Category Archives: BUSINESS

Rethinking state ownership after COVID-19

Sanitary workers wearing face masks following the COVID-19 outbreak are seen on Tiananmen Square before the closing session of the Chinese People's Political Consultative Conference (CPPCC) in Beijing, China, 27 May 2020 (Photo: Reuters/Thomas Peter).

Author: Meijun Qian, ANU

State ownership might be crucial for sectors that are vital for social stability. Over the last half century, the consensus among economists has been that state ownership is notorious for management inefficiency. Since the 1970s, there has been a wave of privatisation globally.

But in recent years the percentage of state-owned enterprises (SOEs) in the Fortune Global 500 has risen to nearly a quarter. The increase in state capitalism over the last two decades in countries like Singapore, China, Brazil and Norway offers an opportunity to explore the nature of state ownership anew.

The necessity of containing a global pandemic also provides a backdrop to re-examine state ownership. Medical equipment that is in short supply globally — such as tests, masks and ventilators — and social distancing are crucial to combating COVID-19.

Countries with a state capitalist economy seem to be able to deal with both issues more effectively than those with free markets because the state can order an immediate shift in production to meet emergency needs. People in these countries also seem less likely to resist drastic social measures. This could be because they are accustomed to centralised control.

Producing and storing excessive quantities of medical supplies isn’t lucrative under normal circumstances. Companies must account for uncertainties in demand, incurring unpredictable inventory costs, quality maintenance and sales. But because the government can implement price controls during a disaster on humanitarian grounds, these costs might not be covered. In this situation, the market is likely to fail.

Some goods demand state intervention in unusual situations because they are critical to survival. These include medical supplies during a pandemic and shelter during wartime, as well as clean water, air and food. This category could be extended to include utilities such as electricity and services that ensure economic stability, …continue reading

    

2020 Office supply in Tokyo reaches 2nd highest level in history

According to a report published by Mori Building on May 25, a total of 1.87 million square meters (approx. 20 million sq.ft) of new office space is expected to be supplied in Tokyo’s 23 wards in 2020. This is the second-highest level seen since the company began collecting data in 1987. Despite the large supply, most of the new office space is already leased.

The previous record was an annual supply of 2.16 million square meters seen in 2003. Large commercial projects completed in 2020 include Otemachi One (357,000 sqm), Tokyo World Gate Kamiyacho Trust Tower (195,000 sqm), and Toranomon Hills Business Tower (172,900 sqm).

2021 and 2022 is forecast to see annual supply drop to around 540,000 square meters, before recovering to 1.43 million square meters in 2023. Mori’s Toranomon-Azabudai Project is expected to add 213,900 square meters of office space when completed in early 2023.

With a growing number of companies quickly implementing remote-work options amidst the coronavirus pandemic, there are some signs of office leases being cancelled as companies seek to reduce operating costs and shrink office space. This could have a potential impact on the record-low office vacancy rates that central Tokyo landlords have been enjoying for the past few years. The average office vacancy rate in Tokyo’s 23 wards was 1.8% in 2019, down from the most recent peak of 7.8% seen in 2012 when the property market bottomed out.

Otemachi One

Sources:
Mori Building News Release, May 25, 2020.
The Nikkei Shimbun, May 25, 2020.

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5 Ways To Help Small Businesses In Japan

local shop

Local small businesses are essential for creating unique neighborhoods. Customers are more often satisfied by these sorts of businesses as they show a similar awareness about their communities and provide friendly customer service for all.

The Japanese government is providing every resident in Japan with a ¥100,000 stimulus package. If possible, why not put this extra cash boost towards something meaningful and economically boosting? If you’re someone who has some extra yen to spare, spend it away with love for the sake of your community. Here are five awarding ways to support your local small businesses.

1. Order products with takeaway or delivery options

Delivery

Many of us are probably taking full advantage of takeaway and delivery options when it comes to premade meals, but another suggestion is to look into other local stores such as flower shops and fashion boutiques to see if they also have alternative shopping options.

SAVVY PICKS

Lotus Garden is a flower shop in Yamagata which delivers flower arrangements with a variety of themes all around Japan. They also provide free flower arranging lessons on their website and lesson kits for different flower themes. If you’re just after some flowers we recommend asking your local flower shop to see if they have anything available first, but if you’re wanting something specific Lotus Garden will be more than happy to provide it.

2. Buy “future tickets”, gift cards or credit for later

naramirai

Buying gift cards and credits are a great way to support your local businesses whilst still getting something in return later on. …continue reading

    

How You Can Support Local Businesses in Japan During COVID-19

Source: Gaijin Pot
How to Support Local Businesses in Japan during COVID-19

The COVID-19 pandemic has proven to be an economic marathon for those small businesses and independent companies who have seen their customer base plummet.

With so much happening right now, and hints at the nation beginning to get a little back to normal, we still need to remain diligent and to avoid potentially facing a second wave outbreak.

If you’re looking for a way to continue to shop safely and help local businesses, there are some pretty easy ways to chip in, help locals get back on track, and get a few goodies for yourself too.

Buy a local produce box

A farmer’s market in Shimo-takaido, Tokyo.

If this current time isn’t the absolute pinnacle moment for online shopping, I don’t know what is. Rather than going straight to Amazon, make your online spending a little more ethical by shopping locally.

While you’re trapped inside with extra time and a rediscovered passion for cooking—or at least flexing your culinary skills on Instagram—a locally sourced produce box is a win-win all around. You get fresh fruit and veggies, you don’t have to leave the house, and you’re supporting farmers directly.

With a majority of restaurants running on a low capacity model or just offering take out, there’s a pretty good chance you’ll get the cream of the crop as many producers are stuck with an excess of product.

Where to buy

Help local farmers and get more delicious produce while doing it.

Couple Atsue and Cameron run Base Side Farm out near Fussa Yokota Air Base. They’re selling a variety of seasonal vegetables, including plenty of greens, all of which you can see on their Facebook page<span …continue reading

    

The economy dominates South America’s relationship with China and Japan

Grain is loaded aboard ships for export at a port on the Parana river near Rosario, Argentina, 31 January, 2017 (Photo: Reuters/Brindicci).

Author: Nobuaki Hamaguchi, Kobe University

The United States and Europe tend to associate South America with Amazon rainforest burning, pink-tide leftist ideology, drug trafficking, corruption and illegal migration. These issues oppose their values of justice, social stability and global order. For China, whose 2016 Policy Paper on Latin America and the Caribbean states a position of ‘non-interference in each other’s internal affairs’, these are not of concern.

China seeks South American natural resources like oil, gas, metals and food and access to its capital and consumer goods markets comprising 431 million potential consumers. South America also receives substantial Chinese investment in the resources and infrastructure sectors. For South American countries, the growing presence of China is an opportunity to pursue development agendas which may not be otherwise viable.

China has extended the Belt and Road Initiative (BRI) to South America and invested in mega-infrastructure projects, including ports and railways. Chinese technology company Huawei is also selling 5G networks to Brazil, despite US efforts to block it by tempting President Jair Bolsonaro’s administration with a military cooperation program. If realised, Brazil would become a showcase of a South American regional market using a technological platform made by China.

China has become the number one or two trade partner for all South American countries. But a high concentration in natural resources trade has created tensions in economic relations, as shown by the increasing number of anti-dumping complaints against China. WTO statistics show that South American countries initiated 23 per cent of anti-dumping probes against China over 1995–2019 — the same as the United States and European Union combined.

There is also a fear that the South American economy may be too dependent on China. The fear is becoming a reality as the COVID-19 crisis unfolds. The UN Economic Commission for Latin America and the Caribbean …continue reading