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 AOYAMA VIEW

Ready for Rooster? It will be a wild ride!
Welcome to the New Year of Rooster! And not just any rooster, but Fire Rooster according to Chinese annals. That means 2017 will be unforeseen turbulent and we all know where the heavy winds will be blowing from. Today we'll see inauguration of new US president like no one before: full-mouthed, self-loving, attention seeking egocentric narcissist, who listens no reason and takes no criticism and will continue his double life as billionaire business tycoon and social media celebrity. His mood swings and bed time Tweets will set the waves that the whole world - politics, financial markets, national economies, global companies - will be riding this year. And three more. Buckle up your seat belts.

If only the storm damage would be limited to U.S. whose voters elected him in! Many say that with the global impact of world No.1 economic power, all the world citizens should have a vote in selecting the world's No. 1 political leader. As that is not so and the local voters have made their decision, there is no need to cry over spilt milk, but just face the situation bravely and hope some good things will come out as well. It's encouraging that there appears to be world views in the forthcoming US government that are quite opposite to what the Boss has said so far. And, anyway, his tweets seem to focus on outrageous claims and personal vendettas, condemning and insulting people, threatening companies and just about anything in sight that he does not personally like. Happily, that leaves him less time for world issues. And, at the end, he is a small man with his small world, easy prey for other global leaders once you get to know how to please him. Just pay him money to build a Trump Tower in your hometown.

In such positive spirit, following are Aoyama predictions of what we can expect this year. Hope you find them entertaining. Just warning that my imagination does not reflect FCCJ's official opinions nor do I take any responsibility if they don't all come true. Neither do half of the serious economic predictions.

USA: Following bombastic inauguration today with focus on the parade stopping at his hotel across the street from White House, Trump government appointees will be all sworn in despite criticism that most of them are maniacs or crooks in line with their boss. Those few that are not, will resign soon for disagreeing with him. The show starts with domestic issues pleasing his own crowd like wrecking the newly created public health care for millions and cancelling out all environment protection rules, the international damage will come in the second wagon. So NATO can live for some time more and NAFTA won't be unilaterally dissolved but renegotiated, which will take time. TPP will be also reneged into a row of bilateral deals that look cosmetically "better" for US, but reaching most of them will take well beyond Trump's four years. By then, all other participants are already members of the China-led RECP trade agreement, so Japan will manage to avoid Trump demands to buy more potatoes from Idaho and Cadillac cars for all public officials and corporate executives, who wish to do business in USA.

In a surprise deal, China Government Construction Company will get the job to build the bigger and better wall on Mexico border. The deal includes financing from Bank of China, the biggest tenant in Trump Tower, so that US voters don't have to pay a penny just like The Big Man promised. China will later recover its money back from Mexico in a new trade deal, so that part will be realized, too. That all Mexicans will drive Chinese cars and have Chinese white goods at home instead of American, matters less.

As it looks like the financial markets are already getting cold feet about Trump after a month long early fever, the Prez and his Wall Street honchos rush with the promised corporate tax cut to keep the fires burning. To show off to his voters he is not totally in Goldman's pocket, Trump will repeat his threat to arbitrarily tax big companies unless they repatriate their overseas profits to USA. The result of the two combined will push USD up again to JPY 130. US exports suffer while Toyota profits sore. Trump blames this on China and Japan currency manipulation so that he can start one of his own.

CHINA: President Xi's appearance at Davos this week as savior of the global free trade, clean environment and orderly international relations will lead to countless global companies and European government officials crowding Beijing for his favors and for help against Trump excesses. Asian countries are queuing at his door to join China's new free trade area and investment bank, but president is busy jailing opponents before the crucial party conference that is supposed to canonize him as the new Mao. Government media is competing who can wax most lyrical about Xi and most malicious about the US president. Government sponsored hackers penetrate Trumpfs Twitter account. People's Army beefs up its armament installations on the South Sea islands in anticipation of US Foreign Minister's threat to cut it out from there. Billions of worth Boeing orders will be transferred to Airbus while Intel, Microsoft, GM will be all hit by accusations of unfair competition. Facebook will remain barred from China even if Zuckerberg makes his pollution challenging jogs across Tiananmen without mask a regular weekly event.

In the prevailing patriotic mood, consumer spending is thriving and Japanese companies, too, are booming there. Billionaire Wang's Hollywood studios ally closer with Sony Pictures and the two prevail the 32 foreign movies allowed in the country. Ali Baba's Jack Ma will follow up his promise to Trump to create a million (Chinese speaking) jobs in US to get American non-fake merchandize to his internet sales. CITIC and Itochu will buy more loss making wind farms in Germany and Ms. Merkel will award their CEO's high German awards. Volkswagen will change its HQ from Wolfsburg to its main market China.

RUSSIA: Putin makes a deal with Trump to cut a few missiles from Russia's nuclear arsenal for US suspension of trade sanctions. With Merkel red faced, EU is forced to follow. The Big Boys meet in Iceland to conclude the deal in global live broadcast. Thanks to thousands of US press present, many living in newly made igloos in lack of hotels, the world's most expensive beer price goes double. Whale meat consumption hits roof, too, prompting threats from Sea Shepherds to shift its navy there. Finnish dairy companies' shares get a big boost. Exxon gets a multibillion deal to drill in Russian Arctic and Tillerson resigns from government to take an advisor position in his old company.

Finland and Baltic governments express fears that the agreement between the two Big Leaders includes hidden addendum where to draw the European border line between the two powers like Ribbentrop and Yalta deals. When reporters ask Trump about this, the Prez replies he's never heard of such "hombres".

Peace agreement for Syria is concluded in Kazakhstan negotiations. US is represented by Jared Kushner, who also announce a Trump Tower plan there. Bashar Al-Assad consolidates his power over the country except areas held by ISIS – more people die than in Aleppo bombing. Norwegian Nobel committee puts Putin on its list for Peace prize candidates. Putin's popularity at home hits over 100% according some surveys.

Meeting in Moscow, Abe gets new promises of "serious consideration" in the island matter as Japanese companies start realizing the agreed investments in Russian Far East. Trump will declare Japan's new business inroads to Russia as exemplary behavior that US corporate sector should follow.

FIFA warm up tournament for the 2018 World Cup is marred by crowd violence, both racial and political. Russian team is caught for doping. Putin blames all on "foreign agents".

JAPAN: Barely back from his whirlwind tour of Philippines, Indonesia, Vietnam and Australia selling his new motto "Trump is not so bad" and doling out aid money, PM Abe is off next week to report the results to The Boss in White House. (Don't know yet whether it's the North, South or DC one.) He will also report his his swift action to prepare for a Trump Casino in Tokyo as he promised in their last meeting. Never before has a law change been rammed so quickly through Japan Parliament! Just six hours of talks in the Lower House before the forced vote! Will you please now continue support us with your military?

FY2017 budget will be rammed through Parliament with same speed to make way for another useless election in April "to confirm continued support to my Abenomics". A month later all political attention turns to Tokyo City Council election and PM is concerned that Koike-san's "school" musters a sizable number of seats to LDP's detriment. His strategic mind swirls: those Buddhist monks Komeito, now allying themselves with Koike for Tokyo election, could fail LDP even on national level, so it's better to have the national election before Tokyo's. For long term, better prepare to get Osaka Isshin - whatever its English name is these days - ready to fill in. After all, their main target is simply to have a casino in Osaka - same as mine for Tokyo, but it might take some time for Donald to get a license here as he is a foreigner. That Koike-devil, of course, will do her best to slow the process down. She already offered to use that Ishihara's toxic new fish market for the casino. Pretty insulting to my new friend! We must kick her out of the party.

Then we must deal with Emperor's retirement as people are getting anxious with the lack of progress in the matter. After calling up all kind of committees and now asking even MP's to debate about it, it looks we will run out of excuses and must make a decision. 2018 should be a good time as it will be his 30th year and that should allow us two years to prepare people to get used to idea of new God, oops Emperor. We cannot expose them to such a shock as that cold day in January 1989. The time before that was more than 90 years ago so luckily nobody remembers that.

While Prime Minister is occupied with such important themes, the economy is allowed to tick along its usual slow, steady course. Of course, there's his usual call for companies to pay more wages and hire more permanent staff and even Keidanren has asked corporate bosses not to overwork their staff to death. In reality, companies don't pay and the new overwork rules are just recommendations, so nothing much will change. With big generations continuing to retire there will be less permanent staff, smaller total salary pot and more overwork.

As the competition for consumers' money is getting tighter, the retailers will increasingly resort to the old price cut methods to keep sales up - this already proved very successful for Uniqlo with 1Q profits 46% up thanks to low prices. As retail prices going down won't show on official CPI any more than when they went up, the rising energy price and low JPY are enough to show some inflation to BOJ's delight. Yet, Kuroda-san cannot wind up his bond buying binge as that would lead to rising interests, higher JPY and lower share prices.

Big companies will continue each in their own way where they left off last year. Toyota will announce two new factories in USA in return to the Mexican one ("a great deal, thanks to me", Trump tweets) and all car companies report good profits. Nissan's impertinent Frenchman will keep reminding PM May of her promise to compensate all losses in case of Brexit. Following its Dutch and Italian takeovers, Asahi Beer buys Hartwall and Super Dry becomes No.1 seller in Finland. In return, Karhu beer is launched in Japan.

Toshiba, practically bankrupt after declaring its new US losses, will be given "serious warning" by Tokyo Stock Exchange instead of delisting as should. It will get crucial financial input from state-owned Development Bank and a new trillion yen deal from Tepco to "create new technologies" to clean up Fukushima, its main source of profit in past four years. As before, Toshiba will buy the know-how from foreign companies like French Areva and Finland's Fortum, who are barred to bid themselves. No Japanese media writes about this way of keeping Toshiba alive artificially. The government persuades Toshiba not to sue Westinghouse's US auditors, who so obviously failed their job in due diligence, as this would create unnecessary political friction in the new good relations.

With the official encouragement for investments in Russia, Softbank's Son will start on his old plan for Pan-Asian electricity network by building power line from his new solar farms in Mongolia through Russian Far East and Sakhalin to Hokkaido. For this he will get his first ever audience with the PM.

EU-Japan FTA will be signed in Helsinki based on Japanese side request - they want to use the opportunity to visit Moominworld and Onkalo same time. Finnish companies, small and big alike, get "Japan fever" to start business here. Some of them even understand it does not happen just by sending English promotion material by internet.

Japan wins baseball World Championship and gets its first Japanese sumo Grand Champion in 25 years. Sara Takanashi wins the ski jump World Cup for fourth year in row and Noriaki Kasai retires to become Team Finland coach. Blue Samurais don't qualify for 2018 World Cup, but neither does Korea. The Red Team wins Kohaku New Year Eve song competition based on public vote, not NHK management manipulation like last month.

The nation is happy. It's been quite a year but as they say, when end's well, all is well.
Everybody's ready for the Year of Dog. But is it a Fighting Dog according to Chinese?

Timo Varhama  
Tokyo January 20, 2017   


Previous Columns

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



About the Columnist

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.

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