Category Archives: BUSINESS

Historic ryokan sells for ¥212 million

The city of Fuchu in Hiroshima Prefecture will be purchasing a historic ryokan for an estimated 212.5 million Yen (approx. US$2 million).

Koishiki opened in 1872 as a traditional inn and operated up until 1990. It sits on 2,500 sqm of land with a landscaped Japanese garden. The 3-story wooden main building is typical of the gable-roofed architectural style seen in traditional inn towns. In 2004, the main building and four other buildings within the grounds were registered as a National Tangible Cultural Property. In 2005, a local company purchased the property and operated it as a restaurant, cafe and event space. After several years of operating losses, the company closed the restaurant last year and approached the city with an offer to sell.

The city plans to re-open it as an event and tourism spot in 2021. The city contributed approximately 60% of the purchase price, with the remaining 40% donated by two local businesses in exchange for future operating rights.

Location

Fuchucho, Fuchu City, Hiroshima Prefecture

Sources:
The Sanyo Shimbun, June 23, 2020.
The Mainichi Shimbun, June 5, 2020.

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The multilateral system: use it, or lose it

Workers remove the International Monetary Fund (IMF) emblem and nation flags from the podium after a World Bank/IMF ceremony in Hong Kong (Photo: Reuters).

Author: Editorial Board, ANU

Asia’s businesses and households rely on a global system of rules and institutions to do business overseas. That global system is under attack, and Asian governments are yet to mobilise to stop it. Governments in the region weaken the system every time they preference short-term bilateral band-aids over long-term multilateral solutions; from managing US–China tensions to the response to COVID-19. Now is the time for Asian governments to show leadership on the global system and its reform. If they don’t use it, they’ll lose it.

Losing it would be a big problem for the region. Asia relies on the global system for its prosperity. Asian governments rely on the World Trade Organization to settle trade disputes and rely on the global trade rules for the majority of their trade. They rely on the Paris Agreement to address climate change, the WHO to address global health challenges and international law to bolster security. Asia relies on the US-led global financial system for investment, finance and stability.

The global system is vital to Asia’s interests. Yet, one by one, global rules and institutions have been undermined in recent years. The United States has shelved the WTO dispute settlement process, shown contempt for trade rules and trade partners, withdrawn from the Paris Agreement and cut funding to the WHO. The United Kingdom has threatened to breach international law in its Brexit negotiations. China has responded to US flouting trade rules with managed trade and shows disrespect for international human rights law in Hong Kong and in its treatment of Uighurs in Xinjiang. The United States, China, Japan and South Korea have sidelined the multilateral system in their trade disputes. During the COVID-19 crisis the cooperation and solidarity of the global financial crisis has been replaced with confrontation and suspicion.

The multilateral system is …continue reading

    

Domestic policies key to the Supply Chain Resilience Initiative

Workers are busy at producing vehicles at a factory of Dongfeng Honda, a 50:50 joint-venture between Dongfeng Motor Group and Honda Motor Company, Wuhan city, central China's Hubei province, 7 April 2020 (Photo: Fachaoshi/ Reuters).

Author: Ken Heydon, LSE

Reports are circulating of a trilateral exploration by Japan, India and Australia of a ‘Supply Chain Resilience Initiative’ (SCRI) seeking to secure supply chains and reduce dependence on China. The initiative — seemingly instigated by Japan — will likely be broached at an India–Japan summit in coming weeks. It is envisaged to eventually extend to ASEAN and the United States.

The initiative prompts some critical questions. What, for example, is the degree of shared ambition? India and Japan have clear economic motivations — including fostering Indian pharmaceutical activity in Japan and Australia, and Japanese motor vehicle production in India. But distinctive strategic concerns also arise from recent border tensions with China in East Ladakh and the Senkaku Islands.

The driving ambition of the United States is no less than to constrain China’s rising technological and strategic prowess. But although Australia may wish to have fewer eggs in the China basket, it will not want to jeopardise crucial trade links with the region’s largest market. And ASEAN members, whose participation is unlikely, are reluctant decouplers as emerging beneficiaries of Chinese offshoring.

Another question is one of principle. Is it possible to designate and foster prospective areas of economic activity — such as semiconductors, aerospace, medical devices, textiles, chemicals and rare earths — without falling into the trap of picking winners? This danger is very real for Japan, having budgeted US$2.2 billion to reconfigure supply chains. The risk is also particularly acute in the framework of the global value chains (GVCs). The temptation will be to reduce import restrictions on intermediate inputs while increasing them on final products, raising the spread of tariffs (tariff dispersion) and hence trade distortion.

A related question is one of practical feasibility. How realistic is it to seek to displace China in GVCs? Some firms, like Toshiba and …continue reading

    

Is the end nigh for tapioca? Tokyo tapioca shops suffer closures in the midst of COVID-19

Will this be the nail in the coffin, the last boba straw through the lid? Tapioca, also known as boba, bubble tea, or pearl milk tea depending on where you’re from, peaked during the summer of 2019 in Japan with a multitude of stores popping up and some establishments even selling one-liter (33.8-ounce) servings. While […]

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Japan’s Indo-Pacific vision will endure

Japan Maritime Self-Defense Force personnel are seen on the destroyers JS Suzutsuki (DD 117) (L) and JS Inazuma (DD 105) as they arrive as part of an Indo-Pacific tour at Tanjung Priok Port in Jakarta, Indonesia, 18 September 2018 (Photo: Reuters/Willy Kurniawan).

Author: Tomohiko Satake, NIDS

Since the now former Japanese prime minister Shinzo Abe announced his resignation on 28 August, many have discussed how Japan’s foreign policy will change under the new administration. Questions have emerged about whether Japan’s new administration sworn in on 16 September will continue to pursue the ‘free and open Indo-Pacific‘ (FOIP) vision promoted by the Abe administration.

The question becomes more relevant given Japan’s domestic situation. Japan’s fiscal condition, including its massive deficit, is worsening under massive government spending to counter the pandemic impact. Japan’s GDP shrank a record 27.8 per cent between April and June. Inevitably, the new administration’s focus is on domestic economic recovery. There are nevertheless at least four reasons why the administration will likely carry on Abe’s foreign policy activism, represented by FOIP.

First, Prime Minister Yoshihide Suga clearly emphasised during his election campaign for Liberal Democratic Party (LDP) leadership that he would follow in Abe’s footsteps on foreign policy, including FOIP. As Abe’s chief cabinet secretary, Suga worked in the inner circle of the Abe government.

Suga’s career has equipped him with experience in dealing with mainly domestic affairs. He had previously served as a Yokohama City Council member. Suga has not yet raised any new foreign policy initiatives (unlike another LDP leader candidate, Shigeru Ishiba, who proposed an ‘Asian NATO’). His lack of foreign policy experience may give more weight to the National Security Secretariat and the Ministry of Foreign Affairs — which are responsible for implementing the FOIP vision — in foreign policymaking.

Second, it is highly unlikely that the new administration would weaken its commitment to the FOIP vision, endorsed by the United States and other Indo-Pacific partners. Although often overlooked, one of the great achievements of the Abe administration was …continue reading