japan's political leadership and traditional business establishment, he loves to hob knob with global leaders, no matter whether US billionaire president, Saudi king or China's top communists.
Another international move on more mundane level: Japan's top toilet makers Toto and Lixil are out to "civilize" Europe to better toilets. Even with cold weather in North and "bidet" invented in France, only 1% of European toilets have warm seats and in-built bidet in comparison to 80% in Japan today. Toto started its inroad into Europe already in 2008, Lixil joined in 2014 when it bought Germany's No.1 brand Grohe and both companies are now gearing to promote Japan's advanced technology in this intimate area. For those of us with memories of both old Japanese-style toilets here and traditional "outhouses" in country homes back at home, the promise of new comforts in Finland sounds highly attractive. As Toto chairman is Finland's Honorary Consul in Kyushu, we count on that he is making extra effort to civilize my countrymen first.
The annual summer pilgrimage to Finland is approaching and, unfortunately, it always starts with the long, tedious trip to Narita in faraway Chiba.
It would be so much nicer if our Finnair, now the No.1 European airline here with most flights, would fly out from close-by, comfortable Haneda. Relegated to domestic flights only from 1972 when Narita was opened and finally released from this for 2002 World Cup, Haneda has developed its international connections from just a few daily flights to Korea and China from a temporary barrack terminal into global multi-destination, multi-million business that does any more fit into its new international terminal, but will now take over one of the two big domestic terminals. Haneda's total number of flights exceeded 80,000 last year lifting it into World No.4 past London's Heathrow and its comfortability is also rated top of the world: it's one of only five airports in the world with "5 Star" status from Skytrax Institute. If you wonder how this was achieved in just 14 years while Narita's profile has improved little from 44 years ago, consider the difference between professional business management and endless row of "amakudari" bureaucrats.
It's businessmen, who are behind the new Legoland that opened last week in Nagoya, but there are signs that say the Danes – or their Japanese sponsors - did not do their homework properly. Early report says the place is rather small and cheaply made, the model buildings do not "involve" visitors and restaurants are not very well organized. Moreover, the advance promotion failed or there are simply less Lego-fan in Japan than in Europe as the opening day crowds were not that big. Or maybe it was the high ticket prices: charging more to see a collection of building blocks than big global brands with big parks like Disneyland or Universal Studios do for their countless wild rides and colorful shows, does not sound a good "value deal".
Naturally wishing success to our Danish friends, but fully counting on that the Moomin Park project, which will open in about 2 years' time, will turn out better. It certainly has a better starting point: Moomin is much better known in Japan than Lego.
In sports, the high point of the week was Yuzuru Hanyu's skating in Helsinki World Championships. Probably half the nation was watching their idol on television and hundreds of devoted fans – mainly middle-aged females – cheered him at Hartwall Arena with placards and Hinomaru flags. The 2014 Olympic champion, who has failed to win ever since, did not let down his fans: despite placing only 5th after an imperfect short program, the Sendai native put in an incredible free program with flawless jumps that included four quads and ended with world record points that lifted him to overall No.1.
I am not a fan of figure skating or pretty boys but could not help being impressed by the power of Hanyu's perfect performance. After seeing it, I'm ready to buy the expert opinion that his biggest challenge is that he is too much perfectionist, who focus on pushing himself to new artistic and physical heights instead of just making sure he wins.
With 19 year old Shoma Uno taking the No.2 slot in Helsinki with two solid performances, Japan is now well placed for next year's Winter Olympics in this genre.
If Japan is such old fashioned country in gender roles as they say, how can you explain that its males are better in figure skating and women better in ski jumping. Same if you look at other traditionally male-dominated sports: based on number of Olympic golds, Japan's females are better in wrestling and about equal in judo.
Maybe it's in the changing diets: they talk about "veggie eating" boys and "meat eating" women today.
Tokyo, April 5, 2017
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!"
17 December 2016
"AOYAMA AWARDS: THE BEST AND THE WORST IN JAPAN 2016"
9 December 2016
"Finland independent with free word, good education - Japan and USA: Abe to Pearl, Son in Trump Tower"
4 December 2016
"Statistics, politics and plain bad management - difficulties to plough through it all "
24 November 2016
"TPP is dead – or is it? What comes next?"
14 November 2016
"US uproar shakes up the old world order, Korea in turmoil"
2 November 2016
"Showdown in U.S., Japan battles on"
25 October 2016
"Nobels, Narita and Niigata -
Olympics and popularity politics"
26 September 2016
"In autumn downpours, Japan's wheels are slipping"
16 September 2016
"Moomins, Metsä, Mitsubishi and missiles - business, politics and sports"
6 September 2016
"Uunivited Guest Crashes the G20 Party"
31 August 2016
"It's not Super Mario, It's Super Abe! -- And Super Japan! "
8 August 2016
"Summer holidays, heat, rush and relax, while the world keeps turning"
12 July 2016
"Fog of uncertainties ahead: Japan, Britain, China and USA, each in their own way"
24 June 2016
"UK Splits, shakes EU, even Japan"
13 June 2016
"Rainy season: it's pouring on Prime Minister
30 May 2016
"Obama is a Class Act, G7 Meeting Was for Japanese Audience
8 May 2016
"With More Headaches at Home, Abe Takes Golden Week Europe Tour
23 April 2016
"Dramatic Giant Quake, Business Slowdown, Election Mode in Politics"
7 April 2016
"Tokyo Great City, Japan hmmm...Colorful People
22 March 2016
"Spring energy, child care and train travel
11 March 2016
"Five Years from Japan "3-11" - Making Best Out of Gigantic Recovery Task
28 February 2016
"A Dig Deeper into Politics: Ignorance, Camouflage, Chicanery
15 February 2016
"Markets in turmoil, economy in decline, challenges grow for Abe"
5 February 2016
"Minister scandal distract, economy slow down, Kuroda rides for rescue
28 January 2016
ABE: THE REALITY BEHIND ALL THAT TALK "
20 January 2016
"Bear Outlook for Monkey Year Grows, Taiwan Votes to Keep Distance
from China, but Pop Group is More Important for Many "
12 January 2016
"NEW YEAR VIEWS - AND A LOOK BACK AT 2015"
17 December 2015
"Global Environment, Food Tax, National Stadium: Historical Decisions or Political Parading? "
8 December 2015
"Challenges in Paris Conference, Challenges Back Home in Japan
27 November 2015
"Refugees, bombs, business and global warming - can we control them all?
3 November 2015
"Japan, USA, UK or Germany - China Impacts Us All Today
22 October 2015
"New Ministers, New Trade Deals, All Political Play"
7 October 2015
"Power games, ball games, trade deals and refugee misery"
25 September 2015
"Big Problems, Big Talk and Big Figures - Each in Their Own Way".
9 September 2015
"Challenges in Japan, Tougher in USA and Europe ".
1 September 2015
"Looking at Neighbors, Japan Seems Stable and Safe ".
19 August 2015
"End Summer, Ceremonies and Holidays Over, Back to Work for All".
6 August 2015
"Hot Weather, Hot Air in Politics - From War Anniversary to Whisky in Space".
23 July 2015
Greece, China, EU, Japan: looking for the lost reality
23 June 2015
World No.1 City? The Difficulty of Passing New Laws, the Easiness of Spending a Lot
16 June 2015
"Only in Japan?" - Somethings, Yes, But Others Are Same All Over
4 June 2015
Security and Finances: Pensions, Companies, Banks, Olympics, FIFA
21 May 2015
Economy Back on Track, Record Profits at Big Companies
11 May 2015
Spring Events: Odaiba Rock, Shibuya Sex, Capitol Hill, White Hall and Red Square
22 April 2015
Elections, Elections - Finland, Japan, Around the World
30 March 2015
Sakura: beautiful, but just for a short, fleeting moment
16 March 2015
Better late than never - Japan moves slowly
2 March 2015
Three struck out, three more in doubt - Abe's ministers under attack again
19 February 2015
Spring, Sibelius, Chocolate, Budget and Big, Bad Putin
5 February 2015
Reform Work Starts - Energy, Farming and Food on Wish List
26 January 2015
Terror strikes, plenty work, sad memories wait
15 January 2015
Watching AKB, Eating Mochi, Spending JPY 96 Trillion
- Japan Off to Better 2015 After So-So 2014
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.