Tokyo,
Shinkansen!!
La déflation du Japon
Christ Jesus and Seneca, or Seneca the Younger, (c. 1 BC – 65 AD) lived in the same era.
Though Christ Jesus, as a human being, was killed at the age in his middle 30's, Seneca, a Roman philosopher and a teacher of Emperor Nero, was forced to commit a suicide by Nero after having lived twice longer than Christ Jesus.
I think the God had set Seneca as somebody to be compared with Christ Jesus. Indeed, they belong to the same generation.
The point at issue is whether or not Seneca knew anything about Christ Jesus. There is a theory that Seneca was baptized by St. Paul, which is however unlikely.
Christ Jesus and Seneca shared one big tragedy that both were betrayed, at least to the surface, by their disciples: Judas Iscariot and Emperor Nero who both however later committed a suicide.
So, what is a lesson the God gave in this context with Seneca as a contemporary of Christ Jesus?
At least, we may think that there is almost no difference if a man of justice dies at his 30's or 60's. They both would be highly revered or respected in history. So, the final point at issue is how much we can accept it: a heroic, glorious, but tragic or otherwise humble death at our 30's or 60's. To consider this point meaningfully, we need a true religion.
CHAPTER I: Stagnation of Export or Lost Decade of Japan
From 1996 to 2002, it became clear that Japan was in a decade long period of recession and deflation.
As Japan was already at its summit of material development of the society (even its nature was at a risk of total demolition and contamination due to massive industrialization), it could not boost domestic needs in a conventional way. So, it had to turn to export for its further growth in economy, at least, on the balance sheet. But, export itself stopped growing linearly as had been observed before.
One side of the truth is found in the trend of its export in the era as presented in the figure below showing Japan's export to East Asia including China, China only, the U.S., and EU 15, the four major export destination for Japan.
Around 2003, Japan's GDP showed some increase and its state of economy was improved. There are still arguments going on why the situation was improved then. Some point to effect of the reformation the then Prime Minister Mr. Junichiro Koizumi introduced on the supply side.
But, the answer is the economic rise of East Asia, especially China as seen in the above figure.
As another world No.2 economy (China) emerged adjacent to the authentic world No.2 economy (Japan), some critical influence must have appeared on the authentic world No.2 economy (Japan) and the No.1 economy (USA).
It was deflation for Japan due to cheaper labor costs in Japan; it was higher unemployment in the U.S. as manifested after the 2008 financial crisis.
Japanese businesses opted for transferring their business to China for cheap labor costs in China so as to take up a challenge of international competition. This massive movement caused deflation in Japan. Cheap goods imported from China also forced prices of goods manufactured in Japan to be cut drastically. In this way, wages and prices have bee falling down in Japan. It led to less and less tax revenues for the Japanese Government.
Japanese businesses had to increase export to China for their profits. They had to also import cheap products to sell in Japan, which spurred their investment into China and operation of plants and factories in China. In fact. Japan is now the largest exporter to China and the third largest importer from China.
Though the No.1 importer from China, the U.S., has 2.5 times more population than Japan, its import from China is just 2.5 times larger than Japan's import from China. It means Japan consumes Chinese goods per person as much as the U.S. does. This is also one of the major key factor of Japan's deflation.
(http://www.rieti.go.jp/users/china-tr/jp/100224world.htm)As everybody in the world is praising the economic success of China, each country in the world wants to be the No.1 exporter to China to boost its economy. But, it is Japan who is the No.1 exporter to China, since Japan has invested so much into China more than the U.S. has.
But, Japan is in 15-years long deflation due to Chinese cheap labor costs, intensified international business competition, and saturation of its material/industrial development in Japan. Poor manipulation of interest rates and poor provision of paper money by the Bank of Japan are not the major cause of this deflation. Even a decreasing trend of Japan's population is not a major cause, though Japanese businesses have not tried to increase the number of workers in Japan since they can employ Chinese at cheaper wages.
In fact, currently more than 28,000 Japanese companies are operating in China, though some already withdrew due to lies, betrayals, and crimes in China. If these companies stayed in Japan, they would employ one million to two million more Japanese workers domestically in total. But, as they have moved their business and operation, though mostly partially, to China, so many Japanese workers have lost jobs and wages, leading to less and less tax revenues to the Japanese Government. This is the most important factor in Japan's lost decade, big financial deficit, and 15-years-long deflation.
The Western media have never discussed China and Japan correctly in its true relationship. They are just happy to see a kind of fall of Japan that has denied inherent superiority of European races and the Christianity since the late 19th century. But now, Europe is in a worse shape than Japan. While the Western media expected the state bankruptcy of Japan, Iceland, Greece, and Ireland broke down. The U.K. was forced to increase a tax rate. The U.S. had to even suffer the bankruptcy of GM. Yet, the Western media continue to show less respect for Japan laughing at Japan's rapidly aging society. What is worse, the Western media would not report reality in China, while Norway has been intimated by China for the Nobel Peace prize issue.
Now, you know what the Japan problem is. Your attitudes to the Western media and China would change, accordingly. Then, you might contribute to sound global economy where China is one of the major controversial elements.
CHAPTER II: Nikkei 225
The economic state in Japan can be represented by Nikkei 225, a stock market index for the Tokyo Stock Exchange.
In light with the above figures concerning export from Japan, it is apparent that the Japanese economy went through the recession after the burst of the bubble till 1996 while being supported by a steady growth of export.
From 1996 to 2002, as export from Japan lost an upward momentum due to a change in global demands and heavy investment into China, deflation came to be intensified in Japan.
But, around 2002, the Chinese economy was launched into a high growth orbit, and the American economy recovered. Accordingly, export from Japan started to grow again rapidly, leading to some boom domestically.
And, with the 2008 financial crisis, the U.S. import from Japan drastically dropped; the Nikkei 225 index plummeted down.
This trend of the economic situations in Japan can be confirmed in the following figure presenting the sales trend of Japanese makers.
(http://www.meti.go.jp/report/whitepaper/mono/2010/g00601a02j-2.pdf)As Japan has not abundant natural resources needed for its industry, its domestic demands are closely linked with industrial activities for export. Domestic companies have a great amount of business contracts with exporting companies such as Toyota. Contribution to Japan's GDP from domestic companies is actually indirect contribution from exporting ones such as Toyota.
In other words, with China continuing import from Japan and the U.S. economy coming right on the track again, the Japanese economy would naturally get out of the current recession. Or, if Americans cannot spend big money any more like they did before the Lehman Shock in 2008, the emerging markets in Asia, including India, would cover reduction in export to the U.S. In either case, as long as Japanese businesses keep a superior competitive edge, it can avoid the worst case.
Yet, how to deal with the 15-years long depression is the most important challenge for Japan.
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Mencius said:
"There are five ways to educate a young man.
First, bring up his personality like an appropriate amount of rain grows a plant in nature.
Secondly, lead him so that he will bring his virtue to completion.
Thirdly, lead him so that he will develop his talent fully.
Fourth, simply ask questions and have him answer them.
And, fifth, have him receive indirect guidance so as to train himself.
The master chooses an appropriate method from the five ways according to individuality of a young man."
Luk 1:16 And many of the children of Israel shall he turn to the Lord their God.
Luk 1:17 And he shall go before him in the spirit and power of Elias, to turn the hearts of the fathers to the children, and the disobedient to the wisdom of the just; to make ready a people prepared for the Lord.