Japan ups ante to re-exert influence
Land of the Rising Sun is pushing companies with high savings to venture overseas.
JAPAN’s Ambassador to Malaysia Dr Makio Miyagawa was adamant that his country “is not finished yet” when he was inundated with questions at a function last year, amid an incessant flow of news on the Belt and Road initiative and China’s expanding influence to reshape the world.
Tokyo’s economic influence in the region has been eclipsed by the stronger presence of China’s investments in Malaysia and other Asean nations after President Xi Jinping launched his ambitious economic-cum-diplomatic initiative in 2013.
But for Dr Miyagawa, who has witnessed the height of Japanese investments in his previous posting during the premiership of Tun Dr Mahathir Mohamad, the prospects of Japan being sidelined is just too much to stomach.
Japan was an economic model for Malaysia during the Look East policy of Dr Mahathir, who had showered praises on Japanese technology and corporate work ethics.
However, in recent years, China is the buzz word.
Events of late showed that Japan has upped its ante in several regions. They showed that Tokyo is not oblivious to the decline in its economic role and influence outside Japan.
Despite the tough challenges posed by China, Japan – which has slowed down its overseas investments and financial aid partly due to its serious fiscal deficit – seems determined to re-ignite its past lustre.
“Our authoritative economist will use facts and figures to dispel your despair on Japan,” said the ambassador when hosting a talk by renowned Professor Emeritus Motoshige Itoh last Monday.
Itoh, 66, is economic adviser to Japanese Prime Minister Shinzo Abe and a member of Japan’s powerful Council on Economic and Fiscal Policy.
In his lecture on Japan’s economy, Itoh lent support to the ambassador’s stand that the sun has not set for the Land of the Rising Sun.
Japanese corporations are now directed by Tokyo to utilise their war chests to raise investments – locally as well as overseas, according to the professor from Gakusyuin University.
The surplus funds in the corporate sector came from record high profits posted by companies after Abe’s government imposed corporate governance reforms.
“Japan’s corporate savings is the highest among the developed nations. We have not used our savings yet. The government is encouraging companies to invest locally and abroad, and give them support,” said Itoh.
Over the past four years, the total savings by the corporate sector have possibly hit US$1 trillion (RM4.3bil) due to record profits posted and the non-utilisation of the funds.
These “idle” funds in the Japanese private sector is as large as the amount China has promised to invest in Asia, Middle East and Europe for its Belt and Road projects that could alter the global trade routes.
“Japanese enterprises are encouraged to expand abroad with their savings. Promotion of investments in infrastructure, construction, power and water are very important for the Prime Minister. We hope to regain our lost lustre,”
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Itoh told Sunday Star after the talk.
Hence, it is no surprise that Japan has become more active on global stage in recent months.
Although China is the second largest economy in the world and has developed the world’s largest railway system, Japan – backed by its track record in rail technology – is competing with China for high speed rail (HSR) jobs in the region.
It is laying groundwork for the bidding for the RM70bil Kuala Lumpur-Singapore HSR. This includes regular visits by high-level officials to Malaysia and Singapore
Last Monday, Japan’s Minister for Land, Infrastructure, Transport and Tourism, Keiichi Ishii, hosted a symposium in Singapore to tout its wares for the HSR project to his Singapore counterpart Khaw Boon Wan.
Japan has often cited the safety, reliability and sustainability aspects of its Shinkansen HSR system as selling points.
Ideas proposed by Japan for collaboration with Singapore include the manufacturing of the Shinkansen system in the republic and joint development of design and implementation policies for the HSR, according to Channel News Asia.
Although a similar symposium was held in Malaysia last May, Ishii still flew over to Kuala Lumpur after his Singapore visit.
“Our minister had a meeting with Prime Minister Datuk Seri Najib Tun Razak about the high speed rail,” an official from Japanese Embassy told Sunday Star.
Japan’s intensified efforts on public relations is understandable, given that not long ago Tokyo’s plan to construct Jakarta-Bandung HSR line in Indonesia was usurped by China.
Further away, Japan caused alarm by standing in the ring exchanging blow for blow with China in their bid to extend influence via infrastructure investments craved for by very poor countries.
In Bangladesh, Japan was awarded a contract to build a deep-sea port on Matarbari Island at the expense of a Chinese proposal to build a similar one nearby.
In Sri Lanka, Japan and India are planning to build a port and industrial zone at Trincomalee after China took over the Hambantota deep-sea port.
Three months ago, Japan and India announced the establishment of the Asia-Africa Growth Corridor – seen as a mini Belt and Road plan.
However, China watcher Wade Shepard opines that roads and rails and economic zones China and India are investing in across Asia ultimately will bolster connectivity, development and trade.
“While China and Japan are competing to develop infrastructure in Asia and Africa and squabbling over particular projects and points of geopolitical influence, what both are building amounts to the same thing: the New Silk Road,” Shepard writes in Forbes.com.
On a global scale, Japan is keen to lead the Trans-Pacific Partnership (TPP) that has been abandoned by the United States – the original architect of TPP that excludes China.
But so far there is no consensus on leadership for TPP11 (TPP with the 11 remaining members).
“The TPP is very important for us as it will create wealth for us,” said Itoh after his talk.
Although TPP11 – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – have said they remain committed to the deal, the implementation of the TPP has stalled.
Last week, officials from some TPP member countries met in Sydney to discuss amendments to TPP terms but no major conclusion was reached.
Japan is prepared to lead TPP and “wait patiently” for the United States to rejoin the grouping, said Itoh.
“TPP11 is important for two reasons – it is important even without the US because it remains a high-level free trade agreement and, secondly, if we have a TPP11, it provides more opportunities for the US to come back whether during Donald Trump’s administration or later,” he said.