Showing posts with label japan. Show all posts
Showing posts with label japan. Show all posts

Monday, June 1, 2009

Remember Ozawa: "If Japan desires, it can possess thousands of nuclear warheads"

The Axis of Evil, Again. By BRET STEPHENS
WSJ, Jun 02, 2009

Not 24 hours after North Korea's nuclear test last week, Iranian President Mahmoud Ahmadinejad issued a statement insisting "we don't have any cooperation [with North Korea] in this field." The lady doth protest too much.

When it comes to nuclear weapons and the means to deliver them, history offers two hard lessons. First, nearly every nuclear power has been a secret sharer of nuclear technology. Second, every action creates an equal and opposite reaction -- a Newtonian law of proliferation that is only broken with the intercession of an overwhelming outside force.

On the first point, it's worth recalling that every nuclear-weapons state got that way with the help of foreign friends. The American bomb was conceived by European scientists and built in a consortium with Britain and Canada. The Soviets got their bomb thanks largely to atomic spies, particularly Germany's Klaus Fuchs. The Chinese nuclear program got its start with Soviet help.

Britain gave France the secret of the hydrogen bomb, hoping French President Charles de Gaulle would return the favor by admitting the U.K. into the European Economic Community. (He Gallicly refused.) France shared key nuclear technology with Israel and then with Iraq. South Africa got its bombs (since dismantled) with Israeli help. India made illegal use of plutonium from a U.S.-Canadian reactor to build its first bomb. The Chinese lent the design of one of their early atomic bombs to Pakistan, which then gave it to Libya, North Korea and probably Iran.

Now it's Pyongyang's turn to be the link in the nuclear daisy chain. Its ties to Syria were exposed by an Israeli airstrike in 2007. As for Iran, its military and R&D links to the North go back more than 20 years, when Iran purchased 100 Scud-B missiles for use in the Iran-Iraq war.

Since then, Iranians have reportedly been present at a succession of North Korean missile tests. North Korea also seems to have off-shored its missile testing to Iran after it declared a "moratorium" on its own tests in the late 1990s.

In a 2008 paper published by the Korea Economic Institute, Dr. Christina Lin of Jane's Information Group noted that "Increased visits to Iran by DPRK [North Korea] nuclear specialists in 2003 reportedly led to a DPRK-Iran agreement for the DPRK to either initiate or accelerate work with Iranians to develop nuclear warheads that could be fitted on the DPRK No-dong missiles that the DPRK and Iran were jointly developing. Thus, despite the 2007 National Intelligence Estimate stating that Iran in 2003 had halted weaponization of its nuclear program, this was the time that Iran outsourced to the DPRK for proxy development of nuclear warheads."

Another noteworthy detail: According to a 2003 report in the L.A. Times, "So many North Koreans are working on nuclear and missile projects in Iran that a resort on the Caspian coast is set aside for their exclusive use."

Now the North seems to be gearing up for yet another test of its long-range Taepodong missile, and it's a safe bet Iranians will again be on the receiving end of the flight data. Nothing prevents them from sharing nuclear-weapons material or data, either, and the thought occurs that the North's second bomb test last week might also have been Iran's first. If so, the only thing between Iran and a bomb is a long-range cargo plane.

Which brings us to our second nuclear lesson. Secretary of Defense Robert Gates has lately been in Asia taking a tough rhetorical line on the North's nuclear activities. But it's hard to deliver the message credibly after Mr. Gates rejected suggestions that the U.S. shoot down the Taepodong just prior to its April test, or when the U.S. flubbed the diplomacy at the U.N. So other countries will have to draw their own conclusions.

One such country is Japan. In 2002, Ichiro Ozawa, then the leader of the country's Liberal Party, told Chinese leaders that "If Japan desires, it can possess thousands of nuclear warheads. Japan has enough plutonium in use at its nuclear plants for three to four thousand. . . . If that should happen, we wouldn't lose to China in terms of military strength."

This wasn't idle chatter. As Christopher Hughes notes in his new book, "Japan's Remilitarization," "The nuclear option is gaining greater credence in Japan because of growing concerns over the basic strategic conditions that have allowed for nuclear restraint in the past. . . . Japanese analysts have questioned whether the U.S. would really risk Los Angeles for Tokyo in a nuclear confrontation with North Korea."

There are still good reasons why Japan would not want to go nuclear: Above all, it doesn't want to simultaneously antagonize China and the U.S. But the U.S. has even better reasons not to want to tempt Japan in that direction. Transparently feckless and time-consuming U.S. diplomacy with North Korea is one such temptation. Refusing to modernize our degraded stockpile of nuclear weapons while seeking radical cuts in the overall arsenal through a deal with Russia is another.

This, however, is the course the Obama administration has set for itself. Allies and enemies alike will draw their own conclusions.

Sunday, May 24, 2009

Japan should have ability to strike enemy bases in defense: LDP panel

Japan should have ability to strike enemy bases in defense: LDP panel
Japan Today, Monday 25th May, 06:44 AM JST

TOKYO — A subcommittee of the ruling Liberal Democratic Party’s defense panel plans to propose that Japan be allowed under a new basic defense program to have the ability to strike enemy bases within the scope of its defense-only policy, according to a draft proposal made available Sunday. It also says Japan should be allowed to develop an early warning satellite system to detect the launch of a missile or other objects that may be aimed at the country.

The recommendations are being sought apparently in view of North Korea’s missile launch in April. The government plans to compile a basic defense program for fiscal 2010 to 2014 by the end of this year, and the subcommittee wants to make those recommendations for the deliberations of the outline.

‘‘Japan should have the ability to strike enemy bases within the scope of its defense-oriented policy, in order not to sit and wait for death,’’ the LDP subcommittee said in the draft proposal.

The government takes a stance that Japan can strike an enemy military base even under the nation’s pacifist Constitution, if hostile attacks are certain.

But Defense Minister Yasukazu Hamada and some lawmakers have taken a cautious attitude toward examining Japan’s possessing such capability.

Japan, meanwhile, is depending on a U.S. early warning satellite against possible missile attacks. But since the April 4 missile launch by North Korea, there have been calls for developing Japan’s own system among members of the LDP.

Monday, April 27, 2009

A Pacific Alliance for Peace - Japan and the US

A Pacific Alliance for Peace. By William R. Hawkins
FrontPageMagazine.com, Monday, April 27, 2009

Excerpts:

As [some] relish reports that President Barack Obama is seeking to temper the image of the United States as the world’s preeminent power, it can be forgotten that there are overseas allies who want and need America to remain strong and vigilant against rising threats. They want America to continue its leadership role in forging coalitions to meet global dangers. This message was very clear at a conference April 17 in Washington sponsored by two Japanese think tanks, the Sasakawa Peace Foundation and the Ocean Policy Research Foundation.

The theme of the conference was the U.S.-Japan Maritime Alliance and how it can be expanded. Japan’s ambassador Shotaro Yachi opened the session by reading a message from Prime Minister Taro Aso calling for Washington and Tokyo to take the lead in building an “Arc of Freedom and Prosperity” which would sweep across “Japan, the Republic of Korea, Southeast Asia, the Indian subcontinent, the Middle East, Central Asia, Guam, Central and Eastern Europe, the Baltic region and Scandinavia roughly speaking.” This geographical description is of the opposite side of the “Arc of Instability” that has been used since the 1970s to describe the main trouble spots in the Eurasian landmass. The positive concept of the Arc would be founded on the values of “freedom, democracy, basic human rights, the rule of law and the market economy” according to Aso. The Asia-Pacific section of the Arc, extending as far as the Persian Gulf, would be backed by a “Seapower Network” that should expand beyond the current U.S.-Japan alliance to include Australia, India and the United Kingdom.

In this formulation, it is not difficult to understand from where the threats to those protected by the Arc alliance are expected to come. For diplomatic reasons, Aso had to say that the Arc “is not intended to contain China or Russia,” but his extended remarks were filled with examples of the dangers Beijing and Moscow pose to peace, stability and economic development. The Prime Minister noted China’s advancement to the ocean is particularly spectacular. The Chinese Navy is proactively modernizing. We also have information that China is working to build aircraft carriers. China’s opaque expansion and modernization of its military, including the Navy, may greatly impact the maritime security environment which is so important to both Japan and the U.S. Moreover, Russia is increasingly more actively engaged in military activities in the Far East.

A major element in the “Japan-United States Seapower Alliance for Stability and Prosperity on the Oceans” paper presented at the conference by the Ocean Policy Research Foundation is development of seabed resources, both minerals and energy. The proposal calls for joint research and the sharing of new technology that can reach these untapped resources. But it is also clear that ocean wealth will also have to be protected from rivals. Prime Minister Aso pointed out that Japan and China have conflicting claims in the East China Sea, and that “China continues to carry out unilateral development based on its own claims. This cannot be considered to be an action of a responsible major power.” He also noted “excessive claims of jurisdiction by coastal states. This is a problem the U.S. Navy has faced from Chinese harassment of its ships in international waters. Beijing claims that the Exclusive Economic Zones awarded by the UN Law of the Sea Treaty confer sovereignty over large ocean expanses and not just a limited right to exploit resources.

Japan also has territorial disputes with Russia, and Aso mentioned the construction plan Moscow has for a strategic nuclear submarine base on the Kamchatka peninsula. China has recently built a similar base on Hainan Island menacing the South China Sea.

Former Prime Minister Shinzo Abe appeared in person to deliver the keynote address at the Sasakawa conference. He echoed Aso’s arguments, and even compared, without naming names, the rising Chinese threat to that posed earlier by the Soviet Union. He stated that during the Cold War, Japan was the “cap in the bottle” past which the Soviet fleet could not pass from its Pacific base at Vladivostok. He then observed that the “Japanese island chain can fulfill the same role against another power if it pushes the envelop.” Geographically that chain could be seen as extending all the way south to Taiwan and the Philippines, forming a base for containing China’s naval ambitions.

Beijing is well aware of island geography. In the 2005 report on China Military Power issued annually by the U.S. Defense Department, General Wen Zongren, Political Commissar of the elite People’s Liberation Army Academy of Military Science, is quoted as saying that taking control of Taiwan is of “far reaching significance to breaking international forces’ blockade against China’s maritime security….to rise suddenly, China must pass through oceans and go out of the oceans in its future development.” Chinese strategists have discussed the creation of their own “string of pearls” naval bases to control the sea lanes of the Pacific Rim.

The OPRF paper urges Washington and Tokyo “to cooperate with all nations opposing the emergence of any aspiring hegemonic state that could disrupt the balance of power on the seas and create instability in the security environment” another thinly veiled reference to the rise of China. “The process of building the new seapower alliance will also serve as a new challenge for the Japan-U.S. alliance that many believe is beginning to waiver, “says the OPRF document.

An example of those who believe the alliance should not just waiver but dissolve was presented during the question period following Abe’s speech. Stanley Kober, a research fellow at the libertarian Cato Institute, cited out of context George Washington’s warning against “entangling alliances.” He then claimed such alliances only serve to keep the world divided. He asked the former Prime Minister, “If the U.S. and Japan strengthen their alliance, what will Russia and China do?” Kober also thought it was a mistake to try to include India in the alliance. Cato has a history of trying to undermine American defense policy, and has been exhibiting a growing pro-Chinese bias.

Cato Vice President Gene Healy made the same reference to “entangling alliances” in a recent op-ed calling for “genuine, and deep, cuts in military spending” in which he also cited the “counterintuitive claim” of Christopher Preble, Cato’s Director of Foreign Policy Studies, that “our military dominance actually makes us less safe.” Last summer, Malou Innocent, another Cato foreign policy analyst, wrote an op-ed criticizing presidential candidate Sen. John McCain for “talking too tough on Russia and China.” She called on the next president “to continue cooperating with China and Russia.” Cato pronouncements are obsessed with trade and investment in China [...].

Abe responded to Kober by restating that the U.S., Japan and India “are democracies with shared interests” who also believe in human rights and the rule of law. Next year will mark the 60th anniversary of the U.S.-Japan alliance. Abe declared, “The United States has no better friend in the world than Japan.” Other Japanese speakers at the conference reinforced this point. Shunji Yanai, an advisor to the Ministry of Foreign Affairs and professor at Waseda University argued that the Iraq War has helped pull Washington and Tokyo closer together, as has the crisis over North Korean nuclear and missile programs. Japan sent military engineers to Iraq to help with reconstruction and has deployed naval units to support coalition operations in Afghanistan. Yanai also believes that North Korea has a secret uranium enrichment program that has not been addressed by the Six Party Talks orchestrated by China.

Naoyuki Agawa, a Dean at Keio University, joined Yanai in support of changes in Japanese constitutional interpretation to allow Tokyo to play a more active role in collective security operations. He agreed that joint operations in the Middle East have pulled the two fleets together and proclaimed, “Despite legal and constitutional restraints, the Japanese Maritime Self-Defense Force is willing to fight alongside its fellow sailors” in the U.S. Navy.

It may not come to that. A strengthened and expanded alliance of maritime nations can serve as a powerful deterrent to the ambitions of China, Russia and their dangerous prodigies in Iran, Burma, North Korea and elsewhere. It will, however, take more than proclamations. Words must lead to actions.

The lunch speaker at the conference was Deputy Chief of Naval Operations Vice Admiral William Crowder, who had been commander of the U.S. 7th Fleet in the Pacific. He was dismayed by how much the size of the U.S. Navy has declined in recent decades. Today it has less than half the warships that were as sea when Ronald Reagan was president. The cuts in naval programs announced April 6 by the Obama administration, along with other cuts in high end programs involving aviation and missile defense that are part of the proposed 2010 defense budget, will undermine the favorable balance of power now enjoyed by the United States.

A warning from Japanese leaders of what is at stake in Asia could not have come at a more important moment.

William Hawkins is a consultant on international economics and national security issues.

Wednesday, April 8, 2009

Japan warns against U.N. inaction on N Korea rocket launch

Japan warns against U.N. inaction on N Korea rocket launch
Japan Today, Wednesday 08th April, 06:30 AM JST

TOKYO — Japan’s foreign minister warned Tuesday that the U.N. Security Council must give a strong response to North Korea’s recent rocket launch or risk losing its authority.

Foreign Minister Hirofumi Nakasone said a failure to respond to the North’s Sunday launch could hurt multilateral talks aimed at getting the communist nation to halt its nuclear programs.

“If violations are allowed, the U.N. Security Council’s authority would be threatened and trust placed upon it would be impaired,” Nakasone told a news conference. “The U.N. Security Council should respond properly and teach North Korea a lesson that it has to pay for the act of provocation.”

He said the lack of a strong response to the rocket launch—seen by many as a cover for testing long-range missile technology—would send the wrong message to the North.

Security Council diplomats were mired in squabbles over how, or even whether, to punish North Korea for Sunday’s launch. World leaders, including President Barack Obama, called it a provocative act and a violation of previous sanctions, imposed after the North’s underground nuclear test in 2006.

Japan said Monday that while it was trying to lobby China and Russia, which are reluctant to punish the North, it would extend sanctions against North Korea for another year in response to the launch.

Japan imposed tight trade sanctions against the North in 2006 following Pyongyang’s missile and atomic tests that year. The ongoing sanctions, which ban North Korean ships from entering Japan and prohibit imports of North Korean goods, have been renewed every six months since and were to expire on April 13.

Pyongyang continued to claim it put a communications satellite into orbit and is now transmitting data and patriotic songs. But Japan joined the rest of the world in saying that it appeared to be a failure.

Nakasone said Japan has yet to determine whether North Korea launched a satellite or a missile, but either way the launch violated the Security Council ban because it used missile technology.

The international community will allow North Korea to engage in space development “only if the North fulfilled its obligation to abandon all nuclear programs and no longer poses a threat to Japan and the rest of the world,” he said.

Saturday, April 4, 2009

North Korea in International Limelight over its Space Development Programme

North Korea in International Limelight over its Space Development Programme. By Rajaram Panda and Pranamita Baruah
Institute for Defence Studies and Analyses, April 2, 2009

North East Asia’s fragile peace is being threatened by North Korea’s planned launch between 4 and 8 April over Japanese territory of a communication satellite. The US and its allies suspect the planned satellite launch to be a long-range ballistic missile test. The prevailing uneasy peace is accentuated by the fact that both a ballistic missile and a satellite launcher operate on very similar technology. According to Dennis Blair, Director of US National Intelligence, the technology for a space launch “is indistinguishable from an intercontinental ballistic missile.” If the “three stage space-launch vehicle works,” it could technically reach the US mainland. Consequently, the reactions from the US and its allies have been strong.

There has remained a lurking suspicion that North Korea and Iran have joined together to build missiles. That Iran has made rapid strides in missile technology is an established fact. But whether the collaboration between the two countries includes warheads or other nuclear work remains shrouded in mystery. But given the behaviour of the two countries over the years, it is difficult to disbelieve that both Iran and North Korea are not cooperating in such activity.

North Korea already possesses the Taepo Dong-2 with ICBM potential (striking range of 5500 kilometres or greater). It may be recalled that Pyongyang’s August 1998 test firing of a Taepo Dong-2 into the Sea of Japan had panicked American friends and allies in East Asia. It is a different matter that the test failed 40 seconds into its launch. However, it propelled North Korean engineers to make substantial modifications in the missile’s design. The advanced version of Taepo Dong-2 is supposed to have a minimum striking range of 6,700 kilometres (4100 miles), capable of striking the US west coast.

Despite its precarious economic problems, Pyongyang has never felt shy of demonstrating its defence capabilities by upgrading its missile development systems continuously. It has built a ballistic missile arsenal capable of hitting not only Japan and South Korea but also the west coast of the US. In total, North Korea deploys around 750 ballistic missiles, including between 600-800 SCUDs, 150-200 No Dongs, 10-20 Taepo Dong-1, and a few Taepo Dong-2s.

Pyongyang has not halted its nuclear programme despite the denuclearisation deal that it struck at the Six Party talks in February 2007. It is suspected that Pyongyang is aiming to produce nuclear payloads for its ballistic missiles. It is also feared that Pyongyang’s missile development programme is projected towards developing a nuclear warhead sophisticated enough for delivery aboard a space-bound rocket. In the event of Pyongyang achieving that capability, it would be in a position to detonate a nuclear warhead in space. The electromagnetic pulse (EMP) emanating from such a detonation would have frightening repercussions, especially for unhardened satellites. A space launch would advance Pyongyang’s missile programme, enabling it to produce more accurate and powerful ballistic missiles capable of terrorizing not only Seoul and Tokyo but also Los Angeles and San Francisco.

With a view to deterring and intercepting missiles from the North, South Korea has announced its own plans to complete a missile defence system by 2012. Japan too has affirmed its commitment to acquire a multi-layered system after the US withdrew from the Anti-Ballistic Missile Treaty (ABM) in 2002 and North Korea left the NPT regime in 2003. If North Korea does not retract from its ballistic missiles test programme, the US, Japan and South Korea are likely like to keep their missile defence options open.

There already exist the necessary mechanisms through international legal instruments to deter North Korea from upgrading its missile development capability. United Nations Security Council resolution 1718 (2006) prohibits Pyongyang from conducting any ballistic missile activity. North Korea is a signatory to the 1967 Outer Space Treaty, which prohibits the deployment of nuclear weapons or other weapons of mass destruction in orbit, in the moon or elsewhere in space. However, it has asserted its right to engage in a peaceful space programme. The state-run Korean Central New Agency said “preparations for launching experimental communications satellite Kwangmyongsong-2 by means of delivery rocket Unha-2 are now making brisk headway” at a launch site in Hwadae Country in the northeast. The statement called the upcoming launch “a giant stride forward” for the country’s space programme.

North Korea finds fault with the US and Japan, claiming that these two countries have already launched their own satellites and therefore have no moral right to prevent it from doing the same. It further warns Washington and Tokyo that if they deny Pyongyang the right to use space for peaceful purposes, it would not only be discriminatory but also not in keeping with ‘spirit of mutual respect and equality’ of the 2005 disarmament pact. Pyongyang further warns that any sanctions that the UN, US and its allies might impose on it would “deprive the Six-Party talks of any ground to exist or their meaning.” Meanwhile, North Korea has asserted that it would regard any attempt to shoot down its rocket as an unprovoked Act of War and retaliate with prompt strikes on the US mainland, Japan and South Korea.

The international community is aghast at Pyongyang’s obduracy. Japan has decided to call for an emergency meeting of the UNSC if the launch takes place. In the event of the North’s missile firing, Japan will urge the UNSC to take immediate action regardless of how other UN members would react, as it would be directly exposed to an immediate missile threat. Japan has warned that it will shoot down a missile or any debris if it threatens to hit Japanese territory.

Japan debated between two possible options in response to a missile launch by North Korea: to ask the cabinet to take an instant decision after a missile launch or to give military approval in advance to shoot it down, and finally decided to exercise the second option by issuing an advanced order to the Self Defence Forces on March 27 to use the Patriot missile defence system to destroy any missile or debris that shows signs of falling toward Japan. Japan, however, does not want to strike a North Korean rocket unless it appears to pose a direct threat, in the event of a mishap that could send an errant missile or debris flying toward the country.

Japanese Prime Minister Taro Aso has already obtained the support of British Prime Minister Gordon Brown. Both Japan and Britain have agreed to take the issue to the UNSC to discuss possible punitive action if Pyongyang goes ahead with the launch. As a pre-emptive measure, Japan has deployed three Aegis destroyers, two of which are fitted with anti-missile missiles, around Japan and Patriot guided-missile units at select locations in Japan. The US Seventh Fleet has been deployed around Japan. US cruisers and destroyers based at Yokosuka also reportedly have the capability to launch guided missiles against ballistic missiles. Five Aegis destroyers of the US Navy modified for ballistic missile defence have already left Yokosuka and other Japanese ports on March 30. They are expected to detect and track the North Korean rocket passing over northeastern Japan if the launch goes according to plan.

South Korea is worried over the heightened tensions on the Peninsula and President Lee Dang-hee has appealed for restraint. Seoul has also alleged that Pyongyang’s long-range rocket launch clearly violates UNSC resolution 1718. It has described Pyongyang’s planned rocket launch as a ‘serious challenge and provocation’ to regional security. North Korea, however, has ramped up its anti-Lee rhetoric, warning that the Koreas are headed for a military clash.

Russia too has joined the chorus of nations expressing concern over the upcoming launch. Russian Deputy Foreign Minister Alexei Borodavkin said that the launch would lead to increased tensions in the region and urged Pyongyang to refrain from it. As regards China, a traditional ally and a major donor for impoverished North Korea and UNSC permanent member, it has not publicly urged Pyongyang to halt the launch. However, both China and Russia have notified the Obama administration that North Korea has a legitimate right to launch a satellite. The perceived tacit support from China and Russia might embolden North Korea not to rethink its planned space satellite launch.

It appears that the uneasy peace in the North East Asian region stemming from Pyongyang’s intransigence is likely to continue for some more time to come. If North Korea is to be trusted about its intentions for the communication satellite launch programme, it would serve the interests of the country. If, however, Pyongyang has other covert intentions, it will have to face the reactions from its neighbours and the US.

Dr. Rajaram Panda is Senior Fellow, and Pranamita Baruah is Research Assistant, at the Institute for Defence Studies and Analyses, New Delhi.

Friday, March 27, 2009

Why I’m bullish on Japan

Why I’m bullish on Japan. By Jesper Koll
Japan Today, Mar 27, 2009

The media loves to harp on Japan’s “lost decade” and use the world’s second-largest economy as a negative example. Yet while corporations in other countries are still gaming the government for handouts and freebies, corporate Japan has learned the hard way that government actions tend to merely delay the inevitable. This time, Japan Inc is restructuring for real and a leaner, meaner Japan is poised to rise back to the top.

As the global crisis deepens, it is back to basics. No more excuses, no more cushion from fancy financial products. The future winners will be those who focus on their core competence and redefine their competitive edge. Japan’s core competence is clear: superb technology and a proven track record of applying technology to bring innovation and better products to global consumers and producers.

The facts speak for themselves: Japan’s focus on investing in R&D has been relentless. Currently, almost 3.5% of GDP is invested on R&D, by far the highest in the OECD. The U.S. is about 2.6%, and China is barely 1%.

Most importantly, Japan’s R&D investment has steadily increased over the past decade. Japan’s competitive edge may be hidden by the current gloomy cyclical news. But structurally Japan is in pole position—whether energy efficiency, medical devices, construction machinery, cars, electronic components, the world cannot do without Japanese suppliers.

Global patent-applications data confirms Japan’s undisputed lead in Asia. Her engineers filed 28,744 patents last year, which is about 18% of the global total, second only to the U.S. China is often touted as the next intellectual property superpower, but the facts suggest Japan has nothing to fear from the Peoples Republic. Last year, China filed 6,089 patents, not even one-fifth of Japan’s total.

Moreover, over the past four years (2004-08), Japan added 8,480 patents to its annual total—more than twice as many as China did over the same period. Remember, Japan barely produces one-twelfth of the engineers that China does, so clearly Japan’s got a sizable productivity advantage.

Also, Panasonic and Toyota alone registered 3,093 patents in 2008-two companies alone doing more than half of what all of China achieved. Japan’s top six companies exceeds China’s total. Also interesting, in China Huawei Technologies alone accounts for 29% of all of China’s total patents. Japan’s leader—Panasonic—is barely 6% of the country’s total.

Sure, Japan is a developed, advanced industrial economy while China is still in the development stage. However, the diversity, depth and number of intellectual property patents produced by Japanese companies is still overwhelming. Make no mistake—the immediate future will be designed and invented in Japan, not China, nor elsewhere in Asia.

Technology is a powerful asset, but in the end the most important asset for any economy is its people. Here, it is fashionable to lament the decline of youthful vigor in Japan’s younger generation, but this is more an indication of the older generation not willing to let go, rather than the lack of new, creative and forward looking ideas from the younger generation.

In the corporate world, the current crisis is acceleration the generational change. Already, the leading car company, under new, younger leadership, is pushing through changes that the older generation would have thought impossible. For example, steel is now being sources from lower cost Korea and the entire supply chain and merchandising chain is being radically restructured.

Rather than crying to the government, Japan’s companies are making hard but forward-looking decisions to ensure future global leadership and competitiveness. The government is seen as an obstacle, not a solution, to help corporate leaders size the opportunities created by the global crisis. This perhaps is the biggest contrast between Japan and America today: Japan is rediscovering its capitalist roots, while America is gaming the public sector for all it can get.

Japan’s most powerful asset, however, is its people. Highly educated, diligent and hard working, Mr and Mrs Watanabe still possess a basic power and discipline that build a strong foundation for future recovery. Everywhere global consumers face harsh adjustment, with unemployment rising and debt repayments mounting. Japan is not spared the former, but has nothing to worry about from the later.

Household balance sheets are very strong, since Japan’s deleveraging already happened during the 1990s. Prudent borrowing and spendthrift financial management is nothing new to the Japanese people, and the current crisis is not a financial and balance sheet crisis for Japan’s consumers.

Indeed, if there is one household sector in the world that has the financial wherewithal to invest, it is the Japanese households with their huge liquidity base—almost two-thirds of Japanese household financial assets are in bank deposits/liquid assets. Just as in management, the generational change of these assets from old into the hands of the young, will unfreeze this capital. A young generation will take risks, in fact is eager to do so sooner rather than later.

Finally, Japanese politics is much better than its reputation. It’s fair to criticize the lack of leadership in the current government. But let’s not forget that Japan is a functioning democracy. The opposition Democratic Party of Japan (DPJ) has a real chance of winning control of the government, not just because the ruling Liberal Democratic Party (LDP) has made such a mess of things, but also because their ideas are actually forward looking, new and credible.

Health-care reform, pension reform, tax reform, reform of the technocracy—all the hard-to-tackle policies at the core of Japan’s problem are right at the top of the DPJ agenda. Where the old-generation LDP just waffles, the young DPJ wants to make real changes—just as the young corporate leaders are actively building a new, leaner and meaner corporate Japan.

Of course, there is much that needs to be done. Most daunting, perhaps, is the task to reform public finance. It’s well known that Japan’s fiscal deficit is more than 180% of GDP. But its real problem is that the tax system is terribly inefficient—the tax multiplier is barely 0.5, while in most OECD countries, including the U.S., it’s about 1.

But every country faces harsh fiscal realities as the cost to combat the crisis mounts. In the end, public debt will have to be paid back by the people and by the returns generated on national assets. Japan’s technology base and its powerful diligent workforce should bring high returns.

With the stock market, land prices and the level of production all back to levels last seen in 1983, it’s certainly been fashionable to “short” Japan and treat it as a has-been. But Japan thrives in times of hardship and global turmoil. This time, in my view, will be no different. A new generation of Japanese leaders in business and politics is poised to emerge and, together with the strength and creativity of the Japanese people, will prove that it is by no means a lost generation.

Jesper Koll, former chief economist for Merrill Lynch Japan, is the president of TRJ KK, a Tokyo-based investment-research firm.

Thursday, March 26, 2009

North Korea places Taepodong-2 missile on launch pad

North Korea places Taepodong-2 missile on launch pad
Japan Today, Thursday 26th March, 03:22 AM JST

TOKYO —
North Korea has positioned what is believed to be a Taepodong-2 long-range ballistic missile on the launch pad at a facility in Musudanri, sources close to Japan-U.S. relations said Wednesday night. North Korea has said it plans to send a satellite into orbit from the facility between April 4 and 8. But Japan, the United States and South Korea suspect the planned launch may actually be a test-firing of a ballistic missile.

NBC television, quoting U.S. officials, said in its online edition Wednesday that while two stages of the missile can be seen on the launch pad, the top is covered with a shroud supported by a crane. But now that the missile is on the pad, the launch itself could come within a matter of days, NBC said.

North Korea has informed the International Maritime Organization of the plan and warned that the first stage of the rocket will fall into the Sea of Japan while the second stage will fall into the northern Pacific Ocean. The Japanese government also received the information from Pyongyang.

Japan is expected to issue an order for the destruction of debris from the missile in case its planned launch fails.

North Korea launched a Taepodong-1 missile in August 1998, part of which flew over Japan and into the Pacific Ocean.

A Taepodong-2 missile is believed to have a range of more than 6,000 kilometers. Its test launch in July 2006 apparently ended in failure.

Saturday, March 21, 2009

Japan, China differ over how to deal with North Korea

Japan, China differ over how to deal with North Korea
Saturday March 21, 2009, 06:50 AM JST

BEIJING —
Japanese and Chinese defense ministers agreed Friday it would be best if North Korea refrains from a planned rocket launch, but made demands to each other over ways to deal with the issue. While Japan asked China, North Korea’s traditional ally, to urge Pyongyang’s restraint, Beijing asked Tokyo to handle the issue ‘‘in a calm manner,’’ Japanese Defense Minister Yasukazu Hamada and a Japanese government official said.

North Korea’s planned rocket launch was a topic in Hamada’s meetings with his Chinese counterpart Liang Guanglie as well as Wu Bangguo, chairman of China’s legislature. Liang said ‘‘it would be best if North Korea did not fire’’ the rocket, Hamada said. But he added that countries such as Japan ‘‘should take a cool-headed attitude’’ on the issue, he said.

The Chinese official was believed to be reacting to recent discussions in Japan about intercepting the rocket, which North Korea has said will be launched in early April to put a satellite into orbit.
Countries such as Japan suspect the plan to be a cover for testing a long-range ballistic missile, given the similarities between the technology involved.

Japan has said that even if it is a satellite launch, North Korea would be violating existing U.N. Security Council resolutions that prohibit it from engaging in ballistic missile activities.
China has taken a more nuanced approach. Although it has indicated its desire for North Korea to refrain from the launch, it has not said whether it would view the act as a violation of the resolutions.

Hamada said that Chinese officials did not clarify what Beijing plans to do if the launch takes place.

A Japanese government official said that while Hamada urged China to urge North Korea’s restraint in his meeting with Wu, there was no direct response from the Chinese official.
In their talks, the two defense ministers agreed that the two countries will seek ways to cooperate in antipiracy operations off the coast of Somalia, according to the Japanese government official. Both countries have committed naval vessels to the operations.

Hamada also conveyed Japan’s concern over China’s growing military spending, which will mark the 21st year of double-digit growth in 2009, the official said.

Liang replied that there is no need for concern because Beijing’s policy is defensive, according to the official.

Liang also touched on China’s intention to build an aircraft carrier, telling Hamada that China is the only major nation in the world not to have one, the official said.

‘‘China has a vast sea area and the Chinese Navy needs to develop,’’ the official quoted Liang as saying.

Thursday, March 19, 2009

Japan: Number of households receiving single-mother allowance tops 1 mil

Number of households receiving single-mother allowance tops 1 mil
Japan Today, Thursday 19th March, 05:26 AM JST

TOKYO —

The number of households receiving allowances for low-income single-mother families has topped 1 million for the first time on record, the Health, Labor and Welfare Ministry said Wednesday. The figure stood at 1,000,552 as of December against a backdrop of a rising number of divorces, while the average income of single-mother households remained at around 40% of average households.

The latest figure represents an increase of about 10,000 from December 2007, when it stood at around 990,000. Of the 1 million households, 878,000 became single-mother families through divorce while the families of unmarried mothers accounted for 79,000. State and municipal governments provide up to 42,000 yen in monthly allowances to single-mother families with one child.

Tuesday, February 17, 2009

State Sec Hillary Clinton Remarks on Japan: A Cornerstone of U.S. Foreign Policy

Japan: A Cornerstone of U.S. Foreign Policy. Remarks by Hillary Rodham Clinton, Secretary of State
Secretary of State Hillary Rodham Clinton With Japanese Foreign Minister Hirofumi Nakasone
Tokyo, Japan, February 17, 2009

FOREIGN MINISTER NAKASONE: (Via interpreter) A while ago, I had a meeting with Secretary of State Hillary Rodham Clinton and myself, and I think we had a very good meeting, and let me discuss the content of that meeting. I told her that I welcomed the fact that she chose Japan as the destination for her first overseas trip as Secretary of State, because that is an indication that Secretary Clinton and the U.S. Administration attaches importance to Japan and the Japan-U.S. relations.

At the Senate hearings, the Secretary mentioned that the Japan-U.S. alliance is the cornerstone of U.S. policy and for the peace and security of the Asia-Pacific region - that this alliance is indispensible for that. And I certainly agree that this is very important, the alliance is very important, so I couldn’t agree more, that being our relations. But also, globally, as we face various challenges, I believe we have to further step up Japan-U.S. alliance, and we agreed on that. In the meeting, as a foreign leader to be invited to the White House by the U.S. President, President Obama – as you conveyed to us, an invitation by President Obama to invite Prime Minister Aso on the 24th of February, that the Japanese Foreign Minister will be the first foreign leader to be invited – again, a reflection of the importance of Japan-U.S. relationship that we most welcome this.

Prime Minister Aso very gladly accepts this invitation and would like to visit the United States with the consent of (inaudible). And through Japan-U.S. cooperation, we would like to make the necessary preparations. This early bilateral summit meeting, I believe, will indicate to the entire world that the first and the second economic powers in the world will together address the financial and economic difficulties that are confronting the world.

We too see instabilities in the Asia-Pacific region, and Secretary Clinton expressed the U.S. commitment to the defense of Japan, including nuclear deterrents, and we welcome this. With regard to the realignment of U.S. forces, we agreed that we will steadily implement this realignment on the basis of a roadmap from the viewpoint of alleviating burdens on Okinawa and local communities while maintaining deterrents. The Guam Agreement we signed is a reflection of that firm commitment of the two countries vis-à-vis the realignment of U.S. forces in Japan. We agreed to aim at building an affluent, stable, and open East Asian region, and in that, we shared the hope that China will play a constructive role in the international community.

With regard to the North Korean issue, we agreed on the importance of resolving, in a comprehensive manner, the abduction issue, nuclear, and missile and other pending issues. And we also agreed to further step up Japan-U.S. coordination and Japan, U.S., and South Korea coordination at the Six-Party Talks towards the realization of complete denuclearization of the peninsula. And we also agreed that our two countries will further step up our efforts with regard to Afghanistan and Pakistan, because the stabilization of Afghanistan and Pakistan is a challenge for the entire international community. I also proposed our preparedness to host a Pakistan support conference, and towards this realization, I meant that we agreed that we will step up cooperation between our two countries, as well as consult with other countries and institutions concerned.

Now, the international community today is faced with numerous difficulties and challenges such as climate change and energy, financial and global economic issues, nuclear disarmament and nonproliferation, development and healthcare in Africa, global – other global challenges including UN Security Council reform as well as international situations such as the Middle East peace, counter piracy measures off Somalia, et cetera. And we agreed to further strengthen our partnership in addressing these issues.

As I mentioned, we had a very good meeting and we agreed to further step up the information exchange and policy coordination on strategically important challenges. And especially between I, myself, and Secretary Clinton, we agreed to get in touch and consult with each other at any time by phone and other means, even when there is no specific agenda or issue. Thank you.

MODERATOR: Thank you very much. Secretary Clinton, please.

SECRETARY CLINTON: Thank you very much, Foreign Minister Nakasone. I first met the foreign minister 18 years ago, and so it was a great pleasure to renew our acquaintances in this new setting. And I thank you for your hospitality, and for the broad-ranging discussion that we had today.

The alliance between the United States and Japan is a cornerstone of our foreign policy. And working together to deal with the multitude of issues that affect not only Asia, but the entire world, is a high priority of the Obama Administration. I was very pleased to extend an invitation on behalf of President Obama to welcome Prime Minister Aso to Washington, D.C. on February 24th. This will be the first foreign leader visit that President Obama will be receiving at the White House.

We have just signed the Guam International Agreement on behalf of our two nations. This agreement reflects the commitment we have to modernize our military posture in the Pacific. It reinforces the core of our alliance, the mission to ensure the defense of Japan against attack and to deter any attack by all necessary means. It enshrines our two nations’ shared contributions in carrying out the realignment of our forces and the relocation of marines from Okinawa to Guam.

This is one more example of the strong and vibrant alliance that we enjoy. Mr. Nakasone and I ranged across the world. Of course, there are matters that we are concerned about on a bilateral basis. But equally, we are concerned about what we can do together to address the challenges and seize the opportunities of this time. We addressed the economic challenges facing our two countries and the world as a whole, which demand a coordinated global response. As the first and second largest economies in the world, we understand those responsibilities, and we also know the importance of making sure our economies work on behalf of our own citizens. So it is a great responsibility that both Japan and the United States assume. Japan has been a leader in laying the groundwork for a clean energy future, and we look forward to working together on a bilateral and multilateral basis on energy and climate change.

With respect to North Korea, we discussed the importance of very close coordination in our approach to the Six-Party Talks. We must advance our efforts to secure the complete and verifiable denuclearization of North Korea. The possible missile launch that North Korea is talking about would be very unhelpful in moving our relationship forward. I know the abductee issue is of great concern here in Japan, and I will be meeting with families later today to express my personal sympathy and our concern about what happened to those who were abducted.

I want to commend Japan because this nation has been a leader in promoting stability and prosperity in Pakistan and Afghanistan. The minister shared with me in very particular detail the amount of work and the financial contributions that Japan has undertaken, and I pledged high-level U.S. participation in the Pakistan donors conference that will be held later. I also want to thank Japan and the Japanese people for your support in Operation Enduring Freedom. It’s been very important for our overall success of the coalition mission in Afghanistan. I also appreciate Japan’s dispatch of two naval vessels to the Gulf of Aden to help fight this scourge of piracy.

There is so much that we discussed that it is hard to do it justice in this short review. But let me underscore how closely we will be working together. We’ve already discussed how we will have our ministries – the Foreign Ministry and the State Department – work on economic, climate change, clean energy, and other issues of great responsibility and importance.

I am delighted to be back in Japan. I looked at that old picture of us, Minister, and a lot of time has passed, 18 years since we first met in the United States. But I know that our enduring relationship on behalf of our two nations is as strong as ever. And it will be our responsibility to chart that course into the future. I’m looking forward to hearing from some of the young people in Japan when I later am privileged to be at Tokyo University, because everything we do is about their future, and we share a great hope for the kind of future that the young people of both Japan and the United States will have in a world of peace, progress, and prosperity. Thank you.

MODERATOR: Thank you very much. We would like to entertain questions from the Japanese press first. Please, (inaudible).

QUESTION: (Via interpreter) A question for Secretary Clinton. The fight against terrorism in Afghanistan, and so on, I wonder how you appreciate Japan’s contribution, and what you would hope to get from Japan? And you also signed the relocation agreement, but Okinawa prefecture is seeking the correction or modification of the air station replacement facility.

And now, in the meeting you were having with Mr. Ozawa, I wonder if you can exchange views on the Futenma station – Air Station issue.

SECRETARY CLINTON: Well, with respect to Afghanistan, we greatly appreciate the work that the Japanese Government has already undertaken in supporting coalition efforts and in contributing to the improvement of life for the people of Afghanistan. I invited the minister to have someone work with us on our policy review of Afghanistan and Pakistan, because we want to have the benefit of the experience of the Japanese involvement as we go forward to determine the approach that we will be taking. I’m very pleased that we were able to sign the agreement concerning Guam. It embodies the understandings that exist between our two nations, and we intend to move forward to implement it.

MR. WOOD: Next question will be Paul Richter of the Los Angeles Times.

QUESTION: Yes. Madame Secretary, Pakistan has reached an agreement with militants in the Northwest Territories that will halt government military offenses there in the hope of reaching peace, and I wonder if you have any concern that this might end up being a capitulation to a strategy that hasn’t worked in the past.

And Mr. Foreign Minister, I’d like to get your specific thoughts about what you’d like the U.S. to do on the abductees issue.

SECRETARY CLINTON: Well, Paul, I think that the decision that was announced by the Government of Pakistan has to be thoroughly understood, and we’re in the process of pursuing that at this time. Obviously, we believe that the activity by the extremist elements in Pakistan poses a direct threat to the Government of Pakistan, as well as to the security of the United States, Afghanistan, and a number of other nations not only in the immediate region.

So before I comment on what its meaning might be, I want to be sure that we have as good an understanding of both the Pakistan Government’s intention and the actual agreed-upon language. And that I don’t have at this time, so I want to wait until we can provide that.

FOREIGN MINISTER NAKASONE: (Via interpreter) With regard to what sort of support we would get from the United States concerning the abduction issue, well, over the years – well, or President Obama and Secretary Clinton have been saying that they are very much concerned about this abduction issue, concerned by North Korea, and that they have expressed their deep sympathies.

Having had my meeting with Secretary Clinton – and of course, North Korean issues are not just abduction issues, but there is the nuclear issue, missile issue, as well as the abduction issue, but especially with regard to the abduction issue, she expressed that she will continue to support us strongly and help us.

Following this meeting, I understand the Secretary is going to meet with the families of the abductees. So, from this fact alone, you can see that the Secretary is very much concerned about this abduction issue. And it’s not just an issue for Japan and the United States, but we also need the cooperation of other countries, Republic of Korea, et cetera, for the earliest possible resolution of the problem.

I would like to receive third question from the Japanese press, (inaudible).

QUESTION: (Via interpreter.) A question first for Foreign Minister Nakasone. From the experience of the U.S.-North Korea rapprochement under the Democratic Clinton Administration and the delisting of North Korea by the Bush Administration, there are people who are concerned here in Japan that the Obama Administration might become more easy on North Korea. And I wonder if that concern has been allayed.

Now, with regard to reconstruction contributions in Afghanistan, I wonder how you appreciate Japan’s support, and what you would expect of Japan, Secretary Clinton.

FOREIGN MINISTER NAKASONE: (Via interpreter) Well, let me first answer the question. As I have mentioned earlier, with regard to North Korea-related issues, the U.S. is very concerned. And also through the Six-Party Talks, we believe we need to work on the denuclearization of North Korea. And also, we have been – in fact, over the years, we have been addressing these issues, including denuclearization and missile and abduction issues.

Japan and U.S. should maintain close contacts and also through cooperation with South Korea, Russia, and China. And it is our intent to, through this cooperation, try to resolve these problems. We are not, therefore, concerned that the U.S. policy vis-à-vis North Korea is going to change in any significant way.

And also, with regard to abduction issue, as was mentioned, we can count on further cooperation by the United States. So we would count on that sort of cooperation, and make remaining close contacts and coordination with the United States.

SECRETARY CLINTON: Well, let me underscore the commitment that the United States has to the denuclearization of North Korea, and to the prevention of further proliferation by the North Koreans. This is a matter of great concern. We discussed it in-depth today. And the Six-Party Talks are the framework that we believe is best positioned to make progress on our goals with respect to North Korea.

The abductee issue is part of the Six-Party Talks, and we believe it should be, because it is more likely to yield to progress as part of a comprehensive engagement with North Korea. And I would underscore that the North Koreans should in no way be mistaken. President Obama, on his Inauguration, during his address, made it clear that the United States will reach out a hand to those with whom we have differences so long as they unclench their fists. But the decision as to whether North Korea will cooperate in the Six-Party Talks, end provocative language and actions, is up to them. And we are watching very closely.

I have said on several occasions that if North Korea abides by the obligations it has already entered into and verifiably and completely eliminates its nuclear program, then there will be a reciprocal response, certainly from the United States: a chance to normalize relations, to enter into a peace treaty rather than an armistice, and to expect assistance for the people of North Korea. So it is truly up to the North Koreans. But in the meantime, those of us who are parties to the Six-Party Talks will be coordinating and working together to renew the vigorous outreach that we want to have in order to build on what has already occurred.

I want to express deeply the appreciation to Japan for the reconstruction assistance that has already been provided in Afghanistan. Schools have been built. Children are going to school that would not otherwise have been able to do so without the generosity of the Japanese people. There will be a new airline terminal opening up. And it is, again, a tangible sign of the willingness by the Japanese people to try to help the people of Afghanistan, and there are many other examples. So we are very, very grateful, Mr. Minister.

MR. WOOD: The next question will be from Indira Lakshmanan from Bloomberg News Service.

QUESTION: Secretary Clinton, was it a mistake for the Bush Administration to remove North Korea from the list of state sponsors of terrorism? And what can you do now to pressure the North Korean Government on the Japanese abductee issue?

And Foreign Minister Nakasone, how responsible is the U.S. for the financial crisis that threw your own economy into the worst contraction in the last quarter in 35 years? And what do you want the U.S. to do to address the effects of the financial crisis on Japan, and is your own stimulus package insufficient? Thank you.

SECRETARY CLINTON: A lot of questions, Mr. Minister. (Laughter.)

I’m not going to go into an analysis of the past. We have inherited a set of challenges that we are going to address, and one of those is the fact that in the last eight years, the North Koreans have obtained the capacity to, as we expect from the information available to us, make nuclear weapons through its reprocessing of plutonium.

Now if we could turn the clock back, we would not have let that occur. It is, unfortunately, much easier to obtain the fissile material necessary through the reprocessing of plutonium than through the process of highly enriching uranium. But we are where we are. And what we are underscoring is the obligations that North Korea entered into in 2007. And we expect them to continue on that path. Now, we know that the work ahead of us is not easy. People have acted in good faith trying to determine the best way forward. We will be looking at where we are today and determining what is the best path to take now.

Our goal remains the same: a denuclearized North Korea with the kind of complete and verifiable inspections that will put to rest questions about whether or not they have the capacity to make nuclear weapons. In addition, we wish to end the proliferation that has emanated from North Korea. So those are our goals. They’re goals that we share with our Japanese friends, and it is what we will pursue in the Six-Party Talk framework.

FOREIGN MINISTER NAKASONE: (Via interpreter) Well, the question for me – I think there were two points – one is how we work on North Korea. And the second point was our views on U.S. stimulus policy, or package.

First, on North Korea: U.S. and North Korea relations unfortunately have failed to make progress. On the abduction issue, through the Japan-North Korea consultations on August the 12th, North Korea agreed to establish an authoritative committee on reinvestigation, that they will establish that committee early on and redo the investigation. And in response of that, Japan will lift sanctions –in other words, allow the resumption of charter flights, and also allow the resumption of people-to-people exchanges. So we entered into that mutual commitment.

In September we had a new cabinet. Yet I think if they wanted to see – make sure what the new administration’s policy will be on this matter, but Prime Minister Aso, as well as I, myself, in Diet queries have expressed that our policy will remain the same as in the past. Once North Korea resumes reinvestigation, we are ready to lift sanctions. So we have been making that point time and again.

For more than 30 years, they have not met their families. The abductees and the families are waiting for the earliest return of the abductees. So Japan would like to resolve this issue as soon as possible, and we are working on that with that intent. And yet the reality is what I’ve said just now. So with the cooperation of other countries concerned, we would like to do our best to resolve this problem as early as possible.

On the economic question, in November last year, there was a G-20 in Washington, D.C, and then there was APEC meetings, and then in April, there will be the London summit on the financial crisis. Now this is a global financial and economic crisis, and therefore, all economic powers will need to cooperate with each other, and try to resolve the issue in a concerted manner.

But above all, the largest economy in the world, the United States, has passed a relevant bill in the Congress, which accompanies large-scale spending and tax cuts. And I think this is most meaningful.

Japan today, following the supplementary budget, is deliberating on next fiscal year’s budget. And I think each country needs to work to improve its real economy. I think that is important for our recovery.

Well, thank you very much. With this, we would like to conclude this joint press conference. Thank you very much.
# # #

PRN: 2009/T1-3

Japan's Downturn Is Bad News for the World

Japan's Downturn Is Bad News for the World. By Michael Auslin
The U.S. can't count on Japanese savers.
WSJ, Feb 17, 2009

As Hillary Clinton visits Tokyo for her first trip as secretary of state, she will find a country in the midst of its worst recession in 50 years. Japan's economy is contracting across the board: Exports have cratered, industrial production is on track to plummet 30% from a year ago, and the Japanese government projects that GDP will drop 12% from last year. The world's second largest economy, Japan is also the largest holder of U.S. Treasury bonds.

Recently, many economists and scholars in the U.S. have been looking backward to Japan's banking disaster of the 1990s, hoping to learn lessons for America's current crisis. Instead, they should be looking ahead to what might occur if Japan goes into a full-fledged depression.

If Japan's economy collapses, supply chains across the globe will be affected and numerous economies will face severe disruptions, most notably China's. China is currently Japan's largest import provider, and the Japanese slowdown is creating tremendous pressure on Chinese factories. Just last week, the Chinese government announced that 20 million rural migrants had lost their jobs.

Closer to home, Japan may also start running out of surplus cash, which it has used to purchase U.S. securities for years. For the first time in a generation, Tokyo is running trade deficits -- five months in a row so far.

The political and social fallout from a Japanese depression also would be devastating. In the face of economic instability, other Asian nations may feel forced to turn to more centralized -- even authoritarian -- control to try to limit the damage. Free-trade agreements may be rolled back and political freedom curtailed. Social stability in emerging, middle-class societies will be severely tested, and newly democratized states may find it impossible to maintain power. Progress toward a more open, integrated Asia is at risk, with the potential for increased political tension in the world's most heavily armed region.

This is the backdrop upon which the U.S. government is set to expand the national debt by a trillion dollars or more. Without massive debt purchases by Japan and China, the U.S. may not be able to finance the cost of the stimulus package, creating a trapdoor under the U.S. economy.
So far, Japan's politicians have been unable to find a way out of this mess. While another $53 billion stimulus package works its way through parliament, fully one-third of Japan's prefectures have instituted emergency economic stabilization measures.

But the big issues elude short-term solutions. Though Japan's leaders are currently cutting back on military expenditures and domestic services, they're unable to agree on budgets or reform plans. They have no strategic road map for reining in the yen, opening up to international competition, or taking an economic leadership role in Asia that will promote growth and strengthen democratic, market-oriented societies.

Things don't have to turn out this way. If Japan's leaders can craft a monetary policy that ends Japan's deflationary spiral by carefully expanding the money supply, recommit to structural reform, and halt the yen's rise, they can jump-start economic growth. They should also ignore the powerful domestic agriculture lobby and embrace a robust free-trade agenda, which would help them as well as the rest of Asia.

Mrs. Clinton's visit cannot be a simple photo opportunity. This trip needs to result in a clear U.S.-Japan approach to restoring confidence and rebuilding a robust and open international system. Without action, Japan and America may go over the cliff together, dragging Asia and the world down with them.

Mr. Auslin is a resident scholar at the American Enterprise Institute.

Thursday, February 5, 2009

Ex-Pentagon official warns of Japan's decline - ‘‘Few in Japan share my concern’’

Ex-Pentagon official warns of Japan's decline
Japan Today, Friday February 06, 2009, 08:43 AM JST

WASHINGTON — A former senior Defense Department official warned Thursday that Japan must take action to arrest the decline in its regional and international standing. ‘‘The erosion of Japan’s international, regional position has begun,’’ said Richard Lawless, deputy undersecretary of defense for Asia and Pacific security affairs. ‘‘If this marginalization process of Japan is not addressed openly and proactively, the relative decline will accelerate,’’ he said, adding that ‘‘Few in Japan share my concern.’’

Lawless said in a speech that Japan’s decline is partly attributable to the ongoing global financial crisis, which has forced many leading Japanese companies to expect to fall into the red. As well, he pointed out inaction on the part of Japanese policymakers in relation to a plethora of challenges, as exemplified by the recent response to piracy off the coast of Somalia.

It took China ‘‘about 10 seconds’’ to decide to participate in an antipiracy mission there, but Japan spent a tremendous amount of time before deciding this week to send two destroyers on a similar mission, Lawless said.

‘‘It’s not bad, but sad,’’ he said.

A former CIA official, Lawless played a major role in talks with Japan and South Korea over the realignment of U.S. forces and military bases in the two U.S. allies in Asia. He was also active in promoting military exchanges between the United States and China.

He expressed hope a new Japanese government to be launched after the next general election, which must be held by September, will ‘‘get serious’’ about Japan’s decline and take steps to counter it.

‘‘That new government, I think, must take a long, hard look at Japan and the region and the world, and make its own decisions about what it’s going to do,’’ he said.

‘‘If Japan wants to be where it needs to be, it needs to act like it’s in the game,’’ Lawless said. ‘‘It’s not a spectator.’’

Wednesday, January 21, 2009

PPI: Asia Spends More on Research than Europe

Asia Spends More on Research than Europe
Progressive Policy Institute, January 21, 2009

The Numbers:

Spending on scientific research & development, 2007:
- North America: ~ $393 billion
- Europe: ~ $290 billion
- Asia: ~ $320 billion


What They Mean:

India's medieval mathematicians invented the zero and modern numerals around 500 AD. Engineers in neighboring China dreamed up paper, explosives, the compass, and movable type. But the 17th-century Scientific Revolution came not in Asia but the west, and so did the 20th century's medicines, airplanes, radio, computers, spacecraft, TV sets, and telecom gear.
Why? Albert Einstein, wondering about the issue in 1922, blamed Asia's high populations and low labor costs for slowing invention. ("In both India and China the low price of labor has stood in the way of the development of machinery.") A half-century later, British history-of-Chinese-science master Joseph Needham speculated that Europe had jumped ahead by inventing capitalism, which meant competition among businesses for customers and therefore innovation. The question remains interesting -- but only in an historical sense, because Asian science has roared back to life.

Asia's most sophisticated economies have been among the world's heaviest researchers for years. Japan's $130 billion in R&D spending amounted to 3.2 percent of Japanese GDP, far above the rich world's 2.1 percent average and topped only by Israel and Sweden. (The United States was at 2.7 percent, Australia 2.2 percent, Canada 2.0 percent, and Europe 1.7 percent.) Korea's $38 billion in research spending outstripped Britain's $35 billion, and made up 3.0 percent of GDP. Taiwan and Singapore are also well above the world's rich-country average.

Science is reviving in the two giants as well. Chinese research spending, relative to GDP, has doubled in a decade from 0.8 percent to 1.5 percent. In dollar terms, China's $85 billion spending ranks third or fourth in the world (depending on exchange rates), roughly at par with Germany. India's science spending is about $24 billion and about 0.8 percent of GDP. And within the last three or four years -- likely for the first time in four centuries -- Asia's research spending topped Europe's. The United States still tops the world, at $370 billion to Asia's $320 billion and Europe's $290 billion ... but for how long?


Further Reading:

Is Asia inventing, or just spending? In 1980, according to the U.S. Patent and Trademark Office, European researchers filed twice as many U.S. patent applications as Asians. By 2007, Japan's 79,000 applications alone outnumbered the 69,000 from all European countries combined, and Asia's total nearly doubled Europe. Korea's 23,000 applications were barely behind Germany's second-place 23,600; Taiwan, with 18,500, was above both Britain and France. India and China still file fewer patents than the top-tier Asian technological economies and the big European states, but are rising fast. Chinese and Indian researchers accounted for 30 patent applications in 1980, 900 in 2000, and 5,300 in 2007. The PTO patent records: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/appl_yr.pdf


Science in Asia links:

Tokyo-based Asia Science and Technology Seminar trains young Asian scientists:http://www.jistec.or.jp/ASTS/asts_e.html

Indian Prime Minister Manmohan Singh speaks to the Science Congress in Shillong on India's high-tech future:http://pib.nic.in/release/release.asp?relid=46369

The Robotic Association of Japan insists that soft, weak, vulnerable humans have nothing to fear from its metallic, computerized and remorseless creations:http://www.rsj.or.jp/index_e.html

Korea's Ministry of Knowledge Economy (until last year the Min. of Commerce & Industry), perhaps missing the real threat, proposes an ethics charter meant to prevent human abuse of androids:http://www.korea.net/news/news/newsView.asp?part=100&serial_no=20080228018

China's Science and Technology Ministry:http://www.most.gov.cn/eng/

Taiwan's National Science Council announces bio-tech parks, cryptography, license-plate recognition, and more:http://web1.nsc.gov.tw/mp.aspx?mp=7 ASEAN's Science and Technology Network:http://www.astnet.org/

And San Diego's school system instructs America's youth on classical Chinese technology:
www.sdcoe.k12.ca.us/score/chinin/chinintg.htm


R&D around the world:

High end -- Israel is the world's most science-intensive economy, devoting 4.7 percent of GDP to R&D. Sweden is next at 3.7 percent, followed by Japan and Finland at 3.4 percent. South Korea ranks fifth 3.2 percent, with Switzerland sixth. Japan's commitment has risen from 2.0 percent in 1980, and 2.7 percent in the mid-1990s. America's 2.7 percent remains high on international rankings, but -- in contrast to Asian economies -- has not grown since the mid-1980s. American businesses spend heavily on R&D, and U.S. government investment in life sciences and medicine is high. The lag comes from low public funding for research on physics, aerospace, chemistry, and other hard sciences. The National Science Foundation has data on American research spending and other science matters over time:http://www.nsf.gov/statistics/infbrief/nsf08317/
And the OECD counts research totals by country for its members plus Argentina, China, Israel, the EU, Singapore, Slovenia, South Africa, Romania, Russia, and Taiwan:
http://www.oecd.org/dataoecd/9/44/41850733.pdf

Can do better -- The luminaries of European science would not be pleased. Galileo would blush to see Italy's low 1.1 percent of GDP; Archimedes would likewise fume to see Greece spending only 0.6 percent. Newton would be startled to learn that Korea spends more on research than Britain. (The U.K. government research budget is high, but British companies apparently do less research than some of their rivals.) Copernicus might feel worst of all, with Poland the only advanced country to have cut its R&D budgets in this decade. The highest research commitments are in Scandinavia and Germany. The European Science Agency:
http://sci.esa.int/science-e/www/area/index.cfm?fareaid=1

Developing world -- Latin America, the Middle East apart from Israel, Africa, and Southeast Asia are well behind East Asia as research powers. The World Bank's 2008 Development Indicators book finds the Latin average at 0.6 percent, led by Brazil's 0.9 percent. Tunisia is the Muslim world's most research-intensive state at 1.0 percent of GDP, followed by Malaysia, Morocco, and Turkey at 0.7 percent; Uganda's 0.8 percent and South Africa 0.9 percent are Africa's highest rates. Singapore tops Southeast Asia at a rich-world 2.3 percent, but larger ASEAN members could be doing more: the Philippines and Indonesia are at 0.1 percent, Thailand 0.3 percent and Vietnam 0.2 percent. Brazil's 0.9 percent is Latin America's highest rate, with Chile, Argentina, and Mexico next at 0.5 percent.

Monday, January 19, 2009

Engaging North Korea Didn't Work for Japan

Engaging North Korea Didn't Work for Japan. By Melanie Kirkpatrick
WSJ, Jan 19, 2008

Excerpts:

In her confirmation hearing this week, Secretary of State-designate Hillary Clinton said the Obama administration would use the six-party talks with China, South Korea, Japan and Russia to press North Korea to give up its nuclear program. With U.S. negotiator Christopher Hill reportedly staying on at State, it looks like déjà vu for U.S. policy.

Somewhere in Pyongyang, a little man in a boiler suit must be must be smiling -- and marveling at how often Washington falls for his negotiating legerdemain. Dictator Kim Jong Il's latest diplomatic coup came in October when he got the U.S. to take North Korea off the State Department's list of terror-sponsoring countries. What did Pyongyang do in return? The six-party talks collapsed last month when the North said it wouldn't abide by the verbal commitments it had made on verification of its nuclear program. Thus ended Secretary of State Condoleezza Rice's attempt at engagement with the North.

Since Mrs. Clinton is promising to pursue much the same policy, perhaps it's a good moment to review an even longer-running negotiation with dictator Kim Jong Il that has also faltered: Japan's attempt to get information about its citizens who were abducted by North Korea in the 1970s and 1980s. Most of the victims, including a 13-year-old girl, were grabbed by North Korean agents on the streets or beaches near their homes in western Japan, hidden in ships bound for North Korea, and pressed into service training the North's spies to pass as Japanese nationals. The North also kidnapped South Koreans; several hundred are still missing.

The fate of their countrymen is understandably an emotional issue for the Japanese. The names of the 12 people on the official list of the still-missing are well known throughout the country. Prime Minister Taro Aso is often spotted wearing a blue-ribbon pin in their honor. Virtually every political leader supports Japan's longstanding policy: No aid for North Korea unless it releases information on the abductees.

Kyoko Nakayama, special adviser to the prime minister on the abduction issue, was in the U.S. last week to gain support for Tokyo's stance. "The abductions are a state-sponsored crime," she says. "One of the keys to resolving the abduction issue is for the U.S. and Japan to work together." She uses the word "disappointed" -- Japanese understatement for "outraged" -- in reference to President Bush's decision to take North Korea off the terror list.

Tokyo first raised the issue of the abductions with Pyongyang in 1991, Ms. Nakayama says. "We had had our suspicions for years but we couldn't prove [them]." In 2002, when then-Prime Minister Junichiro Koizumi was in Pyongyang, "Kim Jong Il acknowledged they [the abductees] existed, and apologized." Kim's admission "opened a door and we could really start negotiating."

Later that year "we were able to get five people back." Of the remaining 12 kidnap victims on Japan's list, Ms. Nakayama says, "the North Koreans told us that eight had passed away and four had never entered the country." Pyongyang sent a funeral urn containing what it said were the remains of one: Megumi Yokota, the 13-year-old girl. DNA sampling showed the remains not to be Megumi's, Ms. Nakayama says. When Tokyo confronted Pyongyang on the deception, "first of all they said they wanted the bones back. . . . Then they said the DNA test had been trumped up." Since that time "there has been no progress."

Given that background, what is Ms. Nakayama's view of dealing with Pyongyang? "Our experience with negotiating with the North Koreans is that they denied [that they had] abducted citizens for years, and they were very comfortable doing so," she says. "Our experience with agreements with the North Koreans is that they'll make excuses for not fulfilling them."

If that sounds familiar, consider the North's denials and obfuscations on its uranium-enrichment program, which it trumpeted in 2002 and subsequently denied. In 2007, the Bush administration backed off its claims about the North's uranium program. Now, in a valedictory speech this month, National Security Adviser Stephen Hadley warned of "increasing concerns" in the U.S. intelligence community that the North has "an ongoing, covert uranium-enrichment program."

[...]

Ms. Kirkpatrick is a deputy editor of the Journal's editorial page.

Saturday, January 17, 2009

Japanese Defense Ministry eyes developing early warning satellite for missile shield

Ministry eyes developing early warning satellite for missile shield
Kyodo News, Saturday, Jan 17, 2009 @ 06:28 AM JST

TOKYO — The Defense Ministry is considering developing an early warning satellite to detect a ballistic missile in its boost phase to better deal with threats under Japan’s missile shield, according to the ministry’s basic policy on space development and use released Friday. The development of a man-made orbiter, if realized, would be the first step toward Japan having a satellite-based missile detection system of its own.

Japan currently relies on the United States for information on ballistic missile launches, such as those undertaken by North Korea. The early warning satellite would be designed to detect the heat released by a ballistic missile during its boost phase using infrared sensors, providing Tokyo with more time to respond. The development of such a satellite is likely to face many hurdles, however, not only due to technical problems and the huge costs involved but also because of the potential reaction of the United States, Japan’s closest ally.

Tuesday, January 13, 2009

Rent-a-friend in Japan

Rent-a-friend in Japan. By Duncan Bartlett
BBC, Monday, January 12, 2009, at 08:46 GMT

Excerpts:

[...]

Lola - or Rora - to give her a slightly more Japanese pronunciation - is a beauty and she knows it.

Customers pay by the hour for her company. Usually they just want to stroke her, but as a special treat for favoured clients, she will lie back in a chair, close her eyes and pose for photographs.

Lola is a Persian cat who works at the Ja La La Cafe in Tokyo's bustling Akihabara district. It is one of a growing number of Cat Cafes in the city which provide visitors with short but intimate encounters with professional pets.

When I called, there were 12 felines and seven customers, mostly single men.

One man, in his early 30s, was attempting to bond with an Oriental Longhair by means of a rubber mouse.

Yutsuke, who speaks with a lisp, is normally rather shy with people. He longs for a cat of his own but frequent business trips make that difficult. Besides, he lives alone, so the Ja La La is his solution to the problem.


The right pet

It costs about £8 ($10) an hour to spend time in a Cat Cafe.

If felines do not appeal, other establishments will rent you a rabbit, a ferret or even a beetle.

There are more than 150 companies in Tokyo which are licensed to hire out animals of various kinds and although beetles may be cheap, dogs are much more popular.

First you pay a deposit and a hire fee. Then you are issued with a leash, some tissues and a plastic bag and given some advice on how to handle your new friend.

Kaori is a pretty waitress who regularly spends her Sunday afternoons with a Labrador. They go for a walk in the park if the weather is fine, or if it is wet they just snuggle up in front of the TV in her apartment.

"When I look into his eyes, I think he's my dog," Kaori told me. "But when I take him back to the shop, he runs away from me and starts wagging his tail when he sees the next customer. That's when I know he's only a rental dog."


Every need considered

Of course, it is not only animals whose loyalties can be decided by money, as people who work in Japan's vast entertainment business will testify.

The industry offers an enormous variety of opportunities to exchange money for company.

Very popular at the moment is the Campus Cafe, where men go to socialise with female university students. It is cheaper than the upscale hostess clubs in which businessmen and politicians drink whisky with women in kimonos, although that is a business which is in crisis because of the recession.

[...]

One specialist agency is known as Hagemashi Tai, which translates as I Want To Cheer Up Limited. It rents relatives.

Actors are despatched to play the part of distant relations at weddings and funerals. For an extra fee, they will even give a speech.

But the firm's services do not stop there. It can also provide temporary husbands to single mothers who want them.

The website says the "dad" will help the children with their homework. He will sort out problems with the neighbours.

He will take the kids to a barbeque or to a park. He could also appear at the daunting interview with a nursery school head teacher which parents are required to endure in order to persuade the principal to give their child a good start in life.


Cry for help

There is a service for women who are about to wed too. Apparently, they can practise for married life with a hired husband, although whether this involves seduction or sock washing is not exactly clear.

And if things are not working out with a real husband, a woman considering a divorce may choose to hire a "mother" in order to discuss her marital anxieties.

Mr M O from Shizuoka near Mount Fuji called upon the services of I Want To Cheer Up Ltd because he needed a father.

Mr M O has been blind since birth and had a number of concerns that he felt he could not speak to others about.

"I kept it all inside and couldn't deal with the criticisms that had been directed at me by my parents and teachers," he testified.

After some discussion, the company sent an older man to have dinner with him. "Usually I can't open up when I meet someone for the first time but on that occasion, I felt I was really talking with a normal father. I'll use the service again," he said.

Loneliness is a problem faced by many people on these crowded islands. But the Japanese are prone to believe that, in the right circumstances, money can turn a stranger into a friend... at least for a couple of hours.

Check the article at BBC's site.

h/t: Tyler Cowen, Marginal Revolution

Monday, January 12, 2009

Strengthening Our Japanese Alliance

Strengthening Our Japanese Alliance, by Dan Blumenthal
Why the United States should sell the F-22 to its most important Asian ally.
The Weekly Standard, Jan 08, 2009 @12:00:00 AM

Of the many items on President-elect Obama's foreign policy to-do list, one of the most important long-term tasks is repairing America's relationship with its key Asian ally, Japan. Though often taken for granted by American policymakers, Japan is the linchpin of America's strategic position in Asia. Since the end of World War II, the U.S.-Japan alliance has underwritten the relative peace in Asia that has allowed the region to prosper.

While the relationship was attended to with renewed vigor during the early years of the Bush administration, the outgoing president's North Korea policy and lean toward Beijing has alarmed policymakers in Tokyo, and set the relationship on a downward spiral.

Now the president-elect has a chance to revitalize the Japanese alliance while at the same time creating high paying American jobs during a recession, reducing the costs of recapitalizing its U.S. air fleet, and improving America's strategic position in Asia. How? He can sell the F-22 fifth generation fighter aircraft to Japan.

Tokyo is in the market for a new air-superiority aircraft. The Japan Air Self- Defense Force currently has three fighter jet models in its fleet: an F-15 variant, a Vietnam era F-4, and the F-2 (a longer-range variant of the F-16C). But Japan will begin retiring the F-4 platform entirely early next decade.

To retain its ability to maintain dominance over Japan's airspace, Tokyo needs a fighter that can outperform China's growing fleet of Su-30s. The F-22 is unmatched in range, stealth, speed and reconnaissance capability.

Moreover, since 2001, the United States and Japan have made great strides in their ability to defend against common threats. The two countries have set up a combined air operations center to help meet the growing regional air and missile threat Tokyo's possession of the F-22 would further Washington's longstanding goal of increasing the two countries' interoperability.

Washington's sale of the F-22 to Japan would also help reduce unit costs of the plane for the U.S. Air Force. The USAF originally wanted to purchase 700 to 800 F-22 fighters, but was told they needed to cut their buy to 442, then 381, and finally 180. These cuts have substantially increased the cost per aircraft, and now F-22 production may end by 2010. The U.S. military is concerned about its long-term ability to maintain air dominance in the Asia-Pacific, with China's vast airpower advances. Exporting the F-22 to Japan would keep the production line open and allow the air force to purchase more aircraft at a lower price. An added benefit for the Obama administration is that many good manufacturing jobs would be saved, and created, by producing more F-22s. Approximately 95,000 American (mostly union) workers help produce or are suppliers for the aircraft.

So what are the downsides? Some argue that the F-22's technology is too advanced to sell to anyone and that Japan has already leaked information about its Aegis- class destroyer. But if Washington's defense policy of building strong partnerships is to have any real meaning, it must be ready to sell advanced technology to key allies. Washington's technology transfer policies remained mired in Cold War-thinking, designed to keep U.S. technology out of the hands of the Soviets. Today, there is broad consensus in the defense policy-making community that U.S. arms sales policy should be to build up the strength and capacity of allies to defend themselves. It is time to change a policy that does the reverse. Moreover, Japan has no record of proliferating advanced technology.

Others say that the sale of F-22s to Japan will enrage South Korea and "create an arms race" with China. Is it true that South Korea, America's other key ally in Northeast Asia is, for historical reasons, still suspicious of Tokyo. Washington can mitigate these concerns by pushing for closer three way ties among Seoul, Tokyo, and Washington, while quietly urging Japan to be more forthcoming about its past with South Korea. Tokyo has no aggressive intent, and regards South Korea as an ally. And, there is no reason why South Korea should be prohibited from buying the F-22 if they indicate an interest.

The China question is somewhat more complex. There may be an emerging "arms race" in Asia, but so far only one country is off to the races: China. Over the past decade it has deployed more that 1,000 ballistic and cruise missiles and 300 advanced fighter aircraft to its Southern coast. Japan, for obvious reasons, is concerned. The task for the U.S.-Japan alliance is to maintain a regional political system that China does not dominate. At this stage, this means a greater military presence in the region to check China's destabilizing military advances.

The time has come to stop talking about the need for a favorable balance of power in Asia, and to begin to act. Exporting the F-22 to Japan makes sound strategic and military sense. President-elect Obama could improve alliance relations, further America's Asia-Pacific defense policy, and create good jobs at home. Once alliance relations are righted, the United States and its allies can continue to engage China on issues of common interest from a position of strength.

Dan Blumenthal is a resident fellow at the American Enterprise Institute.

Sunday, January 11, 2009

Lee Myung-bak will not demand a new apology from Tokyo for its 1910-45 invasion and rule of Korea

Japan, S Korea agree to boost economic cooperation
Japan Today, Monday 12th January, 06:31 AM JST

SEOUL — The leaders of South Korea and Japan agreed Sunday they must boost bilateral cooperation to weather the ongoing global financial storm, as the neighbors try to move beyond their bitter shared history.

Prime Minister Taro Aso, who arrived in Seoul early Sunday, is expected to discuss economic cooperation and international efforts to end the North Korean nuclear standoff at a summit with President Lee Myung-bak on Monday.

Since taking office 11 months ago, Lee has been pushing for improved ties with Japan and has held five summits with Japanese leaders. He has also resumed top-level visits, which were suspended in 2005 to protest then-Prime Minister Junichiro Koizumi’s repeated trips to a controversial Tokyo shrine that honors war dead, including convicted war criminals.

Lee has also said he will not demand a new apology from Tokyo for its 1910-45 invasion and rule of the Korean peninsula. Japanese leaders have repeatedly issued apologies about their country’s colonial past, but many South Koreans say the apologies are insincere.

Addressing a meeting of Korean and Japanese business leaders at his presidential mansion Sunday, Lee called for the two countries to increase their “substantial cooperation” to cope with difficulties arising from the international financial meltdown and jointly tackle other global issues.

Aso told the meeting he felt ties between the traditional rivals had “greatly” improved since Lee came to power.

He earlier told a business forum that Japan and South Korea should cooperate to surmount the financial crisis.

South Korea and Japan are key trade partners with two-way trade reaching $82.6 billion in 2007.

The two countries have taken steps toward restarting stalled free trade talks—which ground to a halt in late 2004 over disagreements on how much to lower trade barriers on agricultural goods. The sides held working-level meetings twice last year to prepare for reopening negotiations.

Aso said both Japanese and South Korean governments have been receiving requests from businessmen to reach the deal.

Bilateral trade has favored Japan with South Korea recording a nearly $30 billion trade deficit with Japan in 2007.

Yasuhisa Kawamura, deputy press secretary at Japan’s Ministry of Foreign Affairs, told reporters in Seoul that South Korea’s trade deficit is “definitely one of the issues, challenges” that free trade talks have to address.

Lee’s diplomatic overtures toward Japan took a hit in July when Tokyo announced it would recommend that a government teaching manual include Japan’s claim to uninhabited islets claimed by both countries.

South Korea temporarily recalled its ambassador in Tokyo and heightened security near the islets. Activists staged near-daily protests in front of the Japanese Embassy and many scholars and newspaper editorials demanded Lee toughen policy on Japan.

Thursday, January 8, 2009

Ozawa and Obama

Ozawa and Obama. By Michael Auslin
The likely success of the Democratic Party of Japan in this year's general election could mark a new era in Japanese politics and have a significant impact on the Obama administration's relations with its closest Asian ally.

Wall Street Journal Asia, January 6, 2009

After seeming to get back on track earlier this decade, Japan once more faces a host of intractable problems, from a paralyzed political system to an economy again officially in recession. Like its American counterpart, the Japanese electorate wants change, and the likely success of the Democratic Party of Japan in this year's general election could mark a new era in Japanese politics and the end of over half a century of Liberal Democratic Party rule. A DPJ government will not only lead to new policies, but may have a significant impact on the Obama administration's relations with its closest Asian ally.

For over two years now, the LDP has been unable to resolve Japan's economic and political challenges. Having lost control of the Upper House of Parliament in 2007, and on its third prime minister in as many years, the LDP will be hard-pressed to retain its majority in the powerful Lower House. An election must be scheduled no later than September, but with current Prime Minister Taro Aso's popularity in the 20% range, the LDP might be forced to call elections earlier, and an electoral defeat could lead to its dissolution. Should the LDP manage to keep a majority in the Lower House, the current political deadlock will continue, with the two parties splitting control of Parliament and unable to agree on any but the most basic legislation. This would paralyze most of Japan's foreign and domestic initiatives, and impoverish the country at home and abroad.

Ichiro Ozawa, head of the DPJ, is waiting impatiently. Mr. Ozawa has spent the past two decades trying to defeat the LDP, largely through populist measures such as reforming the tax code, improving social services, and distancing Japan from U.S. foreign policies -- in particular those related to the war on terrorism. For example, he has repeatedly expressed a desire to work more closely with the U.N. on international issues and avoid becoming entangled in U.S. global military activities.

Mr. Ozawa's policy preferences cause concern among "strong alliance" proponents on both sides of the Pacific. He is also seen as more pro-China than recent Japanese leaders, who have continuously, if quietly, balanced the economic benefits of closer Sino-Japanese relations with concern over Beijing's growing political influence and military strength.

Even if he wins, however, Mr. Ozawa will not have carte blanche to impose new foreign and domestic policy. The DPJ is riven with factions. Younger foreign policy "hawks" are uneasy with their leadership's call for closer cooperation with the U.N. or with China. Others are skeptical that the DPJ's plan for massive stimulus spending to jumpstart the economy will work any better than the LDP's failed pump-priming in the 1990s. Moreover, should the Democrats falter once they take power, young politicians across the political spectrum may find it more appealing to join forces, thus radically altering the Japanese political landscape.

Even if Japan's voters deliver a clear verdict in elections, whoever wins faces a tremendous economic challenge in 2009. Christmas news that manufacturing output plunged more than 8% in November underscores the bleak prospects for the coming months. The global slowdown has reached Japan's leading exporters, such as Toyota, and the knock-on effect on Japan's numerous domestic suppliers to multinationals will have widespread impact throughout an already fragile economy. Much of Japan's job growth the past decade was through temporary employment. Those workers are now being laid off in droves, putting pressure on social services.

Without a firm government policy to lower taxes and recover the reform mantle wielded by popular former prime minister Junichiro Koizumi, Japan's economic gains of the early decade are at risk, and the country may be facing yet another "lost decade." Combined with America's own extended slowdown, the world economy will be profoundly weakened by the problems plaguing its two largest economies.

The Obama Administration needs all the help it can get to shore up the global economy and ensure stability around the globe. Mr. Obama will undoubtedly find many areas of common interest with a potential Ozawa government, but both should learn from ineffective policies pursued during Japan's recession in the 1990s. Both will do well to recognize that their trans-Pacific partnership can be a powerful tool for solving some of the vexing problems they face, but only if both act resolutely.

Tokyo and Washington should jointly push for free trade to stimulate economic growth, set an example by lowering tax rates, promote development of new energy technologies, and commit to maintaining stability in Asia's common areas. Doing so will help both Japan and its American partner weather a year of living dangerously.

Mr. Auslin is a resident scholar at the American Enterprise Institute.