Thursday, December 27, 2012

A Little Year’s-End Punditry on Japan and (Largely) China

No, you most likely will not be hearing this exchange, unless, say, you’re in Africa and you have a strong interest in Asia.

1.              Japan’s economy has been experiencing major contractions. Was 2012 economically overshadowed by Fukushima or are the problems this year broader than that?

It was actually the third quarter, I believe, and I’m not ready to call it a major contraction. Now the consensus is that it was driven by the global economic downturn, or slowdown, including China. In any case, it’s worrying, and we’re looking at a large supplementary budget to tide us over, and an inflation target as well. Fine, but we need to ultimately face up to the long-term challenges, or we’ll be stuck where we were before we pumped the money into the economy.

2.              Japan has raised regional tensions with China this year over disputed islands, will Japan look back on this decision as hurting their role in the region and their economic future

I would argue that China has raised regional tensions with Japan over the islands. But this is not the place to settle that argument. Instead, let me remind everyone that, yes, Japanese businesses have been hurt. But their Chinese joint venture partners have also been hurt, their Chinese suppliers have been hurt, their Chinese employees have been hurt, the Chinese consumer has been hurt. It hurts everyone. Now, Mr. Abe is making some important overtures to the United States, South Korea, Russia, and, of course, China. But it takes two to tango. I am a cautious optimist, so I am hopeful that the two sides will work together to contain negative spillover from the issue.

3.              Political chaos has gripped Japan for years, with the Eelection of Shinzo Abe is the country finally moving forward in a more united way?

I could spend hours talking about the several important issues on which the LDP-Komeito coalition and the DPJ are quite close and could cooperate, collaborate in attacking them. But I’ll skip that and instead mention that the Abe administration will have a supermajority in the lower house that it can use as a last resort to get over any legislative obstacles that the opposition puts in its way. Prime Minister Abe is in a good position to sustain his administration until the lower house must face its next election.

4.              My Name is (your name) and the most influential person of 2012 is (your choice) because….

My name is Jun Okumura and the most influential person of 2012 is “No one” because we are in a G-Zero world, as Ian Bremmer at Eurasia Group says, where no one is in charge. The presidency of the United States is not what it was cracked up to be, the presidency of China is not there yet and may never be. President Putin has his own problems, and Europe’s problem is collective, and the solution will be collective. No one: that’s my answer.

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