The Sixteenth Edition of Roundtable Japan will be exceptionally held online
Securing Japan’s strategic interests in a post Covid world
What does it mean for Japan?
The world economy is going through a shock without precedent since the great depression of the 30s, with all major economies, with the exception of China, in negative growth up to minus 12% in some cases, public debt levels continuing to soar, unemployment rising and no prospect of getting back to 2019 level before the first part of 2022 at best. As things stand, China looks set to emerge from the crisis in a much stronger position than the US, with Europe and Japan coming behind.
- What kind of new balance of economic forces are we looking at post pandemic?
- What will be the implications?
- What could that mean for Japan economic and geopolitical orientations?
- Robert A. Feldman, Senior Advisor, Morgan Stanley MUFG Securities Co., Ltd., Japan
- Itoh Motoshige, Professor, Gakushuin University, Japan
- Christian Noyer, former Governor, Bank de France
- Terasawa Tatsuya, Senior Advisor to the Cabinet Secretariat, Special Advisor to the Minister, former Vice-Minister for International Affairs, METI, Japan
- Claude Smadja, Founder and Chairman, Smadja & Smadja Strategic Advisory, Switzerland
The pandemic is forcing Japan to accelerate business digitization and changes in workforce practices in an unprecedented way. The pandemic needs to be used as an opportunity for a major push towards modernization of the country’s economy. However, digitization
is also creating more pressure to address in a more systematic way increasing threats to cybersecurity. The government has set new guidelines for promoting digitization of activities, also aiming at creating a “digital government”.
- What measures to push for the development of e-commerce as part of the digitization process and as a way to boost economic activity?
- How would a “digital agency” help create a quantum leap in Japan’s digitization process?
- Beyond the business domain, what measures in the education and medical services domains?
- In what ways will teleworking help modernize the country work practices?
- What are the immediate steps to ensure that increased cybersecurity will keep pace with business and society digitization?
For a number of years Japan had been the odd man out with subpar growth or economic stagnation, deflation, excess savings, aging population. However, since the end of the 2008-09 financial crisis Japanization has become a buzzword describing the similar situation faced by a number of advanced economies with long-lasting zero or negative interest rates and extended quantitative easing. And now, as they assess the medium and long-term impact of the pandemic, many economists are warning that “Japanization” might be the fate of most advanced economies.
- What are the implications for Japan of the fact that most advanced economies are now in the same kind of fiscal and monetary situation than Japan and that “Japanization” might become the new normal?
- Would Japan’s experience in having to deal for a long time with a situation that other advanced countries are now experiencing give some kind of competitive advantage to the country in a post Covid context?
- What could this mean for the evolution of the Yen and for the way foreign investors look at Japanese assets?
- Matsumoto Oki, Chairman, Monex Group, Japan Inc.
- William Pesek, Contributing Columnist, Nikkei Asia & Author, “Japanization: What the World Can Learn from Japan’s Lost Decades”
- Paul Sheard, Research Fellow, Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government, USA
- Georges Ugeux, Chairman & CEO, Galileo Advisors LLC, USA
- Iwata Kazumasa, President, Japan Economic Research Center, Japan
Prime Minister Suga has put administrative reform and deregulation as a top priority for his government. The context of the pandemic might help the new cabinet overcome resistances from vested interests and move forward with reforms that would help increase economic efficiency and provide significant support for a more robust economic performance in the future.
- What “low hanging fruits” in terms of administrative reform and deregulation could translate into immediate tangible improvement in business framework conditions?
- PM Suga has been quiet on labor market reform. To what extent should this be an important element of the deregulation agenda?
- How far should a reform of the telecom sector go to improve significantly business conditions and e-commerce boost?
- How to advance on immigration reform without creating a backlash?
Japan needs to have equally good relations with the US as well as with China, from a geopolitical as well as an economic point of view. The country has the same trade volume (US$ 300 billion with both partners). However, the confrontation between the US and China – even in a Biden administration – forces Tokyo into a very delicate balancing act, especially as questions about US reliability cannot be under-estimated. One can expect PM Suga to continue Mr. Abe’s policy of improving the relationship with China but also to strengthen Japan’s security position.
- What can Japan do to avoid becoming a victim of the weaponization of supply chains for geopolitical purposes, whether by one or the other of its partners?
- How could Beijing and Tokyo ensure that the bilateral relationship remains steady and what steps from both sides could help improve it and reduce the trust deficit?
- Japan has avoided siding completely and openly with Western countries in their tougher stance – and in some cases sanctions – against China. Will Tokyo be able to maintain this “middle of the road” position, and on what conditions?
- Ronnie Chan, Chairman Hanglung Properties, Hong Kong SAR
- Brad Glosserman, deputy director & visiting professor, Center for Rule Making Strategies, Tama University, Senior Advisor (non resident), Pacific Forum
- Miyamoto Yuji, former Ambassador of Japan to China
- Nobutani Kazushige, President, Japan External Trade Organization (JETRO), Japan
- Wang Huiyao, Founder & President, Center for China and Globalization (CCG), People’s Republic of China
- Claude Smadja, Founder and Chairman, Smadja & Smadja Strategic Advisory, Switzerland
There is a consensus that a vaccine or a few of them could be ready by the end of the year but that we will have to wait, presumably until the end of the first quarter of 2021, before a very significant number of people in different countries will be able to benefit from it. There is no underestimating the number of very acute issues involved when a vaccine will be considered ready for use, such as networks of distribution, who would be the people able to get the vaccine first at the national and international level, prices etc.
- Are there some realistic analyses on the evolution of the pandemic at the global level, and the ways to contain it or cure it?
- Where are the main uncertainties and how will they continue hang up with tremendous implications on social and health conditions and on economic activity?
It recently came as a shock that Berkshire Hathaway was making a big bet on Japan, taking stakes now valued at US$ 6.7 billion in the country’s five leading trading companies. However, beyond stock market bets, are there some reasons for a more positive assessment of Japan’s prospects than has been the case in the last few years?
- Could it be that investors are beginning to realize that Japan’s monetary and economic situation might be a kind of precursor of what the world’s advanced economies could look like in the next few years and thus Japan might have some attractive features for these investors with its relatively low-priced equities and steady yields to shareholders?
- To what extent could the pandemic shock and the incentive for digitization and workstyle reform help improve the country’s productivity and thus contribute to the revitalization of the economy despite the demographic factors?
- In what way could the country’s relatively low level of Covid casualties and the very strong economic policy response to the pandemic put Japan in a better position than many other developed economies in a post-Covid global environment?
- What sectors could be selected as the new potential growth drivers for the economy?
Most observers consider that this year’s US presidential election will be the most important one in the last fifty years or more. While all polls give Joe Biden as the winner, a surprise can definitely not be excluded, and Donald Trump might still find his way back to the White House next year.
- What a Biden victory would mean for America’s economic and fiscal policy?
- What to expect from the markets’ evolution – especially in a context of still very subdued economic activity in the US and at the international level?
- Would a Biden policy towards China and the US allies and partners mark a significant shift with a positive impact for business and economic relations, contributing to accelerate an economic recovery?
- Would there be a change of tone, substance or emphasis to be expected from a Trump 2 administration in the fiscal, economic and trade domains?
- What could a Biden or a Trump victory mean for the US dollar and its relationship with other major currencies?