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APRIL 2016 VOL. 53, ISSUE 4 ¥800 JOURNAL THE THE AUTHORITY ON GLOBAL BUSINESS IN JAPAN JOURNAL.ACCJ.OR.JP COOL & CREATIVE JAPAN ENTICES FANS FROM AFAR 毎月一日発行 第五十三巻 4 号 ジャーナル 二〇一六年四月一日発行
CONTENTS VOL. 53, ISSUE 4 4 FEATURED CONTRIBUTORS 22 TRAVEL Cool & Creative 5 EDITOR'S DESK Japan entices fans from afar Making Moves John Amari Brandi Goode 24 PARTNER CONTENT 7 SOCIAL MEDIA Tokyo’s Ambition Generation Trending on the Web Foreign Affairs 8 LEAD STORY 28 ENTREPRENEUR Japan’s Economy: A Life Well Lived “Mostly Free” Brandi Goode Riley Walters 31 13 J-MEDIA GREEN BUSINESS Diet Dailies Charting Its Course More Multilingual Signs Five years after 3/11, Tohoku in the Works searches for its future direction Doubts Raised over Richard Smart My Number and Point Cards translation of news 16 PARTNER CONTENT from Keizaikai Japanese Manufacturers Dip into Global Water Business 37 ACCJ MEMBER NEWS Nikkei Asian Review 18 TRAVEL Okinawa: the New Hawaii? DISCLAIMER THIS PAGE PHOTO: Julian Ryall Custom Media and the ACCJ will not accept liability Shisa lion dogs on for any damages caused by the contents of The Journal, Okinawan roofs including, but not limited to, any omissions, errors, facts or false statements. Opinions or advice expressed in – Page 18 the The Journal are not necessarily those of the ACCJ or Custom Media.
RILEY WALTERS RICHARD SMART JULIAN RYALL FEATURED CONTRIBUTORS “Japan’s Economy: “Charting Its “Okinawa: ‘Mostly Free’ ” Course” the New Hawaii?” page 8 page 13 page 18 Hometown: Alexandria, Virginia Hometown: Sheffield, Britain Hometown: London Languages: English and Japanese Languages: English and Japanese Languages: English, French, and a smattering of Japanese Years in Japan: Two; one in Most memorable interviewee: Kumamoto, one in Tokyo Average people in absurd situations Most memorable interviewee: give the most meaningful comments Ric Gillespie of The International Favorite place in Japan: Shibuya, and create the best narratives Group for Historical Aircraft Tokyo (though there are so many for stories. Recovery, for his unswerving, 30-year other great places!) quest to solve one of the greatest Years of experience: Living and Role model: I enjoy the teachings of mysteries in aviation history—the writing in Japan since 2002 Nobel Laureate Friedrich A. Hayek 1937 disappearance of Amelia Social media handle: @tokyorich Earhart—and his insistence on doing Twitter handle: @WalteRiley all the foot-slogging and due diligence Currently listening to: The Weeds required to achieve that podcast is essential listening for anyone with an interest in US politics Favorite place in Japan: Yokohama at this important time. It might Years of experience: 25 in Japan; be wonkish, but the opinions and 27 in journalism analysis of Ezra Klein, Sarah Kliff, and Matthew Ygleisias should be heard by Role model: My father people across the political spectrum. Favorite author: Antony Beevor You don't need to agree with what they say (I often don't). Currently reading: North Korea: www.vox.com/the-weeds State of Paranoia, by Paul French. Secret skill: An uncanny ability to spend more than I earn each month Thoughts on print journalism: Sadly, a dying art Publisher Client Services Manager To advertise or subscribe: Simon Farrell Joy Fajardo accj@custom-media.com simon@custom-media.com Marketing Manager Editorial: President Megumi Okazaki editor@custom-media.com Robert Heldt Advertising Sales Directors Custom Media Editor-in-Chief Anthony Head Publishers of The Journal for the American Chamber Brandi Goode DeWitt Mosby of Commerce in Japan. Specialists in bilingual brand www.custom-media.com strategy/visual communications, corporate bespoke Studio Manager Account Managers solutions. Producers of Business in Japan TV. Paul Leonard Kimo Blackmore Joshua Ellis Deputy Editor John Amari Business Development Director Daiwa Azabudai Bldg. 6F Graphic Designers Kotaro Toda 2-3-3 Azabudai, Minato-ku, Michael Pfeffer Tokyo 106-0041 Ximena Criales Project Coordinator Yoshiki Tatezaki Tel: 03-4540-7730 Client Services Director Sam Bird Media Coordinator © 2016 Custom Media K.K. Kiyoko Morita The Journal is printed on paper certified by the US Forest Stewardship Council with vegetable oil ink certified by the Japan Printing Ink Makers Association. 4 THE JOURNAL n APRIL 2016
EDITOR'S DESK MAKING MOVES STARTUP CULTURE JOURNEY OF OPPORTUNITY Entrepreneurialism is a topic dear to The April edition of The Journal also the heart of the American Chamber highlights travel and tourism. of Commerce in Japan (ACCJ). ACCJ partner organization the Ease of access to capital is key to American Chamber of Commerce in Brandi Goode cultivating a startup culture. Yet, while Okinawa (see page 18) is working to brandi@custom-media.com venture capital funds raised in Japan foster US businesses in the region. With doubled from 2014 to 2015—as we a 68 percent year-on-year increase in the read in “Tokyo’s Ambition Generation” number of foreign visitors in 2015—and With Japan’s fiscal year having come (see page 24)—Japan has the second- the national government’s designation to a close in March, money is on lowest level of early entrepreneurial of Okinawa as a hub for tourism the mind. activity in the world. It comes just promotion—Japan’s southernmost behind Suriname, a remote South prefecture is poised to become a major Our April issue spotlights fiscal American nation. source of revenue for leisure businesses. and financial matters, beginning with In our Entrepreneur column this On a separate note, I, too, will soon be the lead story (see page 8) evaluating month, you’ll meet Atsuko Toko Fish doing some traveling. This is my last issue Japan’s ranking out of 178 nations in (see page 28). In an interesting turn of of The Journal, as I am relocating with the Index of Economic Freedom, an events, Fish’s international career began my family to Manila, the Philippines. It’s annual report published for more than when she was executive assistant in a been an absolute pleasure getting to know 20 years. We also attended a talk by place familiar to most readers: the ACCJ so many ACCJ members and helping Randall Jones, head of the Japan/Korea office. Fish’s mother instilled in her, from redefine the ACCJ’s flagship publication. desk at the Organisation for Economic an early age, the value of learning English Christopher Jones will be assuming Co-operation and Development and going abroad. the post of editor-in-chief, beginning (see page 46). As a founder of the Japan Women’s with the May issue. I’m confident that While Jones and the report are Leadership Initiative (JWLI), Fish his experience, professionalism, and generally optimistic about Japan’s empowers Japanese women to enact personality will further strengthen the future, they point to the need for fiscal positive social change and spark reputation of The Journal as the authority and monetary policy reform, as well innovation. Yuko Nakaoka, formerly on global business in Japan. n as private-sector changes to promote of the ACCJ Kansai office, is a 2015 A flagship publication of the American growth and household consumption. JWLI fellow who now works as a Chamber of Commerce in Japan (ACCJ), Both also extolled the value of SelectUSA commercial specialist at the The Journal (formerly the ACCJ Journal) is a innovation and entrepreneurs. U.S. Consulate General Osaka-Kobe. business magazine with a 53-year history.
NOW TRENDING ON THE WEB SOCIAL MEDIA IN THE NEWS FROM JAPAN TOP HASHTAGS LINKEDIN Tweets from Tweets in Japanese This month: Popular tags Discussions from media outlets from people and media from the top 30 list global leaders @japantimes @Diplomat_APAC Surf’s up—and business is up—in Hawaii as Japan Robotics Diplomacy can’t get enough of the and the US–Japan 50th state Alliance http://jtim.es/ZsIsc http://bit.ly/21rGg5a @AirwaysNews @JapanNewsForum How Will the Haneda- How China Could Kill US Market Change With Japan’s Abenomics Daytime Slots? Gains - Forbes http://bit.ly/1UimtVy http://ow.ly/3cf19W NHKニュース 野球賭博問題 高木投手は「1年間の失格処分が相当」。 Rank @nhk_news http://www3.nhk.or.jp/news/html/20160322/k10010451861000.html 4 #gameinsight Baseball Gambling Scandal - An investigation committee submitted a report saying a Yomiuri Giants pitcher, Kyosuke Takagi, should be disqualified for one year. * 5 #Oscars ≪総理の動き≫本日(3月22日)安倍総理は官邸で第9回「まち・ひと・しごと創生会議」を開催しま 首相官邸 した。会議では政府関係機関移転基本方針について決定されました。http://twme.jp/jpn/00Mg 15 #Periscope @kantei Prime Minister Shinzo Abe held the ninth “Conference for Creating Cities, People, 27 #job and Jobs” at his office today, March 22. The basic policy for relocating government organizations and associations was decided. * 29 #GOPDebate * Translation of original content in Japanese Yoshito Hori, Tai Tran Founder and president of GLOBIS Marketing PM, Forbes 30 Under 30 TWEET IT LIKE TRUMP: THERE’S NO SUCH THING AS BAD PUBLICITY TWITTER CELEBRATES ITS 10TH BIRTHDAY: How can a man so universally hated continue to win state after RECOUNT OF TOP state in the primaries and be looking increasingly certain to become MEMORABLE TWEETS the Republican Party’s presidential candidate? I’ve got a one-word answer to that: ATTENTION. Twitter is celebrating its People love Trump. People hate Trump. But no one ignores Trump. 10th birthday. Its most compelling value proposition? Real time content. From the Arab Spring to Ellen DeGeneres’ Oscars selfie, here are the top memorable tweets that best highlight Twitter’s real time history. THE JOURNAL n APRIL 2016 7
JAPAN’S ECONOMY: "MOSTLY FREE" By Riley Walters For more than 40 years, Japan has been secure in its Economic Co-operation and Development, the International Monetary Fund, and the Asian Development Bank (ADB). position—alongside the United States and China—as one of the world’s three largest economies in terms HOW DOES JAPAN RANK? In the 2016 index, of 178 world economies, Japan ranks 22nd, of real GDP. This is even despite the past 20 years of with an aggregate score of 73.1 out of 100. This places Japan’s anemic growth. economy in the category of mostly free. There are five rankings possible in the index: free, mostly According to a 2016 report, Japan’s level of economic free, moderately free, mostly unfree, and repressed. This year freedom, as ranked by the Index of Economic Freedom—and only five economies—four of them directly competing with measured according to 10 components—had been on the rise Japan in the Asia–Pacific region—were ranked free: Hong Kong, following the report’s inception in 1995. However, since the Singapore, New Zealand, Switzerland, and Australia. These 2008 Lehman shock, the ranking of Japan’s economic freedom nations have achieved top rankings in the survey nearly every has remained lackluster, and the country is falling behind year, with Canada and Ireland occasionally also figuring in the competing nations. ranks of free economies, instead of the mostly free category where they rank in 2016. WHAT IS ECONOMIC FREEDOM? Japan ranks sixth among all Asian nations, just behind Taiwan, Economic freedom rankings are based on the average score of 10 which scored 74.7 out of 100. components that reflect fixed aspects of a country’s economy. Over Japan’s numeric score places it above 90 percent of the countries the long term, factors that foster or hinder economic freedom can surveyed in the Index of Economic Freedom. But, when individual affect substantially a nation’s GDP growth. components are examined closely, specifically government The 10 components evaluated in the annual index are: property spending and fiscal freedom—which typically reflects consumer rights; freedom from corruption; fiscal and corporate tax rates—Japan scores freedom; government spending; freedom far below the world average. The in terms of business, labor, and monetary Japan’s numeric score 2016 world averages for government policy; as well as trade, investment, and places it above 90 percent spending and fiscal freedom are 65.7 financial freedom. and 60, respectively; Japan scored 46.2 of the countries surveyed Countries where it is relatively easy to open and 48.8 in said categories. and close a business, for example, or where In addition, Japan’s level of monetary labor mobility is high, would be favorably scored according to the freedom, a component reflecting inflation rates and price stability, components of business and labor freedom. Meanwhile, excessive has continued to fall over the past 10 years. The country’s score taxing and rampant government spending would lead to a reduced in this category is likely to drop below the current world average score in the fiscal freedom and government-spending components. of 75.7 sometime in the near future. Japan currently scores The information that goes into the Index of Economic Freedom is 81.2. Greater central bank intervention, rather than market collected from a variety of sources, including the Organisation for dependence, tends to have a negative effect on monetary freedom. 10 COMPONENTS OF ECONOMIC FREEDOM property freedom from fiscal government business labor monetary rights corruption freedom spending freedom freedom policy freedom 8 THE JOURNAL n APRIL 2016
LEAD STORY Meanwhile, compared with other countries, Japan has flourished in such JAPAN’S ECONOMIC FREEDOM Total Score Ranking (left scale) (right scale) areas as improved freedom in business, labor, and trade. It is still relatively easy 73.5 5 to set up a business in Japan, with only eight procedural hurdles to overcome, 73 10 according to the World Bank Group’s Doing Business 2016 report. Then there 72.5 15 18 17 is the fact that Japan has the typical labor 19 19 components of a free developed country: 72 20 20 20 22 22 good labor force participation (59 percent), 24 71.5 25 25 relative ease of hiring, and severance pay. As an island nation, Japan has increasingly 71 30 focused on bolstering trade relations. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Japan’s average tariff rate is 1.2 percent, versus 1.5 percent for the United States. Source: The Heritage Foundation’s 2016 Index of Economic Freedom. COMPETING ECONOMIES Over the past few years, in a bid to maintain its ranking among Of Prime Minister Shinzo Abe’s three arrows of structural the index’s top 20, Japan has been neck and neck with a number reform, one and two were always seen as quick and easy solutions of European countries, including Iceland, Austria, and Sweden. to getting Japan out of its economic stagnation. The difficulty In the Asia–Pacific area, some of Japan’s largest trading lies in the implementation of the third arrow, including the partners, including South Korea and Malaysia, are catching up in enactment of promised structural reforms. the rankings (27th and 29th, respectively) as they look to increase In many aspects, Abenomics’s third arrow began fiscal and financial freedom. Economic freedom will grow as a Goliath transformation of the nation’s business other countries in the region deregulate domestic markets, a environment. Japan’s implementation of a Stewardship more stable environment is created by placing greater emphasis Code in 2014 essentially redefined corporate governance on the rule of law, and where government is less intrusive in nationwide. Abe’s goal to include more women in markets than in Japan. the workforce and his administration’s accession into Countries such as the Philippines and Vietnam have freed international trade initiatives such as the Trans-Pacific up their economies dramatically in recent years, by increasing Partnership have reflected positively on the nation’s trade freedom and regulatory efficiencies. And the potential reputation abroad. economic gains are already being seized, as is seen from increased In addition, Abe’s stated aims to lower the corporate tax foreign direct investment (FDI) in those countries, and broader rate to below 30 percent by 2020 and further deregulate investments in the nations by multinational organizations such industrial sectors such as agriculture bode well for FDI. as the ADB. In 2014, the Philippines and Vietnam had net FDI Abenomics 2.0 has made broader promises to tackle the inflows of $9 trillion and $6 trillion, respectively. issues brought on by an aging society. Investment will continue to expand in the region, as China’s Still, many of these policy changes are slow to take effect. Asian Infrastructure Investment Bank, which opened for Innovation takes time, and society as a whole is weighed business in January 2016, looks to begin investing in projects in down by the higher social and regulatory costs associated developing countries such as Indonesia. with doing business in Japan, rather than in some emerging free economies. Because of the relatively short THE BURDEN OF MONETARY POLICY implementation time required for changes in monetary Much like its economy, Japan’s economic freedom is stagnating. policy and government spending, the government returns Even before Abenomics, the Bank of Japan (BOJ) continued to these measures to spark growth. In doing so, however, it its near-zero (.05 percent) interest rate policy for almost stacks the deck against future generations, who will have to two decades. Only now, additional quantitative easing has deal with the increasing burden of a graying society. been integrated into monetary policy, with the BOJ buying Japanese households aren’t directly profiting when the government bonds to increase the monetary base by anywhere BOJ purchases government bonds, as monetary policy from ¥5 trillion to ¥7 trillion a month. has a trickle-down effect. Businesses in Japan today are retaining greater profits, while real Japan’s average tariff rate is wages remain stagnant. Part of 1.2 percent, versus 1.5 percent this is also reflected in the low job mobility rate, despite an increase for the United States. in the number of jobs. Add to this the nation’s near-zero interest rate policy, a fixation on a 2 percent inflation target, and the occasional consumption tax hike, and it is no wonder households are suffering under the first and second arrows’ trade investment financial regulatory burden. freedom freedom freedom THE JOURNAL n APRIL 2016 9
LEAD STORY BUY MORE THINGS, PLEASE since 1997. Japan has the potential to be innovative and the ability Policymakers continue to blame the economy’s lackluster growth to keep from crashing hard. The question is whether the policies on Japan’s low consumption. They use this argument to defend the now in place can prepare Japan for the future, or whether Japan’s 2 percent inflation target and planned increase in consumption economy will continue to drag along, as neighboring countries tax. The rationale is the need to jump-start the economy by forcing become more economically free and ripe for investment. people to spend now rather than later. Many Japanese investors are already looking offshore for gains. For households, though, consumption has remained strong over The value produced by Japanese across the world, relative to the past 20 years. It’s hard to imagine this increasing any further, simply the value produced domestically, has been increasing each given the current state of Japan’s economy and stagnant wages. year for the past 30 years. Household investment has also steadily decreased in recent In the 1990s, the gap between gross national income and GDP years. Japanese households just aren’t saving as much as they once increased to about 1 percent annually, while in the 2000s the did, which puts downward pressure on potential future household difference edged to about 2 percent. It’s now closer to 3 percent. consumption, irrespective of another consumption tax increase. In 2013, Japanese made almost ¥17,900 trillion more abroad than Meanwhile, government consumption remains strong. they did at home. Considering its current monetary policies, Japan should brace The trend is also reflected in foreign investment figures. itself for more short-term recessions. It has had at least four Seeking to reap greater value for its money abroad, over the recessions over the past 10 years, although it had no post-war past few years Japan has invested roughly three times more in recession until 1990. With bond purchases increasing and interest the United States than the United States has invested in Japan. rates diving ever further into negative In 2014, US investment in territory, recessions may become more frequent. There is still room for improvement, Japan came to $108 billion, while Japanese investment That said, Japan should experience with increased deregulation on a in the United States totaled economic gains from the structural national scale and a decrease in $373 billion. In fact, investment reforms accompanying the into Japan has just barely implementation of Abenomics’s third government-related inefficiencies. returned to pre-Lehman arrow, although in the near term, any shock levels. such gains should not be expected to offset the malaise brought on The good news is, however, that Japan’s economy isn’t at risk of by monetary policies. corruption or having property rights taken away from its citizens, One would be remiss to omit reference to Japan’s growing debt unlike other countries in the region. Social and regulatory when discussing its fiscal and monetary policies. Certainly Japan hurdles will continue to negatively affect job mobility, however. is less susceptible to global interest rate movements than are other It will take time for such traditions of the working environment nations, since most of its sovereign debt is held domestically. But as seniority-based promotions and long working hours to reach no, this doesn’t mean it should continue paying little or no attention levels on par with global norms. to its public debt. After all, the figure is at least double the nation’s Abenomics’s third arrow has set in motion commendable total GDP. reforms that could make Japan better suited for international Bond purchases of debt look nice when interest rates are low, investment. Japan is already a leader in pioneering and and the lower the interest rates fall, the better the prospects appear. implementing tech-based programs, such as greater automation But this continues to play into the catch-22 situation that Japan through robotics and the Internet of Things. But there is still has created, by selling promises today at tomorrow’s price. The room for improvement, with increased deregulation on a national interest rate policies established to date essentially have trapped scale and a decrease in government-related inefficiencies. bondholders. Any rise in interest rates will create a massive loss of The questions that must be answered now are: Should the wealth for those holding sovereign debt. monetary and fiscal policies that have persisted over the past 20 years continue? Will the government and BOJ continue to risk WHERE THERE’S HOPE, THERE’S A WAY tomorrow’s economy for possible gains today? And will Japan be Japan’s economy is a paradox. The nation holds enormous wealth able to keep its economic freedom on par with that of competing with a high per-capita GDP, but real GDP has hardly increased regional and first-world economies? n Private residential investment Private non-residential investment JAPAN’S ECONOMY (Trillions of yen) Government consumption Household consumption (right scale) 150 320 300 100 280 50 260 0 240 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Cabinet Office Annual Real GDP (calendar year) THE JOURNAL n APRIL 2016 11
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GREEN BUSINESS Five years ago, Japan and the world experienced a disaster unlike any that One marquee project is the construction of a seawall, about 13 meters high, along had been seen before. Many were reminded of the multinational earthquake about 400 kilometers of coastline to protect on December 26, 2004, as the tsunami swept the coast of east Japan. However, against future tsunamis. Supporters see it as a protection for future generations, but this time was different, as half a century of modernity was swept away many locals believe it is a waste of money in minutes. that would be better spent elsewhere. “Many oppose it, but the bureaucrats Factories and houses were dismantled northern Japanese region worst affected by are just coming and presenting their plans, as easily as tents, the world’s most reliable the disaster? What lessons did the disaster presenting and presenting, and people cars were effortlessly crushed, and Japan teach, and how could they be applied to get tired,” says Dr. Christian Dimmer, an again faced the wrath of the atom as the the economy? assistant professor at the Urban Design Lab, Fukushima Dai-ichi Nuclear Power Plant The University of Tokyo. “At some point, experienced meltdowns. BERLIN WALL there are just three people at the meetings, As the chaos calmed, the confirmed Quickly, the conversation turned to and the bureaucrats assume that means death toll reached more than 15,000, with making sure cities were sustainable and the community has reached a consensus to thousands more missing. On visiting more disaster resilient. Tokyo set up the move ahead.” Tohoku, the power of the wave and of Reconstruction Agency and moved the The concrete is being poured and Japanese technology were apparent: up to nation toward renewable energy, paying work on the barrier goes on, at a cost the point the wave had reached, everything for electricity generated by solar and other of nearly $7 billion. Beyond all else, it was gone, or nearly so. Beyond the water natural sources. is difficult to see how the construction line, houses were standing, cars were on the Under the agency, the idea of forming can be viewed as anything other than a roads, and rebuilding lives was possible. a new Tohoku was devised, based on monstrosity aesthetically. Questions about the future of the nation three pillars: creating a strong regional It is a Berlin Wall for people who have a quickly came to the fore. Should Japan community, building up infrastructure, deep connection, through the good times continue to use nuclear power? How and bringing in expertise from across and the bad, with an ocean that has for could there be a recovery in Tohoku, the the country. generations defined their lives. It is also CHARTING ITS COURSE Five years after 3/11, Tohoku searches for its future direction By Richard Smart THE JOURNAL n APRIL 2016 13
GREEN BUSINESS an expression of the distance between the idealism of the New Tohoku policies, formulated by the mandarins of Tokyo, and the reality of life in the areas affected by the tsunami. AMBITIONS Cities across the east coast, aware of the costs of nuclear energy and the ferocious power of the ocean, have begun to consider ways to become more sustainable. Power saving devices, smart grids, and renewable energy projects have all been substantially discussed and reviewed at municipal and Oranda-jima House’s natural environment was made possible by donations from Canada Wood and others. regional levels. Minami-soma, on the cusp of the radiation evacuation zone, particularly “This [influx of workers] has had various Dutch companies provided the money, suffered after the disaster. At one point impacts on the city, including an increase van der Linden designed the facility after the Great East Japan Earthquake and in traffic jams and accidents on the road, as at no charge, and other companies Tsunami, the city’s population shrank from well as a rise in crime,” Sakurai said. “Even donated materials. 71,000 to less that 10,000, although in if these workers are only here temporarily, “We had difficulties in terms of the the years since, it has again risen to about they have caused citizens concern, and that budget. Some things were expensive 57,000. All are working to entice people to must be addressed.” because materials were being used to return and contribute to building a more Sakurai’s office is now working with the rebuild piers and higher seawalls. But we sustainable community. police to address the issues, but his city had very generous sponsors. We could “In March of 2015 I issued a declaration faces a bigger problem down the line: If or build almost exactly what we wanted. that Minami-soma would be an anti- when the workers leave, what happens to Canada Wood donated maybe ¥10 million nuclear-power city, perhaps the first in the town? Efforts to promote industry may in wood to us.” Japan,” Katsunobu Sakurai, mayor of not be enough to solve the problems. Oranda-jima House is full 75 percent of Minami-soma, said at a news conference. Tohoku is not alone in seeing the time. Located in an area the tsunami “All of the city’s energy will be derived its population shrink. Japan’s most did not reach, it gives residents peace of from renewable energy by 2030. We are recent census data shows that almost all mind. “It’s a big contribution to the city,” now working toward this by increasing prefectures face a similar decline. And most says van der Linden. All the people that installations of renewable energy such are working to find ways to attract people. worked on the construction of the building as solar.” were from Yamada, bringing a sense of Toshiba Corp. is among the companies MAKING DO purpose to the locals and helping get the working with the city to improve its energy Not all areas took the same, optimistic economy back on its feet. grid. It has supplied the municipality approach to recovery as Minami-soma. For As for the house’s energy needs, solar with a large-scale battery energy storage some, sustainability has been about simply power was not affordable. “We didn’t have system that is capable of holding up to getting back to business and improving the budget for it. It just didn’t work out. We 40 megawatt-hours of electricity, an amount community ties where possible. started construction in 2013, by which time that could power between 1,600 and 3,600 The Iwate Prefecture fishing town of there was a bit of donation fatigue.” homes, depending on the season. This Yamada, not much bigger than a village, has In the end, the facility was fully insulated has added much-needed stability to a grid a population of about 16,000. It received and double glazed, and air conditioning that could see large fluctuations in supply, help from the Netherlands Chamber was cut in favor of open windows in the depending on factors including the weather. of Commerce in Japan (NCCJ) in the cooler climate. “In the winter, the sun heats Beyond energy, the town is also looking aftermath of the disaster. up the building and in the summer, there’s to develop new industries such as robotics Martin van der Linden, the head of an overhang to keep the heat down.” and smart agriculture. The aim is to bring Van Der Architects in Tokyo and activities The compromise frustrated van der in people from other parts of Japan to chairman for the NCCJ, suggested soon Linden, but he believes that without work in Minami-soma’s industrial and after the events of March 11 that something the appropriate guidelines for creating agricultural sectors. Many working-age should be done to help. Another chamber sustainable buildings, Japan will not be residents who left after the disaster have no member pointed him to Yamada, which able to achieve its vision of self-sufficient, plans to return. has had a relationship with the Netherlands resilient cities. The population of workers in town since 1643. Yamada, he believes, has a fighting temporarily has reached 8,000. Many have “We went too early, the whole city was chance of making a comeback and gone there from across the country to destroyed and people were still in shock,” says overcoming the demographic issues that engage in reconstruction and help to clean van der Linden. “In the end, a year later, we afflict much of Tohoku. “It is one of the up the areas affected by radiation. This asked ‘really, what do you want?’ and they towns with a relatively large population has caused problems in the eyes of many said ‘an after-school facility.’ ” The group then of children, so it is a city with a relatively local residents. got to work on Oranda-jima House. bright future.” n THE JOURNAL n APRIL 2016 15
Three large pump parts are bolted together at Ebara’s plant in Futtsu, Chiba Prefecture. Japanese Manufacturers Dip into GLOBAL WATER BUSINESS Water—it’s crucial for life, as well as for a smoothly functioning Including design time, the manufacturing process takes about economy. Because water resources are a vital and basic part of a year, with the most difficult part infrastructure, large projects are teeming with activity, and commercial reportedly being mounting the rotating shafts linked to the impeller. opportunities in the water business are bubbling up around the world. Being off by only a few millimeters can cause friction and generate heat, Infrastructure companies are stepping up the battle for resulting in the shaft scorching the pump itself, which in turn business related to water. Japanese companies are not on necessitates replacement of parts. Yet manually adjusting the the scale of water majors like France’s Suez S.A. or Veolia impeller’s balance requires considerable expertise. Environnement S.A., but they have a presence in the market for the necessary equipment and technology. INDUSTRIAL LIFEBLOOD The main plant of Ebara Corp.—the largest domestic At Jazan, an industrial park is being prepared where the Saudi manufacturer of commercial pumps—is located in Futtsu, government hopes to cultivate industry, and coal gasification Chiba Prefecture, across Tokyo Bay from the capital. Lined up facilities and an oil refinery will be constructed. outside the maker’s building are parts and Ebara’s pumps will be used in large- materials for pumps that weigh around scale facilities that draw in seawater and five tons, and measure about two meters in Ebara's Futtsu plant process it into commercial-grade fresh diameter and three meters in length. supplies many projects water. The company will supply a total Each of the finished products sucks of 28 pumps with an estimated value in enough water in 30 seconds to fill a in the Middle East. of around ¥4.5 billion. High-pressure 25-meter pool. The first of the pumps pumps will be the heart of the site, and was completed in June 2015 and the last of the 12 on order the water they will help circulate will be the lifeblood flowing is slated to be finished before the end of 2016. Their ultimate through the entire industrial park. destination is Jazan, western Saudi Arabia. The water of the Red Sea features high temperatures and salt “We might make pumps this large once a year,” says a content, which demand strict durability parameters. Ebara in worker in the production management department. 2002 became the first in the world to develop a stainless steel 16 THE JOURNAL n APRIL 2016
PARTNER CONTENT pump that is both lightweight and corrosion- In 2015, Chinese authorities opened bidding for about resistant, and has won numerous orders for it. 50 cutting-edge coal-fired power plants known as “ultra- Among the orders it has received is one in supercritical models.” More than 30 percent of the pumps 2013, for 24 pumps for a water pipeline linking a for such plants were awarded to Ebara. They require high- seawater desalination plant in Yanbu, in western pressure technology capable of pumping water to a height of Saudi Arabia, with the holy city of Medina. The 4,000 meters. An official in the global product sales division pumps send water some 600 kilometers, and 10 expressed confidence that Ebara “has the top share of the of them can blow water to a height of 500 meters. Chinese market for large pumps.” Ebara President Toichi Maeda said that pumps Ebara is not alone in pursuing projects at the national like those of his company, capable of pumping level. Engineering companies do the same. The main stage is, 5,000 cubic meters of water an hour, “can only be naturally, the Middle East, where there has been a series of made by five or six companies worldwide.” projects to build large-scale power generation and desalination In Japan, it is often said that “water and safety plants that simultaneously produce water and electricity. are free,” but that sentiment isn’t shared by the At a plant in Qatar for which Mitsubishi Corp. and Tokyo entire world. Many regions suffer from water Electric Power Co. won orders in 2015, and which is intended shortages or deteriorating water quality, and to go into operation in 2017, Hitachi Zosen is in charge of such problems require resolution at the national seawater desalination systems. The company completed level. The worse such problems become, the another system in Qatar last fall, and is steadily compiling a more business opportunities arise, in terms track record in the Middle East. of desalinating seawater and improving water Plant and facilities builder JGC Corporation is also treatment and circulation. increasing its presence in this field. Its investments in water Ebara's Futtsu plant supplies many projects and power-related fields now exceed ¥30 billion. It has even in the Middle East. It is frequently visited by invested in desalination and power facilities at one of the officials from Saudi Arabia’s state-owned petroleum company world’s largest petrochemical plants, run by Aramco and Saudi Aramco and Saudi desalination company Saline Water Sumitomo Chemical in western Saudi Arabia. Conversion Corporation. Each time, one room in the Ebara The company in which it has invested will sell water and office is quickly converted into an Islamic prayer room for power to a state-owned company for roughly 20 years. the visitors. Water will be cheap, at about $1 per ton, but the project will be highly profitable because the seawater and land are free DEMANDING DURABILITY of charge. Customers demand products that won’t break down after “Middle Eastern desalination and power businesses are even 40 years of continual use. If a supplier can win their safe assets,” says an official in the company’s global marketing confidence, that company will continue to be chosen division. Within two to three years, the aim is to increase for orders. investments to ¥50–¥60 billion, and have 90 workers, An official in Ebara’s Europe, US, and Middle East sales 50 percent more than at present. division emphasized that the company enjoys a “30 percent Some forecasts project that the worldwide water business share of the Middle East’s large-pump market.” Sales to the will grow at nearly 4 percent per year. If this cuts into business Middle East are targeted at ¥23.4 billion in fiscal 2016, a at the national level, even more long-lasting profits can 56 percent jump from fiscal 2013. be anticipated. n Ebara is also setting its sights on China. Wanjiazhai in Shanxi Province is a fortified town, built in ancient times to keep out invaders. In 1999, Ebara, along with Toshiba Corp., ©2016 Nikkei Inc. Nikkei Asian Review is published received an order for 15 pumps for a pipeline that transports by Nikkei Inc. All rights reserved. water from the Yellow River in this area to the provincial capital of Taiyuan. The pipeline stretches some 270 kilometers, A woman collects drinking water from a hand pump in Dhaka, Bangladesh. with an elevation difference of 630 meters. © AP Because the water contains so much sand that it appears yellow, high durability is required of the pumps. Pulling this off was a critical starting point for Ebara to develop a presence in China. The Japanese company also supplied 10 pumps from 2011 to 2013 for the Eastern Route Project pipeline, in eastern China, which was planned to divert water from Yangzhou in the central part of the country to Beijing. European companies landed the orders for the Central Route, and competition is fierce for the upcoming Western Route. THE JOURNAL n APRIL 2016 17
Okinawa : the New Hawa ? By Julian Ryall It has breathtaking beaches and skies so blue you want to reach out and touch them. The islands have a distinctive history and a vibrant present. They have diving and shopping, cuisine and culture, entertainment, and a natural environment it is hard to find anywhere else. Little wonder, therefore, that travelers from around the globe are flocking to Okinawa Prefecture. Beach near Kafuu Resort Fuchaku on the main island’s west coast Equally, the biggest names in the international tourism as Bali or Hawaii, based on sheer numbers,” says Carl sector recognize that Okinawa has great potential for Bastian, managing director of Ryukyu World Office, an their businesses. international tourism consultancy. Bastian is serving his Japan, as a whole, has seen a surge in international fifth term as chairman of the Tourism and Hospitality arrivals in the past couple of years. Inbound tourists totaled Committee of the American Chamber of Commerce in 10.46 million in 2013, climbed to 13.41 million the following Okinawa (ACCO). year, and soared to 19.737 million in 2015. The national The anticipated number of arrivals in 2015 was government’s target of 20 million visitors in 2020, the year 6.9 million, but the actual total was 7.76 million. Growth of the Tokyo Olympic and Paralympic Games, will likely be has been a steady 10 percent over the past three years. surpassed well in advance of that date. Those impressive figures have resulted in the raising of the And, while Japanese still account for 81 percent of 2021 target to 10 million visitors, of whom 2 million are holidaymakers arriving in Okinawa, just over 1.5 million expected to come from abroad. foreign travelers visited the prefecture in 2015, a remarkable “As long as peace prevails in the Asia–Pacific region, 68 percent leap from the previous we should easily clear that as well,” year’s figure. Bastian believes. “At this rate of growth, Okinawa The main obstacle Yet a number of hurdles must will definitely become as big [to boosting tourism] is a be overcome to achieve that shortage of accommodation. figure. The main obstacle, as elsewhere in Japan, is a shortage of accommodation. Nakijin Castle and its ruins are part of a UNESCO World Heritage Site. “The average beach resort enjoys an annual average occupancy rate of 80 percent, while city hotels are sitting at around 70 percent—meaning that a lot of the time they are either full or overbooked,” says Bastian. “There are simply not enough beds to meet demand in the high seasons.” Aware of the potential, two of the world’s largest hotel brands, both headquartered in the United States—Hilton and Hyatt—have recently opened expansive new properties in Okinawa. Several more hospitality-related developments are close to completion or are in the planning stages. 18 THE JOURNAL n APRIL 2016
TRAVEL Naha Airport, due to be completed in 2019, and a second berth for cruise liners to dock at the nearby ship terminal. In terms of tourist attractions, discussions are apparently ongoing between the Japanese company that operates Disney domestically and the prefectural government, for the creation of a new theme park on the site of the Marine Corps Air Station Futenma, as soon as its present tenants are relocated. Similarly, Universal Studios Japan (see page 22) is Mihama American Village in Chatan reportedly exploring opportunities in the prefecture. There are also suggestions that a large-scale casino complex is under consideration. NEW ASIA HOT SPOT Any projects on such a scale will put Okinawa on the map The Hilton Okinawa Chatan Resort opened in the summer of even more emphatically, Bastian says, and will help turn the 2015, and has broken new ground by taking a prime location prefecture’s islands into “a major international destination.” between Chatan’s port and the Mihama American Village—a complex with restaurants, bars, boutiques, cinema, bowling BED—AND VIEW—FOR THE NIGHT alley, live music venues, and even a Ferris wheel. Hence, in part, the flurry of new hotel developments. “The development of inbound tourism, mainly from Asia, Hilton already has one of its Double Tree brand properties is accelerating impressively, and the number of domestic in Naha, while a second hotel, the Hilton Naha Shuri Castle, tourists shows no signs of slowing,” says Timothy E. Soper, is on target to open July 1. The company has confirmed vice president of operations for Japan, Korea, and Micronesia to The Journal that it intends to bring more of its luxury for Hilton Worldwide. brands to Okinawa, including to some of the prefecture’s “First, the location is attractive as there is convenient access outlying islands. from major cities around Asia,” says Soper, pointing out that Starwood Hotels and Resorts Worldwide, Inc. is to open Naha Airport is a 90-minute hop from Taipei, and just two- the 200-room Sheraton Okinawa Sunmarina Resort in and-a-half hours from both Shanghai and Seoul. mid-2016, with 45 rooms scheduled to be added in early “The delivery capacity of inbound travelers is significantly 2017. Even institutional investors have seen the potential, expanding due to an increase in the number of direct flights with Morgan Stanley “flexing its muscles in the market” and from major Asian cities, entry by low-cost carriers, and more expected to have no fewer than three management contracts port calls by cruise ships. in the near future, sources said. “Okinawa is one of the government’s major hubs Japanese developers are also moving swiftly to snap up for tourism promotion, while the prefecture has also opportunities, with Okinawa-based Terrace Hotels opening a independently developed the Okinawa Tourism Promotion new property this month and Hoshino Resorts due to break Roadmap, and begun a full-scale vitalization process for its ground on their first hotel on the main island next year. tourism industry. Ken Corp. is also working on a luxury hotel, while Mori Trust “As a result, we anticipate infrastructure development and has two properties taking shape on the main island and expansion of the islands’ public transportation, such as the another on Irabu Island, in the Miyako island group. monorail, to continue to develop.” The ANA InterContinental Manza Beach Resort is also Other projects that are designed to attract more visitors, upgrading its facilities and services to secure its reputation Bastian points out, are the construction of a new runway at as one of the most spectacular locations on the main island of Okinawa. The hotel occupies a graceful curve atop a pit of land beside a serene bay on the west coast, and is Ancient paths around Shuri Castle in Naha working closely with the local community to regenerate nearby coral reefs. KPG Hotel & Resorts, based in Osaka, is planning its next high-end property in Okinawa. Work is under way to Okinawa has many tropical fruits and its own style of cuisine. THE JOURNAL n APRIL 2016 19
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TRAVEL The Hyatt Regency Naha Okinawa offers a stunning night view by the pool. add another 80 suites to the company’s impressive Kafuu “These are the people who have been to Japan before and Resort Fuchaku on the main island’s central west coast. The visited Tokyo, Kyoto, and Osaka, but want to go somewhere property is unusual for Okinawa, in that it has condos as well new and different. as hotel rooms, both of which offer spectacular ocean views. “It also helps that low-cost carriers like Peach and JetStar “Our occupancy rate was 84 percent in the year to are now flying direct to Naha, and when the new runway is December and we have very definitely benefitted from the completed it will triple the flight capacity of the airport.” government’s decision to relax visas for tourists from China, Rachel Davidson, general manager of Hilton’s Chatan South Korea, and Taiwan,” says Masao Tanaka, managing property and newly elected president of ACCO, says she is director and chief operations officer. “delighted” to have been given the opportunity to lead “such The hotel, a member of ACCO, is also a firm favorite a stunning property in a great destination.” with American guests, winning the Stars and Stripes “Okinawa is deservedly enjoying record increases in newspaper award for the best lodging in the Pacific for three tourist visits,” she told The Journal. “It offers a unique culture, straight years, as well as being recognized for operating wonderfully hospitable Okinawan people, beautiful beaches an international internship program with the University and landscape, nine [UNESCO] World Heritage Sites, great of Central Florida and Johnson & Wales University, in local cuisine, excellent weather, exciting water activities, and Rhode Island. shopping and dining experiences.” “Our brand has a good reputation and a good following And the chamber intends to do everything in its power to in the region, and we now wish to expand that into new build on those foundations. markets,” says Tanaka. “We are particularly interested in the “The ACCO’s mission is to facilitate an environment Middle East, as that is a region where consumers are wealthy for current and prospective American businesses to and they like to travel. flourish in Okinawa,” she said. “We have a number of key “It would also serve as a demonstration of the pull of priorities in 2016 to further the development of commerce Okinawa as a holiday destination,” he adds. and trade with Okinawa and to ensure that we are able The Hyatt Regency Naha Okinawa is the latest addition to to maximize opportunities for our ACCO members, the southern capital’s skyline, having opened in July 2015. including strengthening partnerships and continuing to The hotel occupies arguably the most sought-after spot in build on strong relationships with our business and local the city: Sakurazaka, or cherry blossom hill. It has been communities, local governments, educational institutions, worked in alongside the existing traditional Okinawan- and fellow organizations. style community of low buildings, roofs with orange tiles, “These mutually beneficial relationships and each home with a pair of shisa lion-dogs from local provide support for our businesses and Shisa lion dogs are a common mythology protecting the entranceway. create opportunities for us all.” n adornment outside The hotel is just 200 meters from Kokusai-dori, the Okinawa homes main drag of bars, restaurants, and shops that runs through the heart of Naha, and the airport is ”It also helps that low-cost just 20 minutes away by car. From the upper floors, Shuri Castle can be seen atop the hill that carriers like Peach and JetStar dominates the entire city. are now flying direct to Naha.” “We are finding that Okinawa is benefitting from repeat visitors to Japan,” says Takashi Nakamura, deputy director of sales and marketing. THE JOURNAL n APRIL 2016 21
COOL & CREATIVE Japan entices fans from afar By John Amari Images courtesy of Universal Studios Japan USJ launched the world’s first XR ride this year, combining a virtual reality headset and roller coaster ride. For the second year running, to reach out to the whole world enjoyed the rides and attractions before Universal Studios Japan (USJ) about this event.” they opened to the public. has teamed up with some of the In recreating some of the The first item on the agenda was an country’s top names and brands from popular worlds of Japanese invitation onto the set of “Biohazard: entertainment culture, the The Escape 2,” based on an entertainment the world of manga, anime, games, campaign “aspires to convey franchise known as Resident Evil in the music, and fashion, to recreate one-of-a- the charms of Japan not only United States. Inspired by an action- within the country, but also to adventure film and horror-fiction video kind attractions—in fully immersive the entire world.” The US-based game of the same name, the attraction 3D and 4D experiences—at its franchise draws a considerable pits the wits of participants against those entertainment park in Osaka. number of visitors from Asia to of attack zombies, who are played by its park in Japan. According to a actors in full costume with bloodied faces survey by CLSA, it was the third-most- and a zombie-like gait. visited theme park in Asia in 2013 and In a several-storied building complete 2014 (behind Tokyo Disneyland and with ghoulish sound effects and Tokyo DisneySea). The 2015 and 2016 industrial wasteland-esque detail, teams Its latest manifestation, “Universal campaigns were launched Cool Japan 2016,” showcases five new as part of the government’s attractions: two 4D cinema experiences, Cool Japan strategy to help The 2015 and 2016 campaigns two “participatory encounters,” and promote Japanese pop were launched . . . to help promote the world’s first XR ride. XR attractions culture abroad. combine a virtual reality (VR) headset This year, on opening day, Japanese pop culture abroad. and roller-coaster ride to create what USJ Kyary Pamyu Pamyu said calls “super-real” experiences. she not only felt completely immersed in of players use clues to solve puzzles— In a press release before the campaign the park’s experiences, but the up-close- all via interactive bilingual hand-held opening, Japanese music and fashion and-personal nature of each attraction mobile devices—to find their way to icon Kyary Pamyu Pamyu—whose music allowed her to enjoy some of her favorite safety. However, visitors who are not inspired the XR attraction—said: “I’m genres, such as anime and manga, in Japanese speakers may find this activity really looking forward to witnessing the a completely new way. Some of the challenging, as much of it is conducted in worlds of five big entertainment brands attractions were “hair-raisingly fun,” the local language. that represent Japan come alive with she added. According to USJ, the attraction lets the scale and quality of [USJ]. As the The Journal was among a handful of you “experience the mounting horror [campaign’s] special ambassador, I want international and domestic press that and suspense of zombie attacks and 22 THE JOURNAL n APRIL 2016
TRAVEL Kyary Pamyu Pamyu is the campaign ambassador. Zombies attack at ”Biohazard: The Escape 2” bio-organic weapons sprays of water that are synchronized According to USJ, Kyary Pamyu as the clock ticks, with the on-screen action. Pamyu XR Ride is the world’s first XR [while you] discover a Guests, moreover, get to enjoy the attraction, allowing visitors to “dive into new sense of success action from the point of view of an a bewitching, 360-degree world of pop.” and camaraderie at Evangelion, a bio-robot being, as it goes The ride was designed to stimulate the end, [after having into battle against monstrous creatures all six senses, taking riders beyond successfully navigated all called Angels. The attraction aims to even 4D experiences, as they zoom the challenges].” take the theater-going experience to a unpredictably through the singer’s Along the same new dimension. psychedelic bubble-gum world with line of shock-and-awe Fans of manga are also catered for in fantastic speed. entertainment, “Monster this year’s USJ offerings. An all-new 4D The novelty of the XR experience, Hunter: The Real” brings cinematic experience has been created coupled with the growing popularity of participants face-to-face based on the comic series Attack on Kyary Pamyu Pamyu, made this ride the with giant, animated, Titan. Dubbed “Attack on Titan: The topic of conversation among gathered fire-breathing creatures. It is based on the Real 2,” the attraction allows participants press and a location of perpetual long Monster Hunter series of role-play video to experience the heat of battle against lines on opening day. games. The attraction showcases new human-eating creatures called Titans. According to USJ, Universal Cool creatures from Monster Hunter X with “Become a member of the Survey Japan brings together internationally steaming nostrils that are liable to leave Corps [a military unit that fights Titans] praised Japanese entertainment unsuspecting visitors covered in a light and fly around with Mikasa [and] Armin icons and “applies . . . creativity, film of “phlegm” (watery liquid emitted using three-dimensional maneuvering technology, and talent for high-quality from 4D elements). to fight back against an attacking reproductions [offering] attractions that Lovers of anime, meanwhile, are Female of Titan,” a USJ press release have never been seen before.” treated to a rare cinematic experience implores visitors. The campaigns from this year and of the popular animated TV series Neon But the marquee attraction of Universal last have reportedly earned high Genesis Evangelion, developed in Japan. Cool Japan 2016 may well be the XR ride praise from visitors coming from both Called “Evangelion The Real 4D: 2.0,” through Kyary Pamyu Pamyu’s kawaii domestic locations and abroad, and the attraction provides a fully immersive (cute) world, which is epitomized by her were considerable draws for guests 4D cinema experience. This includes 3D up-tempo pop music video “PonPonPon.” planning holidays in Japan. Universal goggles and seats that move in tune with At the time of writing, the song had over Cool Japan 2016 attractions will be the action, as well as gusts of wind and 92 million views on YouTube. open until June 15. n ”Attack on Titan: The Real 2” offers a 4D cinematic experience. THE JOURNAL n APRIL 2016 23
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