Japanese retail sales increased for the third consecutive month, the report showed. It is interpreted as an improved consumer sentiment as concerns over the spread of COVID-19 have been dampened. Omicron mutation did not reflect the effect of the spread of the virus.
According to Bloomberg News on the 27th (local time), retail sales in Japan rose 1.2% in November from the previous month. It is similar to the Economist estimate (1.3%). Consumers mainly purchased clothes, cars, etc.
In Japan, consumption plunged as COVID-19 spread like in the United States. Consumer spending showed a recovery as the number of people infected with COVID-19 dropped sharply from the fall and the government eased quarantine measures since September. “Consumer sentiment in Japan is gradually improving in order to prevent the spread of the Omikron mutation virus,” said Meijiyasuda Research Institute. “The turnaround in this quarter affected trade improvements in the U.S. and Europe following consumer spending.”
Meanwhile, experts predict that the Japanese economy will grow 6.1% annually in the last three months of 2021. The Japanese government is moving to increase the level of control over private companies with the justification of strengthening the supply chain of important strategic supplies such as semiconductors.
According to the Yomiuri Shimbun on the 12th, the Japanese government plans to establish an “Economic Security Office” (tentative name) in the cabinet department, which will function as a head coach in the field of economic security. The Japanese Cabinet is the ministry in charge of planning and the coordination on policies promoted by central administrative agencies, and is disqualified for South Korea’s government affairs.
As soon as the enactment of the Economic Security Promotion Act (tentative name) to be submitted to the regular National Assembly starting in January next year is passed, the Japanese government will receive dozens of personnel from related ministries such as the Ministry of Finance, Economy, Industry and Defense.
The Economic and Security Promotion Act, which has pledged to enact since Prime Minister Fumio Kishida entered the ruling Liberal Democratic Party presidential race in September, is expected to define economic security as an independent area separate from diplomatic security and include measures to secure important strategic materials and prevent high-tech leaks.
When the Office for Economic Security is launched, the role of the National Security Agency (NSS), which has played a central role so far in the field of economic security, is expected to be somewhat reduced.
The Yomiuri Shimbun said NSS will provide information and advice to the office in charge of economic security, adding that NSS’ economic security-related work is limited to acquisition and investment screening by foreign companies.
According to the newspaper, the Office in charge of economic security is in charge of determining whether to receive subsidies accordingly after receiving reports from companies on plans to secure important materials through supply chains in connection with related ministries.
In addition, if there is a concern that supply will be suspended, an alternative procurement plan will be established to promote stockpiling and diversification of supply chains. For social infrastructure, preliminary screening is carried out, such as investigating whether foreign products that can pose a security threat are used in important devices and systems related to power or communication.
The Office for Economic Security will also have the authority to investigate whether other places entrusted with work related to social infrastructure are eligible and recommend correction to the company if vulnerability is revealed.
It will also play a role in supporting research and development of high-tech technologies such as artificial intelligence (AI) and quantum technology.
The Yomiuri stated that the office in charge of economic security will exercise strong authority, including being involved in judging whether patent applications related to the development of confidential weapons are closed to prevent technology leakage. Recently, there was news that showed a side of the Japanese economy. It is the collapse of the Japanese TV industry. It is reported that Panasonic, Japan’s leading home appliance maker, has decided to produce mid- to low-priced TVs through TCL in China starting next year. Panasonic is said to have virtually closed its TV production as seven out of nine TV factories around the world have already closed. The withdrawal of the company, which once accounted for 10% of the global TV market, seems to be a significant shock to Japan.
In fact, Japan was called the TV Kingdom until the early 2000s. Led by Sony, prominent electronics companies such as Panasonic, Sharp, Toshiba, Hitachi, and Mitsubis swept the TV market. But now only Sony remains lonely.
Behind such a fall lies Korea’s advance. With the opening of the era of flat TV in the early 2000s, South Korea’s Samsung and LG began to threaten their position in Japan with new technologies. It was in 2006 that Sony gave Samsung the top spot. Since then, other Japanese electronics companies have been pushed out to Korean companies one after another, suffering from deficits.
As you can see here, the Japanese economy is gradually being hit by Korea or China. Although it still maintains its position as the world’s third-largest economy, there are dark shadows in many ways. In addition to the so-called “lost 30 years,” low aging birth rates, excessive national debt, and sluggish domestic demand are putting pressure on Japan. High-level prescriptions such as Abenomics are avoiding falling. However, it has rarely escaped from the stagnation phase.
Yukio Noguchi, an honorary professor at Hitotsubashi University, a Japanese economic scholar, is drawing attention for predicting that Korea’s per capita GDP will nearly double that of Japan by 2040. In an article published in Toyo Keizai, an economic map, Professor Noguchi diagnosed, “Both Japan and Korea have fallen into an economic crisis, but in response, Japan lagged far behind Korea.” According to the indicators presented as the basis, Korea’s average wage was $41,960, which has already exceeded Japan’s $38,515. In addition, since 2000, the nominal GDP growth rate per capita in Korea has reached 285.2%, but Japan has grown only 2.9%. As experts say in unison, the Korean economy follows the Japanese economy every 20 to 30 years. Looking at the current situation, it is similar to Japan in terms of low birth rates, aging population, real estate bubble, and national debt. There is a possibility of reproducing Japan’s economic downturn. It is time to establish and strongly implement meticulous economic policies to prevent the situation from worsening.
Sam Kim
Asia Journal
