Rybit
04-10-2005, 07:31 AM
"Take Japanese goods off every shelf." That's what the China Chain Store & Franchise Association is urging members to do, and now. It wouldn't be such a big deal if the group's members didn't account for 10 percent of retail sales in the world's most energetic economy. Most of the credit for Japan's recovery goes to China's economic boom.
Asian trade and economic growth are now in jeopardy as tensions rise between the region's two biggest economies. The cause: Unresolved history dating back to World War II. For similar reasons, frictions are rising between Japan and South Korea, Asia's No. 3 economy.
The enmity between Japan and China was graphically on display recently when Chinese protesters attacked Japanese retailers including Ito-Yokado Co. and Aeon Co. to show opposition to Japan's bid for a permanent seat on the United Nations Security Council. Japan has asked China to ensure the safety of Japanese nationals and companies.
All this could take an ever-growing toll on Asia's economic and financial outlook. "It has the potential to destabilize East Asia," says Andy Xie, Hong Kong-based chief Asia economist at Morgan Stanley.
Cooperation Needed
It's hardly an exaggeration. This may be the Asian century, yet there's no room for this region to be complacent about competing with far more advanced Western economies. It's imperative that leaders and policy makers here join hands to extend today's rapid growth.
Cooperation has never been more vital. Asians still ship vast amounts of savings that could be used here on roads, schools and stimulating entrepreneurship to the U.S., where it's parked in Treasuries. The arrangement keeps U.S. borrowing costs low, though it's not clear how much Asia gets in return - other than slightly cheaper exports.
Japan, China and Korea should be mulling ways to bring that money back home. They also need to step up efforts to create deeper Asian bond markets, reduce trade barriers and adopt a euro-like single currency. They need to link stock markets and standardize accounting systems. They need to figure out what to do about North Korea's unpredictable regime.
They also should be comparing notes on precarious debt situations in each economy. Japan's national debt is approaching 150 percent of gross domestic product, something that's making investors and rating companies antsy. China's financial system is awash in untold numbers of non-performing loans. Korean consumers are sitting on huge debts accumulated since the 1997 Asian crisis.
Textbook flap
Yet worsening feuds make cooperation and economic progress unlikely.
Case in point: Honda Motor Co., the first Japanese automaker to build vehicles in China, is cutting back Japanese employees' business trips to the country in reaction to rising anti-Japanese sentiment.
The latest Japan-China dustup involves changes that Japan's government plans for history textbooks used in public schools. China says the books paint over atrocities by the Japanese Imperial Army during its occupation of China during World War II.
Sino-Japanese tensions also are being affected by competition for energy resources in the East China Sea and a joint U.S.-Japanese defense statement earlier this year naming Taiwan as a security concern. China regards Taiwan as a renegade province.
While economic integration of Japan and China is inevitable, both nations' governments have rarely been further apart. For lack of other options, Xie says, the Japan-China partnership "will probably stumble along on mutual economic interests and hit a crisis at some point."
A bigger pie
The question is the extent to which any kind of crisis will affect Asia's economy. It's impossible to know, but investors who ignore the risk may regret it.
Increased tensions would fly in the face of economic destiny. Japan and China look skeptically at one another. Japanese worry China will siphon off an ever-growing number of its jobs; China worries Japan is working to slow its economic ascent. Yet both nations are natural economic partners.
As Xie has argued for years, the combination of Japan's wealth and technologies and China's low costs is a win-win situation because it creates a bigger economic pie. And he's absolutely right.
Japan has been moving large portions of its assembly industries to China, leveraging it to boost competitiveness in the U.S. China's industrialization also has benefited Japan's equipment industries. Imports of Chinese goods are lowering living costs for aging Japanese population.
The case for integration will only grow stronger. Morgan Stanley says China now accounts for one-fifth of Japan's total trade compared with 12.4 percent in 1999 and 11 percent in 1994. Within a decade, China could account for a third or more of Japanese trade.
The trouble is, political ties are fraying apace. Why not get the leaders of Japan, China and Korea in a room and have them work things out? This suggestion may sound naive, yet such a summit is inevitable. It seems logical to do it now rather than five or 10 years from now, years during which free trade in the world's most vibrant economic region would probably experience major setbacks.
Japan and China - so close and yet so far.
William Pesek Jr. is a columnist for Bloomberg News.A sad and tragic fact is that not many people have a clear conception of what untold crimes the Japanese committed during World War II. The total number of Chinese and Korean civilian deaths resulting from the War of Japanese Aggression is by conservative estimates close to 25-30 million (this is not including Pearl Harbor) (Wikipedia, 2005). It's the "untold holocaust," and honestly, I'm disheartened with Japan's revisionist attitudes toward its World War II history. I'm 1/8th Japanese, and I don't think the Japanese should take this to the grave. Of course, I don't particularly like the means the Chinese and South Koreans are using to get their attention, but it seems nothing else will do.
Most Americans will agree that the surveys of American history produced for college-prep schools have an apologist attitude towards slavery, the Trail of Tears, Indian massacres, the Open Door policy, Vietnam, and so forth. And most Americans can reasonably tell you about them. But I've studied in Japan's Hiroshima Shudo University for a semester before, and what disapoints me is that most of the students I've met (that is, mostly engineering and business students) have very little idea what happened during the war. The purpose of history is to educate the future from making the same mistakes of the past, but by most accounts, it seems that Japan's Ministry of Education threatens to make their atrocities in World War II (Pearl Harbor, Rape of Nanjing, etc) a footnote in the history textbook (Pesek, 2005). They simply should NOT endorse a textbook that seeks to erase any notion of war or holocaust.
Don't get me wrong: I don't think the Japanese should view their mistakes as shame, but I simply believe that they should include it along with all their other "glorious" history. As limiting of free speech as it may seem (but in the interests of the "common good"), the French and Germans have passed a law that prohibits hate speech and holocaust denial.
And going off-topic for a completely unrelated issue--I think a common currency such as an Asian "Euro" is in paper a good idea and would mend relations among Asian countries, but impossible to implement. There are several legitimate reasons why it simply would not happen, such as China's firm grip on currency, fragile relations among Japan, China/Taiwan, and Korea, etc.
What's your say?
Asian trade and economic growth are now in jeopardy as tensions rise between the region's two biggest economies. The cause: Unresolved history dating back to World War II. For similar reasons, frictions are rising between Japan and South Korea, Asia's No. 3 economy.
The enmity between Japan and China was graphically on display recently when Chinese protesters attacked Japanese retailers including Ito-Yokado Co. and Aeon Co. to show opposition to Japan's bid for a permanent seat on the United Nations Security Council. Japan has asked China to ensure the safety of Japanese nationals and companies.
All this could take an ever-growing toll on Asia's economic and financial outlook. "It has the potential to destabilize East Asia," says Andy Xie, Hong Kong-based chief Asia economist at Morgan Stanley.
Cooperation Needed
It's hardly an exaggeration. This may be the Asian century, yet there's no room for this region to be complacent about competing with far more advanced Western economies. It's imperative that leaders and policy makers here join hands to extend today's rapid growth.
Cooperation has never been more vital. Asians still ship vast amounts of savings that could be used here on roads, schools and stimulating entrepreneurship to the U.S., where it's parked in Treasuries. The arrangement keeps U.S. borrowing costs low, though it's not clear how much Asia gets in return - other than slightly cheaper exports.
Japan, China and Korea should be mulling ways to bring that money back home. They also need to step up efforts to create deeper Asian bond markets, reduce trade barriers and adopt a euro-like single currency. They need to link stock markets and standardize accounting systems. They need to figure out what to do about North Korea's unpredictable regime.
They also should be comparing notes on precarious debt situations in each economy. Japan's national debt is approaching 150 percent of gross domestic product, something that's making investors and rating companies antsy. China's financial system is awash in untold numbers of non-performing loans. Korean consumers are sitting on huge debts accumulated since the 1997 Asian crisis.
Textbook flap
Yet worsening feuds make cooperation and economic progress unlikely.
Case in point: Honda Motor Co., the first Japanese automaker to build vehicles in China, is cutting back Japanese employees' business trips to the country in reaction to rising anti-Japanese sentiment.
The latest Japan-China dustup involves changes that Japan's government plans for history textbooks used in public schools. China says the books paint over atrocities by the Japanese Imperial Army during its occupation of China during World War II.
Sino-Japanese tensions also are being affected by competition for energy resources in the East China Sea and a joint U.S.-Japanese defense statement earlier this year naming Taiwan as a security concern. China regards Taiwan as a renegade province.
While economic integration of Japan and China is inevitable, both nations' governments have rarely been further apart. For lack of other options, Xie says, the Japan-China partnership "will probably stumble along on mutual economic interests and hit a crisis at some point."
A bigger pie
The question is the extent to which any kind of crisis will affect Asia's economy. It's impossible to know, but investors who ignore the risk may regret it.
Increased tensions would fly in the face of economic destiny. Japan and China look skeptically at one another. Japanese worry China will siphon off an ever-growing number of its jobs; China worries Japan is working to slow its economic ascent. Yet both nations are natural economic partners.
As Xie has argued for years, the combination of Japan's wealth and technologies and China's low costs is a win-win situation because it creates a bigger economic pie. And he's absolutely right.
Japan has been moving large portions of its assembly industries to China, leveraging it to boost competitiveness in the U.S. China's industrialization also has benefited Japan's equipment industries. Imports of Chinese goods are lowering living costs for aging Japanese population.
The case for integration will only grow stronger. Morgan Stanley says China now accounts for one-fifth of Japan's total trade compared with 12.4 percent in 1999 and 11 percent in 1994. Within a decade, China could account for a third or more of Japanese trade.
The trouble is, political ties are fraying apace. Why not get the leaders of Japan, China and Korea in a room and have them work things out? This suggestion may sound naive, yet such a summit is inevitable. It seems logical to do it now rather than five or 10 years from now, years during which free trade in the world's most vibrant economic region would probably experience major setbacks.
Japan and China - so close and yet so far.
William Pesek Jr. is a columnist for Bloomberg News.A sad and tragic fact is that not many people have a clear conception of what untold crimes the Japanese committed during World War II. The total number of Chinese and Korean civilian deaths resulting from the War of Japanese Aggression is by conservative estimates close to 25-30 million (this is not including Pearl Harbor) (Wikipedia, 2005). It's the "untold holocaust," and honestly, I'm disheartened with Japan's revisionist attitudes toward its World War II history. I'm 1/8th Japanese, and I don't think the Japanese should take this to the grave. Of course, I don't particularly like the means the Chinese and South Koreans are using to get their attention, but it seems nothing else will do.
Most Americans will agree that the surveys of American history produced for college-prep schools have an apologist attitude towards slavery, the Trail of Tears, Indian massacres, the Open Door policy, Vietnam, and so forth. And most Americans can reasonably tell you about them. But I've studied in Japan's Hiroshima Shudo University for a semester before, and what disapoints me is that most of the students I've met (that is, mostly engineering and business students) have very little idea what happened during the war. The purpose of history is to educate the future from making the same mistakes of the past, but by most accounts, it seems that Japan's Ministry of Education threatens to make their atrocities in World War II (Pearl Harbor, Rape of Nanjing, etc) a footnote in the history textbook (Pesek, 2005). They simply should NOT endorse a textbook that seeks to erase any notion of war or holocaust.
Don't get me wrong: I don't think the Japanese should view their mistakes as shame, but I simply believe that they should include it along with all their other "glorious" history. As limiting of free speech as it may seem (but in the interests of the "common good"), the French and Germans have passed a law that prohibits hate speech and holocaust denial.
And going off-topic for a completely unrelated issue--I think a common currency such as an Asian "Euro" is in paper a good idea and would mend relations among Asian countries, but impossible to implement. There are several legitimate reasons why it simply would not happen, such as China's firm grip on currency, fragile relations among Japan, China/Taiwan, and Korea, etc.
What's your say?