Japan Must Work to Revive its Economy From a Broad Perspective

Seiji Fuji

We should not hope for a quick resolution to the Sino-American cold war

 The August 5 issue of The Nikkei contained an article by Tama University Professor Toshifumi Kokubun entitled “Viewpoint: A Prolonged Cold War Would be Beneficial,” as part of the “Economic Security Issues” series. It read:

The faces of many businesspeople turn suspicious when they hear talk of the Sino-American cold war continuing for 30 years or more. People have not yet realized that a prolonged cold war would actually be beneficial to Japan and the world. They fail to understand that true peace is when a cold war does not develop into an actual (hot) war.
The risk of war grows when the balance of power crumbles suddenly. If the balance of power is significantly broken while the countries involved in the dispute – as well as their neighbors – are unable to make preparations for the new reality, then chaos will ensue until a new order emerges. Powers will also take more vigorous actions to change their circumstances in that case.
Countries must use their strengths in entirely different ways during the stage of making efforts to prevent cold war, and when making efforts during the stage after a cold war starts. People who hoped that a Sino-American cold war would never occur are now hoping for an early-stage resolution, based on their desire to quickly bring an end to and calm down the situation. However, this actually is a way to abruptly increase tension and bring about the worst possible results. The main gist of America’s China policy is to delay China’s growth, which China is achieving through unjust methods. This policy was started during the Donald Trump administration and remains unchanged under Joe Biden.
In the emerging technology field, the United States is continuing export regulations on China and further enhancing its Committee on Foreign Investment in the United States (CFIUS). Its goals are to obstruct Chinese technological development that is not grounded on healthy competition (utilizing cyber warfare, forced labor, etc.), and to slow down the pace at which China is catching up to the U.S. This ideology also conforms to that of a prolonged cold war.
Comparing the American cold wars with China and the Soviet Union, the methods used in rivalry related to technological development are entirely different. The past Cold War was a technological development contest premised on the limited and distinctive environment of the battlefield. This was based on military needs in the closed-off defense and space exploration industries.
Meanwhile, the Sino-American cold war is a conflict in which the general public and companies are drawn in as customers. In this contest massive amounts of data are collected and utilized in technological development to widely popularize and promote products and services, which are turned into weapons. To this end, winning over the general public and corporations as customers is an essential process. Data cannot be obtained without fulfilling the needs of regular people and acquiring a market position in which these products and services are vital. Companies must achieve victory in the competition to win customers.
Accordingly, countries are intent on actively controlling competitive environments. Without continually remaking the current systems, companies that instantly dominate markets through irresistibly low prices backed by free distribution and government assistance will appear. And if the market is overly controlled by specific companies, those companies will accelerate their technological progress, and the speed at which the balance of power crumbles will also increase. At the same time, the risk grows that these companies will be turned into weapons that are misused for influence operations, division operations, intentional malfunctions, and other means to destabilize society.
The rapid decline of American national power, caused by the collapsing public order inside the U.S., is a factor that may lead to a Sino-American cold war of short duration. In the new common wisdom of the world, companies that have far too much influence on society due to their excessive market shares will be seen as risk factors in national security.
For this reason, countries must have strategic intentions as they continue switching to new, complex, and difficult rules for winning customers in the general market. They also must slow down the pace at which specific companies are gaining market shares. In addition, they must intermittently revise the rules and disrupt oligopolies on a regular basis.

Businesspeople should also think about national interests and make strategic contributions

 Kokubun writes, “Japanese corporations should contribute by continuously changing the rules of economic warfare to encourage a prolonged cold war, with the aim of preventing a precipitous collapse of the balance of power.” He presents the following three important points:

○ Hurrying to end the Sino-American cold war will bring on the worst possible results
○ Rules should be constantly changed to avoid corporate domination of markets
○ Japanese companies should strategically contribute to lengthening the cold war

 To businesspeople it is extremely refreshing to hear the viewpoint that a prolonged Sino-American cold war is preferable, and that, to accomplish this, high-level rules must be formulated to discourage oligopolies. I think we have entered the phase in which even businesspeople must incorporate this cold war into their future strategies. Perhaps this will prove to be an opportunity for Japan.
 Encouraging continual antagonism between two groups makes it easy for others to profit during their fight. During the period when Western countries administered colonies in the 19th century, they frequently followed the principle of “divide and conquer” and benefitted from long-term rule, an example of which is England’s actions in India. During the Cold War period of American-Soviet hostility, Japan profited and achieved a marvelous recovery after World War II. I think Japan should take this rare opportunity to revive its economy during today’s Sino-American Cold War.

Japanese people opposed the Olympics because they have long abhorred risk

 The Tokyo 2020 Olympic Games are going on as I write this essay. Although the opposition parties and many citizens voiced their disapproval of these games, Japanese athletes are putting on spectacular performances and have won 21 gold medals as of August 5. This is a much higher number than our 16 gold medals at the 2004 Summer Olympics in Athens and the 1964 Summer Olympics in Tokyo. Only China and the U.S. have more gold medals, at 32 and 27, respectively. Both of these countries have many more people than Japan; China’s population is 11 times larger and America’s is 2.6 times larger. If we calculate the number of medals won by Japan according to population, then China should have 231 and the U.S. should have 54.6. With this in mind, it certainly seems that Japan has won many gold medals, even considering its home-field advantage.
 Although Japanese citizens are excited about these medals, some people are still against hosting the games at all. In Japan today, it is a given that dissenters will appear whenever you try to do something new that involves any risk. However, I think the actual games will show most people that holding them was the correct thing to do. Today it is particularly problematic that opposition parties have lost their composure together with their weakening raison d’etre, and they oppose anything that the Yoshihide Suga administration attempts to do.
 In fact, the low level of citizen interest right up until the games – and the people who are saying we should have relinquished the right to host them – is just like what happened at the 1964 Summer Olympics in Tokyo. On July 28 The Yomiuri Shimbun Online published a column entitled, “The Previous Tokyo Olympics Were Only Seen as a Success After the Fact…What About Today?” It read:

Modern history researcher Masanori Tsujita wrote A Society Excessively Ruled by Moods. This book includes his July 2016 essay, “Many Citizens Were Disinterested? The Truth of the 1954 Olympics.” From when Tokyo won its Olympic bid in May 1959 until the end of the games, public opinion polls were continually conducted in the wards of Tokyo by the Ministry of Education, Science and Culture (1959 – 1963) and Japan Broadcasting Corporation (NHK; 1964). Tsuji discusses the results of the June 1964 poll (1,131 respondents in Tokyo), four months before the start of the games, as data showing a low level of interest in the event.
When asked, “What are you most interested in lately?,” just 2.2% percent answered, “The Olympics.” It makes sense that fewer people said their top interest was the Olympics, compared to “Society, the economy, and politics” (33.0%) and “My family, friends, etc.” (13.4%). However, many more people were interested in their hobbies (9.4%) than the Olympics. Moreover, 47.1% agreed with the view, “It’s fine to hold the Olympics, but I don’t care about them,” and 58.9% agreed with the view, “I think Japan has many more important things to do than spending so much money to host the Olympics.”
This apathetic mood continued from when Tokyo was announced as host city until directly after the games. Actress Hideko Takamine (1924 – 2010) penned a column in the September 22, 1959 issue of The Asahi Shimbun in which she called for Japan to give up its right to hold the games. She wrote, “No one knows what will happen over the next five years until the games. This is quite worrisome. […] There is no reason to be so hasty. I think we should have hosted the Olympics 10 years from now.” The title of this column was “Unbalanced.” Many other public figures and intelligent persons voiced their opinions that Japan should not overreach itself in a way that was disproportionate to its national power.

 Japanese people have a tendency to want to avoid taking any risks, both today and in the past. The COVID-19 pandemic is not the particular reason for this.

The success of Tokyo 2020 will be a major source of future power

 The games are going on, with restrictions in place including barring spectators from venues. Companies that invested money in the hope of an Olympic boom are in dire straits. The target for foreign travelers to Japan was 40 million tourists in 2020. The number actually exceeded 30 million people for two consecutive years, in 2018 and 2019. However, the Olympics were postponed due to COVID-19, and the 2020 total was roughly four million foreign tourists, just one-tenth of the target. Despite the circumstances in which these Olympics are being held, foreign travelers are coming to Japan – although the number is much smaller than expected – and it seems clear that the economic situation would be even worse if the games had been cancelled. The people who spoke out against the games are the type who are unable to take advantage of opportunities right before their eyes. For the sake of Japan’s future growth, it is not good for these people to always comprise the majority. I am confident that this experience of decisively hosting the Olympics during a state of national emergency will definitely be a major source of power going forward. Rather than a short-sided view of being frightened by the latest numbers of new COVID-19 cases, we have to think about things from a more forward-looking, broad perspective. If not, the public opinion will head down erroneous paths, like the view that we should not have held these Olympics that inspired deep emotions among people across the world. Citizens, companies, and the media should feel more pride in Japan for winning so many gold medals.
 I think that rapid progress in the Japanese economy will be founded on the great success of these COVID-era Olympics, as well as on the 2025 World Exposition in Japan, which will fully utilize information and communications technology (ICT) to allow people to experience the society of the future.
 It is predicted that economic warfare will grow even fiercer between the U.S. and China – a country with 1.4 billion people, more than 10 times Japan’s population. During this Sino-American cold war, Japan must not quail at extensively investing national funds in technological development to oppose China. We should also strengthen the Japanese economy to achieve further growth.

August 6 (Friday), 10:00 a.m.