Category Archives: BUSINESS

Asia’s nuclear nemeses

Author: S Paul Kapur, Naval Postgraduate School

On 3 June 2018, India conducted the sixth test of its Agni V intermediate-range ballistic missile. The launch reportedly brought the weapon one test away from eligibility for induction into India’s Strategic Forces Command. With a range of 5000 kilometres, the nuclear-capable Agni V can strike targets across China — a point that Indian officials and analysts have publicly stressed. Indian soldiers take part in the rehearsal for the Republic Day parade on a winter morning in New Delhi, India, 8 January 2018 (Photo: Reuters/Adnan Abidi).

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The China-centric nature of the rhetoric surrounding the missile serves as a reminder that although South Asia watchers often focus on India’s rivalry with Pakistan, India’s real strategic competitor is China.

China’s economy and military are far larger than India’s and are growing rapidly. China–India territorial disputes — which triggered the bloody 1962 border war that India lost badly — remain unresolved. The assertive nature of China’s recent regional behaviour suggests to Indian leaders that Beijing may try to settle such disagreements through coercion and fait accompli. If these trends continue, India could find itself economically and militarily outmatched and hard pressed to resist coercive Chinese pressure.

India views nuclear weapons as an important backstop against Chinese …continue reading


Chikyoren opens pre-qualified register to private debt & equity


The 21 trillion yen Pension Fund Association for Local Government Officials has added private debt and private equity categories to its manager pre-qualification register. Known as Chikyoren, it invests a large part of the reserves of 14 of mutual aid associations which cover a variety of public servants from teachers to the police.

The Fund is committed to following the same asset allocation as the Government Pension Investment Fund. This should, in turn, enable it to convert some of its “duty investments” in the debt of the Fiscal Investment & Loan Programme (FILP) and Japan Government Bonds (JGBs) into more productive holdings,

Real estate already features to its roster of alternatives managers but its actual property investments have been more overseas than at home.

To review the Fund’s commitment enter “Chickyoren’ in the search box at the top right.

© 2018 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to and a link provided to the original text on that site.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

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Abe is aching for a seat at the table

Authors: Celeste L Arrington, George Washington University and Atsuhito Isozaki, Keio University

Tokyo has long been something of a fifth wheel in diplomacy related to the Korean Peninsula. Japan’s focus on the abductions issue and the baggage of its colonial rule over the Korean Peninsula complicate Tokyo’s involvement and set Japan apart from South Korea, the United States, China and Russia.

Japan’s Prime Minister Shinzo Abe meets Shigeo Iizuka, the leader of a group of families of Japanese abducted by North Korea, and its members at Abe’s official residence in Tokyo, Japan, 30 March 2018 (Photo: Reuters/Toru Hanai/Pool).

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Japanese fears about getting sidelined from developments on the Peninsula have deepened with the recent spate of summits. Since April 2018, North Korean leader Kim Jong-un has met multiple times with the presidents of South Korea and China, and once with US President Donald Trump. Backed by more than 80 per cent of Japanese respondents, Japanese Prime Minister Shinzo Abe seeks a similar summit with Kim Jong-un, possibly in September.

Despite this anxiety about getting left out, the recent summitry has ameliorated some of Japan’s core security concerns. Going forward, how the agreements from the summits are implemented matters greatly for Japan. Tokyo’s three main concerns are North Korea’s abductions of Japanese nationals in the 1970s and 1980s, North Korea’s missiles and North Korea’s nuclear program. Abe welcomed the Trump–Kim summit in Singapore on 12 June as ‘a step …continue reading


Mori Trust to open Hilton-branded hotel and time-share resort in Okinawa in 2020

On June 26, Mori Trust started construction on a 300-room hotel on Okinawa’s Sesoko Island. The Okinawa Sesoko Project includes the main hotel, which will be operated by Hilton Hotels & Resorts, along with a time-share resort that will be sold to members in weekly units. The time-share resort will be operated by Hilton Grand Vacations.

The resort sits on a 13.4 hectare site with 800 meters of beachfront. The 300-room hotel will be 9-storeys with a total building size of 21,000 sqm (226,000 sq.ft). The 132-room time-share resort will be 10-storeys and have a total building size of 15,000 sqm (161,000 sq.ft). The hotel is scheduled to open in 2020, with the time-share resort opening in 2021.

The project site is located next-door to another beachfront property acquired by Mori Trust in 2016. The neighboring property includes a half-built hotel that a previous developer had started building in 2005 before construction halted in 2008. The previous hotel project had an estimated cost of around 30 billion Yen. Mori is considering redeveloping this site in the future.

[Left] The 300-room hotel; [Right] The 132-room time share resort.

The Daily Engineering & Construction News, June 27, 2018.
Mori Trust Press Release, June 26, 2018.

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New minpaku law sees 98% of listings in Kyoto disappear

A month has passed since Japan’s new rules for home-sharing were introduced. Strict registration requirements have caused a large number of hosts to drop out of the market. In Kyoto City, the number of approvals sits at 47 as of July 13, a stark difference to the 3,000-plus lodgings that were operating beforehand.

An annual letting limit of 180 days and additional regulations imposed by Kyoto City have made casual letting unprofitable for many hosts.

Of the 29 applications received as at the end of June, 25 were for properties where the host also resides in the home, while the remaining 4 were for properties where the host lives next-door or nearby. The City was expecting to have a large number of applications from corporations owning blocks of apartments, but has yet to receive any.

One registered host reported an occupancy rate of 66% over the past month, despite the rainy season. They doubled their nightly rate to 10,000 Yen in response to strong demand from tourists.

Even with an increase in nightly room rates, the annual cap of 180 days per property is expected to limit potential revenue by a third. In order to operate all-year-round with no annual cap, a host must obtain a hotel license – something that many homes do not qualify for.

Furthermore, in exclusive residential zones within Kyoto City, hosts are only permitted to rent out their homes between mid January and mid March for no longer than 60 days per year. For hosts that do not reside within the property, they must have a caretaker stationed within 10 minutes of the property to deal with any problems or troubles that may arise during a guest’s stay.

When the new law was introduced on June 15, the Japan Tourism Agency requested a list of advertised properties from the major short-term …continue reading