[etc.]Genron NPO Conference on Asia Strategy Symposium 1 ―How Should Japan Face a Changing Asia?―

Takashi Anzai: President I.Y. Bank

Born 1941. B.A. from Department of Law - Tohoku University in 1963 and joined the Bank of Japan. Worked as: Director of the Niigata Branch, Assistant Director - Operations Department, Director - Bank Examination and Surveillance Dept. and Executive Director. President - The Long Term Credit Bank of Japan in 1998. In 2000, Executive Advisor - Ito Yokado Inc. Current job since 2001.

Donald P.Kanak: President and CEO of AIG Companies, Japan & Korea

Donald P. Kanak is a President and CEO of AIG Companies, Japan & Korea. He joined American International Group, Inc. (AIG) in 1992, elected Executive Vice President and appointed to member of the Office of the Chairman in 2002. He holds a B.A. degree in Economics from University of North Carolina, a Juris Doctor degree from Harvard Law School, and a Master's degree in Management Studies from Oxford University, England.

Eisuke Sakakibara: Professor of Keio University, Director of the Global Security Research Center

Eisuke Sakakibara is now a professor at Keio University and serves as director of the Global Security Research Center, being engaged in an analysis of global markets including Asia. Sakakibara graduated from the Economics Department of Tokyo University in 1964 and received his Ph.D. in economics from Michigan University in 1969.

Tadashi Yanai: Chairman & CEO of: Fast Retailing Co., Ltd.

Tadashi Yanai is the Chairman and CEO of Fast Retailing Co., Ltd. After graduated from Political Science and Economics Department of Waseda University in 1971, he entered JUSCO Co., Ltd. He joined Ogori Shoji Co., Ltd. in 1972, and established “UNIQLO” brand in 1984. The Company’s name changed from Ogori Shoji Co., Ltd to Fast Retailing Co., Ltd. In 1991.

Jesper Koll: Managing Director Chief Economist Japan Research Department of Merrill Lynch Japan Securities

Before becoming the Chief Economist for Merrill Lynch in 1999 he was a Managing Director of Tiger Management L.L.C. and he was the Chief Economistand Head of Economic and Market Research for J.P. Morgan in Tokyo. He has been serving on several Japanese government advisory councils, including the MITI committee on "Big Bang 2001" Japan's financial system reform." Currently, he serves as a member ofthe MoF task force on global capital flows. Jesper Koll holds a master's degree from the Johns Hopkins University, SAISand graduated fromthe Lester B Pearson College of the Pacific in 1980. He has published manyarticles in Japanese, English and European publications as well as one book,"Towards a New Japanese Golden Age." He has been living in Japan since 1986and is a German national.

Takatoshi Kato: Advisor to the President of The Bank of Tokyo-Mitsubishi, Ltd.

Takatoshi Kato is an Advisor to the President of The Bank of Tokyo-Mitsubishi, Ltd. Most of KatoÅfs professional career was rooted in the Ministry of Finance, Japanese Government, culminating in his assignment as Vice Minister of Finance for International Affairs (1995-97). After retirement from government service, he spent a year at his alma mater Princeton University. He holds a BA degree in law of The University of Tokyo (1964) and earned a MPA degree of Princeton University (1968) on the Japanese Government Scholarship Program.

Zhou Muzhi: associate professor of Tokyo Keizai University

Zhou Muzhi is an associate professor of Tokyo Keizai University. After he worked as the Ministry of Machinery Industry of China (1985-88), he came to Japan to continue his studies. He earned his phD from the faculty of economics, Tokyo Keizai University in 1995. He worked as an senior economist in the International Development Center and participated in many research projects on drafting development policies for developing countries (1995-2002). His major publications include “Mechatronics Revolution and New International Specialization-Asia Industrializaiton in Today’s World Economy”.

Tomohiko Taniguchi: Chief Senior Writer of “Nikkei Business”, a weekly magazine.

Tomohiko Taniguchi is the Chief Senior Writer of “Nikkei Business,” a Tokyo, Japan based weekly magazine. Formerly the magazine's London bureau chief, he was President of The Foreign Press Association in London (1999-2000, the first from Asia including Japan in its 111-year history). His English publications include “Japan’s Banks and the ‘Bubble Economy’ of the Late 1980s,” and the articles that appeared in "Central Banking" and "insight Japan". He was a Fulbright visiting fellow at the Center of International Studies, Princeton University (1991-92). He received BA in Law from University of Tokyo.

No Need to Face Others: Asia Has Already Been United

The results of questionnaire responses from 51 of the symposium participants as to how Japan should face a changing Asia appeal for more efforts to be taken in Japan toward opening under its own volition. An overwhelming majority of 87% responded that Japan should open its doors to the world “even more”.

What then does it take to “open the country” in substance? Why must Japan open? These are the very questions we sought answers for at the first session titled “How Japan Should Face a Changing Asia” comprised of four panelists and three coordinators. The discussion came to the conclusion that the questions themselves have already become obsolete. The perception based on the question assumes that the other parties facing Japan are different from Japan, but in reality, the Japanese economy has already been assimilated into Asia inseparably.

The characteristics of manufacturing industries in recent years are the subdivision of production processes and the transfer of modules. Each module is allocated in a single place in an attempt to attain the optimal efficiency. As made clear in the discussion, China has been developed by participating in such new system of division of labor. The Japanese economy, too, has incorporated itself deeply into the network of division of labor and physical distribution systems that have spread widely in Asia. Therefore, the separation between Japan and Asian countries no longer exists.

A view was presented that the era of when a country took a core role as an axis of a vehicle and other countries were connected through the core had gone with the end of the cold war. If that is the case, it becomes crucial for corporations and countries to utilize the effect of existing network systems. Three lines connect only three stations, but adding two more participants increases the number of network lines up to 10 by connecting five stations. This effect must be utilized.

The question that should be asked instead is whether Japan is attractive enough for other countries to desire extending their networks here. At the session everyone except one person expressed pessimistic views. The higher the expectations of Japan are, the more pessimistic their views might have to be.

Japanese companies and the boardrooms among others close their doors firmly to foreigners. As long as Tokyo is the most uncomfortable city for foreigners among the major developed countries, Japan can never hope to participate in the networks expanding in Asia. Some suggested that Japanese people should start with opening their minds and this idea was supported by many participants. Also, the impressive term “cabin fever” was introduced. The term refers to the situation where people always speak ill of each other in a closed linguistic space. It might reflect the very fact that the voice of Japan is hardly ever heard in Asian countries.

This space looks to some ambitious entrepreneurs like an entrepreneurship that rests peacefully in sound doldrums, evading intense challenges and thus a decline of the entrepreneurship. Asia is a place where both chances and risks are high. “Entrepreneurs must train themselves in those circumstances,” commented a panelist and he asserted strongly that Japan had declined to become a complete petit bourgeois society where nobody cares for others. Even American observers who tend to view changes in Japan as positive signs could not refute this point. “First of all, a strong willpower is necessary, and then comes boldness and decisiveness,” was the American panelist’s remark. This shows the spirit of the American people who survived severe restructuring in the past. The same spirit exists in the Chinese people. A Chinese participant explained making an analogy of the Japanese situation with that of the Chinese at the end of China dynasty and caught participants’ attention. China then had the largest GDP and was the world’s largest exporter. But the country lost its wars with Western nations. Once it was on a downhill course, the accumulated economic stocks disappeared in a very short period of time. The Chinese are making strenuous efforts now in order to avoid having history repeat itself. “Japan, do you intend to repeat the folly of China?” was his hearty remark.

If the first thing the Japanese people need to realize may be the fact that ties between Japan and Asian countries are already too strong to be cut off, the next question arising is how to utilize more efficiently the networks that have already been developed.

There is no doubt about European countries being our predecessors. A participant from Europe advised, “Establish an Asian vision through working together in common projects, or, if possible, those projects in which people can pursue shared dreams,” and it gained a lot of support. Maybe something like the Airbus project would be good, or we could perhaps cooperate in environmental issues. Here, a conceptual ability to form visions comes into question and then the linguistic ability to describe dreams becomes an issue. Unfortunately, Japan has yet to possess these abilities, however, the notion that there is no other time but now to start was agreed upon by many participants.

Those who answered “It is indispensable for Japan to exercise its leadership while integrating itself in Asia in order to cut its way toward the future, and Japan has the potential power to do so.” account for 45% of all the people who answered the questionnaires. The number seems to indicate people’s wish for it to be like that. It is now clear that we have not yet reached a point of black despair, and that is the fruit of this symposium together with active discussions developed at the session.

Reviewer: Tomohiko Taniguchi