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 AOYAMA VIEW

 Towards better world? Circular economy, collaboration with China

The World Circular Economy Forum in Yokohama last week was a big win for Finland and national investment fund Sitra, its originator. While Finland is popular here, can't recall it been so consistently praised in a economic seminar here. Already the starting point that the event was co-arranged by Japan Ministry of Environment put Finland in an enviable position: official Japan does not often agree to do something like this together with other countries. The final touch in Japan's embracement of Finland's circular agenda was the signing of environmental co-operation agreement by the countries' environment ministers at the conference.

See a video of the Forum here!

Deserved or not, Finland was presented time and again as the leader of the new environmental friendly economy model. Hope the green business companies attending from Finland got some concrete business deals here as well. We might have great ideas, but we are not the world's best salesmen.

Over Forum's two days, 1000 corporate and government representatives from 80 countries lapped up countless presentations from 100 experts how we could and should redirect our business and society to avoid suffocating in waste – and how some companies and countries are already doing it. It won't be easy, but everybody seemed to agree there is no other way: it's time to abandon the old "make, take and throw away" model and shift profoundly to reduce, reuse and recycle.

PLASTIC WASTE CHALLENGE
World always needs a specific game changing turn to wake us up to better understanding and in this case it has been China's decision last year not to accept any more plastic waste that America, Europe and Japan were shipping there instead of disposing and recycling it themselves. Mountains of waste without address where to go quickly started to grow up in Western cities and ports driving decision makers to panic what to do with it. Dumping it to waste pits or burning it all did not seem good solutions: plastic stays in ground for years and creates noxious gases. So the right solution is to reduce plastic usage amounts and recycle what remains for commercial value.

Apart from New York, Tokyo or Helsinki, the situation is even more challenging in many developing countries where waste collection is practically non-existing. We have seen the sad photos of rivers running through many Asian multimillion cities so full of plastic waste that you can't see water at all. Same for photos of gigantic waste pits rising like mountains and poor people, often children, digging in there in search of materials they could sell to recyclers for money.

They say that the huge plastic "island" in the middle of Pacific Ocean derives all from big rivers running through Asian continent. With income and living standards rising, Africa is joining into this waste flow into oceans. That Starbucks changes its drink straws from plastic to paper won't help one iota to stop it. One expert presented that the total amount of global waste will grow manifold in the foreseeable future and plastic will make 70% of it – both unless we change our ways.

Furthermore there are micro plastic particles in our washing detergents and facial washes which cannot be cleaned from waste water and hence end up in sea. While television reports can show us fishermen nets ending up full of plastic, more than fish, they cannot show that the caught fish can be full of micro particles that end up in our stomachs.

Plastic is not the only folly: amazing amounts of food is being thrown away. This sounds strange when you think of all malnutrition and suffering around the world, but it's result of our consumer habits and distribution models: we buy too much and our shops stock too much and fresh food has short lifetime. I was amazed to hear that Yokohama City does a great job in recycling and disposing of its 1.3 million tons of waste annually but faces two problem items with equal size that it still has not managed to solve satisfactorily: 100,000 tons of unrecyclable plastic and same amount of thrown away food. The latter sounds crazy and I don't think Yokohama stands alone in this. We must be able to do better.

150 YEARS FROM JAPAN OPENING - AND IT'S SPEEDING UP
Last week was the 150th Anniversary of the Meiji Restoration when Japan opened up from its self-imposed long isolation and the Forum was just one example how Japan is opening up these days again more than ever. There is still much to do to fully leave behind the self-sufficient "island syndrome" mentality that has prevailed in politics, business and the society at large, yet we can see new winds blowing in many areas.

Historians divide the past 150 years into five 30 year periods, each rather different from other, and say the past 30 years of Heisei era from 1989 has seen Japan searching for a new way and looking for new identity after previous 30 years of muscular economic growth and materialistic consumerism. Japan cannot any more lead the world by sheer economic power as then nor can it copy models of behavior from Western powers as it did the first 30 years from 1868, but must find its own way. In areas like aging society, depopulation and maintaining social welfare, the world is now, in fact, following Japan's lead: how it solves the challenges that will come to them a few years later.

Such things are on agenda for the Diet autumn session that started last week, but I'm afraid much of the time will go into opposition's endless efforts to discredit government ministers starting with Abe and Aso. New labor law, new immigration law and ratification of the EU free trade deal are among government proposals, not only Abe's pet project Constitution revision, but opposition parties have already announced they are deftly against them all. We'll see how ruling parties can manage to pull them through. At least, opposition here won't resort into fighting government by stopping normal business with strikes as they have now done again in Finland. Understand that a well-known strike leader in the past with a long record of business disturbance is likely to become Finland Prime Minister following next spring's election.

ABE IN CHINA: ALL LOOK GOOD AGAIN
Abe's long awaited China visit went seemingly well. The two sides agreed to "normalize" relation, i.e. focus again on positive business and put political disagreements on backburner. It's amazing how president Trump's policies can change attitudes, heal wounds and make friends elsewhere, totally unintended. After 7 years of chill, the two Asian giants are moving "from competition to collaboration" and agree both are "defenders of free trade and rule-based world governance".

Japan will get its favored business position back and China will tone down its anti-Japan campaign to get again more corporate investment from Japan. The financial and technological flows will hardly climb back to 80's and 90's level when Japan was by far the biggest investor in China as many companies today play for safe with "China Plus One" production location policy - Thailand and Vietnam are today the leading destinations for Japanese corporate investments. Yet, for instance, Toyota is planning to step up to the plate with multibillion business expansion in China. The big car market there looks now more attractive for the boys in Nagoya, partly thanks to Trump again, so they will try catch up the headway that VW and GM have made there with Beijing's newly-won backing.

It's tit for tat: China will get Japan to join in its multibillion infrastructure projects in third countries that have become recently under international criticism for their one-sidedness. Having Japan join in will lend them more credibility. Sure, Japan makes clear it's not officially joining Belt & Road and will be selective where to share, but the headline news is again more important than the final content.

Our travelling salesman PM pushes on: back from China on Saturday - and Europe before that – Abe was Sunday already hosting Indian Prime Minister for his third visit here. Finland got into picture even here when Abe took the guest to his Finnish loghouse "besso" close to Mt. Fuji. The two leaders' earlier agreement for USD 17 billion high-speed rail project from capital to Modi's home state has hit the wall with land disputes – not unexpected in India - so maybe they will talk up security co-operation instead. Japanese Navy has been exercising in the faraway Indian waters together with locals and even a small Army contingent will travel there now for a mutual exercise. It's all part of Japan opening more as well.

HALLOWEEN AND NEW YEAR
Halloween celebrations grow bigger and bigger every year – the crowds blocking Shibuya crossing have now reached over 100,000 according news. It's another trend that Japan has picked up from outside recently and now it's a tourist attraction: people come from overseas to party here. Personally fail to see the attraction of going out on street with gory face paint and crazy clothes, but it seems to be highly enjoyable experience for the young generation. Maybe it's relief to feel free from their daily stress, study and work. They also say it is the only time when boys can approach girls – or vice versa - openly face-to-face and not through some social network as the usual norm today.

Social commentators have pointed out another good point that applies to us all: Halloween is different from all traditional annual celebrations here in that it does not involve buying obligatory presents and counter presents nor cooking traditional foods. Just think of it: retailers are already drumming up that NOW is the time to order New Year's "osechi ryori" food and "oseibo" presents and update your long list of New Year cards. Have you done yours already?

Timo Varhama  
Tokyo, October 29, 2018  


Previous Columns

2 October 2018
"Circular economy, fish market and construction boom"

2 October 2018
"Abe's "third reich": challenges abound"

17 September 2018
"From Osaka typhoon to Osaka fever - dark side and bright side of Japan"

6 September 2018
"Emperor: love, peace and reverence"

23 August 2018
"Summer heat, new scandals and export worries - but Tokyo is best"

8 August 2018
"Petty politicians, bungling bureaucrats and profitable business"

30 July 2018
"While we were on holiday"

17 June 2018
"From Singapore to soccer - wrapp up for summer"

11 June 2018
"Showdown in Singapore, commotion in Canada and cover-ups in Tokyo"

28 May 2018
"Morals and responsibility, blind loyalty and power harassment"

17 May 2018
"Big Business in record results again, but consumer are not convinced - North Korea spectacle continues under Kim direction"

26 April 2018
"Political spectacle approaches grand finale
- people's trust sinking ever lower"


17 April 2018
"Cruise missiles and cronyism, business boom, old people and sumo"

6 April 2018
"Mystery train and other unpredictable moves in geopolitics around Japan"

26 March 2018
"Trump Unchained and Abelympics – Can PM Make the Party?"

16 March 2018
"Anniversaries, updates, fallacies and deception"

5 March 2018
"WHILE WE WERE WATCHING OLYMPICS..."

26 February 2018
"Korean Olympics: sports shine, politics stink"

14 February 2018
"Korea: Murky Politics and Big Business Behind the Sport Spectacle"

4 February 2018
"It's "smile time" in politics, Olympics, economics and business"

23 January 2018
"Moomin crisis, panda frenzy and Olympics turned into political farce"

12 January 2018
"Heisei 30 looks good: share prices soar, PM rides high "



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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