Japan and Asia: Business, Political and Cultural Interactions (Advances in Japanese Business and Economics, 29) 9811679886, 9789811679889

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Advances in Japanese Business and Economics 29

Mariko Tanigaki   Editor

Japan and Asia Business, Political and Cultural Interactions

Advances in Japanese Business and Economics Volume 29

Editor-in-Chief Ryuzo Sato, Stern School of Business, New York University, Tokyo, Japan Series Editor Kazuo Mino, Faculty of Economics, Doshisha University, Kyoto, Japan Managing Editors Hajime Hori, Tohoku University, Sendai, Japan Hiroshi Yoshikawa, Faculty of Economics, Rissho University, Tokyo, Japan Toshihiro Ihori, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan Editorial Board Yuzo Honda, Faculty of Economics, Osaka Gakuin University, Suita, Osaka, Japan Jota Ishikawa, Graduate School of Economics, Hitotsubashi University, Kunitachi, Tokyo, Japan Kunio Ito, Graduate School of Commerce and Management, Hitotsubashi University, Kunitachi, Tokyo, Japan Katsuhito Iwai, International Christian University, Mitaka, Tokyo, Japan Takashi Negishi, The Japan Academy, Tokyo, Japan Kiyohiko Nishimura, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan Tetsuji Okazaki, The University of Tokyo, Tokyo, Japan Yoshiyasu Ono, Osaka University, Ibaraki, Osaka, Japan Junjiro Shintaku, University of Tokyo, Tokyo, Japan Megumi Suto, Waseda University, Tokyo, Japan Eiichi Tomiura, Hitotsubashi University, Kunitachi, Tokyo, Japan Kazuo Yamaguchi, University of Chicago, Chicago, USA

Advances in Japanese Business and Economics (AJBE) showcases the work of Japanese and non-Japanese scholars researching the Japanese economy and Japanese businesses. Published in English, the series highlights for a global readership the unique perspectives of Japan’s most distinguished and emerging scholars of business and economics. It covers research of either theoretical or empirical nature, in both authored and edited volumes, regardless of the sub-discipline or geographical coverage, including, but not limited to, such topics as macroeconomics, microeconomics, industrial relations, innovation, regional development, entrepreneurship, international trade, globalization, financial markets, technology management, and business strategy. At the same time, as a series of volumes written by Japanese and non-Japanese scholars studying Japan, it includes research on the issues of the Japanese economy, industry, management practice, and policy, such as the economic policies and business innovations before and after the Japanese “bubble” burst in the 1990s. AJBE endeavors to overcome a historical deficit in the dissemination of Japanese economic theory, research methodology, and analysis. The volumes in the series contribute not only to a deeper understanding of Japanese business and economics but to revealing underlying universal principles. Overseen by a panel of renowned scholars led by Editor-in-Chief Professor Ryuzo Sato, AJBE employs a single-blind review process in which the Editor-in-Chief, together with the Managing Editors and specialized scholars designated by the Editor-in-Chief or Managing Editors, rigorously reviews each proposal and manuscript to ensure that every submission is a valuable contribution to the global scholarly readership. All books and chapters in AJBE are indexed in Scopus.

More information about this series at https://link.springer.com/bookseries/11682

Mariko Tanigaki Editor

Japan and Asia Business, Political and Cultural Interactions

Editor Mariko Tanigaki Department of Area Studies Graduate School of Arts and Sciences University of Tokyo Tokyo, Japan

ISSN 2197-8859 ISSN 2197-8867 (electronic) Advances in Japanese Business and Economics ISBN 978-981-16-7988-9 ISBN 978-981-16-7989-6 (eBook) https://doi.org/10.1007/978-981-16-7989-6 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

In the post-COVID-19 world, the rivalry between the USA and China will become intensified. Some may think that the idea of an Asian community in this context is merely a dream, far from the reality. However, might we not interpret the situation as representing the coexistence of cooperation and conflict, which occurred in the Sino-Japanese relations during the Late Qing to Early Republican periods? Although the Asian Community has not yet even developed an institutional framework, the Association of Southeast Nations celebrated its 50th anniversary in 2017, and the ASEAN Community was launched in 2015. ASEAN has already been holding the ASEAN Plus Three, consisting of ASEAN, China, Japan, and South Korea, since 1997. This provides a public sphere for Japan in which to communicate together with the three influential imagined members of the East Asian Community and Asian Community, namely China and South Korea. In addition to the development of trade and investment, supply chain and transportation networks, we can say that a de facto Asian Community has, in fact, materialized. This book aims to review Japan’s postwar interactions with the rest of Asia. The Japanese factory production system, kaizen, has been shared in Asia. This book collects more diverse topics related to Japan’s interactions with China, the Philippines, Indonesia, and Hong Kong. Each chapter will provide details on how the business, political, and cultural interactions enrich both sides. There is no comparable book that aims to deal comprehensively with Asia in terms of business, politics, and culture. It cannot be claimed, of course, that the discussions contained in this book cover aspect, but the fact that five contributors, including myself, have written chapters in this direction makes the book different from others. Many people may be unaware that, in launching its reform and openingup policy, China sought to study how to manage its economy from outside China, including the USA, Europe, and Japan. Japan responded to this by organizing Japan– China Working Groups for the Exchange of Economic Information, whose attendees included Zhu Rongji, the former prime minister of China. Out of the five contributors, three are neither ethnic Japanese nor born in Japan. This element also makes the discussion in this book more multifaceted. Clemente focused on both Japanese and Chinese investment and ODA in the context of the v

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Philippines. Risda conducted interviews with Indonesian workers living in Japan. This book may prove useful in relation to advanced undergraduate and graduate courses. For readers outside Japan, the chapters by Ito, Tanigaki, and Chin, which make extensive use of Japanese references, will inform the present situation regarding Asian studies in Japan and serve as a guide to reading books and articles written in Japanese. Finally, I would like to express my sincere gratitude to the editorial board of the Advances in Japanese Business and Economics series, headed by Editor-in-Chief Prof. Ryuzo Sato, for approving this book project. Tokyo, Japan September 2021

Mariko Tanigaki

Acknowledgments

This book would not have been possible unless Prof. Ryuzo Sato, C. V. Starr Professor Emeritus of Economics at New York University’s Stern School of Business, had not pushed me to publish it. I am very grateful to Ms. Juno Kawakami of Springer Nature for her patience and warm-hearted support in getting the book published. Dr. Susie Casson, the president of Sunflowers Proofreading Services, assisted all the contributors with her professional proofreading, and we would like to express our gratitude. Prof. Tomoo Marukawa generously allowed me to use part of a project grant of the Contemporary China Research Base, Institute of Social Science, The University of Tokyo, for which I am extremely grateful.

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Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mariko Tanigaki

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The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mariko Tanigaki

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Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines . . . . Tina S. Clemente

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Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dianni Risda

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Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Hiroshi Ito The Formation of Chinese Networks: An Analysis of a Hong Kong Family’s Reunion Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Mariko Tanigaki The Political Uses of Japanese Pop Culture in Hong Kong . . . . . . . . . . . . . 249 Chun-wah Chin Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Mariko Tanigaki Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289

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Editors and Contributors

About the Editor Prof. Mariko Tanigaki (Ph.D.) is Professor in the Department of Area Studies, The University of Tokyo, with a B.A. in Asian Studies and an M.A. and Ph.D. in Area Studies at The University of Tokyo, Japan. She studied at the Centre of Asian Studies, the University of Hong Kong, from September 1986 to September 1987. She also taught in the Department of Civilization, School of Letters, Tokai University, as an assistant and associate professor. Her research interests cover contemporary Hong Kong studies and southern China studies. Her recent publications include Heny¯o suru Kanan to Kajin Nettow¯aku (The Morphing South China and Contemporary Chinese Networks, co-edited, F¯uky¯osha, 2014), Sengo Nihon no Ch¯ugoku Kenky¯u to Ch¯ugoku Ninshiki (China Studies and Views toward China in Post-war Japan, co-edited, F¯uky¯osha, 2018), and Colonial Legacies and Contemporary Studies of China and Chineseness: Unlearning Binaries, Strategizing Self (co-edited, Singapore: World Scientific, 2020). The first of these three books won The Japan Consortium for Area Studies award for Collaborative Research. She is Former president of the Japan Association of South China Studies. She has written many articles on the politics and society of Hong Kong and has also contributed to the annual report of the Institute of Developing Economies (1993–2002 and 2004–2006) and the Institute of Chinese Affairs (1995–2002) and also to the biannual report of the Japan Association for Asian Studies (2004, 2006, and 2008).

Contributors Chun-wah Chin is a doctoral student in the Department of Area Studies, The University of Tokyo. He earned his B.Soc.Sc. (Hons) in Sociology from Hong Kong Baptist University and M.A. in Area Studies from The University of Tokyo. His research interests include contemporary Japanese society and culture, Japan–

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Asia relations, national identity, public memory, and Hong Kong issues. His works include Honkon to Nihon (Hong Kong and Japan, Chikumashobo, 2020), “Development of Japanese Studies in Hong Kong from the Perspectives of Chineseness and Hong Kong’s Subjectivity” (2020), “Honkon Etsugo no Hyojunka oyobi Ch¯ubun tono Ketsug¯o” (Standardization of Hong Kong Cantonese and Its Integration with Written Chinese) (2019), among other publications. Tina S. Clemente (Ph.D.) is Professor and Assistant to the Dean for Academic Affairs at the Asian Center, University of the Philippines (UP), Diliman. She earned her Ph.D. and M.A. in Economics as well as a B.S. in Business Economics at the same university. She was awarded the One UP professorial chair in Asian Studies for Teaching and Research for 2016–2018 and 2019–2021. Her research interests include China studies, Philippines–China economic relations, development studies, and economic history. She is Editor-in-Chief of the Chinese Studies Journal and is Lead Editor of China Studies in the Philippines: Intellectual Paths and the Formation of a Field (Routledge, 2018). She was Lead Issue Editor of the Asian Studies Journal: Journal of Critical Perspectives on Asia. As program convener, she led the 2016 China/Strategic Studies Program of the UP Center for Integrative and Development Studies. She is Former President of the Philippine Association for Chinese Studies (PACS). As a subject matter expert, she has engaged with the Development Academy of the Philippines, the National Defense College of the Philippines, the Foreign Service Institute, and the Philippine Institute for Development Studies. In 2021, she was appointed as a member of the UP Diliman Task Force on a Blueprint for Building the Nation. Hiroshi Ito (Ph.D.) is Researcher at Toyo Bunko, with a B.A. in Chinese language at The Tokyo University of Foreign Studies, and an M.A. and Ph.D. in Area Studies at The University of Tokyo, Japan. He joined the Tokio Marine & Fire Insurance Company in 1978 and has held posts such as the chief representative of the Beijing office, manager of the China division, and general manager of Tokio Marine Asia Pte. Ltd., Tokyo branch. He became the editor of the Monthly Journal of Chinese Affairs in 2013 and left the position in 2015. As a part-time lecturer at The University of Tokyo, he taught Chinese language from 2015 to 2019. His research interests cover the contemporary Chinese financial market and the contemporary history of Sino– Japanese economic exchange. His recent publications include Ch¯ugoku Hokengy¯o ni okeru Kaikaku to Kaih¯o (Opening up and Reform in the Chinese Insurance Industry, Ochanomiu Shobo, 2015) and Ch¯ugoku no Kiny¯u Keizai wo manabu (To Study Chinese Financial Economics, co-edited, Minervashobo, 2019). He has written many articles on the stock and insurance markets of China for the China Yearbook of the Institute of Chinese Affairs (2010–2021). Dianni Risda is Lecturer of Japanese Language, Department of Japanese Language Education, Faculty of Language and Literature Education, Universitas Pendidikan Indonesia. She obtained her B.A. in Japanese Language at Universitas Pendidikan Indonesia (UPI: Indonesia University of Education) and her M.A. at National Shizuoka University, and she completed credits in the Ph.D. course of Tokyo

Editors and Contributors

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Metropolitan University, Japan. She joined UPI in 1998 and has been assigned to the Office of International Education and Relations. Her research interests cover Indonesian studies with reference to multicultural symbiosis, Japanese language education in Indonesia, and Japan–Indonesian relations. Her recent publications include “Nihonjin to Indonesiajin Sessyoku Bamen ni okeru Danwa Tenkai o Sasaeru Kikite Gengo Koudou” in Nihongo Jurnal (2015), “Interlanguage Variability in Speaking and Writing Tasks: An Analysis of ‘Taberareteshimatteita’ in Storytelling” in NINJAL Research Papers (2015) and Para Pelopor One Asia, Membangun Sebuah Komunitas Asia (2015), “Sy¯oshi K¯oreika e no tai¯o to Tabunka Ky¯osei Syakai Jitsugen no Kany¯osei: Nihon e no Indonesiajin Kangoshi” in Kokusai Kankei Kenkyu (2017). She has published many articles in Japan Edu and Nihongo Jurnal. Mariko Tanigaki Department of Area Studies, Graduate School of Arts and Sciences, University of Tokyo, Meguro-ku, Tokyo, Japan

Chapter 1

Introduction Mariko Tanigaki

In 2021, 76 years will have passed since the end of World War II. When the Asian Community is discussed, the discussions often stop at the point of whether or not Japan is eligible to participate in it, because of Japan’s past aggression toward Asia and its improper and insufficient response to the events that occurred in the 1930s– 1945. Japan has been called upon to apologize and compensate for their aggression. The author also thinks that history should be properly understood and shared among Japanese nationals. At the same time, the Japanese people should not forget that Japan has been involved in global issues post-World War II. Even if the response to the past has been inadequate, this does not exempt Japan from their responsibility to make an international contribution. When the Gulf War broke out in January 1991, Japan did not send its Self-Defense Forces but paid a total of $13 billion in war and other costs. After the Gulf War ended, Japan was excluded from an announcement in which the Kuwaiti government thanked 30 countries around the world. This led to a trend in Japan to make humanitarian contributions to international efforts. Since then, the Japanese government has turned its attention to international contributions, the SelfDefense Forces have participated in peacekeeping operations, and the nature of its ODA has changed. In light of this situation, this book aims to provide material for the younger generation, born in the twenty-first century, to think about Japan. Firstly, the book will aim to review the postwar interactions of Japan with the rest of Asia. Secondly, the book will aim to provide details on how these interactions have enriched both sides. Thirdly, the book will aim to offer suggestions on how a de facto Asian Community could work. Under these three aims, the author invited four contributors to write chapters for this book. M. Tanigaki (B) Department of Area Studies, Graduate School of Arts and Sciences, University of Tokyo, 3-8-1 Komaba, Meguro-ku 153-8902, Tokyo, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_1

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1.1 The Structure of the Book Regarding the interactions between Japan and Asia, the Japanese factory production system, kaizen, has been shared in Asia. Japanese popular culture became widespread in the 1970s. Especially in the 1980s and 1990s, Japanese TV dramas were popular in Asian countries. This book collects more diverse topics from Japan’s interactions with China, the Philippines, Indonesia, and Hong Kong. Each chapter will provide details on how the business, political, and cultural interactions enrich both sides. Chapter The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia examines Japan’s interaction with Indonesia through a case of the Japan International Cooperation Agency’s (JICA’s) assistance program for the Indonesian National Police Reform. In the 1990s, the paradigm of development aid shifted from economic development to people-centered development. JICA, a comprehensive ODA implementing agency that deals with loan aid, grant aid, and technical cooperation, was restructured in 2003. In the post-Cold War environment, JICA’s international cooperation projects have become increasingly diversified. Among those projects, the police-related ones were unique. The program was initiated by a formal request from the Indonesian government to the Japanese government. The police were separated from the Indonesian National Armed Force in 2000, which became a crucial component for democratization in Indonesia. The overall strategy of the program focused on a project to implement community policing in a model police force, and then to extend the results of that project nationwide across Indonesia. Chapter Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines compares the Japanese and Chinese investment and aid in the Philippines and discusses the Philippines’ partnership with both. In Southeast Asia, Japan has been instrumental in the region’s development since the end of World War II. In contrast, China’s economic presence in the region has recently increased. The respective state visits of Shinzo Abe and Xi Jinping to the Philippines in 2017 and 2018 further hint at what appears to be a strategic repositioning of these countries both with each other and with the Philippines. The focus of this chapter is the investment and aid dimensions of these economic agreements. It analyzes the economic relationship of these countries with the Philippines by considering empirical data on these indicators, the tenor of the discourse, and perceptions. The grant amount symbolized China’s increasing entrenchment, but an observation of the utilization rate and project management status renders another view: that Japan’s grant still retains a considerable presence. The research is sensitive to both China and Japan’s contexts of regional influence. Chapter Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program examines the acceptance of trainees from Indonesia. With the creation of new residence status systems, such as Technical Internship and Special Technical Internship, there are more opportunities for foreigners to work in Japan than ever before. Japan is predicted to experience population aging, resulting in slower economic growth and

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a lack of productive labor, whereas Indonesia will experience a demographic bonus, which is accompanied by problems related to unemployment and poverty. This chapter aims to identify and analyze the reality of the cultural exchanges between Japan and Indonesia. This research adopted a quantitative approach with a descriptive method. The respondents were Indonesian workers who lived in Japan, and the data analysis used the descriptive percentage technique. The questions are divided into three parts: perceptions of employment, perceptions regarding Japanese socio-culture, and perceptions regarding foreign citizens’ understanding of the laws that are in force in Japan. Chapter Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information draws on the experiences of Hiroshi Ito, who has been involved in Sino-Japanese businesses for more than 20 years. This chapter considers how the activities of the Japan–China Working Group for the Exchange of Economic Information (J-C) affect the economic policymaking of the Chinese government. JC was established in 1980 and has been acting as an organization that advances suggestions to the Chinese government. At the end of the 1970s, when China adopted its reform and opening-up policy, the Chinese government considered how to manage their economy from the example set by the United States, Europe, and Japan. J-C has held annual general meetings that last for almost a week. Ten to fifteen people from each country attended these meetings, and they exchanged their views about specific themes. The attendants were Zhu Rongji (the former Chinese prime minister), Gu Mu (the former Chinese vice prime minister), other members of the Chinese government, Saburo Okita (the former Japanese foreign minister), Ryoichi Kawai (the former chair of Komatsu Industry). and others from Japan. The minutes of the meeting were directly reported to, for example, Prime Minister Zhao Ziyang by Gu Mu, then were used to establish economic policy. Chapter The Formation of Chinese Networks: An Analysis of a Hong Kong Family’s Reunion Activities analyzes how Chinese descendants form networks. It is often pointed out that one of the characteristics of overseas Chinese is that they form networks. The Guan family in Hong Kong is a case of how Chinese people form networks without a family business. The Guan family in Hong Kong began with a married couple, Guan Yuanchang and Li Amei. The first generation were educated in the church around the time of the Opium War. The second generation also received a Western-style education and spread over the mainland of China and Southeast Asia from Hong Kong. Many of the third generations pursued their studies abroad. In 1949, when the PRC was established, the majority of the family members migrated to North America. In the 1990s, the family record book was updated and the global family reunions began in 2003. As of February 2016, 1368 members were listed in the family records. The chapter considers the process and the reason why the family launched and continued the family reunions. Chapter The Political Uses of Japanese Pop Culture in Hong Kong examines the images and usages of contemporary Japanese pop culture in Hong Kong. It is

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well-known that Japanese pop culture is important for Japan’s domestic economy and international image. However, its political impacts are relatively unexpected and unpredictable. Japanese cultural products have become highly globalized, being accepted and interpreted differently by local consumers all over the world. This chapter discusses the case of Hong Kong in the 2010s. It was found that Hong Kong people use Japanese pop culture as a “little tool”, to express their political ideas—criticism of the local/mainland Chinese authorities—on the internet, both locally or internationally. In addition to the actions in the virtual world, social movements in the physical world are sometimes assisted by Japanese pop culture. These patterns of action are considered a bottom-up model. Simultaneously, a topdown model, as a kind of propaganda permitted by the mainland authorities, also exists. Japanese cultural content can also participate in the conflict among the nonestablishment camp. It is regarded as a bottom-bottom model. Through the cases of Animal Crossing: New Horizons, Demon Slayer: Kimetsu no Yaiba, Freedom Gundam, Hikaru no Go as well as Digimon, the above-mentioned patterns of the politicization of Japanese pop culture will be specifically examined. Finally, as both the editor and one of the authors of this book, Mariko Tanigaki shared three aims with the four other contributors, received their agreement, and waited for their chapters to arrive. The result shows that these six chapters are unexpectedly related to each other. In the first place, Tanigaki knew that Hong Kong’s political parties were visiting Japan for study tours, and so searched for materials on the exchange between Hong Kong and Japan. Historically, the basis of Hong Kong’s local administration system can be traced back to the period of Japanese Occupation (Chiu and Hung, 1999, p. 80). However, due to a lack of success with collecting materials, Tanigaki gradually shifted her research focus to the export of the Japanese police station system. By chance, she learned from a graduate student that the JICA report was available, and she took up the Indonesian National Police Reform this time, also mentioning the global contribution and international exchange of the Japanese National Police Agency. As a result, Chap. The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia (Tanigaki) and Chap. Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program (Risda) of this book cover the same region: Indonesia. On the other hand, Chaps. The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia and Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines (Clemente) both focus on ODA. Chapter Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information shares some similarities with Chap. The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia in terms of technology transfer from Japan. Chapter Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information (Ito) shows that the technology of the core of economic management in China was linked to Zhu Rongji, who later became the prime minister of China. This, like Chap. Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines, illustrates the Japanese and

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Philippine responses to how they will deal with China. Chapter The Political Uses of Japanese Pop Culture in Hong Kong (Chin) shows that Japanese popular culture is highly globalized and even accepted as a part of local culture. This may confirm that the de facto Asian Community works in reality. Whether people are aware of it or not, Japan is a member of the Asian Community and has a diverse set of relationships within it.

Reference Chiu, S. W. K., & Hung, H.-F. (1999). State building and rural stability. In T.-W. Ngo (Ed.), Hong Kong’s History (pp. 74–100). Routledge.

Chapter 2

The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia Mariko Tanigaki

Abstract This chapter examines Japan’s interaction with Indonesia through a case of JICA’s assistance program for the Indonesian National Police (INP) Reform. In the 1990s, the paradigm of development aid shifted from economic development to people-centered development. The new Japan International Cooperation Agency (JICA), a comprehensive Official Development Assistance (ODA) implementing agency that deals with loan aid, grant aid, and technical cooperation, was established in 2008. In the post-Cold War environment, JICA’s international cooperation projects have become increasingly diversified. The emergence of “governance” on the agenda symbolizes the new trend. Among the JICA projects, the police-related projects were unique. The police lie at the core of a country’s administration. JICA’s field offices could not make decisions, as is the case in the fields of agriculture and health. The program was initiated by a formal request by the Indonesian government to the Japanese government. The police were separated from the National Armed Force in 2000, which became a crucial component for democratization in Indonesia. The overall strategy of the program focused on a project to implement community policing in a model police force, and then to extend the results of that project nationwide across Indonesia. The implications of the above project will be considered from both the Indonesian and Japanese sides. Keywords Japan · Indonesia · National Police · Reform · Assistance · Mutuality · Community policing · Civilian police · Peacekeeping operations (PKO) During the 76 years that have passed since the end of World War II, Japan’s Gross National Product (GNP) has risen to become the second largest in the world. During this period, in what other ways has Japan influenced Asian countries? In other words, are there any other Japanese experiences shared by Asian countries? The author presented lectures at the Japan training seminar organized by the Police Academy of Indonesia. An instructor at the academy was interested in the fact that M. Tanigaki (B) Department of Area Studies, Graduate School of Arts and Sciences, University of Tokyo, 3-8-1 Komaba, Meguro-ku, Tokyo 153-8902, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_2

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Japanese society was so peaceful and people lived a disciplined life, without strict laws or enforceable religion. At that time, the author also learned that Indonesia had adopted the Koban neighborhood police station system from Japan. As a person in Asian Studies, the author could hardly imagine that the Indonesian side was willing to learn from the Japanese police system. In the 1930s, Japan controlled the police in North China, which was described as Japanese imperialism. In this chapter, the author, who has been conducting research on contemporary Hong Kong, will explore the adoption of the Japanese police system in Indonesia. This is the first time the author has written about Indonesia due to an inability to speak and read Indonesian. The Indonesian National Police reform might offer a challenging basis for comparative research about the changes that have occurred in Hong Kong since the 2019–2020 protests. The image of the Hong Kong Police rapidly deteriorated during that time, as did that of the Indonesian National Police before the reform. Firstly, this chapter will review a new development within Japan’s international cooperation during the post-Cold War period. Secondly, it will focus on the Japanese National Police Agency’s international cooperation in light of the White Paper on Police for the period 1973–2020. Thirdly, the development of the Indonesian National Police Reform Assistance Program will be documented, based on the project reports submitted to the Japan International Cooperation Agency (JICA). Finally, the author will consider the implications of the above project from both the Indonesian and Japanese sides and consider Japan’s exchange with Asian countries during the postWorld War II period. The whole program will be completed by 2022. When the author wrote this chapter, the program was still in the process of being implemented.

2.1 A New Development Within Japan’s International Cooperation At present, international cooperation takes various forms, such as Economic Partnership Agreements (EPAs) and Peacekeeping Operations (PKO) organized by the United Nations (UN). A variety of organizations and groups, including governments as well as international organizations, non-governmental organizations (NGOs) and private companies, offer financial assistance to developing countries (JICA, n.d.1). The core of economic cooperation is publicly funded development cooperation, known as Official Development Assistance (ODA). ODA is broadly divided into bilateral aid, in which assistance is given directly to developing countries, and multilateral aid, which is provided through international organizations such as the United Nations. In Japan, JICA is advancing its activities in the form of technical cooperation, loan aid, and grant aid (JICA, n.d.2). Loan aid, known as yen loans, provides the necessary funds for the advancement of developing countries.

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The collapse of the Soviet Union in December 1991 marked the end of the Cold War and also brought about a major change in the field of international cooperation. Central Asian countries that were part of the former Soviet Union, as well as countries that were once part of the socialist camp and received aid from the Soviet Union, were recognized as aid recipients by the Development Assistance Committee (DAC) of Organisation for Economic Co-operation and Development (OECD). Assistance to Central and Eastern European countries, such as Poland and Hungary, began in order to promote their transition to democracy and market economies. In Southeast Asia, the 1991 Comprehensive Cambodian Peace Agreements led to the stabilization of the Indochinese peninsula, and aid to Vietnam and Cambodia has been in full swing ever since (JICA, 1999, pp. 83–84). In the 1990s, the paradigm of development aid shifted from economic development to people-centered development: in 1990 the United Nations Development Program (UNDP) issued its Human Development Report, stating that the goal of development is to improve the lives of people living in developing countries. In 2008, the Overseas Economic Cooperation Division of the Japan Bank for International Cooperation (JBIC) and part of the grant aid activities of the Ministry of Foreign Affairs were merged with the Japan International Cooperation Agency (JICA) to form the new Japan International Cooperation Agency (JICA), a comprehensive ODA implementing agency that deals with loan aid, grant aid and technical cooperation (JICA, 2019a, p. 47). The former Overseas Economic Cooperation Division of the JBIC was the Overseas Economic Cooperation Fund (OECF), which dealt with the yen loans. Amidst these organizational changes, there were also significant changes within JICA. Firstly, following the appointment of Sadako Ogata as president, the overseas office was able to design and decide the projects, and to promote staff to be more field-oriented, leave the headquarters in Tokyo, and make field visits to the projects. Secondly, JICA began to provide humanitarian and reconstruction assistance in addition to emergency disaster relief and development assistance, emphasizing the importance of “face-to-face assistance” and the need to ensure that projects were not transitory but managed in such a way that the recipient became self-reliant and the benefits of the project were sustained, even after the project was completed. JICA describes its mission, vision, and actions as follows: It is JICA that, in accordance with the Development Cooperation Charter, will work on human security and quality growth. JICA, with its partners, will take the lead in forging bonds of trust across the world, aspiring for a free, peaceful and prosperous world where people can hope for a better future and explore their diverse potentials. (JICA, n.d.3)

JICA will pursue five actions: 1. 2. 3. 4.

Commitment: Commit ourselves with pride and passion to achieving our mission and vision. Gemba: Dive into the field (“gemba”) and work together with the people. Strategy: Think and act strategically with broad and long-term perspectives. Co-creation: Bring together diverse wisdom and resources.

10

5.

M. Tanigaki

Innovation: Innovate to bring about unprecedented impacts. (JICA, n.d.3).

In the post-Cold War environment, JICA’s international cooperation projects have become increasingly diversified. The emergence of “governance” on the agenda symbolizes the new trend. For example, the Ministry of Justice (MOJ) has continued to provide legal technical assistance, starting with Vietnam. The International Cooperation Department (ICD) offers legal technical assistance to Asian countries, as part of the international cooperation activities of the MOJ, and in cooperation with JICA. It provides assistance in areas including (1) the drafting and amending of the basic laws, (2) improving the legal and judicial systems, and (3) the capacity-building of legal professionals (Ministry of Justice, n.d.). The first legal technical assistance was introduced into Vietnam in 1994, followed by Cambodia in 1996, Indonesia in 1998, Uzbekistan in 2001, Mongolia in 2004, the People’s Republic of China (hereafter, China) in 2007, Timor-Leste in 2008, Central Asia in 2008, Nepal in 2009, Myanmar in 2013 and Bangladesh in 2016 (Ministry of Justice, n.d.). In Japanese academia, single-author add studies on Japan’s international cooperation began to emerge. Yasutami Shimomura has written a history of postwar international cooperation from 1954 onward, focusing on the policy of loan aid pursued by the Overseas Economic Cooperation Fund (Shimomura, 2020). Yuka Kaneko took up the legal system development assistance and explored its development (Kaneko, 2010). Regarding Southeast Asia, there is a study on JICA’s support for local governance, which combines comparative politics and public administration (Hirayama et al. 2016). With regard to the international cooperation of the Japanese National Police Agency, the topic of this chapter, Keisatsugaku Ronshu (The Journal of Police Science) published three Tokushu(special issue) (Tokushu 2003; Tokushu 2005; Tokushu 2007). H.H. Yamazaki (Harry Hiroto Yamazaki) also documented his activities, mainly in Keisatsugaku Ronshu (The Journal of Police Science) (Yamazaki, 2009a).

2.2 International Cooperation by the Japanese National Police Agency The police are an administrative body that protects the order and stability of society. This led the Japan’s National Police Agency (NPA) to become one of the most domestically focused of Japan’s government agencies. The NPA does not have its own overseas office, and the Indonesian National Police Reform Support Program implemented the projects through JICA (National Police Agency, n.d.). No policerelated experts joined JICA as technical advisors, however. On the website visited in April 2021, there were three pillars shown: assistance to the Indonesian National Police Reform, organizing training seminars, and the Overseas Emergency Relief Activities. Among them, support for the reform of

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the Indonesian National Police Force is placed at the top of the list, indicating its importance.

2.2.1 Previous International Cooperation It was a very different description in the 1973 edition of the White Paper on Police, the oldest edition available on the NPA website. International cooperation was described as exchanges with other countries (NPA, 1973). The Tokyo Metropolitan Police Department, Kanagawa Prefectural Police, Aichi Prefectural Police, Osaka Prefectural Police, and others selected young police officers and sent nine of them to the Metropolitan Police Service (London), the Paris Police Prefecture, the San Francisco Police Department, and elsewhere to receive practical training for a period from three to six months. A further six police officers, engaged in traffic supervision and control with the Hokkaido Prefectural Police, the Tokyo Metropolitan Police Department, the Osaka Prefectural Police, and the Fukuoka Prefectural Police, were sent to the London Metropolitan Police Service to attend Hendon Police Driving School. They received training in motorcycle riding for about one month. Meanwhile, four foreign police officers visited Japan to receive instruction in Judo and arrest techniques, and several Japanese police officers were sent overseas in order to teach both techniques. In addition, 15 foreign police officers from Republic of Korea (hereafter, Korea), Thailand, and elsewhere studied at the Japanese National Police Academy, living alongside Japanese police officers. The present cooperation initiative can be traced back to 1962, when a training course about drugs was held, in collaboration with JICA, for police officers from Asian countries (NPA, 2005).

2.2.2 International Seminars Organized by the Japanese Police Academy Cumulatively, from 1985 to 2005, a total of 801 people participated in international seminars organized by the International Research and Training Institute for Criminal Investigation, Police Academy (1985–2005). By region, 520 of these countries are from Asia, 173 from Central and South America, 56 from Africa, 25 from the Pacific region, 22 from Europe, and 7 from the newly independent states (NIS) of the former Soviet Union. Of these, Indonesia sent 128 participants, followed by 54 from the Philippines, 47 from Pakistan, 45 from Cambodia, 35 from Korea, 33 from China, 28 each from Thailand and South Africa, 24 each from Colombia and Peru, and 22 from Brazil (see Table 2.1).

12 Table 2.1 Number of personnel participating in international seminars organized by the International Research and Training Institute for Criminal Investigation (1985–2005)

M. Tanigaki Country/Region

Total

Asia

518

Indonesia

128

Korea

35

Cambodia

45

Singapore

12

Sri Lanka

16

Thailand

28

China

33

Pakistan

47

Philippines

54

Vietnam

17

Hong Kong

15

Malaysia

32

Pacific region

25

Papua New Guinea

11

Africa

56

South Africa

28

Europe

22

NIS Central and South America

7 173

Uruguay

8

Colombia

24

Chile

10

Brazil

22

Venezuela

15

Peru

24

Source Sugiyama (2005, p. 86) Notes Countries with fewer than ten personnel are not listed in the table

2.2.3 Dispatch of Experts From 1970 onward, the technology and knowledge of the Japanese police attracted considerable attention and there were many requests for technical cooperation in areas such as drug control, criminal identification, traffic control, the police box system, communications control, and organizational management (Table 2.2). Between 1978 and 2002, the Japanese Police sent a total of 391 experts overseas. Of these, 41 were long-term experts dispatched for more than one year, and 350 were short-term experts dispatched for less than one year, usually for a few months. Of

2 The Adoption of Japan’s Experience in Asia: A Case Study … Table 2.2 Number of dispatches of experts by country (1978–2002)

Country

Long-term

13 Short-term

Total

China

2

64

66

Singapore

0

62

62

Thailand

14

38

52

Philippines

16

24

40

Indonesia

7

23

30

Cambodia

1

22

23

El Salvador

0

15

15

Myanmar

0

12

12

Mongolia

0

12

12

Brazil

0

12

12

Vietnam

0

11

11

Malaysia

0

8

8

Laos

1

7

8

Pakistan

0

7

7

Sri Lanka

0

6

6

Nepal

0

6

6

Bangladesh

0

5

5

South Africa

0

3

3

Costa Rica

0

2

2

Czech Republic

0

2

2

Uzbekistan

0

2

2

Jamaica

0

2

2

Korea

0

1

1

Mexico

0

1

1

Panama

0

1

1

Jordan

0

1

1

Poland Total

0

1

1

41

350

391

Source Miyakoshi and Kasahara (2003, p. 124)

the long-term experts, the Philippines received 16, Thailand 14, and Indonesia only seven. The Indonesian National Police Reform Assistance Program was launched in 2002. Of the short-term experts, China received 64 and Singapore 62, followed by Thailand, the Philippines, Indonesia and Cambodia (Table 2.3). In terms of fields, traffic police had the highest number of expert officers, with 135, followed by criminal identification, and community policing, including the Koban system. The introduction of the Koban system in Singapore did not involve long-term experts, but relatively frequent, short-term visits by experts to achieve the technology transfer.

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M. Tanigaki

Table 2.3 Number of experts by field (1978–2002) Field

Long-term

Short-term

Total

Administration

2

19

21

Community policing

1

55

56

Drugs

6

35

41

22

63

85

Traffic control

8

127

135

Communication control/Command

2

48

50

Security

0

3

3

41

350

391

Criminal identification

Total

Source Miyakoshi and Kasahara (2005, p. 124)

2.2.4 Export of the Koban Neighborhood Police Station The export of Koban, the small, neighborhood police station, to Singapore was the first example of technical cooperation. Prior to the 1980s, the Singapore Police Force divided the whole city into eight districts and established eight police stations. The police faced an increase in crime due to rapid urbanization, but the officers mainly patrolled large areas by car (JICA 2016, p.13). In order to solve this problem, the Singapore Government considered introducing the Japanese Koban system. In October 1981, a seven-member team, including the Minister of Home Affairs and Commissioner of Police, was dispatched to Japan. In response to a request by the Singaporean government, in November 1981, the NPA dispatched a team of three officers to Singapore and, in February 1982, submitted to the Singapore Government a proposal regarding introducing the Koban system in conjunction with the reorganization of the Singapore Police Force. Based on the recommendations from the Japanese side, in June 1983, the Singapore Police Force temporarily opened eight police boxes within the jurisdiction of Toa Payoh Police Station and, following a one-year trial, the police box system was fully introduced in Singapore in 1984 (NPA, 1987). The Neighborhood Police Posts (NPPs) in Singapore are located in the heart of housing estates and are larger than their counterparts in Japan, with meeting rooms for community use (NPA, 1987). By 1991, 91 NPPs had been established, replacing three shifts with two shifts, and the NPPs were developed into Neighborhood Police Centres (NPCs), which were one-stop service organizations with a centralized police force of about 100 officers, with additional duties such as crime investigation, liaising with the public, and emergency response (NPA, 1987). In 1995, the Neighborhood Police System, a third-country training program that brought police personnel from neighboring countries to Singapore, was launched (JICA, 2016, p. 17), In 2014, the training was held for the twentieth time and, over the past 20 years, more than 480 police personnel from 35 countries, mainly in Asia, have participated in it.

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Community policing, represented by the Koban system, was later introduced into Brazil as a JICA project. Brazil provided training to disseminate the system to Honduras, El Salvador, and other countries that were suffering from declining public safety (JICA, 2014).

2.2.5 Regional Cooperation There are two notable examples of regional cooperation. One is the Thai Regional Cooperation Project on Drug Control, which was launched in June 2002 as a three-year project aimed at improving drug analysis technology and control capacity in Thailand, Cambodia, Laos, Myanmar, and Vietnam. This was the first attempt by the NPA of Japan to support several countries simultaneously, and JICA had few examples of such a project (NPA, 2005). The Philippines also asked Japan to organize plural projects continuously. The Philippine Drug Enforcement Agency was established in 2002 and the Philippine government asked the NPA for assistance to improve its control and drug analysis capability. In January 2005, a Japanese police officer was dispatched to the Philippines for a period of two years. This practice was preceded by the dispatch of experts over the 20-year period since the mid-1970s. Initially, the Japanese police officers were sent to the Philippine National Police’s Crime Laboratory to provide instruction in criminal identification and, from 1996 onwards, officers who had worked in the field of criminal investigation were sent to the Philippine National Police’s Criminal Investigation Unit (NPA, 2005).

2.2.6 Civilian Police Operations in United Nations Peacekeeping Operations (PKO) When the Gulf War broke out in January 1991, Japan did not send its Self-Defense Forces (SDF) but paid a total of $13 billion in war and other costs. After the Gulf War ended, Japan was excluded from an advertisement in which the Kuwaiti government thanked 30 countries around the world. This led to a trend in Japan to make humanitarian contributions to the international efforts (Hatate, 2018, pp. 27–28). In Japan, the media coverage concentrated on the SDF and election observers, but the police also sent 75 civilian police officers to Cambodia. One police officer, Haruyuki Takata, was killed and four others were injured (two of them seriously) during the mission. The second dispatch of civilian police was to East Timor, consisting of three officers in 1999 and four in 2007 (Hatate, 2018, p. 255; Yoshida, 2019).

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M. Tanigaki

2.3 Assistance Program for the Indonesian National Police Reform The Assistance Program for the Indonesian National Police Reform was a notable example of Japan’s international police cooperation. Japanese police have been involved in supporting Asian countries in various fields, such as the traffic division and criminal identification, but this program marked the first attempt to support the reform of the entire police system of a country (Yamazaki, 2012, p. 204). Several long-term experts were dispatched to support the reform of the Indonesian National Police. It was the deputy director general-level official of Japan’s NPA who led the whole program and oversaw multiple projects. It was unusual for a high-ranking deputy director general-level officer to be dispatched to Indonesia for two years to lead a project. The program to support a whole country’s police force overlapped with the civilian police activities as part of the Cambodia Peacekeeping Operation, which included providing advice, guidance, and supervision. Among the JICA projects, the police-related projects were unique. The police lie at the core of a country’s administration. JICA’s field offices could not make decisions on the police-related projects when they received the request from the local country, as they could in the fields of agriculture and health. The program was initiated by a formal request from the Indonesian government to the Japanese government.

2.3.1 Background to the Project’s Launch The project aimed to assist the Indonesian National Police to transform it from a police force constituting the national army into a civilian police force, directly responsible to the president. This was an important step in the democratization of Indonesia after Suharto resigned as president (Shiraishi, 2003, pp. 91–92). The United States chose Indonesia as the recipient of its democratization project. For successful democratization, it was necessary to attain peace under the democratization regime. Reforming the police and enhancing the judiciary were considered crucial issues. After the Asian currency crisis in 1997, Suharto resigned as president to resolve the political and social unrest due to the failure of the Indonesian Rupiah. During his presidency, the armed forces were the main actors responsible for both the defense and security of the country (Yamazaki, 2008, p. 54). In April 1999, the government decided to separate the national police from the national armed forces and, in August 2000, the People’s Consultative Assembly decided formally to separate the police from the national armed forces, making it the national police force, under the direct control of the president. As a result, the Indonesian National Police became eligible to receive Japanese ODA, as Japanese ODA did not grant aid to military organizations (JICA, 2008). The preparation for the program began in 2000 (JICA, 2007, p. 155). In February 2000, Police General Roesdihardjo, Chief of the Indonesian National Police, met

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Ambassador Kawakami and requested Japan’s assistance with the police reform. In May of that year, Roesdihardjo visited Japan and requested support for the reform again. In response, in June 2000, a survey team was sent to consider what kind of support Japan could provide to the Indonesian Police Force. The Government of Indonesia wrote to the Government of Japan, requesting support for the reform of the Indonesian National Police (INP), including the dispatch of a policy advisor to the Chief of INP. In November 2000, Susilo Bambang Yudhoyono, Coordinating Minister for Political and Security Affairs, visited Japan, and Setsuo Tanaka, Commissioner General of the NPA, introduced Harry Hiroto Yamazaki as a candidate for first Advisor to the Chief of INP. The following year, in February 2001, Yamazaki, as the Chief Superintendent, was officially posted to Indonesia to launch the program, and later was involved again as the fourth Program Manager during 2009 and 2012 as the Superintendent Supervisor (Yamazaki, 2012, p. 205). Yamazaki spent more than a decade abroad during his 36 years of service as a police officer. He graduated from the Faculty of Law of The University of Tokyo in 1976 and joined the NPA that same year, serving as the Director of the Security Department of Okayama Prefectural Police from 1983 to 1985, as the first secretary of the Japanese Embassy in Indonesia during 1988–1991, as the Contingent Commander of the Japanese Civilian Police Component dispatched to Cambodia PKO during 1992–1993, and as the President of the National Police Academy during 2007–2009. After serving as the Policy Advisor in INP, he retired from the Japanese NPA and became the Managing Director of ZENNIKKEI Co., Ltd., which is one of the biggest security companies in Japan (Yamazaki, 2012, p. 206; Yamazaki, 2018, p. 42). Whether or not the police could maintain public order was extremely important in Indonesian politics in order to consolidate the direction of democratization (Shiraishi, 2003, p. 93). With the amendment of the Police Law in 2002, the police reform began. The National Armed Forces adopted the basic principle: the national army would take responsibility for the national defense, and protect the Indonesian territory against external forces. The police would take charge of maintaining domestic security and public order. However, by 2002, when the Japanese program began, the conservatives had taken control of the national army. If the national police could not fulfil their domestic security duties, the principle of “the national army for the territorial defense and the police for the domestic security” would not work and the national army would once again seek to expand its role within the security functions.

2.3.2 From Military Police to Civilian Police The INP reform prioritized the building of trust in the Indonesian community. The project aimed to encourage a change in its organizational culture and the attitudes of its personnel, and to reform the entire national police system (JICA, 2007). The rebirth of the Indonesian National Police could not be implemented simply by talking to the public in a friendly manner.

18

M. Tanigaki

The INP was established in 1945, and became part of the national army in 1966, after the September 30 Movement which led to the Suharto presidency and a mass purge of actual and suspected Indonesian Communist members and sympathizers. The police were the fourth force and auxiliary force, responsible for traffic policing and the investigation of general prison cases (Yamazaki, 2008, p. 54). The overall budget of the National Police was said to be equal to that of the Jakarta Military District Command. Fewer promotions to the military headquarters and the Military Intelligence Agency were observed among police personal compared with the army, navy, and air force. There were also fewer secondees at the Ministry of Home Affairs and Parliament from the police than the army, navy and air force. As a result, in the 1990s, there were informal discussions about the need for police reform and the separation of the police from the national army (Shiraishi, 2003, pp. 87–88). The INP became institutionally part of the military, and for its members, the military style was adopted for their education. (JICA 2008). Yamazaki pointed out that the organizational culture differed in the two institutions. While the military is an organization that is formed by narrowing the discretionary range of decision-making power given to a single soldier, the police is an organization that is formed by allowing a large amount of discretionary power to the front-line police officers, regardless of their experience or age and by enhancing the independent decision-making within the discretionary range. It is not easily achieved overnight that overcoming this difference and reforming the mindset of each and every Indonesian police officer as a citizen police and providing administrative service. (Yamazaki, 2003, p. 50)

As the police force was part of the national army, the orders of superiors demanded absolute obedience. In this context, the program aimed to change the mindset of the Indonesian police. In fact, the Indonesian police at that time had already been imbued with a military culture and way of thinking for over 30 years (Yamazaki, 2018, p. 42). A negative image of the police had arisen among the public, and there was a widespread view that people were unwilling to get involved with or approach the police. In those days, the Indonesian police rarely responded to citizens who reported incidents or accidents. To begin with, even if you called the number 112, which is equivalent to 110 in Japan, you would not get through. It is common to ask citizens for a handout, and there is even a saying: “If you tell the police that a chicken has been stolen, they will take a goat.” Both the organization as a whole and individual police officers had a lot of work to do. (Yamazaki, 2012, p. 207)

Symbolically, there were very few films or TV dramas featuring police officers in Indonesia. When Yamazaki said to a popular actor of his acquaintance, “Why are there no police dramas?”, the answer was, “If I play a policeman, it’ll damage my image. It would be better if I played a villain with taste.“ The police were distrusted by the public (Yamazaki, 2009b, p. 84). The cultural background of Indonesia also hindered prompt police action. In Indonesia, there existed Tonari Gumi, neighborhood associations, established by Japan during the wartime occupation and consisting of 100 to 1000 households in a neighborhood. Most of the citizens consulted the head of their neighborhood

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association about any problems that arose, and only after the head of the neighborhood association agreed that they should contact the police did they report problems (Yamazaki, 2012, p. 208). Another element is the Indonesian culture, which has a high respect for dead bodies. In the essay written in 2012, Yamazaki recalled that, even at the scene of a crime, the body was cleaned up. When the police arrived at the scene, it was difficult to trace how and when the victim died, and they needed to explain carefully the necessity for criminal identification (Yamazaki, 2012, p. 208). There is a rather striking result from a 2001 opinion poll regarding the reliability of the public institutions (Table 2.4). Kawano pointed out that the National Traffic Police attracted the lowest level of trust from the public: not only the National Traffic Police but all of the police and judicial institutions attracted a lower level of trust than the National Armed Forces (Kawano, 2005, pp. 41–42). This trend did not change with the occupation of the respondents. Police activities are close to the daily life of people. More transactions may lead to a negative image of the police. In addition, the income of police officers was low (JICA, 2008). Retired Police Force Brigadier General Sri Krisumariyati stated, during an interview in 2008: “In Japan, police officers don’t have to worry about their income and can concentrate on their duties. But in Indonesia, police officers’ salaries run out in about a week, causing illegal levies to be seen everywhere”.

2.3.3 Three Pillars and Slogans of the Program The basic goal of the Indonesian National Police Reform program was to gain the basic trust of the citizens. In order to win the trust of the citizens, two pillars were erected. One was to “respond to citizens’ requests with integrity” and the other to “respond quickly to citizens’ demands” (Yamazaki, 2009a, p. 51). As shown by Singapore’s introduction of the Koban neighborhood police stations, community policing is the strength of the Japanese police. Police reform was the process by which the military police were reformed into the civil police. The basic policy of the project was to introduce community policing (CP), which is an activity designed to improve public safety by solving problems in the community through the participation and cooperation of the police and local people (Kiba, 2016). Integrity will be ensured by the criminal identification work of collecting evidence at the scene of a crime. By showing police officers steadily carrying out tasks such as taking fingerprints at the scene of a crime, the aim was to show the public that the police were making an effort to solve the case (Yamazaki, 2012, p. 208). The second pillar of the system was the use of communication commands, which would allow police officers to rush to the scene of a crime to solve the problem, gradually changing the traditional image of the police as not acting even after a call (Yamazaki, 2012, p. 208). As a third pillar, the Koban system was introduced in 2005. In Indonesia,

20 Table 2.4 Opinion poll results regarding the reliability of public institutions in 2001

M. Tanigaki Name of institution

Households (housewives)

Enterprises

Civil servants

Mosque, Church, Temple

4.3

4.2

4.6

Post Office

3.5

3.6

4.1

News media

3.5

3.5

3.6

The Armed Forces

3.2

3.2

3.6

Ministry of Education

3.2

3.2

3.6

Provincial Government

2.7

2.6

3.2

Members of Parliament

2.6

2.6

3.2

Ministry of Forestry

2.6

2.6

3.0

Bank Indonesia

2.4

2.5

3.0

Ministry of Justice

2.5

2.5

2.9

Police excluding Traffic Police

2.4

2.4

2.9

Office of Prosecutor

2.4

2.3

2.8

Judiciary

2.3

2.3

2.8

Customs authority

2.3

2.2

2.8

Traffic Police

2.2

2.1

2.6

Source Kawano (2005, p. 39). The original data are from a National Survey of Corruption in Indonesia: Executive Summary, October 2001. Jakarta: Partnership for Governance Reform in Indonesia. Mimeo Notes 5 indicates “most reliable” while 1 indicates “unreliable”

the Koban is called BKPM, for Balai Kemitraan Polisi dan Masyarakat, “the Police– Citizen Partnership Center”, meaning the public space for a partnership between the police and the community (Yamazaki, 2008, pp. 54–55). The slogan of the support program is “No panic, no rush, but never get bored, never give up”. This was the motto of Terutake Kikuchi. He was an owner of the oldest Japanese restaurant in Jakarta, and had lived in Jakarta since before the war, and been a great help to those seconded from NPA to the Japanese Embassy in Jakarta. Yamazaki understood that this slogan expressed well the favorable behavior of mingling with the Indonesian local people. There were more principles and beliefs

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behind the project: “Be patient and do not comply with the request for money from the INP”; “Change the minds of the Bekasi police officers and Bekasi citizens through the activities of the project”; “The Koban is not an export project, but a dojo” [a training place] where the entire INP learn the spirit of community policing (JICA, 2007, p. 155). Yamazaki’s antithesis was the case of Mike Bowron, another Advisor to the Chief of INP, who was dispatched from the United Kingdom. His approach focused on human rights issues as the problem with the Indonesian police. The seminar topics ranged from the popular repression by the riot police, police corruption, and the suppression of the independence movements in East Timor, Aceh, and Papua. The Western donors had a tendency to aim for quick progress and rewards (Yamazaki, 2009a, pp. 33–34). In the early days of the program, criminal identification and communications were the two pillars but, about two years after being dispatched to INP, Yamazaki began to hear complaints that “Japan sends people but does not give us things” (Yamazaki, May 2012, p. 208). Yamazaki felt that this might obstruct the smooth implementation of the program. After the Bali bombings in 2002, other donors, mainly Western ones, stepped up their support for counter-terrorism. The United States and Australia introduced specific investigative methods, such as the interception of communications, and shifted their support to counter-terrorism. In particular, Australia built a training facility on counter-terrorism in Semarang (Yamazaki, 2009a, p. 37). Under such circumstances, the Koban was introduced into Indonesia. Thus, the Japanese style of technology transfer took a route that was different from that of other donors. Yamazaki thought that “there’s no quick fix for terrorism” and took the view that “getting closer to the citizens will contribute to counter-terrorism” (Daily Jakarta Shimbun, 2012).

2.3.4 POLMAS, An Indonesian-Style Civilian Police Force The concept of civilian police is the opposite to that of military police. Immediately after the separation from the National Armed Forces, the term “civilian police” was publicly announced. The police are responsible for maintaining public safety and order (JICA, 2007, p. 142). The basic policy of the project was the introduction of community policing. After the separation from the National Armed Forces, several projects for assisting the reform were implemented, including the JICA–Japanese Police projects. The International Organization for Migration (IOM) launched a project on community policing in the East Java, West Java, and West Kalimantan Police Departments. Through observing these projects, INP developed a model for community policing (POLMAS) (JICA, 2007, p. 142). The chief of the Indonesian National Police announced Resolution SKEP/737/X/2005 on 13 October 2005 and demonstrated the direction of community policing, which was consistent with the JICA–Japanese Police program.

22

M. Tanigaki

On 23 April 2014, an official notice by the chief of the INP, No. ST/884/IV/2014, was issued in order to direct all of the regions to perform by relevant sections and implement a door-to-door system observed in the Bekasi model. In July 2015, POLMAS Regulation No. 3 of 2015 by the chief integrated all of the related regulations and instructions and stipulated the mission and policy of POLMAS, and the duties, responsibilities, and code of conduct for POLMAS officers.

2.4 Implementation of the Program 2.4.1 Overview of the Program The overall strategy of the program focused on a project to implement community policing in Bekasi on the outskirts of Jakarta and then to extend the results of that project nationwide across Indonesia. The Indonesian National Police Reform Assistance Program is not a stand-alone program. By the end of the first decade following its launch, the following individual projects were designed to generate mutual interactions: (1) a technical transfer project on community policing, using the Bekasi Police Force (BPF) as a pilot case; (2) a country-specific training program to send young INP officers to Japan; (3) a counterpart training program to send INP senior officers to Japan; (4) a project on the Bali Tourism Police Division; (5) the dispatch of Japanese experts to the Police Postgraduate College; and (6) the dispatch of the Policy Advisor to the chief of INP/program manager. The area under the jurisdiction of the Bekasi Police Force is a mixture of urban and rural areas, which was later divided into the Metro Bekasi Police Force and Bekasi Police Force. The original Bekasi Police Force area contained a traditional village, port town, industrial estate, commercial area, and residential area. It was convenient for observing the various cases in a single district when constructing the model for community policing. In addition, the location of the area, adjacent to the capital city of Jakarta, was also convenient for maintaining a close liaison with the Indonesian National Police Headquarters and the Jakarta Metropolitan Police (JICA, 2012a, p. 132). Police forces in Indonesia are usually large compared to those in Japan, similar to the size of prefectural police in Japan. The Bekasi police forces covered an area of 15,000 m2 , slightly smaller than Japan’s Kagawa Prefecture, with a population of about 3.7 million, similar to Shizuoka Prefecture. There was a total of 2800 officers, which means that there were 1300 people per police officer, whereas in Japan the average ratio is 516 people per police officer (JICA, 2012a, p. 132).

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2.4.2 Input to the Program The number of long- and short-term experts sent to Indonesia has been gradually decreasing, but the project still maintains a large number of staff. It is unusual for Japanese ministries to send deputy-directorate-level senior officers overseas for more than two years, except for the Ministry of Foreign Affairs. This shows the deep commitment of the NPA. The Indonesian counterpart personnel in 2012–2017 includes the Indonesian project personnel who were not included in the Indonesian counterpart personnel during 2002–2012: Vice Chief of INP as Project Director, Chief of Department of Security Guidance, Chief of Institution for Education, and Chief of Department Detective Criminals as Vice Project Directors, Chief of Planning Assistance Division as Project Manager, Chief of Human Resources Division and Chief of International Relations Division as Co-Project Managers. The costs of the project are in accordance with the progress of the project. Phase 1 (2002–2007) and Phase 2 (2007–2012) focus on a project to implement community policing in the Bekasi police forces on the outskirts of Jakarta. In Phase 3 (2012– 2017), the results of that project will be extended nationwide across Indonesia. During Phase 1, three BKPMs were constructed and equipped with vehicles, motorbikes, wireless communication equipment, computers and fax machines. One of these was a BKPM run entirely by female police officers. The idea came from the Indonesian side, based on females’ high degree of participation in the workforce in Indonesia (Ministry of Foreign Affairs, 2009). During Phase 2, two other BKPMs were constructed and related equipment was purchased. In addition, equipment for audio-visual training, communication and command control, and on-the-scene criminal identification was also provided during the first half of Phase 2. In contrast, no equipment was purchased during the third phase (Table 2.5). Instead, during the third phase, the local cost increased to 175.34 million yen, and the number of counterparts on the Indonesian side increased rapidly, to 39. The following arrangement showed the INP’s willingness to carry out the activities of POLMAS without accepting JICA’s financial support and began seeking how to make a financial arrangement inside the INP (JICA 2017, p. 12). In-country training (ICT) originally meant a training course offered by the JICA experts dispatched from Japan, but this has gradually changed into the training course offered by both JICA experts and the BPFs of Indonesian counterparts. As part of the local cost, the INP covered the costs of the transportation and part of the meals for the ICT participants from the Civilian Professional Police Academy (PUSDIK BINMAS). In the on-the-scene criminal identification training and examinations, the participants’ transportation and accommodation costs were covered by the provincial police, while the transportation expenses of the instructors from Bekasi Police Forces and the On-the-scene Criminal Identification Division of the Criminal Investigation Department, INP headquarters, were covered by the program. In North and South Sumatra, criminal identification training and examinations were

580,000

580,000

700,000

2002 – 2007

2007–2012

2012–2017

12

14

11

Long-term experts

19

21

23

Short-term experts

118

82

185

Training in Japan 14

Training in third countries

58,474

59,828

Equipment (JPY thou sand)

Sources JICA (2007, p. ii), JICA (2012a, p. ii), JICA (2017, pp. ii and 71) Notes *The number was counted by the list provided by the Indonesian counterpart in March 2017 (JICA, 2017, p. iii)

Input (JPY thousand)

Years

Table 2.5 Input to the INP reform assistance program

175,346

59,515

81,273

Local cost (JPY thousand)

39*

21

27

Indonesian counterpart personnel

24 M. Tanigaki

2 The Adoption of Japan’s Experience in Asia: A Case Study …

25

conducted, funded by the budget surplus of the Criminal Identification Division. Over ten officers participated, and their costs were covered by the provincial police’s own budget during August–October 2016. The budget for Phase 1 and Phase 2 has remained almost the same, while Phase 3 has seen an increase in the total input from the Japanese side of more than 100 million yen. In Phase 3, although there was no provision of equipment or local cost sharing, the local activity costs amounted to nearly 180 million yen. Among the programs, the training in Japan includes (1) a country-specific training program to bring young INP officers to Japan and (2) a counterpart training program to bring senior INP officers to Japan.

2.4.3 Composition of the Indonesian Counterpart The change of the project is symbolized by the composition of the counterpart (Table 2.6). In Phases 1 and 2, the counterpart of the project was the Bekasi Police Force. After the division of the Bekasi Police Force into the Metro Bekasi Police Force and Bekasi Police Force in Phase 1, both the Metro Bekasi Police Force and Bekasi Police Force sent personnel as counterparts to all posts, such as police station management, criminal identification, communication control and command (JICA, 2007, p. 68). In Phase 2, both Metro Bekasi Police Force and Bekasi Police Force also sent personnel to all posts (JICA, 2012a, p. 33). Compared with Phase 1, Phase 2 increased the post of the civilian police activities. In Phase 3, the entire program was focused on rolling out the Bekasi model nationwide in Indonesia. As a result, the departments in the INP Headquarters and educational institutions were more involved, although both Metro Bekasi and Bekasi Police Forces continued to participate as counterparts.

2.4.4 Japanese Project Personnel The composition of the Japanese personnel also changed according to the development of the program. Compared with the Indonesian counterparts, the range of change was small (Table 2.7). In Phase 1, there was one long-term expert, respectively, for organizational management, field criminal identification, communications command, and operational coordination, with training added in April 2006 (JICA, 2007, p.11). Phase 2 shifted its focus to POLMAS activities. A new sub-leader joined as an expert on civilian police activities. A communications command expert was no longer sent to assist with the project on a long-term basis. In Phase 3, the entire program was focused on the propagation of the POLMAS model, a Bekasi model developed by the JICA project in Metro Bekasi Police Force,

26

M. Tanigaki

Table 2.6 Number of posts for Indonesian counterparts (2002–2017) Section

2002–2007

2007–2012

2012–2017

Old Bekasi/Metro Bekasi Police Force: organizational management

4

2

(2)

2

(1) (1)

Old Bekasi/Metro Bekasi Police Force: civilian police activities Old Bekasi/Metro Bekasi Police Force: on-the-scene criminal identification

4

2

Old Bekasi/Metro Bekasi Police Force: communication command

9

3

Old Bekasi/Metro Bekasi Police Force: office management Bekasi Police Force: organizational management

1 2

Bekasi Police Force: civilian police activities

2

(2)

2

(2)

Bekasi Police Force: on-the-scene criminal identification

3

2

(1)

Bekasi Police Force: communication command

5

4

Bekasi Police Force: office management

1

Department of Security Guidance, INP

5

Institution for Education and Training, INP

3

Planning Assistance Division

4

STIK (Police Postgraduate College)

3

SESPIMMA (Police Staff College for Elementary Officers)

2

Criminal Identification Section, Criminal and Detective Department, INP

1

International Relations Division

3

Jakarta Metropolitan Regional Police Department

1

Metropolitan Bekasi Police Force

5

Bekasi Police Force

6

Sources JICA (2007, p. 13), JICA (2012a, p. 33), JICA (2017, pp. 66–68) Notes For 2012–2017, numbers shown in parentheses are included in the following numbers of posts for Metro Bekasi and Bekasi Police Forces

and the Bekasi Police Force. The Japanese personnel organized extensive ICT and in-house training (IHT). IHT means local, in-country training, conducted by ICT trainees for their colleagues and subordinates in their posts. It can be assumed that, in order to cope with the rapid increase in the number of ICTs and IHTs, as described later, the quantity of the coordination supervision work necessarily increased (Table 2.8). The change in the number of short-term experts reflects more clearly the development of the program. In terms of the number of days spent, Phase 1 was dominated

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Table 2.7 Japanese long-term experts (2002–2017) Section

2002–2007

Program Manager: Chief Advisor, Police station management

*****

2007–2012

2012–2017

Program Manager: advisor to the Chief of INP

*****

*****

Project Leader: organizational management

*****

Project Leader: human resources development

*****

Sub-leader: organizational management

*****

Sub-leader: civilian police activities

*****

Civilian police activities

*****

On-the-scene criminal identification

*****

Communication control/command

*****

Education and training

***

*****

Training/program Coordinator

*****

*****

Project Coordinator (1)

*****

**

Project Coordinator (2)

*****

Sources JICA (2007, p. 71), JICA (2012a, p. 8), JICA (2017, p. 69) Notes “*”indicates that the number of the years for which the long-term expert(s) stayed in Indonesia. The usual case was that the long-term expert would stay for one year, and one long-term expert would be dispatched within one year. At the time of the changeover, the predecessor and successor would work at same times. One might return to Japan much earlier than scheduled for various reasons. “*” does not necessarily indicate that one expert is staying for 12 months a year Table 2.8 Japanese short-term experts (2002–2017) Field

2002–2007

2007–2012

2012–2017

Police station management

**

Criminal identification

****

*****

***

Communication control/ command

***

***

Education and training

*

Community crime prevention

*

Civilian police activities

**

*****

Sources JICA (2007, p. 71), JICA (2012a, p. 8), JICA (2017, p. 69) Notes “*” indicates the number of the years for which the short-term expert(s) stayed in Indonesia. The average stay of a short-term expert was 1.70-1.99 months. Typically short-term experts stayed for nearly one month. Some stayed for a fortnight, and, considering the average, some must have stayed for two months or longer. There were no data reported for 2007

28

M. Tanigaki

by 14 on-the-scene criminal identification experts for 577 days and four communications commanders for 512 days, with experts sent for 275 days of education and training only in 2004 to prepare teaching materials. In Phase 2, short-term experts were no longer dispatched for communications command, starting in FY 2010, and instead personnel were dispatched to strengthen POLMAS. In Phase 3, almost 90% of experts were allocated to POLMAS reinforcement. Only a small number of fingerprint experts were sent for on-the-scene criminal identification. The total period of deployment was less than 1000 days in Phase 3, compared with more than 1100 days in Phases 1 and 2.

2.4.5 Cooperation with the Indonesian National Police (INP) The unique aspect of the INP Reform Assistance Program is that a Deputy Director General-level officer is dispatched from the NPA of Japan to be stationed at the INP as an advisor to the Chief of INP. He or she also serves as a program manager and organizes the whole project. The advisor’s office is located at the INP headquarters rather than in the Bekasi Police Forces. D’ai Bachtiar was appointed as Chief of INP in November 2001 and was Yamazaki’s counterpart during most of the latter’s first batch of personnel as program managers. He described the importance of the exchange of views at the top level as follows (Bachtiar, 2018, p. 40): It is important to conduct the technical transfer and its application of technology between police officers regarding the daily activities, but at the same time, policy reform is also important through high-level communication. It is not enough to implement a project in the field for a few years, as is often seen in the case of cooperation projects. In this respect, I would like to mention how important it was that the National Police Headquarters was staffed by advisors to the Chief of Indonesian National Police, sent by the Japanese police. During my term in office, my counterpart was Yamazaki, the first advisor to the Chief of INP. We often discussed the progress of the program. The communication was really smooth. Yamazaki was originally fluent in Indonesian, but all of the advisors learned Indonesian prior to their dispatch. It was wonderful to be able to communicate directly in Indonesian. On one occasion, when I asked Tanaka Setsuo, Commisioner General of the NPA of Japan, to extend Yamazaki’s term, he joked that Yamazaki was already a member of the Indonesian National Police. That’s how good the relationship was between us.

During 2002–2007, the INP held a working group every month and monitored the program. At the Bekasi, the Japanese dispatched experts who communicated with their counterparts on a daily basis. The project leaders sent letters to the Chief of Metro Bekasi Police Force and the Chief of Bekasi Police Force, informing them about the problems. The Japanese experts stationed in Bekasi held a short meeting every morning to confirm the daily agenda and tasks. Every Friday afternoon, they visited the Program Manager’s office at the INP Headquarters in Jakarta and had a regular meeting attended by the JICA Indonesian Office. During these meetings, the progress of the program was reported and explained, and any problems were discussed. The direction of the activities was decided by considering the situation and

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preferences of the Jakarta Metropolitan Police, the upper body of the Bekasi Police Forces. Again, after consulting the leaders in the field, the following framework and direction were finally decided, following direct consultation with the Chief of Police. The result was shared in the field and put into practice (JICA, 2012a, p. 125). When Phase 3 began, closer collaboration with the Indonesian National Police was required for the nationwide roll-out of the Bekasi model. In this context, M. Ohara, who has been the Program Manager since 2017, established a tripartite meeting with the Institution for Education and Training, and the Public Guidance Division of the Department of Security Guidance in September 2017 (JICA, 2017, p. 7). In Phase 4, in order to transfer the initiative to INP, a Joint Coordination Committee was activated and provided an officer who participated in the first country-specific training. In practice, the Joint Coordination Committee was no different from the Working Group, but it successfully built on the JICA program elements in the INP organizational structure in collaboration with the Indonesia Sakura Association (ISI), an alumni association of past participants in country-specific training in Japan (JICA, 2017, pp. 7–8).

2.5 The Program’s Activities The author will trace the activities of the Assistance Program for the Indonesian National Police Reform by using the project terminal evaluation report. The entire program is divided into two projects: the Project for the Enhancement of Civilian Police Activities and the Project for the Nationwide Capacity Development of Police Officers for POLMAS—Indonesian Civilian Police Activities. Each project has two phases, so the entire program consists of four phases. The fourth phase will be terminated in 2022.

2.5.1 Project for the Enhancement of Civilian Police Activities This project is classified as technical cooperation. It aims to transfer Japanese-style community policing. The core pillar was on-the-scene criminal identification and communication control and command. Later, the Koban neighborhood police station was introduced as a training center for community policing.

2.5.1.1

Phase 1 (2002–2007)

The goal of the project was to implement civilian police activities in the model police station, Bekasi Police Forces (JICA 2007, p. ii). The evaluation was based

30

M. Tanigaki

on the following four activities: (1) improvement of the capacity of BPF to manage civilian police activities; (2) improvement of criminal identification by BPF; (3) improvement of the communication control and command system in BPF; and (4) improvement of the training programs for police station management, criminal identification, and communication control and command. Of these activities, (2) was assessed as Achieved while (1) and (4) were assessed as Largely Achieved (JICA, 2007, p. iii and pp. 59–61). With regard to (2), it was noted that BPF showed a remarkable improvement in the field of fingerprinting and photography. Those who had passed the instructor level played a central role in the preparation of introduction manual VCDs to explain the handling of the equipment provided by the grant, and had taken the initiative in providing orientation for new officers. With regard to (1), both the old and new BPF welcomed visitors from various institutions, including the upper echelons of the INP, and could show them that the Bekasi police officers had a cultivated attitude and strong discipline as professionals. As for (4), various teaching materials were developed, and instructors were brought up, as mentioned in (2). Those materials were utilized in the JICA-supported training at Bekasi but were not accepted as textbooks at the official education and training facilities of the INP. As for the communication command, due to a lack of research, the communication equipment was incompatible with the Metro Jakarta Police Department, an upper body of Bekasi, and the plan had to be revised (JICA, 2007, p. vii). The project as a whole received a positive evaluation. The most obvious advance was the introduction of BKPMs, Koban-type neighborhood police boxes, which were added later. The Country-Specific Training, called Kunitoku, is noteworthy. As mentioned in Sect. 2.4.2, a training course in Japan for young executives below the age of 40 started in January 2002. The trainees were selected from across Indonesia and given a mix of observation and field experience in Japan so that they might learn about the community policing practices in Japan (Yamazaki, 2013, pp. 20–21).

2.5.1.2

Phase 2 (2007–2012)

The aim of the project was to strengthen the citizen policing in the model police station (BPF) in order to gain the basic trust of the citizens (JICA, 2012a, pp. i–ii). In comparison with Phase 1, the criterion for gaining the basic trust of the public was clearly stated. Phase 2 went one step further and stated that civilian policing would be strengthened, whereas Phase 1 stated that civilian policing would be implemented. In the evaluation report, the following four activities were assessed: (1) the improvement of the administrative and management capacity of the commissioned officers of the BPF; (2) the improvement of the functioning of on-the-scene police activities related to civilian policing in the BPF; (3) the establishment of a good partnership between the local residents and local government agencies; and (4) the improvement of the training system in relation to police activities toward civilian

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police, in coordination with the JICA program (JICA, 2012a, pp. ii–iv and pp. 24– 26). Phase 2 combined on-the-scene criminal identification and communications command and control activities with on-the-scene police activities. Of the these, (2) and (4) were assessed as Achieved and (1) and (3) as Generally Achieved (JICA, 2012a, pp. ii–iv). Overall, the project received a higher rating than Phase 1. With regard to (2), which was assessed as Achieved, the police functions were improved, particularly with regard to criminal identification and BKPM activities (JICA, 2012a, p. iv and pp. 24–25). A total of 426 training course in POLMAS, an Indonesian-style civilian police and criminal identification process, were organized at BPF and 1064 BPF police officers participated in them. BPF came to be recognized as the most skilled criminal identification police force. The amount of on-the-scene criminal identification increased. As for investigations of criminal identification, 855 cases by Metro BPF and 529 cases by BPF were performed in 2011. The amount of valid fingerprints collected at the scene also increased, with 304 and 61 being collected at the scene, respectively, in Metro BPF and BPF. An improvement in the skills level was reflected in the higher number of the police officers who passed the technical skill test for criminal identification in fingerprint and/or photography. In the field, the number of police services, such as patrols, communication, and consultations with local residents, also increased in number. In particular, the number of consultations with local residents increased, from 111 cases in 2008 to 425 cases in 2011 (JICA, 2012a, p. iv). As for (4), by using the textbook on civil police activities developed by the project, in-country training (ICT) was conducted 13 times in total, with 667 participants in POLMAS and 86 in criminal identification. The training and seminars were conducted by counterparts (JICA, 2012a, pp. iii–iv). The ICT training was conducted by counterpart Bekasi police officers, and also in collaboration with the Police Sakura Association (ISI), established in 2007, which consists of past participants of JICA country-in specific training known as Kunitoku and individual experts, dispatched to the Police Postgraduate College since 2007, to strengthen the POLMAS activities (Yamazaki, 2013, p. 9 and p. 15). In particular, technical instructors came from the above human resources, with 79 out of the 187 criminal investigation training sessions being led by Indonesian counterparts. At that time, it was common practice for the Japanese experts and their Indonesian counterparts to deliver lectures according to the topics. Some POLMAS training courses were taught entirely by the Indonesian officers, without the Japanese experts being present (JICA, 2012a, p. 26). These participants expressed their satisfaction with the training course on the evaluation sheets. At the National Police School, 90% responded that they could understand the POLMAS activities (JICA, 2012a, pp. iii–iv and p. 26). In the case of (1), the workshops and training programs were organized for the commissioned officers of BPF to raise their awareness about strengthening the POLMAS activities, the branch police stations, and the introduction of the work management system. The reporting system for work management was introduced to BPF, and the commissioned officers gained a clearer understanding of the POLMAS

32

M. Tanigaki

activities (JICA, 2012a, p. 24). As for (3), a variety of initiatives were suggested to the evaluation team; the steady performance of the police officers was reported, such as distributing public information related to protect the public security. The Police–Citizen Partnership Forum (FKPM) also held a total of 1521 meetings over a 5-year period, with an average of more than 300 per year. The FKPM also held local seminars with local government agencies and residents, spread public relations activities through its journal, and engaged in community crime prevention activities in cooperation with neighborhood watch organizations (JICA, 2012a, p. iv). One symbolic result was the increased number of consultations of the police by local residents, as mentioned in (2).

2.5.2 Project on the Nationwide Capacity Development of Police Officers for POLMAS This project focused on the formation of a nationwide framework for the development of BPF through the Project for Enhancing Civilian Police Activities. Both Japan and Indonesia agreed that the entire program of assistance for the INP reform would be terminated in 2022, at the end of the Project on the Nationwide Capacity Development of Police Officers for POLMAS, Indonesian Civilian Police Activities (JICA, 2017, p. 3).

2.5.2.1

Phase 1 (2012–2017) Activities

The goal of the project was to increase the number of regional police departments which implement POLMAS activities. It specified that the chief goal was the establishment of a system for implementing POLMAS in all of the regional police departments (JICA, 2017, p. ii). The joint terminal evaluation report assessed the following specific outcomes: (1) the establishment of operational rules and guidelines to enhance POLMAS activities; (2) the continuous offering of training to police officers to implement POLMAS activities; and (3) the enhancement of POLMAS activities at BPF to provide an advanced model (JICA, 2017, pp. iii–v and pp. 45–48). All three outcomes were assessed as Achieved (JICA, 2017, p. ii). With regard to (1), a trilateral meeting attended by the Department of Security Guidance, the Institution for Education and Training, and JICA was held as a task force for enhancing POLMAS activities. At this trilateral meeting, the project’s activities, such as pilot regions, follow-up visits, and a POLMAS presentation competition, called POLMAS Romba, were discussed and decided. The trilateral meeting proposed the candidates for the pilot regions to the Chief of INP, after which the pilot regions were approved and publicly announced by the Chief of INP, scaling up from 10 regions/17 stations in 2014, to 12 regions/36 stations in 2015 and 16 regions/40 stations in 2016, respectively (JICA, 2017, pp. iii–iv and pp. 45–46).

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The national criminal identification examination system was established in June 2013, after a series of discussions by a committee formed by the Criminal Identification Section of the Detective and Criminals Department, INP, and JICA. The Decision Letter, dated 13 June 2013, was issued officially in order to stipulate the examination system for criminal identification skills related to fingerprint collection, teaching–learning materials, and examiners. A total of 22 criminal identification examinations were conducted by the project, meaning that the target value of 15 times was exceeded (JICA, 2017, pp. iii–iv). Regarding (2), the Institution for Education and Training, Department of Security Guidance, and JICA jointly developed the curriculum, modules (textbooks), and teaching–learning materials for the POLMAS training, which were used in the incountry training, for both ICT and IHT. From the start of the project to February 2017, ICT was held 34 times in 16 pilot regions and at the relevant training institutions under the Institution for Education and Training, amounting to 999 participants in total. Since 2014, IHT was organized by the ICT participants in their home regions, and carried out in 11 pilot regions by applying what they had learned during the ICT. The IHT was held 24 times, with 516 participants. The total number of participants in the ICT and IHT was 1515, exceeding the target of 1500 (JICA, 2017, pp. iii–iv). At the same time, the Lembaga Sertifikasi Profesi (LSP), or Professional Certification Institute, of the Institute for Education and Training, established a National Instructor Qualification System in collaboration with JICA. The Certificate of National Instructor was awarded to those who had completed the advanced program organized by JICA and LSP. As of March 2017, the advanced training courses had been conducted four times, granting the national instructor’s certificate to 45 officers for POLMAS and 17 officers for criminal identification (JICA, 2017, p. iv). By the time of the evaluation, all 16 pilot regions carried out ICT, and IHT was organized in 11 pilot regions. Six of the 16 pilot regions were identified as eligible to organize IHTs independently and were expected to be core resources for offering POLMAS training to their own and even neighboring regions (JICA, 2017, p. iv) (Table 2.9). Table 2.9 Submission rate of reports on the controlling system for POLMAS activities Metro BPF Supervisor

BPF Head of BKPM

Average (%)

Supervisor –

Head of BKPM

Average (%)

2012

–

–

22.0

–

45.0

2013

48.0%

41.0%

37.3

99.6%

0%

62.0

2014

60.7%

45.0%

49.3

99.97%

6.87%

67.8

2015

90.0%

71.6%

80.8

91.5%

12.10%

57.6

2016

115.0%

85.5%

100.4

93.5%

21.70%

77.9

Source JICA (2017, p. 49). The original data are taken from the JICA project Notes The submission rate for the Head of BKPM was calculated separately from the Head of Polsubsector only in 2013, and has been calculated together thereafter since 2014

34

M. Tanigaki

Table 2.10 Number of problem-solving cases Metro BPF

BPF

Total cases

Case/per person/month

Total cases

Case/person/month

2012

225

–

584

–

2014

2220

0.94

2343

0.68

2015

3694

1.61

2821

0.83

2016

2752

1.78

3697

1.08

Source JICA (2017, p. 49)

Regarding (3), the program focused on strengthening the management ability of the police officers. The target was to improve the submission rate of reports on controlling the system of POLMAS activities. The submission rate was counted as 100% if a supervisor submits reported to all fellows every month. If a supervisor had 100 fellows under his instruction, he needed to submit 100 reports every month in order to achieve 100% A supervisor is required to submit report(s) to all of his or her fellows, called Bhabinkamtibmas. Bhabinkamtibmas are ordinary police officers who work on the front line of POLMAS through patrols, communication, and consultations with local residents. BKPM is an Indonesian-style Koban neighborhood police station. Yamazaki recalled that the control system of POLMAS activities was introduced first to BPF, and later to Metro BPF (Yamazaki, 2013, p. 8). He did not mention that the control system entailed submitting reports, but the difference in the rate of report submission is quite clear until 2014. In other words, report submission could be observed as a habit in BPF. This result was above the target of 50% (JICA, 2017, pp. iv–v and p. 49) (Table 2.10). The number of problem-solving cases by POLMAS officers also reached the target of one case/month/person. The number of problem-solving cases rapidly increased, from 225 in total in 2012, to 2220 in total in 2013 at Metro BPF; and 584 in total in 2012, to 2343 in total in 2013 at BPF (JICA (2017, pp. iv–v and p. 49) (Table 2.11). A survey of the appreciation level of communities toward police activities in Bekasi was conducted in November 2016. The result showed a high satisfaction level with the activities related to community policing (JICA 2017, p. 48).

2.5.2.2

Phase 2 (2017–2022)

Phase 2 remains incomplete at the time of writing. The author will use the Expert Activities Report by the 7th Advisor to the Chief of INP, whose term was from 2017 to 2019. The entire program is facing the “post-program situation” as we reach the final stages of completing the 20-year program. Mitsuhiro Ohara acted as the POLMAS-enhancing expert during Yamazaki’s term as the 4th Program Manager. At that time, he assisted Yamazaki with designing the Project for the Enhancement of Civilian Police Activities Phase 2 and bridging to the

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Table 2.11 Appreciation level of the community in Bekasi regarding police activities % I feel safe where I live

89

My safety situation has changed in the last ten years

82

I am satisfied with the BKPM’s presence in my neighborhood

82

BKPM activities (door-to-door visits, problem-solving, etc.) are effective in reducing crime 84 If I have a problem in my neighborhood, I call a police officer

94

I have confidence in police officers

90

I am satisfied with how police officers communicate with me

75

Source JICA (2017, p. 48). The original data come from the results of a beneficiary survey, conducted for the ex-post evaluation of the Project for the Enhancement Civilian Police Activities Phases 1 and 2

Project on the Nationwide Capacity Development of Police Officers for POLMAS (JICA, 2019b, p. 2). He was dispatched to Indonesia again in 2017, as Program Manager for Phase 2. Ohara graduated from the Faculty of Law of The University of Tokyo. He joined the NPA in 1990, and held positions such as the of the Director of the Security Department of the Kanagawa Prefectural Police, and Chief of the Toyama Prefectural Police (Mainichi Shimbun, 2019). At the beginning of Phase 2, in his second term of office, Ohara created an opportunity to participate in the monitoring activities related to the pilot regions and selfsustaining regions. The self-sustaining regions were regions with the capacity to conduct ICT without the assistance of the JICA experts and BPF. He also visited the national criminal identification examination, and launched a POLMAS course at STIK (the Police Postgraduate College), discussed it with the students, and attained a better understanding of POLMAS implementation in the field (JICA, 2019b, p. 5) among the police officers. Based on these observations, he realized the poor capability of management in the Public Guidance Division of the Department of Security Guidance, which was pointed out in the 2017 Joint Terminal Evaluation (JICA, 2019b, p. 5). He decided to amend the program and focus it on the improvement of the capacity for planning, evaluating, and policy-making with regard to POLMAS activities. The Program would concentrate on offering a consultation service to the regional police departments regarding POLMAS activities. To improve operations, he involved the Planning Assistance Division and Human Resources Division of INP in the Program, and formed a task force consisting of the JICA program, the Institute for Education and Planning, the Public Guidance Division of Department of Security Guidance, and ISI (JICA 2019b, p.9). Here, ISI, the Indonesia Sakura Association of alumni of countryspecific training in Japan, appeared as the actor inside INP and began to play a role as the inheritors of POLMAS education and training. In order to ensure the inheritor remained alive, a new attempt to train the inheritors has been consolidated. Ohara

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planned to deliver a POLMAS lecture at STIK, the Police Postgraduate College, as a route to be chosen as a candidate for Kunitoku (country-specific training in Japan). Ohara drafted the project design as follows; the goal of the project was to establish a self-sustaining system to implement POLMAS in all regional police departments. The higher goal was for POLMAS activities to be implemented in all regional police departments. Attainment would be measured by concrete indicators: (1) whether more than one regional police department could acquire the necessary management capacity for the continuous implementation of POLMAS activities, (2) whether nonsustaining regions would access more than a single ICT session, organized by selfsustaining regional polices, and (3) whether more than half of the criminal identification officers in each regional police force could attain Class A or Class B in the examination for the National Certificate on Criminal Identification Skills (JICA, 2019b, pp. 27–28). At the end of Phase 2, the following outcomes would be evaluated by the evaluation team: (1) the establishment of regulations and systems for the implementation of POLMAS activities, (2) the enhancement of a system for organizing the POLMAS training, (3) the strengthening of POLMAS activities in BPF as an advanced POLMAS model, and (4) the transfer of Indonesian POLMAS practice to the third countries (JICA, 2017, p. 30). In order to consolidate the results during the post-program period, the horizontal development of the program was welcomed by the JICA Japanese experts. Ohara absorbed the provision of a training course for Timor-Leste as part of Phase 2 (JICA, 2017, p. 17).

2.6 Implications of the JICA INP Program 2.6.1 Significance for INP This chapter has described how the INP received the outcome of JICA program. The INP officers encountered a different police culture as a result of the program. More explicitly, the participants in the country-specific training in Japan gained experience of how Japanese community policing worked (JICA, 2012b). INP officers, who had always obeyed the orders of their superiors, were surprised by the daily life of the Japanese police during their Kunitoku training. On 8 October 2012, 24 trainees from the special country-specific training course entitled a Comparative Seminar on Indonesian Police Administration, which was part of the Civilian Police Activities Promotion Project Phase 2, arrived in Japan, selected from senior police officers across Indonesia. The purpose of the training was to experience the differences between the police systems of Japan and Indonesia through attending lectures at the NPA and observing police activities in the provinces, as well as examining case studies for reference and methods to apply in their own

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countries. The 24 participants were divided into groups of three and visited eight locations in three prefectures: Hokkaido, Ibaraki, and Fukuoka. It was reported that the trainees were surprised that the Japanese police were able to act at their own discretion at the scene of an incident, and that the minipatrol cars were equipped with criminal identification equipment so that criminal identification could be conducted immediately after an incident. In addition, the sharing of information with the fire service and cooperation with local neighborhood watch groups and traffic safety associations became a reference for the trainees on how to improve their ability to respond quickly to a scene while at the same time meeting the needs of the local population and building a relationship of trust. They were also impressed by the professionalism exhibited while handling disputes in the district by themselves. During the process of the four projects, a change became visible, as shown in Tables 2.8, 2.9, 2.10 and 2.11. Yamazaki also noted examples of good practice in BPF (Yamazaki, 2012, p. 210). A steady change in the police officers in BPF was noticed. They were aware of their mission to ensure the safety of the citizens. Some of them give out their mobile numbers in order to establish a safety network with the residents. They were not provided with official radios or mobile phones, and so had to pay for their own calls. The number of police officers trusted by the citizens was increasing, and Yamazaki called a “star police officer” a model for POLMAS implementation (Yamazaki, 2012, p. 210). In addition, the first batch of trainees dispatched to Japan reached to Deputy Commissioner-level positions, where they could finally have their own policy implemented.

2.6.2 Significance for NPA of Japan Let us now review the implications for the NPA of Japan. Firstly, the Indonesian National Police Program has provided a valuable international exchange experience, not only for the JICA experts dispatched to Indonesia but also police officers in Japan. By welcoming the trainees and explaining daily practice, NPA officers also received an opportunity to realize the hidden meaning of everyday activities that they had taken for granted. Secondly, this became an example of international cooperation for good governance and capacity enhancement. Thirdly, the program might have completed the mission which was only partially fulfilled by the Cambodia peacekeeping mission. In 1992–1993, the Japanese civilian police did their duty of “advising, guiding, and monitoring the local police”. Yamazaki was the head of the Japan team. The nature of the JICA program was quite close to this. The Ampil unit, to which Haruyuki Takata belonged, voluntarily gathered Lanalit police officers and opened a Police Academy. They learned how to prepare to be police officers, how to inspect the scene of a traffic accident, and how to take fingerprints. Takata, an NPA police officer dispatched to the Cambodia PKO, also taught a class on crime prevention activities, and prepared and taught the class until late at night (Hatate, 2018, p. 375). Takata had a strong

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desire to work in an embassy abroad as a security officer in the future (Hatate, 2018, p. 54). After the Ampil team was attacked and Takata was killed, it was graduates of the Ampil team’s own Police Academy who guarded the cars of Japanese civilian police officers (Hatate, 2018, p. 279). Despite the inadequate situation, in 1992, the Japanese police carried out the task of “guiding, advising, and monitoring the local police”. It could be the Indonesian National Police Reform that started the work in a peaceful environment, at the request of the government of the other side, and with adequate preparation.

2.6.3 Mutual Significance for Both Sides Finally, we should identify the significance for both the Indonesian and Japanese sides. Yamazaki dreamed that, one day, the INP would have the opportunity to teach the Japanese police (Yamazaki, 2012, p. 210). It seems unlikely, because the NPA of Japan is a donor, providing assistance, and the INP is the recipient. However, in a broad context, even today, the INP could teach the NPA of Japan about the experience of civilian police activities and United Nations Police activities. The INP has been sending personnel to peacekeeping operations since Namibia, and has gained rich experience of providing advice and guidance for the future international contribution of the Japanese police. In 1992, Yamazaki realized that the INP was sending police officers to Cambodia after about three weeks of survival training in the jungle. In contrast, most of the Japanese civilian police were officers from the prefectural police, who had no international experience or special training regarding conflict zones. The training took place at the Kanto Regional Police Academy and other locations for a total of ten days on two separate occasions, immediately prior to deployment. Apart from administrative work, such as uniform fitting, insurance, and vaccinations, the actual training consisted of leg training on Mt. Takao, Khmer and English language training, and vehicle training for the Toyota four-wheel drive vehicles used in the area (Hatate, 2018, pp. 62–63). Regarding the exchange experience, the existing good relations are, of course, welcomed. The mutuality enabled the learning and teaching to be conducted smoothly, as D’ai Bachtiar, former Chief of the Indonesian National Police, recalls: The good thing about our cooperation with Japan was not just the knowledge and experience we gained, but also the fact that we were able to build a relationship of equality, not one of superiority or inferiority. In 2004, I joined the Jakarta Centre for Law Enforcement Cooperation, a training center for international organized crime and counter-terrorism. In 2004, we established the Jakarta Centre for Law Enforcement cooperation, a training center for international organized crime and counter-terrorism, which accepts trainees from the Asian region. (Bachtiar, 2018, pp. 40–41)

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There is a strong affinity between capacity building by JICA experts and civilian police work. Those who can participate in supporting the reform of the Indonesian National Police are restricted in terms of rank and experience, so young people are not “limited to position rank” in their participation. Nevertheless, the fact that those without experience of diplomatic missions abroad have been involved in supporting the reform of the Indonesian National Police as it opens up new possibilities for the international contribution of the police. Notes: After submitting this paper, the author heard from an ex-project member that the fourth phase of the project would be extended in FY 2023 because of COVID19 and that there was a possibility that it might be continued after that.

References Bachtiar, D. (2018). Kokka keisatsu kaikaku shien puroguramu no igi to omoide (Significance of the assistance program for Indonesian National Police Reform and its memoirs). In: JICA: Indoneshia ni taisuru Nihon no ky¯oryoku no sokuseki (Indonesia’s Development and Japan’s Cooperation: Building the Future Based on Trust, pp 39–41). Tokyo. https://www.jica.go.jp/pub lication/pamph/ku57pq00002iqnxw-att/indonesia_development.pdf. Accessed April 08, 2021. Daily Jakarta Shimbun (2012, August 12, updated 2012, August 23). Michi Nakaba mo, Akarui Zairyo, Shin-sedai R¯ıd¯a ni Kitai: Keisatsu Shien no Yamazaki-san (Halfway, but a bright spot, hopes for a new generation of leaders—Yamazaki on police support). Jakarta. https://www.jak artashimbun.com/free/detail/204.html. Accessed April 15, 2021. Hatate, K. (2018). Kokuhaku: Aru PKO taiin no shi, 23 nenme no shinjitsu (Confession–A death of PKO officer and its truth hidden for 23 years). Kodansha. Hirayama, S., Nagai, F., & Kimata, Y. (2016). Chih¯o kara no kuni dukuri: Jichitai-kan-ky¯oryku ni kaketa Nihon to Tai karano15 nenkan no ch¯osen (A Nation Building from the Local Area–Fifteen Years of Challenge of Japan and Thailand for Local Government Partnership). JICA Kenky¯usho (JICA Institute), Tokyo. JICA. (1999). Kokusai ky¯oryaku jigy¯odan 25 nenshi: Hito dukuri, kuni Dukuri, kokoro no hureai (Twenty-Five Year History of Japan International Cooperation Agency). Tokyo. https://libopac. jica.go.jp/images/report/P0000043875.html. Accessed April 08, 2021. JICA. (2007). Indoneshia ky¯owakoku shimin keisatsu katsud¯o sokushin purojekuto sy¯ury¯o ji hy¯oka ch¯osa h¯okokusho (Terminal Evaluation Report for the Project on Enhancement of Civilian Police Activities). Tokyo. https://libopac.jica.go.jp/images/report/P0000173321.html. Accessed January 15, 2021. JICA. (2008). Suri-san to Anzai-san, keisatu soshiki no kaikaku wo mezasu Nihon karano o¯ en wo sasaeta Hito-tachi” (Sri and Anzai, supporters of Japanese assistance for Indonesian police reform). https://www.id.emb-japan.go.jp/oda/jp/topics_200810_police.htm. Accessed May 20, 2021. JICA. (2012a). Indoneshia ky¯owakoku shimin keisatsu katsud¯o sokushin purojekuto (F¯ezu 2) sy¯ury¯o ji hy¯oka ch¯osa h¯okokusho (Terminal Evaluation Report for the Project on Enhancement of Civilian Police Activities). Tokyo. https://libopac.jica.go.jp/images/report/P1000007052.html. Accessed January 15, 2021. JICA. (2012b). Indoneshia keisatukan no mita K¯oban: Indoneshia keisatsu gy¯osei hikaku semin¯a sono-2 (Indonesian Police Officer’s View of the KOBAN neighborhood police station: Comparative Seminar on Indonesian Police Administration Part 2) (https://www.jica.go.jp/tokyo/enterp rise/kenshu/article/2012/report69.html. Accessed May 13, 2021. JICA. (2014). JICA to Burajiru no KOBAN (JICA and KOBAN in Brazil) https://www.jica.go.jp/ brazil/office/information/articles/20140910.html. Accessed April 15, 2021.

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JICA. (2016). Y¯uk¯o to ky¯oryaku no rekishi : Nihon Singaporu gaik¯o kankei juritsu 50 sh¯unen kinen (50th Anniversary of the Establishment of Diplomatic Relations between Japan and Singapore: A History of Friendship and Cooperation). Tokyo. https://www.jica.go.jp/publication/pamph/ region/ku57pq00002izp9j-att/history_of_friendship_and_cooperation.pdf. Accessed April 12, 2021. JICA. (2017). Indoneshia ky¯owakoku shimin keisatsu katsud¯o (POLMAS) zenkoku tenkai purojekuto sy¯ury¯o ji hy¯oka ch¯osa h¯okokusho (Joint Terminal Evaluation Report for Project on Nationwide Capacity Development of Police Offices for POLMAS-Indonesian Civilian Police on Enhancement of Activities). https://libopac.jica.go.jp/images/report/P1000007052. html. Accessed January 15, 2021. JICA. (2019a). Kokusai ky¯oryku kik¯o shi 1999–2018 (History of Japan International Cooperation Agency--1999–2018). Tokyo. https://www.jica.go.jp/about/history/ku57pq00002jr4ze-att/ all.pdf. Accessed April 08, 2021. JICA. (2019b). Senmonka katsud¯o h¯okoku (Expert Activities Report on the Assistance Program for the Indonesian National Police Reform). https://libopac.jica.go.jp/images/report/1000041041. pdf. Accessed January 15, 2021. JICA. (n.d.1). About JICA. https://www.jica.go.jp/english/about/index.html. Accessed May 29, 2021. JICA. (n.d.2). Japan’s ODA and JICA. https://www.jica.go.jp/english/about/oda/index.html. Accessed May 29, 2021. JICA. (n.d.3). Our Mission, Vision and Actions. https://www.jica.go.jp/english/about/mission/ index.html#vision. Accessed April 12, 2021. Kaneko, Y. (2010). Ajia no h¯o seibi to h¯o hatten (Improvement of the Judicial System and Legal Development). Daigaku Ky¯oiku Shuppan, Okayama. Kawano, T. (2005). Indonesia kokka keisatsu kaikaku no hitsuy¯o-sei to Nihon keisatsu niyoru kaikaku shien no arikata ni tsuite (Urgent Need for Police Reform in Indonesia, and Japan’s Contribution to Indonesia’s Democratization). Keisatsugaku Ronshu (journal of Police Science), 58(10), 36–52. Kiba, S. (2016). T¯onan Ajia ni okeru komyunityi Porisingu: Chi’an kaizen oyobi keisastu kaikaku eno inpakuto no kent¯o (Research Proposal of ‘Community Policing in Southeast Asia-- Examining the Impact on Public Safety Improvement and Police Reform). International Program of Collaborative Research, Kyoto University. https://ipcr.cseas.kyoto-u.ac.jp/fy2016iv-10kiba/. Accessed May 20, 2021. ¯ Mainichi Shimbun. (2019). Honbu-ch¯o ni Ohara shi sy¯unin e (Ohara to take over the Chief of Tokyama Prefectural Police). Toyama local edition. 7 August 2019. https://mainichi.jp/articles/ 20190807/ddl/k16/010/188000c. Accessed May 20, 2021. Ministry of Foreign Affairs, Japan. (2009). “Aiming for Police Services Trusted by Citizens—Police Box Operated by Women in Indonesia”. White Paper on Development Cooperation 2009. https://www.mofa.go.jp/mofaj/gaiko/oda/shiryo/hakusyo/09_hakusho_pdf/pdfs/09_ c13.pdf. Accessed May 31, 2021. Ministry of Justice, Japan. (n.d.). International Cooperation Department’s legal system development support activities. http://www.moj.go.jp/housouken/houso_lta_lta.html. http://www.moj. go.jp/EN/housouken/houso_icd.html. April 20, 2021. Miyakoshi, K., & Kasahara, T. (2003). Nihon keisatsu ni okeru kokusai ky¯oryku oyobi genj¯o to kadai (The present situation and issues of internal cooperation in Japanese Police). Keisatsugaku Ronshu (The Journal of Police Science), 56(10), 102–136. National Police Agency, Japan. (1973). Keisatsu hakusho (White Paper on Police 1973). https:// www.npa.go.jp/hakusyo/s48/s480900.html. Accessed April 7, 2021. National Police Agency, Japan. (1987). Keisatsu hakusho (White Paper on Police 1987). https:// www.npa.go.jp/hakusyo/s62/s620103.html. Accessed April 7, 2021. National Police Agency, Japan. (2005). Keisatsu hakusho (White Paper on Police 2005). https:// www.npa.go.jp/hakusyo/h17/hakusho/h17/index.html. Accessed April 7, 2021.

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National Police Agency, Japan. (2007). Keisatsu hakusho (White Paper on Police 2007). https:// www.npa.go.jp/hakusyo/h17/hakusho/h17/html/G2010300.html. Accessed April 7, 2021. National Police Agency, Japan. (n.d.). Kokusai ky¯oryku no suishin (Promotion of International Cooperation). https://www.npa.go.jp/bureau/soumu/kokusai/kyoryokujokyo.html. Accessed April 20, 2021. Shimomura, Y. (2020). Nihon-gata kaihatsu ky¯oryku no keisei: Seisaku shi I 1980 nendai made (The Formation of Japanese-style Development Assistance—a History of Policy till 1980s). Tokyo Daigaku Shuppankai (University of Tokyo Press), Tokyo. Shiraishi, T. (2003). Indoneshia no keisatsu kaikaku, sono seiji teki igi” (Police reform in Indonesia—Its political significance). Keisatsugaku Ronshu (journal of Police Science), 56(10), 85–94. Sugiyama, Y. (2005). Kokusai s¯osa kenshujo ni okeru kokusai ky¯oryku no genj¯o to tenb¯o (The present situation of international cooperation of international research and training institute for criminal investigation National Police Academy). Keisatsugaku Ronshu (The Journal of Police Science), 58(11), 69–86. Tokushu. (2003). Indoneshia keisatsu kaikaku no shien (Special Issue for Assistance to Reform of Indonesian National Police). Keisatsugaku Ronshu (The Journal of Police Science), 56(10), 1–136. Tokushu. (2005). Nihon keisatsu no kokusai ky¯oryku no genj¯o to tenb¯o (Special issue for present situation and prospects of international cooperation in Japanese National Police). Keisatsugaku Ronshu (The Journal of Police Science), 58(10), 1–86. Tokushu. (2007). Keisatsu ni okeru kokusai ky¯oryku no suishin (Special issue for the promotion of international cooperation in Japanese Police). Keisatsugaku Ronshu (The Journal of Police Science), 60(5), 1–54. Yamazaki, H. H. (2003). Indonesia kokka keisatsu kaikaku shien (Assistance to reform of Indonesian National Police). Keisatsugaku Ronshu (The Journal of Police Science), 56(10), 42–72. Yamazaki, H. H. (2008, September). Shinrai sareru shimin keisatsu tanj¯o no o-tetsudai (Assistance to the birth of a trustful Civilian Police). Gaiko Forum, 242, 54–55. Yamazaki, H. H. (2009). Indonesia kokka keisatsu shien 10-nen no kiseki (Successful 10 years of the Bilateral Cooperation between Japanese Police and Indonesian National Police to Enhance Civilian Police activities). Keisatsugaku Ronshu (The Journal of Police Science), 62(5), 25–44. Yamazaki, H. H. (2009b). Umi wo wataru KOBAN (KOBAN crossing the Sea). Bungei Shunju (Monthly), 87(11), 82–84. Yamazaki, H. H. (2012). Waga Indoneshia keisatsu kaikaku ki (My diary of Indonesian Police reform). Bungei Shunju (Monthly), 90(8), 204–210. Yamazaki, H. H. (2013). Indoneshia kokka keisatsu kaikaku shien puroguramu no ashita no tameni: Shodai soshite 4-daime toshiteno t¯usan 7-nen han no kinmu wo oete (Recent developments of the program for assistance of the Indonesian National Police Reform—Expectation for the further success). Keisatsugaku Ronshu (The Journal of Police Science), 66(1), 1–24. Yamazaki, H. H. (2018). Indoneshia kokka keisatsu kaikaku shien puroguramu no jizoku to hatten (Continuity and development of assistance program for Indonesian National Police Reform). In: JICA. Indoneshia ni taisuru Nihon no ky¯oryoku no Sokuseki (Indonesia’s Development and Japan’s Cooperation: Building the Future Based on Trust, pp. 42– 44). Tokyo. https://www.jica.go.jp/publication/pamph/ku57pq00002iqnxw-att/indonesia_develo pment.pdf. Accessed April 08, 2021. Yoshida, Y. (2019). Dai 102 kai kokuren keisatsu (UNPOL) no gaiy¯o to kokuren heiwa katud¯o ni okeru yakuwari (Article 102: Overview of the United Nations Police (UNPOL) and its role in UN peace operations). http://www.pko.go.jp/pko_j/organization/researcher/atpkonow/articl e102.html. Accessed April 18, 2021.

Chapter 3

Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines Tina S. Clemente Abstract When President Rodrigo Duterte of the Philippines assumed office in 2016, his trips to China and their resulting bilateral economic agreements attracted significant attention. To many observers, these reflected a pivot toward China. However, Duterte also traveled to Japan, with bilateral talks resulting in economic agreements as well. The respective state visits of Shinzo Abe and Xi Jinping to the Philippines in 2017 and 2018 further hint at what appears to be a strategic repositioning of these countries with both each other and the Philippines. The focus of this chapter is the investment and aid dimensions of these economic agreements. How does China’s development partnership with the Philippines in terms of investment and aid compare to that of Japan? How do these countries’ relations with the Philippines contribute to the narratives on investment and aid? This study analyzes the economic relationship of these countries with the Philippines by considering empirical data on these indicators, the tenor of the discourse, and perceptions. The research is informed by the increasing entrenchment of China’s economic presence in both the Philippines and Southeast Asia amid Japan’s historically dominant role in the region through its postwar development initiatives. Keywords Philippine bilateral economic relations · Strategic competition · Public perception on investment and aid

3.1 Putting the Inquiry into Perspective Five months after assuming office as the Philippines’ new president in May 2016, Rodrigo Duterte made his first state visit to China on 18–21 October, where the so-called pivot toward China was on full show. Prior to this, there were many official pronouncements that indicated an effort to warm relations with China. In July 2016, the tepid official reaction to the Permanent Court of Arbitration’s decision on Philippines v. China, also referred to as the South China Sea Arbitration, was very T. S. Clemente (B) Asian Center, University of the Philippines, Diliman, Quezon City, Philippines e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_3

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telling although, even during the presidential campaign, Duterte’s China-leaning was already apparent. In his visit to China, Duterte’s words evoked significant interest. I announce my separation from the United States. Both in military, not maybe social, but economics also. America has lost. I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to [President Vladimir] Putin and tell him that there are three of us against the world — China, Philippines, and Russia. It’s the only way. (“Duterte in China: Xi lauds ’milestone’ Duterte visit” 2016)

Duterte’s state visit to Japan on 25–27 October later that year, however, proved to be an interesting counterpoint. In Japan, the President characterized his talks with China as simply economic in nature. He declared that he was on Japan’s side regarding the South China Sea and affirmed his commitment to the rule of law. The Philippines’ “separation” from the US was contextualized as simply emblematic of the President’s stance, which pushed for an independent Philippine foreign policy. This served to allay concerns, given that the US is Japan’s strongest ally and Japan is in dispute with China regarding the East China Sea. Furthermore, Japan’s strategic competition with China has led the former to strengthen its ties with Southeast Asia in order to balance China’s growing presence. The Philippines was able to secure USD 24 billion worth of investment and loan agreements from China and USD 1.8 billion worth of private joint ventures from Japan (Ranada, 2016, Takenaka & Sieg, 2016, “Duterte in China: Xi lauds ‘milestone’ Duterte visit” 2016). These developments created an impression of a shift in the importance of China and Japan in the Philippine economy. Has China taken Japan’s place in terms of economic presence in the Philippines? And will this presence entail greater political influence? It is important to note that the disparities in monetary value of the Philippine deals with China and Japan must be appreciated alongside data on the existing partnerships and their contexts. For instance, at the time of the visits in 2016, Japan was the Philippines’ top trading partner and the source of the largest share of official development assistance (ODA) to the Philippines. Japan has dominated in Southeast Asia as a top economic partner in consonance with its post-World War II reconstruction program. In aid of advancing its relations with the Philippines, Japan signed the Japan–Philippines Economic Partnership Agreement (JPEPA) in 2006. It is noteworthy that, in February 2016, before President Duterte assumed office, the Philippines signed a bilateral defense cooperation with Japan that allows defense equipment and technology transfer (De Castro, 2016). Moreover, the administration seemed to seek to strengthen the relationship through creating a security partnership that includes bilateral consultations and joint naval exercises (De Castro, 2017). On the other hand, China has had maritime disputes with the Philippines and is ranked relatively low in terms of its foreign direct investment (FDI) in and ODA to the country. When the Belt and Road Initiative (BRI) was rolled out, the Philippines was late to the party due to the diplomatic tension, that heightened during the Aquino administration. Nevertheless, the heralding of agreements as bilateral relations warmed showed great optimism regarding a new era of partnership.

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This chapter presents a comparative exploration of Chinese and Japanese economic relations with the Philippines by focusing on narratives on investment and aid. Far from being exhaustive, the discussion emphasizes how both the interwovenness and disconnects between the discourse, data, and perceptions shape the construction of the narratives. The study engages the academic literature, empirical data, and media/popular articles to gain a strong purchase of the dynamics among Japan, China, and the Philippines. The chapter attempts to create a nuanced characterization of bilateral economic relations by considering the internal Philippine dynamics and the historical context of cooperation and conflict. Official Philippine datasets cover available data from 2016–2020 for FDI and 2016–2019 for ODA. During the discussion, these are supplemented by other datasets. The analysis speaks to the present period of the Duterte administration while drawing from historical references whenever these are relevant for understanding the dynamics within the current relations. The research seeks to be of use to scholars interested in the undercurrents of economic relations, emphasizing a leaning toward area and strategic studies. In the next section, on dynamics, strategies, and relations in Asia, this chapter tackles strategic rivalry, the evolving approaches to investment and aid, and perceptions. The third and fourth sections respectively peruse investment in and aid to the Philippines from China and Japan and analyze the related trends, patterns, and narratives. The discussion on narratives in these sections is not intended to be exhaustive. Rather, it reflects the discursive emphasis in selected current debates. In this light, the chapter abstracts from a discussion on the sectoral distribution of FDI and the actual projects under BRI and PQI. The chapter ends with brief closing remarks.

3.2 Dynamics, Strategies, and Relations in Asia 3.2.1 Strategic Rivalry and Evolving Approaches Japan has been attempting to redefine its place in Southeast Asia as an enduring economic partner that is responsive to the needs of the region. This effort to strengthen Japan’s ties occurs amid the rising competition that China poses. Not only has China been making its presence felt militarily and politically but its economic entrenchment has also been undeniably growing, contestations notwithstanding. Because Japan perceives that complementarity is more productive within and outside the region, it seeks not to supplant or impede China’s influence but to negotiate its own influence on how countries in the region respond to China’s increasing power. This is achieved by pointedly distinguishing itself from China in its actions and projects, which complicates China’s own strategy in the region. It is observed that the use of resources does not always translate into the desired favorable perceptions and commensurate cooperation (Wallace, 2019). As Japan continues its efforts to distinguish itself from China, the latter engages in its own effort to produce a distinction in

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the narrative by depicting itself as the reference point while the West is the departure (Aukia, 2019). The investment of Japan in Southeast Asia has become more important in stimulating its economy, such that the Japanese FDI in the region for 2008–2017 substantially exceeded that in China. By linking infrastructure initiatives with the Association of Southeast Asian Nations (ASEAN) production supply chain, manufacturing production is intended to bolster Japanese companies (Kikuchi & Unzaki, 2019). Not to be outdone, China has been improving its economic engagement with ASEAN. Due to the latter’s economic and political importance, China and Japan have been intensifying their involvement in promoting ASEAN integration through infrastructure development. Attempts to secure deals on railways and ports in the region are carried out through Japan’s Partnership for Quality Infrastructure (PQI) and China’s BRI (Berger, 2019). The creation of PQI itself as a program indicates Japan’s efforts to create a distinction from China’s BRI by emphasizing “quality,” thereby implying its superiority to China with regard to projects. The other subtext that is prevalent in the Philippines, at least, is the contrast between Japan’s established reputation as a trusted producer of technologically advanced, efficient, and durable products and China’s reputation as a producer of cheap, generic items that are not known for their quality. Nevertheless, this effort to distinguish also shows China’s increasing foothold in the sector in which Japan has always been dominant. Given the strategic competition, both countries’ plans for economic expansion had to evolve. At the outset, China’s establishment of the BRI and the Asian Infrastructure Investment Bank (AIIB) seems to challenge Japan’s post-WWII dominance within Southeast Asian infrastructure development. However, Japan’s efforts to revitalize its economy, which has suffered an extended slump, and China’s desires to find new engines for growth, considering its slowing economy and the needs of its Western region, help to paint a clearer picture, notwithstanding the intertwining geopolitical issues. Through East–West railway development and infrastructure exports, Japan is linking continental Southeast Asian countries, maximizing its networks, and spurring its commercial interests. China intends to develop the North–South Pan-Asian Railway Network in aid of capitalizing on the high-speed rail in Malaysia and Singapore, in line with the creation of economic corridors and industrial parks. Both countries attempt to secure projects by deepening their diplomacy, making bids and financing more competitive projects, reducing their infrastructure costs, and aligning their development aid wherever possible. These innovations show how the financing regimes of both countries are evolving. Japan is challenged to build on past gains and maintain its presence by redefining what it can offer (Zhao, 2019), while China continues to explore various approaches in dealing with its partners. China has come a long way from the turn of the century when it set out to promote its global expansion. It sought to liberalize its outward FDI, encourage more private sector participation, and improve regulation (Bath, 2015). A short time ago, Chinese FDI in Southeast Asia was still relatively new and the gap it was filling was being observed. For instance, its aid to Myanmar was under scrutiny due to the sanctionsrelated departure of Western investment (Frost, 2004). Wang and Zhao (2017) posit

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that the evolution, as exemplified by the BRI, AIIB, and various mergers and acquisitions, was also contingent on the changes occurring within China’s economy. While securing resources for domestic development as an objective for Chinese foreign investment—such as natural gas and overseas farmland investments (Lu et al., 2020; Zhou et al., 2020)—is still important, the shift to a supply-side, consumption-driven economy has reoriented the outward FDI, which now focuses on creating global connectivity and innovations. Where aid is concerned, Jain (2016) characterizes Japan’s official development assistance as one that has become more diverse even while many ODA projects focus on infrastructure. Not only do projects serve mutual bilateral interests, but Japan also seeks to emphasize projects that empower the host countries to address their development needs. This is the result of Japan’s efforts to evolve its approach to aid in light of competition from external parties such as the Development Assistance Committee/Organisation of Economic Cooperation and Development (DAC/OECD), the US, and China as well as competition among different domestic players. Efficiency improvements to the aid program, which began nearly a decade after World War II, include streamlined institutional processes, more players, and an openness to external review and views from the public. The focus on China’s aid approach has often underscored how it marks a departure from the existing standards. For example, China’s use of aid to secure critical natural resources has attracted criticism but is actually akin to Japan’s postwar strategy (Reilly, 2013). On the ground, Reilly (2012) observes how China’s aid adheres more to international practices, when the environment has greater transparency and international players. The way in which China has been managing aid financing in different countries shows how it is mediating its practices, given the existing norms, and, at the same time, challenging the same in its efforts to create an institutional environment that is conducive to its interests. China’s foreign aid and governmentsponsored investment activities (FAGIA) comprising grants, interest-free loans, and concessional loans (Wolf et al., 2013), have prompted scholars to consider Chinese assistance through different lenses. On one hand, these show flexibility. On the other hand, there are concerns about the implications of the difficulties associated with tracking them. In Dreher et al. (2017), China’s Official Finance consists of ODA and Other Official Flows (OOF). In turn, OOF is comprised of flows characterized as “ODA-like,” “Vague Official Finance,” and “OOF-like.”

3.2.2 Do Perceptions Matter? Even before the backlash against Chinese investment and aid projects, there have been many negative perceptions associated with China owing to the longstanding maritime disputes, historical tension towards ethnic Chinese in Southeast Asian countries, and the influx of new Chinese migrants. Despite these, there have been many points of entry for China to gain support. In Asia, the latter is attributed primarily to the magnitude of economic benefits from cooperation and the lack of orientation toward

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democracy (Xi & Primiano, 2020), but the cultural dimension is also instructive. In Dang and Zhao’s (2020) perspective, the cultural dimension is relevant in negotiating perceptions, such that elements like language, religion, and legal orientation matter. They describe Chinese FDI in Southeast Asia as having a relatively low cultural risk. For Chinese soft power to work, these fundamental elements must co-exist in a shared social construction of likeness (Feklyunina, 2016). As an interesting juxtaposition to the narrative of inferior Chinese cooperation, Fu et al. (2020) find that Chinese FDI affects capital accumulation in developing countries just as US FDI does, except that, where employment and productivity growth are concerned, the former has a greater effect. Furthermore, low-income countries benefit from Chinese FDI’s greater effect on growth while US FDI’s effect on growth is generally observed in middle-income countries. However, the positive note in the evolving nature of Chinese FDI does not see traction in the narrative, as negative perceptions tend to dominate. Japan continues to project itself as a responsible stakeholder through its companies in other countries. This contrasts with the negative perception of Chinese firms. In regard to environmental excesses, for instance, Gong (2020) points out that many Chinese firms are pursuing infrastructure investments that promote inclusive development but Chinese efforts regarding environmentally-sound, high-quality projects are overshadowed by the skepticism regarding project feasibility, transparency, and the likelihood that China can be a responsible stakeholder even when the host government is weak. In line with the argument that China’s reforms have improved Chinese companies’ environmental performance in the host countries, Dong et al.’s (2020) analysis shows that, since the rollout of the BRI, Chinese companies now find investment sites with weak regulations less attractive. Wu et al. (2020) provide empirical evidence that BRI countries in the Pacific, East Asia, South Asia, Central Asia, and Europe benefit from Green Total Factor Productivity as a function of Chinese FDI, with the caveat that institutional strength plays a role in this effect. Chen et al. (2020) affirm the importance of enabling conditions, arguing that investment facilitation is a major factor that determines BRI countries’ FDI flows from China. While it is true that aid effectiveness, as with foreign investment, is determined also by the enabling environment, such as how political stability is positively related to domestic capital formation (Dutta et al., 2015), the negative perception persists about Chinese aid. “Debt-trap” is often used to underscore the wariness toward Chinese loans even while it has been controverted (Brautigam & Rithmire, 2021; Jones & Hameiri, 2020). Aside from these distinctions, Chen (2020) attempts to account for China’s high-interest loans in developing countries, which are often compared to the low-interest-rate loans from Japan and other advanced countries. Chen posits that China’s state intervention is less directly channeling fiscal revenue by subsidizing interest rates but, rather, is focused on providing project credibility and government guarantees of the project’s feasibility. Despite the view that Chinese loans are less favorable than those offered by other aid sources, China is observed to be effective in filling the gap in development financing. This can be attributed to the absence of domestic watchdogs in Chinese civil society to keep projects in check or a monitoring mechanism as part of the aid program (Natsios, 2020), but this lack of constraint has also heightened the scrutiny of its approach to aid.

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3.3 Investment from China and Japan This and the following section elucidate on empirical evidence drawn from surveys, research, and government data as well as the narratives surrounding foreign investment in the Philippines from China and Japan. The data featured are drawn from available official datasets published by the Bangko Sentral ng Pilipinas (BSP) and the National Economic and Development Authority (NEDA). Why does the empirical evidence need to be unpacked if publicly available data can stand on their own? The answer is simple. The narratives of cooperation outcomes are not based solely on the rise and fall of investment flows but also on how the relations are debated and the issues perceived. The tenor of foreign relations, which is based on ongoing debates and perceptions, past bilateral interactions, and the Philippines’ experience with other countries, has the capacity to shape and reshape the narratives.

3.3.1 Trends and Patterns This chapter utilizes data on FDI from the BSP. FDI is distinguished from approved foreign investments, which is tracked by the Philippine Statistics Authority. “Approved foreign investments represent investment commitments and pledges by foreigners regardless of the percentage of ownership of the ordinary shares, which may be realized in the near future while FDI refers to actual foreign investments generated, with the foreign investors owning 10 percent or more of the ordinary shares”.1 The distinction between these definitions is important. Approved foreign investments are investment commitments and pledges, including those with less than 10% equity. FDI are actual generated investments, which meet the equity cutoff, signifying lasting interest. Equity considerations distinguish both from portfolio capital, which is not included in the PSA’s Foreign Investment Information System. While investment commitments and pledges are reported to the public2 and even heralded as expressions of bilateral economic diplomacy, FDI remains the better indicator in regard to tracking which investments with a lasting interest are actually infused into the Philippine economy. Signed agreements on investment deals that are reported in the media may take time to be actualized and should not be confused with FDI. For the purposes of this chapter, data from the BSP were processed and the investor countries were ranked according to their total FDI in the Philippines during the same reckoning period. In Fig. 3.1, China is ranked sixth in the sample for total FDI in the 5-year period, while Japan is ranked third. Chinese FDI in 2018 and 2019 registered a marked improvement while it was the opposite for Japanese FDI in 2017 and 2018, with the former exceeding the latter for the first time in 2018. Even if Chinese FDI was lower than Japanese FDI in 2019, the increases in 2018 and 1

The relevant approving bodies are “the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BOI-Bangsamoro Autonomous

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Fig. 3.1 Net FDI flows, 2016–2020 (in USD million).3 Source Author’s processing based on data from Bangko Sentral ng Pilipinas, www.bsp.gov.ph. Accessed 1 April 2021

2019 created the impression that the trend will continue, showing China’s growing presence in the Philippine economy, especially after the warming of relations in 2016. However, based on preliminary data for 2020, Chinese FDI indicated a drastic drop, contrasting with Japanese FDI, which topped the list. Figure 3.2 compares the trend of both countries’ FDI for 2011–2020. It is observable that Japan’s FDI and its share in total equity capital have always been substantially greater than that of China, except in recent years.

3.3.2 Narratives on Foreign Investment Japanese investment in Southeast Asia began before the 1960s as an effort to acquire raw materials to satisfy its domestic needs. This eventually facilitated Japan’s export surge, decades later. In the mid-1980s, Japan’s export motivation intertwined with that Region in Muslim Mindanao (BOI-BARMM), and Cagayan Economic Zone Authority (CEZA)” (Philippine Statistics Authority, 2020: 1). 2 The Philippine Statistics Authority provides publicly accessible quarterly tables on www.psa. gov.ph. The published reports on AFI can be found here: https://psa.gov.ph/content/foreign-invest ments-0. 3 The BSP adopted the Balance of Payment, 6th edition (BPM6) compilation framework, effective 22 March 2013, with the release of the full-year 2012 and revised 2011 BOP statistics. On 21 March 2014, the BSP released the BPM6-based series. In BPM6, net FDI flows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments, net (i.e., net intercompany loans).

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Fig. 3.2 Chinese and Japanese FDI (in USD million) and share in total equity capital (in %), 2011–2020. Source Author’s processing based on data from Bangko Sentral ng Pilipinas, www. bsp.gov.ph. Accessed 1 April 2021

of Southeast Asian economies, which set their sights on fulfilling their development goals by encouraging greater FDI inflows. Also, Japan’s decreased dependence on the US led to the former’s investment and trade push in the region.4 In the course of Japan’s rise, Southeast Asia benefited from the transfer of knowledge, technology, and capital (Rodriguez, 2013). As Japan entrenched itself in the region, its FDI became associated with increasing exports from the Southeast Asian economies— albeit with variations across economies. The effect of FDI on Philippine electronics exports was no exception (Palanca-Tan, 2014, Maquito & U, 2014). Furthermore, encouraging Japanese investors was seen as producing a more competitive industry in light of the close linkage between assemblers in Japan and suppliers in the Philippines (Palanca-Tan, 2014). The notion that Japan’s ascent facilitated Southeast Asia’s rise turns out to be a powerful narrative on Japan’s role in regional development. The Flying Geese (FG) model, for instance, underscores the vital part that Japan played in its pro-tradeoriented FDI in Southeast Asian growth. Japan’s further role in the “agreed specialization” (Kojima, 2000: 383) in Southeast Asia purports itself to be a continuing actor in regional integration. While agreed specialization has been contested owing to the challenges of concertedly maintaining niched industries per country in aid of the common interest (Memis, 2009), it still adds to the narrative that Japan is an integral 4

To reduce the US trade deficits, the currency market intervention in 1985—widely known as the Plaza Accord—was intended to allow the US dollar to depreciate against the yen and deutschmark. In addition, US protectionist moves raged against Japanese exports (Rodriquez, 2013).

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enabler of the region’s development. How is this narrative in play in the Philippines? While the Philippines benefited from Japanese FDI, its extent is qualified by domestic constraints. From 2016 to 2019, the Philippines was fifth, behind Singapore, Indonesia, Vietnam, and Malaysia, in terms of FDI inflows (United Conference on Trade and Development 2020). The inability of the Philippines to attract FDI has always underscored the weakness within the institutional conditions, business environment, and economic diplomacy. Limitations to foreign ownership, corruption, poor infrastructure, and power costs are particular issues that are often invoked as unresolved bottlenecks. The lack of suitability between FDI flows and the Philippine context of upgrading industry as being intertwined with issues of political economy provides another perspective on why the FDI outcomes in the Philippines have fallen short of ideal (Montes & Cruz, 2019). In 2008, JPEPA was ratified. JPEPA is an economic partnership that includes trade in goods and services, investment, the movement of natural persons, and other areas of cooperation.5 It is the only bilateral agreement of its kind that the Philippines has with another country. While it was celebrated as a mechanism for deepening economic relations, the treaty’s ratification was delayed due to heavy criticism from different sectors. The main focus of the opposition was the inclusion of provisions on investment, competition, and government procurement (also known as the Singapore issues) that were deemed unfavorable to the Philippines, and the environmental concerns related to the dumping of Japan’s toxic and hazardous waste in the Philippines. The Singapore issues remained in the treaty in the context of improving the domestic market by reforming the attendant business and institutional environments. As for the environmental issues, the mechanisms within the treaty as well as the Basel Convention on the Transboundary Movement of Hazardous Waste, which both countries signed, soothed concerns. However, the Philippines’ capacity to monitor and enforce the regulations has been invoked as a critical factor regarding actualizing the benefits (Medalla et al., 2013). Five years after JPEPA came into effect, the Philippines’ disappointing performance in terms of FDI relative to its regional neighbors shows that, in regard to the regional production network, the country has not expanded its position. These observations still resonate today. The Philippines’ investment climate was found wanting and this limited the opportunities to realize investment possibilities. Poor infrastructure and high electricity costs, which exceed those of its Southeast Asian peers, serve as stumbling blocks that the Philippines’ advantages—its geographical proximity to East Asia, vast natural resources, and English-fluency—cannot surmount. This predicament translates into higher production and distribution costs (Medalla & Ledda, 2013). Improvements have been made to the investment climate, but the weaknesses persist. Another indication of this is the observation that the Philippines has been unable to take advantage of investors leaving China due to rising costs. Philippine 5

The agreement can be found here: https://www.mofa.go.jp/region/asia-paci/philippine/epa0609/ main.pdf. Accessed 31 December 2020.

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Senator Franklin Drilon lamented the sluggish efforts of the Philippines, unlike its neighbors, to attract these investors, such that the country is only getting “leftovers.” Japanese investors who are leaving China have Vietnam, Indonesia, and Thailand in mind as alternatives because of the “supply chain, resources and raw materials production,” according to the Japanese Chamber of Commerce and Industry of the Philippines Inc. (Romero, 2020). Vietnam has been shoring up its role as a top investment destination, providing a contrast to the Philippines. Japanese FDI in ASEAN dramatically increased from 2008 to 2017, surpassing China as an investment destination for FDI. During this period, Vietnam witnessed a growth of 750% relative to the amount of FDI in the preceding decade. In contrast, the Philippines witnessed a growth of only 120% (Kikuchi & Unzaki, 2019). Important reflections can be gleaned from Japan’s investment in the Philippines. The regional narrative emphasizes the messaging of a consolidated effort by Japan to push the region forward in the context of regional development and integration. Even with a relatively positive narrative in the Philippines, the opportunities from economic relations with Japan have not been maximized as domestic issues continue to hamper this. Also, the resounding message is that Japan has been and remains important to Philippine development despite how dismally the Philippines performs compared with its regional peers in terms of Japanese FDI. Furthermore, there has been criticism of bilateral cooperation with Japan but, since the latter is not seen as an existential threat, it has been deemed workable using the existing mechanisms. In the case of China, much has been said about the negative perceptions in the Philippines toward Chinese investment. In a Pew Research Center (2019a) survey on how Asia–Pacific countries perceive Chinese investment, for instance, the Philippines was joined with South Korea, Indonesia, Australia, India, and Japan in the Asian country group. In this cohort, the Philippine respondents posted the most positive view toward receiving investment from China, with 45% of them stating that investment from China was a good thing (Fig. 3.3). This was 14 percentage points above the median in that country grouping but seven percentage points less than the 16-country median for the West Asian, African, and Latin American country groups. While negative perceptions slightly outweigh positive ones, the Philippine perceptions in the Asian group still seem relatively favorable toward China compared to those of the other countries in this cohort. Although Chinese FDI improved in 2018 and 2019, these improvements were below expectations. Duterte’s pivot toward China was met with much hype because it occurred against the backdrop of a maritime dispute so the expectation was that the economic payoffs from better cooperation between the two countries would make the conciliatory stance worthwhile. Hence, when the flows are incommensurate with the fanfare, the perception is that the Philippines conceded for nothing. In other words, the discrepancy between Chinese investment commitments/pledges and the actualized projects affects the narrative negatively, as the disappointment and heightened scrutiny are associated with the maritime disputes, compounded by other issues with

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Fig. 3.3 Investment from China is a good or bad thing for the country? (in %). Note “Don’t know” responses not shown. Source Spring 2019 Global Attitudes Survey Q28, Pew Research Center (2019a) https://www.pewresearch.org/global/2019/12/05/chinas-economic-growth-mostlywelcomed-in-emerging-markets-but-neighbors-wary-of-its-influence/pg_2019-12-05_balance-ofpower_2-07/. Accessed 31 March 2021

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Chinese enterprises in the Philippines, such as those relating to online gambling,6 the influx of Chinese workers for China-funded projects, and the environmental excesses of Chinese mining firms. In the previous year, a Memorandum of Understanding (MOU)7 was signed. With the Philippines’ formal accession to the BRI in 2018, Paderon and Ang (2017) calculated the estimated gains from the BRI and found positive GDP elasticity for FDI, capital stock, and trade in the short run. In the long run, the positive GDP elasticity in regard to FDI and capital exceeds the negative GDP elasticity in regard to trade. In addition, Paderon and Ang argue that the investment in machinery and electronics manufacture (the major Philippine exports to China) need to be supported by tax incentives, among other measures, and that the improvement in trade facilitation and infrastructure should be upgraded, as these also entice investment in addition to promoting trade. While the potential of BRI is acknowledged, the results of the study raise the question of whether the Philippines’ domestic woes are impeding the capacity of the country to maximize its gains. In various other indices, the Philippines’ performance reinforces the critiques on the business and institutional environment, despite the improvements and existing potential. For instance, Knight Frank reports that, because the institutional effectiveness in the Philippines has been upgraded, the country’s position improved in 2019 with respect to the Belt and Road Index, which ranked “66 BRI-related countries by their economic potential, demographic advantage, infrastructure development, institutional effectiveness, market accessibility, and resilience to natural disasters.” The Philippines was ranked 44th, one place higher than Myanmar. Among the ten ASEAN countries, the Philippines was ranked ninth. This shows that there remains much to be desired. The legal constraint on foreign ownership is mentioned as a major factor in the slow rollout of BRI-related investments in the Philippines (Knight Frank, 2019: 2–3,7). On the Oxford Economics’ export FDI attractiveness scorecard, which ranks ten Asian countries, Vietnam ranked first while the Philippines fifth. Consistent with previous observations, the report notes the poor infrastructure and high corporate taxes as major culprits regarding the slow trickle of FDI into the country (De Vera, 2019). As for the 2018 Belt and Road Big Data Annual Report, the Philippines was ranked 26>th and 14th among 71 BRI nations regarding investment environment and digital connectivity, respectively, while Singapore was ranked first for both indicators. Where bilateral cooperation is concerned, the Philippines was ranked 21st—the second lowest ranking among ASEAN countries.8 This reflects how the

6

Online gaming firms are authorized as Philippine Offshore Gaming Operators (POGO) in the Philippines but facilitate gambling for foreigners outside the country. Since the clients are predominantly Chinese, the workers hired by the POGO firms are Chinese. Critics have highlighted that the social cost, including, but is not limited to, trafficking and prostitution, kidnapping for ransom, and crime, outweighs the revenue generated. 7 The MOU can be found here: https://cnnphilippines.com/news/2018/11/27/philippines-chinamemorandum-of-understanding-belt-and-road-initiative.html. Accessed 31 December 2020. 8 Three ASEAN countries are listed in the top ten for investment environment, five for digital connectivity and five for bilateral cooperation.

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Table 3.1 Physical status of ODA grant-assisted projects by China and Japan, 2016–2019 Completed

Ahead of schedule

On schedule

Behind schedule

China

Japan

China

Japan

China

Japan

China

Japan

2016

–

2

–

2

–

2

1

3

2017

1

3

–

–

2

10

–

–

2018

–

4

–

–

2

7

–

–

2019

–

1

–

–

2

13

–

–

Source Author’s compilation based on data from the National Economic and Development Authority (2017, 2018, 2019, 2020)

projected warming of the Philippines–China diplomatic relationship does not necessarily translate into actual cooperation, as the latter draws from a mix of indicators. For instance, first-level indicators include policy coordination, facility connectivity, unimpeded trade, financial integration, and people-to-people bonds” (Yang & Li, 2019: 8).9

3.4 Chinese and Japanese ODA to the Philippines China is a new player in the field of ODA. The China International Development Cooperation Agency was established in 2018. Meanwhile, Japan’s ODA mechanism has been operating for decades. The Japanese International Cooperation Agency was established in 1974. The literature confirms how Japan has evolved in terms of making its aid mechanism efficient and streamlined (Jain, 2016) but China’s efforts are not to be discounted. China has been improving rapidly, partly because of the competition that Japan poses (Zhao, 2019).

3.4.1 Trends and Patterns Regarding the status of grant-assisted projects, Table 3.1 shows that Japan has the upper hand for the period. Japan’s (China’s) projects per year in 2016–2019 are 9(1), 13(3), 11(2), and 14(2), respectively. In 2019, Japan had completed one project while 13 others were on track compared to China’s two projects. In terms of grant amount and utilization in 2016–2019, Japan contributed more grants than China (Fig. 3.4). In 2018, China started catching up until it greatly exceeded Japan’s amount by 2019. However, because the utilization rate was very low, the actualization was only a very small fraction compared to that of Japan. The 9

See Yang and Li (2019) for details the indices used in the 2018 Belt and Road Big Data Annual Report: the Investment Environment Index of the Belt and Road Initiative, the Digital Silk Road Connectivity Index, and the Bilateral Cooperation Index of the Belt and Road Initiative.

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Fig. 3.4 Grant utilization rate (in %) and amount (in USD million), 2016–2019. Source Author’s processing based on data from the National Economic and Development Authority (2017, 2018, 2019, 2020)

only other time that China had better grant utilization than Japan was in 2016, but since the grant amount was relatively small, it could not compare to that of Japan. To contextualize aid flows, Fig. 3.5 is helpful. The top development partners are ranked according to their contribution during the entire period of reckoning. China is ranked eighth in the 4-year period. In 2019, its aid financing to the Philippines trailed that of four other countries (USD 590.35 million) and yielded a considerable disparity compared to top-ranked Japan (USD 8.51 billion). This disparity increased even further by the end of 2016 and 2017. Figure 3.6 likewise contextualizes the share of China and Japan within the total ODA from all development partners. We ranked the partners according to the 2019 share. The expectation was that China’s share would start increasing as a result of the pivot. The figure shows an increase but one that is not commensurate with expectations. Figure 3.7 shows the preferences of both countries regarding loans and grants. While Japan’s loans and total ODA far exceed those of China, we observe that China’s pattern as an aid partner reflects the evolution of its own program and systems. That is, in 2016 and 2017, China only had grants as aid financing. Loans picked up considerably, albeit remaining considerably below Japan’s figure, in 2018 and 2019. Interestingly, China’s grant financing was nearly as large as Japan’s in 2018 but exceeded it in 2019. In a survey conducted by the Pew Research Center, respondents from 18 countries were asked if China’s expanding economy positively affects their country for the years 2014, 2017, and 2019 (Table 3.2). The country responses were ranked according to the percentage-point change in responses from 2014 to 2019. Comparing

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Fig. 3.5 Top ODA partners ranked by total ODA, 2016–2019 (in USD million).10 Source Author’s processing based on data from the National Economic and Development Authority (2017, 2018, 2019, 2020)

Fig. 3.6 Share of ODA source in total ODA, 2016–2019 (in %). Source Author’s processing based on data from the National Economic and Development Authority (2017, 2018, 2019, 2020)

3 Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering …

59 700

9,000

8,000 600 7,000

500

400

5,000

China

Japan

6,000

4,000

300

3,000 200 2,000 100 1,000

0 Loan

Grant

Total ODA

Loan

2016

Japan 5,474.34 China

0

149.32 1.56

Grant

Total ODA

Loan

2017 5,623.67 5,168.08 1.56

0

157.07 63.60

Grant

Total ODA

Loan

2018 5,325.15 6,132.86 63.60

273.30

106.76 91.62

Grant

Total ODA

0

2019 6,239.62 8,462.07 364.92

493.08

51.91

8,513.98

97.27

590.35

Fig. 3.7 Loan net commitment and grant amount, 2016–2019 (in USD million). Source Author’s processing based on data from National Economic and Development Authority (2017, 2018, 2019, 2020)

the responses for 2014 and 2019, the Philippines was ranked third, indicating a 17percentage-point change. The jump from 2014 to 2017 reflects the warming of relations between the Philippines and China and the economic agreements that were made. Notably, from 2017 to 2019, the survey shows a 1-percentage-point decline (Pew Research Center, 2019b). There was great potential for economic cooperation during the Duterte administration compared to the previous administration, but the outcomes seemed to take longer to actualize, which affected perceptions.

3.4.2 Narratives on Aid There was great publicity surrounding Duterte’s pivot to China. When the actualization of the aid agreements proved to be low, there was no concealing the disappointment, partly due to the notion that the Philippines seemed to have reduced its defiance toward China in exchange for concessions, yet the promised agreements had not materialized. Philippine Foreign Secretary Teodoro Locsin commented during a talk at the Asia Society in New York in 2019: Yes, we sign up to this and that agreement but they hardly materialize. 10

The other ODA partners listed in the ODA portfolio are Germany/GIZ/KIW, OFID, Canada/CanDFAT, Italy, Austria, Spain/AECID, New Zealand, Turkey/TIKA, Norway/NoRad.

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Table 3.2 Percentage who say that China’s growing economy is good for their country 2014

2017

2019

2014–2019 change

Mexico

38

–

64

26

South Africa

41

–

64

23

Philippines

30

48

47

17

Brazil

39

–

55

16

Nigeria

68

–

83

15

Argentina

41

–

54

13

Japan

47

53

55

8

Turkey

24

–

31

7

Lebanon

64

–

65

1

U.S

49

–

50

1

Tunisia

66

–

66

0

Israel

62

–

61

−1

India

23

20

20

−3

South Korea

57

45

48

−9

Kenya

80

–

68

−12

Indonesia

55

49

40

−15

Australia

–

70

65

–

Canada

–

–

53

–

Note Statistically significant differences are shown in bold Source Spring 2019 Global Attitudes Survey, Q41, Pew Research Center (2019b). https://www. pewresearch.org/global/2019/12/05/chinas-economic-growth-mostly-welcomed-in-emerging-mar kets-but-neighbors-wary-of-its-influence/pg_2019-12-05_balance-of-power_2-06/. Accessed 31 March 2021.

They hardly materialize and if you would compare to Japanese investments and official assistance—[it’s] nothing. If there is such a thing as a rising China, there’s apparently a phenomenon… of a rising Japan and we’re feeling that. Not only that but military assistance. We get what…10 [military] ships? (Sabillo, 2019)

Ironically, despite Chinese loans having higher interest rates than those of Japan, they were considered favorable in the sense that they not only contributed to project financing, which Japan alone cannot fulfill, but the project processing was also expected to be faster, relative to that of Japan (“Japan has better rates for loans, but PH needs China, too to speed up infra projects: Pernia”, 2018). The perception was that the availability of Chinese loans would boost the Duterte administration’s infrastructure initiative titled Build, Build, Build (BBB). The Duterte administration seemed to have shifted from public–private partnership (PPP) to public sources (ODA

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and government budget)11 as the main source of infrastructure financing12 due to the slow rollout of PPP projects, which was attributed to delays in the bidding process and contract negotiation, among other things. These delays were linked to the processes in the public sector, which apply to projects regardless of the source of financing. Interestingly, according to a 2015 report by the Economist Intelligence Unit, the Philippines’ PPP environment was ranked seventh among Asia–Pacific countries and first in ASEAN (Ito, 2018). As it turned out, the rollout of Chinese projects has been slow, leading government officials to turn to PPP to bolster BBB (Ordinario, 2019), implying that the complementarity of ODA and PPP should have been the framework adopted from the beginning. Unmet expectations prompted Socioeconomic Planning Secretary Ernesto Pernia to describe the Chinese government’s process as slow. The Philippines’ own meticulous vetting also contributed to this slow process. This was to prevent a repeat of the controversies surrounding the Chinese projects secured during Gloria Macapagal-Arroyo’s administration (De Vera, 2020). The NBN-ZTE13 corruption scandal led to Senate investigations and the Office of the Ombudsman’s indictment of Macapagal-Arroyo and others. They were eventually cleared but the scandal left an indelible mark on the perceptions of Chinese projects. Taking a different perspective, Trinidad (2016) considers the incident as an example of the disjointedness between Chinese aid and Philippine policies. The incongruence of the orientation of Chinese aid (which developed outside the auspices of the DAC/OECD) with the Philippines’ DAC-oriented reception of foreign aid resulted in juridical gaps, making it susceptible to political scrutiny. This, combined with the domestic political dynamics in play, resulted in the cancellation of the projects. Given the great financing that the Philippines needs for its infrastructure sector that has been sluggish in carrying out adequate improvements, China seeks to make its presence felt in infrastructure through the BRI while Japan is pushing the PQI. However, the maritime conflict has aroused negative perceptions regarding their attempts to push BRI and aid projects. China’s geoeconomic rivalry with Japan is playing out in the Philippines, with the maritime dispute causing complications. Meanwhile, the Philippines’ consideration of Japan as the weightiest actor in development assistance makes it more challenging for China to gain traction in establishing its place and generating positive perceptions of its initiatives (Trinidad, 2019). In a 2018 Oxford Economics report, the Philippines was ranked last of the ten ASEAN countries for BRI-related capital flow, which comprises direct, portfolio, and official investment. Indonesia topped the tally with USD 171.11 billion compared to the Philippines’ USD 9.4 billion. Furthermore, the ten largest BRI projects in ASEAN are located in eight ASEAN countries. Only Vietnam and the Philippines 11

In some cases, public sources are used to fund the construction phase while PPP is used for the operation and maintenance phases of infrastructure projects. This arrangement is believed to speed up the initial processes (Ito 2018). 12 In the Philippines, infrastructure financing comes from public sources (e.g., taxes, ODA), PPP, and the capital market (Navarro and Llanto 2014). 13 NBN stands for the National Broadband Network of the Philippines while ZTE is a Chinese telecommunications company.

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are not listed. Nevertheless, Vietnam is second only to Indonesia in terms of the total number of BRI projects (Yan, 2018).14 Tai and Huang (2018) underscore the BRI’s potential in the Philippines but recognize the maritime dispute as a factor swaying perceptions. The study also points out Philippine foreign relations with the US and the latter’s relations with Japan as factors that influence how the infusion of foreign financing is proceeding in the Philippines. While there has been criticism of both countries’ aid initiatives with the Philippines, what makes the critiques of China more prominent, while minimizing the criticism of Japan, remains the West Philippine Sea/South China Sea maritime dispute which, in the past few years, has galvanized perceptions of Philippine sovereignty and allies (Gallardo & Baviera, 2013). With the linguistic construction of nationalism in the media (Montiel et al., 2014), the notions of threat, risk, and opportunity interact with each other in regard to China’s economic and security cooperation in the Philippines, but the latter still shapes perspectives more than the former (Pitlo, 2020). The negative views emanating from controversial, uncompleted projects, the international backlash against Chinese aid, security issues such as the maritime dispute, and domestic politics, have certainly posed challenges for bilateral relations (Pitlo & Rabena, 2019). The ambiguities in BRI project classification do not help to alleviate the trust deficit regarding Chinese projects. It is often challenging to attribute projects to BRI since the Philippine government does not have an official list containing details of the financing modalities involved. Hence, more of the same data on investment and aid do not produce a better sense of the BRI outcomes. Some analysts posit that BRI projects in the Philippines simply refer to big-ticket, China-funded infrastructure projects. Beyond tracking China’s footprint in the economy, much needed detailed comparative studies can be problematic since BRI projects in other countries allow multiple financing modalities. While the MOU is simply a declaration that signifies intentions and does not have definite provisions that affect economic cooperation, as in a free trade agreement, it remains to be seen whether more structured bilateral agreements will be considered. Where Japan is concerned, it had numerous implementation issues with ODA projects during the years 2016–2019. For four straight years, the key implementation issues included site condition/availability; procurement; processing of approvals and clearances including government/funding institution approval; budget and funds flow; design, scope, and technical; and contractor/consultant performance. Since China only had a few ODA projects, there were only a few issues mentioned. In 2019, the Binondo-Intramuros and Estrella-Pantaleon Bridges project and the Chico River Pump Irrigation Project were mentioned. In 2018, the latter was again mentioned but in relation to the processing of approvals and clearances.15 Regarding the following

14

Reports like this are informative but tend to confuse the measures. While BRI-related capital is defined, in the Philippines, BRI financing is mostly seen as infrastructure financing through loans. 15 This chapter does not conflate China with AIIB in the charts. However, given that AIIB-related projects are perceived as being strongly linked to China, I will mention in this footnote the instances

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issues, Japan faced implementation challenges in various years within the same reckoning period: the capacity of the Project Management Office and other implementing partners (2019 only); institutional support (all years except 2016); project uptake, the demand and approval of sub-projects (2018, 2019 only); legal/policy issuances (2018 only); sustainability and operations & maintenance (2016 only); inputs and costs (all years except 2016); and other implementation issues (National Economic and Development Authority, 2017, 2018, 2019, 2020).16 The domestic institutional or capacity issues related to rolling out ODA projects need to be interrogated and brought to light so that bottlenecks can be addressed, regardless of who the bilateral partner is. However, the issues with China’s projects are those that capture the public’s attention the most. The Binondo-Intramuros Bridge was a sore point when the Chinese Filipino community protested because of the ill effects on heritage sites and questions about utility. The bridge, being funded by a grant rather than a loan, partly allayed concerns that the bridge is simply a form of posturing, with the costs outweighing the benefits. Nevertheless, the government’s project vetting and preparation process was deemed suspect (Robles, 2018; Ang See & Ang See, 2019; Duarte et al., 2020; Adel, 2019). On another note, when the water crisis hit Metro Manila in 2019, conspiracy theories arose about how the crisis was being artificially induced to promote the Kaliwa Dam, a major China-funded project (Colcol, 2019; Rivas, 2019). Other issues include the onerous loan provisions that allegedly cede Philippine territory, the risk of a debt-trap, steep consultancy fees, and lack of transparency (Ignacio, 2017; Punay, 2019; Rosario, 2019; Roxas, 2019). Government agencies have attempted to dispel the criticism by explaining that the loan provisions are standard and akin to the agreements adopted in other countries (Caraballo, 2019) as well as assuring the public that the Philippines’ position is conservative, with the application of proper vetting. Officials explain that, by 2022, China’s share of total debt stock will be 4.5%, which is lower than Japan’s 9.5% share (Padin, 2019). On the other hand, Japan’s projects are often mentioned in reports with relatively positive frames and often compared with Chinese projects. For instance, the Japan International Cooperation Agency maintains that Japanese ODA projects employ local labor and Japanese technology and expertise, thereby encouraging knowledge transfer. This contrasts with Chinese projects, which tend to prefer Chinese labor and would therefore be more resistant to the notion of hiring more local workers (Valencia, 2019). The positive reports on Japan are closely linked to the long history of Japanese aid in the Philippines, which served as reparation from 1956 to 1976 for Japan’s actions during World War II. Out of over USD 1 billion, the Philippines received in the ODA portfolio where AIIB-related projects were cited as facing key implementation challenges. The AIIB Metro Manila Flood Management Project was mentioned in 2019 in relation to site/condition availability, contractor/consultant performance and inputs and costs. The same project was also mentioned in 2018 in relation to the capacity of the PMO and other implementing partners. 16 Projects cited as facing other implementation issues in the ODA portfolio for each year are excluded from the categories listed here.

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more than half, constituting the lion’s share. The bulk of the aid (60%) was spent on infrastructure projects, while 15% was spent on industry. USD 250 million in commercial loans for development went to Japanese firms’ affiliates in the Philippines (Blaise 2019:7–8). The traction that Japan gained in relating with Southeast Asia years after the war was partly due to US diplomacy (Rodriguez 2013). Due to many decades of engagement, Japan draws on the long experience of relating with the Philippines and the knowledge of institutional arrangements in the country, which are critical for implementing projects. Due to the long period of relations, Japan has been able to generate an overall positive reputation (Trinidad, 2019). Nevertheless, historically, there has been criticism in regard to projects in the sense that they have added to the debt burden owing to the focus on loans vis-à-vis grants; the tying of loans to Japanese goods, services, and standards; the social, economic, and environmental displacement of infrastructure projects; and the lack of transparency (Tujan, 2005; Trinidad, 2019; Camacho & Cuevas, 2013, Rodriguez, 2013). The corruption issue, linking Japanese ODA to Marcos, proved a great scandal in 1986, which was among many issues related to Japanese ODA that influenced efforts to initiate ODA reform (Tsunekawa, 2014; Yokoyama, 1990). These issues resulted in criticism that Japanese ODA to the Philippines heavily favored Japan’s economic and political agenda to the detriment of Philippine interests. Despite contentions in the bilateral relations in the past few years, the narrative of Japanese ODA to the Philippines is currently positive. Concerns about China, and Japan’s continuous effort to distinguish itself from China, have contributed to this. What also assists Japan’s positioning in the public’s perception is that its aid has not only a longer history in the country and is larger in magnitude, but it also more diversified across different sectors. This creates the impression that Japan is more involved in holistic development initiatives. For instance, for FY 2014–2018, the development issues that Japanese ODA covered are: quality infrastructure development for sustainable economic growth; industrial promotion and the capacity building of administrative capabilities; enhancement of law enforcement capacity through public safety/counterterrorism measures; disaster risk reduction and management; productivity improvement and high-value addition in agriculture; strengthening [the] safety net; and peace and development in Mindanao (sustainable peace in conflict-affected areas) (Inada, 2020: 3).

Infrastructure represents most of Japan’s loans while Mindanao peace and development got most of the grants. Since Japanese ODA is heavily based on loans (Fig. 3.7), however, infrastructure is still the primary sector that attracts the majority of Japan’s ODA flow (Inada, 2020). While the previous criticism underscored the need for Japanese ODA to address other aspects of development, the primacy of infrastructure persists in regard to aid flows. One aspect that deserves more elaboration is Japanese aid with respect to upgrading the maritime capacities of recipient countries in the context of enhancing its law enforcement capacity through public safety/counterterrorism measures—the third category listed among development issues that Japanese aid addresses. Trinidad (2018) argues that Japanese aid has had increasing securitization in Southeast Asia, especially in the Philippines and Vietnam. While strategic partnerships with ASEAN

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countries cultivate shared values and cooperation in the economic, social, and cultural dimensions, increased efforts have been made to provide greater assistance for safety, security and defense.17 Japan’s emphasis on shared values, i.e., freedom, democracy, rule of law, and human rights (Trinidad, 2018), is an important aspect in engendering its aid discourse. It not only encourages the notion that the Philippines and Japan are alike in aspirations, but this is also cognizant of China’s difficulty in projecting itself as ascendant in such values. All of the qualifications notwithstanding, Japan is able to promote the narrative that its ODA promotes development in a more balanced way because the Philippines does not have an existential territorial or maritime threat perception of Japan. In aligning the ODA project outcomes with the Philippine Development Plan, results matrices were generated by the National Economic and Development Authority. In 2016–2019, Japan’s project outputs were mentioned in six categories: Expanding economic opportunities in agriculture, forestry, and fisheries; Sustainable and Climate-Resilient Environment and Natural Resources; Accelerating Human Capital Development; Reducing the Vulnerability of Individuals and Families; Accelerating Infrastructure Development; and Ensuring Ecological Integrity, and a Clean and Healthy Environment. Consistent with the earlier observation, while these projects are varied, infrastructure projects received the most mentions. In China’s case, a 2017 project related to the first category was the sole mention during the same period of reckoning (National Economic and Development Authority, 2017, 2018, 2019, 2020). The websites of the embassies of China and Japan in the Philippines further illustrate the differences regarding the number and type of aid-related initiatives. The China Embassy’s website lists Sino-Philippine relations under four categories: Trade and Commerce, Political Relations, Military Exchanges, and Culture and Education. This chapter listed only items under Trade and Commerce and Culture and Education pertaining to the same reckoning period (Appendix 2.1). It is understandable that the China Embassy’s website did not emphasize ODA projects, since these are few. However, in terms of the messaging, the website could have explored positive narratives, such as those on development impact. On the other hand, the Japan Embassy’s website has a page dedicated to its ODA to the Philippines while having other links to pages about bilateral relations, culture and education, and Japan’s foreign policy. Within the page on ODA, there are numerous links leading to pages that provide various glimpses of Japanese ODA (e.g., the regional and sectoral distribution). This chapter culled only information from the page on recent projects pertaining to Duterte’s term as of the time of writing. The items listed are project-related information, which communicates the wide involvement of Japan in Philippine development (Appendix 2.2).

17

See Trinidad (2018) for more details on the five surveillance aircraft, three fast boats, and four coastal surveillance facilities, which were pledged in March 2016 (a few months before Duterte took office), January 2017, and October 2017, respectively.

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3.5 Closing Reflections With a focus on investment and aid, the preceding sections have unpacked the political, economic, and social dynamics in the narratives of Chinese and Japanese economic relations with the Philippines. Far from being exhaustive, the chapter explored a discursive emphasis involving the issues and how these are perceived. In closing, this chapter underscores two areas that are worth pondering.

3.5.1 The Importance of Understanding the Institutional Picture Improvements in investment and aid flows will ultimately depend on domestic conditions, which include the project implementation capacities and different facets of the enabling environment, allowing enterprises to operate efficiently. Regardless of the cooperative framework or whether the partner is China, Japan, or another, the FDI and ODA opportunities will be constrained when the enabling environment and implementation capacities leave so much to be desired. Getting a better purchase of the institutional picture will also allow government managers to make a clearer assessment of the actualization of projects. Frequently, bilateral or multilateral arrangements are expected automatically to translate into economic outcomes, as if signing agreements easily sets internal environments and processes into play. In this sense, unmet expectations may reveal an underestimation of how much the Philippines must clean house before it can maximize cooperation.

3.5.2 The Improvement of the Discourse Through More Information and Research When contentions exist within economic relations, especially in the case of Philippines–China relations, scrutiny arises, and the availability of information and data becomes critical in the discourse. Equally important is the availability of more research and analysis. When information and data are lacking, ambiguity, speculation, and conflation become unfortunate bedfellows. Publicly available information and data can encourage more balanced assessments of the outcomes of relations. For further research, for example, there is much more to study in terms of the impact of Chinese and Japanese FDI in the Philippines. Regional data will benefit comparative studies and generate further insights into the Philippine experience. Alternatively, research that compares the Philippine experience with BRI and PQI with the experience of its regional peers will garner insights into best practices. Where the disparities are not in favor of the Philippines, this will allow the exploration of the attendant interventions.

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Appendix 2.1: Chinese ODA to the Philippines, 2016–2021 Sino-Philippine Relations, 2016–2021 • Philippine president meets with Chinese FM on enhancing bilateral cooperation (2021-01-18) • China, Philippines jointly launch forum, award to promote bilateral relations (2021-01-18) • China, Philippines agree to strengthen cooperation on anti-pandemic efforts, economic recovery (2021-01-18) • Chinese VP meets Philippine president during basketball world cup (2019-09-24) • China, Philippines common interests “far greater” than differences: Premier Li (2019-09-24) • Xi meets Duterte on bilateral ties (2019-09-24) • China, Philippines vow to accelerate bilateral cooperation (2019-08-05) • Xi meets Philippine president (2019-04-26) • Chinese state councilor holds talks with Philippine foreign secretary (2019-03-21) • Chinese tourists top visitors in Philippine island-resort in first two months of 2019 (2019-03-19) • Generate local jobs in the Philippines: senior official (2019-03-19) • Open up a New Future Together for China-Philippine Relations (2018-11-19) • Chinese State Councilor meets Philippine foreign, finance secretaries for closer cooperation (2018-10-30) • China, Philippines pledge more efforts to maintain peace, stability in the South China Sea (2018-10-30) • Philippine president calls for closer cooperation with China on energy, infrastructure (2018-10-30) • The Second Rehab Center Aided by China’s Grant Breaks Ground in Agusan del Sur (2018-02-14) • Chinese Premier Li Keqiang Published a Signed Article in the Philippines’ Newspaper [sic] (2017-11-12) • China Donates Heavy Equipment for Marawi Rehabilitation (2017-10-27) Trade and Commerce • Full text of the report on progress, contributions and prospects of the Belt and Road Initiative (2019-04-23) • Generate local jobs in the Philippines: senior official (2019-03-19) • The Chico River Pump Irrigation Project Financed by the Chinese Government Concessional Loan Breaks Ground in Kalinga (2018-06-08) • The Second Rehab Center Aided by China’s Grant Breaks Ground in Agusan del Sur (2018-02-14) • China Donates Heavy Equipment for Marawi Rehabilitation (2017-10-27) Culture and Education • Statement on the Admission Results of the 2020 Chinese Government Scholarship (2020-09-03) • Filipino “sponge boy” bound for China with scholarship (2019-09-02) • Chinese Government Scholarship-Bilateral Program (2019-08-21) (continued)

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(continued) • Introduction to Chinese Government Scholarships (2019-08-21) • Philippine students showcase talents in “Chinese Bridge” contest (2019-05-31) • Chinese tourists top visitors in Philippine island-resort in first 2 months of 2019 (2019-03-19) • The Chinese Embassy and China International Publishing Group (CIPG) unveil the China Book Center at the University of the Philippines (2019-03-19) Source The items in the Appendix were compiled verbatim from the China Embassy in the Philippines website, http://ph.china-embassy.org/eng/zfgx/. Accessed 27 March 2021

Appendix 2.2: Japanese ODA to the Philippines, 2016–2021 This table includes ODA project information within Rodrigo Duterte’s term as of the time of writing. 2021 • Arrival Ceremony for Batch 1 of LRT-1’s 4th-Generation Light Rail Vehicles • Second Tranche Disbursement of the Post-Disaster Stand-by Loan Phase 2 2020 • Japan Turns over Irrigation System Facilities to Quezon Farmers (12-11-2020) • Virtual Hand-Over Ceremony of Water System to TCES in South Upi, Maguindanao (11-10-2020) • Ceremonial Hand-over of 425 metric tons of Rice Donation from Japan to Taal Eruption victims in Batangas (10-30-2020) • Japan’s Avigan tablets arrive in the Philippines (08-06-2020) • Ambassador Haneda witnesses the signing of 50 billion yen loan accord (07-02-2020) • Japan, Philippines Sign 50 Billion Yen Budget Support Loan (07-01-2020) • Japan inks grant aid to assist Philippine battle versus COVID-19 (06-08-2020) • Japan seals cooperation with the Philippines in two key infrastructure projects (06-08-2020) • Signing of the Exchange of Notes for the Japanese Grant Aid for Human Resource Development Scholarship (JDS) Project (06-08-2020) • Japan signs Exchange of Notes for Grant Aid of Agricultural Machinery for Sugarcane Farmers (06-08-2020) • Japan Turns over 47 rural infrastructure projects in Mindanao (03–10-2020) • Turnover Ceremony for “The Project for the Provision of Medical Fixtures for Bontoc General Hospital” under the Grant Assistance for Grassroots Human Security Projects (GGP) (03–10-2020) • Japan Provides Funding for the Commercialization of Japanese Quality Strawberries and the Promotion of Agri-Tourism in Highland through Ikaw-Ako NGO (03–04-2020) • Japan inks projects for water infrastructure and agriculture training in the Bangsamoro Region (02–24-2020) (continued)

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(continued) • Turnover Ceremony for “The Project for the Construction of Classrooms for Bonifacio Elementary School, Surigao City” under the Grant Assistance for Grassroots Human Security Projects (GGP) (02–14-2020) • Japan Provides Relief Assistance to the Philippines in Response to the Eruption of Taal Volcano (01–29-2020) • Ribbon Cutting Ceremony for the Completion of the Philippines-Japan Historical Museum Renovation (01–29-2020) • Emergency Assistance to the Philippines in Response to the Eruption of Mt. Taal (01–23-2020) • Japan Provides Funding for Sericulture in the Philippines through OISCA International (01–22-2020) 2019 • Japan Turns over Irrigation System Facilities in Narra, Palawan (12–04-19) • Japan Signed Five (5) New Grant Contracts under the Grant Assistance for Grassroots Human Security Projects (GGP) Scheme (11–26-19) • Japan Turns Over One 15 m Class High-Speed Boat to the Philippine Coast Guard (11–13-19) • Ceremonial Hand-over of 560 metric tons of Rice Donation from Japan to Typhoon Victims in Ilocos Norte and Pangasinan (10–15-19) • Inauguration ceremony for the Bitiala Center funded by the Government of Japan (10–01-19) • The Signing Ceremony for Japan-funded Agriculture Training Project in the Bangsamoro Region (09–27-19) • Japan leads the turnover of 560 metric tons of rice under the ASEAN Plus Three Emergency Rice Reserve (APTERR) (09–26-19) • Launching of Decommissioning of Moro Islamic Liberation Front Combatant and Weapons (09–10-19) • Turnover Ceremony for “The Project for the Construction of Classrooms for Catalunan Grande Elementary School in Davao City” (08–29-19) • Project for the Improvement of Equipment for Power Distribution in Bangsamoro Area (08–15-19) • Ambassador Haneda signs the Metro Cebu Project for the Septage Management (07–23-19) • Japan-funded Flood Risk Management Project in Tagoloan River Basin Inaugurated (07–10-19) • Japan Turns over Coco Coir Processing Facilities in Mindanao (07–05-19) • Japan Turns over Five Rural Infrastructure Sub-Projects in Mindanao (07–04-19) • Launching Ceremony of the Disaster Emergency Logistics System for ASEAN (DELSA) Satellite Warehouse (07–01-19) • Turnover Ceremony for “The Project for the Construction of Classrooms in Bagong Buhay Elementary School, Ormoc City, Leyte” under the Grant Assistance for Grassroots Human Security Projects (GGP) (06-20-19) • Turnover Ceremony for “The Project for the Construction of Classrooms for Manglicmot High School in Alamada, North Cotabato” under the Grant Assistance for the Grassroots Human Security Project (GGP) (06-03-19) • Turnover Ceremony for “The Project for the Construction of Classrooms for Gambar Elementary School” under the Grant Assistance for Grassroots Human Security Project (GGP) (06-03-19) (continued)

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(continued) • Groundbreaking Ceremony for LRT-1 Cavite Extension (05-08-19) • Inaugural Ceremony of the Rehabilitation of Equipment for the Project to strengthen Flood Forecasting and a Warning System in the Bicol River Basin Under Japan’s Non-Project Grant Aid (NPGA) (04-30-19) • Turnover Ceremony for “The Project for the Construction of Classrooms for Tictapul Elementary School” under the Grant Assistance for Grassroots Human Security Projects (GGP) (04-26-19) • Turnover Ceremony for “The Project for the Provision of One (1) Unit Mobile Clinic for Zamboanga City Medical Center” under the Grant Assistance for Grassroots Human Security Projects (GGP) (04-26-19) • Japan Turns Over Disaster Reduction Equipment to the Philippines (04-17-19) • LRT2 East Extension installs Japan Train System (04-16-19) • New Brochure and Video on Japan’s Development Cooperation in the Philippines (04-10-2019) • Japan Turns Over Emergency Vehicles to 20 Local Government Units in Luzon through the Grant Assistance for Grassroots Human Security Projects (GGP) (03-26-19) • Japan Signed Five (5) New Grant Contract through Grant Assistance for Grassroots Human Security Projects (GGP) (03-25-19) • Japan and Philippines exchange the Memorandum of Cooperation for Health care (03-19-19) • Japan inks projects for water infrastructure and agriculture training in Bangsamoro Region (03-08-19) • Japan Turns Over Two 12 m Class High-Speed Boats to the Philippine Coast Guard (03-01-19) • Japan-funded Metro Manila Subway Project (Phase 1) starts construction (02-28-19) • Japan and Philippines Sign Exchange of Notes to Provide JPY 3.56 billion (PHP 1.8 billion) of Grant Assistance (02-21-19) • Groundbreaking Ceremony for Japan-funded North–South Railway Project (Malolos-Tutuban) (02-15-19) • Ambassador Haneda Turns Over Gadgets to the PNP for Public Safety and Counter-Terrorism Operations (02-13-19) • Ambassador Haneda attends the Groundbreaking Ceremony for the Marawi Transcentral Roads in Marawi City (02-04-19) • Minister for Economic Affairs attends the Groundbreaking Ceremony of the Project for Community Development through Building Shelters and Livelihood Support for Rebuilding Marawi (02-04-19) • Japan Commits Yen Loan for Mindanao Road Network (01-18-19) • Japan Turns Over Disaster Reduction Equipment to the Philippines 2018 • Japan leads the turnover of 560 metric tons of rice under the ASEAN Plus Three Emergency Rice Reserve (APTERR) (09-26-19) • Japan Turns over Irrigation System Facilities in Sta. Barbara, Iloilo (12-20-18) • Ambassador Haneda visits a tilapia farm in Maguindanao (12-20-18) • Japan Supports Four (4) Projects for Peace and Development in Mindanao (12-14-18) (continued)

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(continued) • Embassy of Japan signs grant contract for Philippine-Japan Historical Museum Renovation (12-06-18) • Japan-funded New Bohol Airport inaugurated (11-28-18) • Japan Signs Yen Loans for Railway and River Improvement Projects (11-22-18) • UH-1H Parts will be turned over to the Philippine Air Force (11-07-18) • Ambassador Haneda Signs Yen Loan for MRT-3 Rehabilitation Project (11-07-18) • Unveiling Ceremony for Fukuda Doctrine Memorial Marker and Symposium (10-01-18) • Japan launches P2.12-billion HARVEST project for Mindanao farmers (09-07-18) • Turnover Ceremonies for “The Project for the Acquisition of One (1) Unit of Container Wing Van for Small Rice Farmers in Labangan, Zamboanga del Sur” and “The Project for the Construction of an Outpatient Building of Rural Health Unit in Vincenzo Sagun” under the Grant Assistance for the Grassroots Human Security Project (GGP) (09-06-18) • Turnover Ceremony of BSL 3 Container Laboratory (08-29-18) • Japan Revised the Country Development Cooperation Policy for the Republic of the Philippines (08-29-18) • Ambassador Haneda attends the Commissioning Ceremony of Two 44 m Class Patrol Vessels and the Handover Ceremony of Three High-speed Boats (08-28-18) • Turnover Ceremony for “The Construction of a Health Facility in Pateros, Metro Manila” under the Grant Assistance for Grassroots Human Security Project (GGP) (08-23-18) • Turnover Ceremony for “The Project for the Renovation of Physical Therapy Center in Parañaque City” under the Grant Assistance for Grassroots Human Security Project (GGP) (08-14-18) • Turnover Ceremony for “The Project for Construction of Barangay Health Stations and Procurement of Medical Equipment in Coron, Palawan” Grant Assistance for Grassroots Human Security Projects (GGP) (07-24-18) • Groundbreaking Ceremony for a Drug Abuse Treatment and Rehabilitation Center (DATRC) in Cavite (07-24-18) • Ambassador Haneda visits two Japan-funded projects (07-17-18) • Ambassador Haneda signed and exchanged notes for the Project for Improving Flood Forecasting and Warning System for Cagayan de Oro River Basin and the Japanese Grant Aid for Human Resource Development Scholarship (JDS) Project (06-14-18) • Turnover of Japan-funded Marabut Municipal Hall under the Programme for Rehabilitation and Recovery from Typhoon Yolanda (06-08-18) • Inauguration Ceremony of Plaridel Bypass Road Project’s Phase 2 and Groundbreaking Ceremony of the Project’s Phase 3 Under Japan’s ODA (05-15-18) • Inauguration Ceremony of Pasig-Marikina River Channel Improvement Project Phase3 Under Japan’s ODA (05-15-18) • Turnover Ceremony of the “Construction of Community Learning Center in Magallanes, Sorsogon” under the Grant Assistance for Grassroots Human Security Projects (GGP) (05-10-18) • Japan Turns over Farm to Market Roads in Maguindanao (04-05-18) • Turnover and Grant Contract Signing for “The Project for Providing Emergency Vehicles to the Bureau of Fire Protection” Grant Assistance for Grassroots Human Security Projects (GGP) (03-27-18) (continued)

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(continued) • Grant Assistance for Grassroots Human Security Project (GGP) Promotion in League of Municipalities of the Philippines—General Assembly (03-22-18) • Ambassador Haneda attends the Signing Ceremony of the Exchanges of Notes for the Waste-to-Energy Facilities in Davao City and the Budgetary Support for Marawi Rehabilitation (03-21-18) • Turnover of Japan-Funded Construction of Classrooms for Al Azhaire in Cotabato City (03-19-18) • Ambassador Haneda attends the Ceremonial Handover of Japanese Heavy Machineries to the Philippine government and the Signing Ceremony of the Exchange of Notes with the UN-Habitat for Marawi Rehabilitation (03-16-18) • Turnover of Japan-funded Lawaan Municipal Hall under the Program for Rehabilitation and Recovery from Typhoon Yolanda (03-02-18) • Japan Signs Three (3) New Grant Contract through Grant Assistance for Grassroots Human Security Projects (GGP) (02-28-2018) • Turn-over Ceremony of 20 Japan-Made Patrol Vehicles with President Duterte (02-13-2018) • Inauguration ceremony of CNS/ATM developed under Japan’s ODA (01-18-2018) 2017 • Japan Signed Five (5) New Grant Contracts through Grant Assistance for Grassroots Human Security Projects (GGP) (12-18-17) • Turn-over Ceremony of 100 Japan-Made Patrol Vehicles donated to Philippine National Police (11-29-17) • Grant Assistance for Grassroots Human Security Project (GGP) Promotion in the League of Municipalities of the Philippines - Luzon and Mindanao Cluster (11-25-17) • Turnover of Japan-Funded Construction of Training Center in Naujan, Oriental Mindoro (08-22-17) • Turnover of Japan-Funded Production and Marketing of a “Clean and Green” (Non-Wood) Charcoal Facility in Baggao, Cagayan Valley (08-17-17) • Japan Commits PHP 117 million for Scholarship Project (06-22-17) • Grant Assistance for Grassroots Human Security Projects “Provision of Emergency Vehicles for BFP” Blessing Ceremony (05-23-17) • Japan Turns Over Next-Generation Vehicle Package to the Philippines under Japan’s Non-Project Grant Aid (NPGA) (05-23-17) • Signing and Exchange of Notes for Grant Aid Projects (03-23-17) • Japan Supports Four (4) Projects for Peace and Development in Mindanao through the Grant Assistance for Grassroots Human Security Projects Though Grant (GGP) (03-13-17) • Japan Provides a Physical Therapy Center in Paranaque City (03-09-17) • Japan Provides Funding for the Japanese NGO Activities in the Philippines (03-08-17) • Commissioning Ceremony of 3rd Japan-Provided Multi-Role Response Vessel (03-07-17) • Japan Supports Four (4) Projects for Peace and Development in Mindanao through Grant Assistance for Grassroots Human Security Projects (GGP) (03-07-17) • Turnover of Japan-Funded Classrooms and a Training Room for Tagbilaran City Central School SPED Center (03-07-17) • Turnover of Japan-Funded Classroom Buildings for Bayugan National Comprehensive High School in Bayugan, Agusan Der Sur (02-27-17) (continued)

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(continued) • The Appari and Guiuan Radar Station Japan-Funded Improvement Project of the Meteorological Radar System Inaugurated (02-03-17) • Turnover of Japan-Funded Classroom Building for Ipil National High School in Ormoc City (02-01-17) 2016 • Commissioning Ceremony of 2nd Japan-Provided Mutli-Role [sic] Response Vessel (12-22-16) • Commissioning Ceremony of 2nd Japan-Provided Mutli-Role [sic] Response Vessel (12-22-16) • Japanese NGO and GOJ Start Support for Micro-Scale Farmers in Northern Luzon (12-19-16) • Grant Assistance for Grass-roots Human Security Projects “provision of emergency vehicles for bfp turnover and grant contract” (12-16-16) • Turnover of Japan-Funded Classroom Buildings for Dumadalig Integrated School in Tantangan, South Cotabato (11-29-16) • Three (3) Turnover Ceremonies of Japan-Funded Classrooms in Pagalungan, Maguindanao, Mindanao (11-22-16) • Grant Assistance for Grassroots Human Security Project (GGP) Promotion in Cotabato City for Philippine NGOs (11-22-16) • Signing and Exchange of Notes concerning Yen Loans to the Philippines (10-26-16) • Japan provides grant aid for the Improvement of the Water Supply System of the Metropolitan Cebu Water District (10-13-16) • Turnover Ceremony of a Japan-funded Two-Story “Piloti” type Processing Plant for Typhoon Yolanda- Affected Areas (10-05-16) • Turnover of Fish Processing Plants for Typhoon Yolanda-affected Areas (09-02-16) • Turnover Ceremony of the Banisilan Rubber Production, Processing and Marketing Enterprise under Mindanao Sustainable Agrarian and Agriculture Development (MinSAAD) (08-16-16) • Japan Provides Funding for the Construction of an Eco-Friendly Plant for Lemongrass Oil Distillation in Negros Occidental (08-16-16) • Turnover Ceremony of the Farm to Market Road under the Agrarian Reform Infrastructure Program III (ARISPIII) (08-02-16) • Turnover of Japan-funded equipment of the National Maritime Polytechnic under the Program for Rehabilitation and Recovery from Typhoon Yolanda (07-28-16) • Turnover of a Japan-Funded Classrooms-Evacuation Center for Almacen Elementary School in Hermosa, Bataan (07-27-16) Source The items in the Appendix were compiled verbatim from the Japan Embassy in the Philippines website, https://www.ph.emb-japan.go.jp/itpr_en/00_000051.html. Accessed 12 March 2021

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Chapter 4

Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program Dianni Risda Abstract Japan is predicted to experience population aging, resulting in slower economic growth and a lack of productive labor. However, Indonesia will experience a demographic bonus as the majority of its population begins to enter productive age, which is accompanied by problems related to unemployment and poverty. This study aims to provide a rationalization regarding the importance of strengthening the relationship between Japan and Indonesia, in light of the above reality. This research adopted a quantitative approach with a descriptive method. The respondents were Indonesian workers in Japan. The conclusions of this research were: 1) sending Indonesian workers to Japan can increase the capacity of Indonesian human resources, including the internship alumni who return to Indonesia. The internship alumni have several career options, such as doing business in the community or independently, as well as continuing to work in Japan through Toukutei Gino (specified skilled workers) or working in Indonesia for certain companies; 2) social interaction between Indonesian workers and Japanese people is a vehicle for acculturation culture as a socio-cultural reality; 3) working in Japan is an alternative route to strengthening the legal literacy of Indonesian citizens, who understand and imitate the good manners of Japanese society through their behavior. Keywords Japan · Indonesia · Diplomatic relations · Mutuality · Workers

4.1 Introduction Japan is predicted to face serious problems in the future, namely, a declining population, decreasing birth rates, and an aging population. These phenomena have an impact on the increasing number of elderly people who need care from nurses but are constrained by the lack of nurses. The declining birth rate and even the aging population serve to reduce human resources available, which is experienced not D. Risda (B) Universitas Pendidikan Indonesia, Japanese Language Education, Jl. Dr. Setiabudi 229, 40154 Bandung, West Java, Indonesia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_4

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only by the nursing industry but also by the construction industry, maintenance of nurture/nourish, agriculture, fisheries, tourism, and other fields. Ford and Kawashima (2016, p. 9) revealed that Japan and Indonesia officially collaborated to send dispatch nursing personnel by establishing the selection and training to apply Japanese language and culture during the 3-year training period. After that, the apprentice had the right to take the national exam to stay permanently in Japan. This diplomatic relationship represents solidarity and mutual benefit, because it leads to efforts to minimize unemployment in Indonesia and is also able to compensate for the shortage of productive population in Japan, because it is the country with the most elderly population in the world, as shown below (Table 4.1). The phenomenon of the reduced Japanese human resources has an impact on the Japanese national economy and socio-culture. Naturally, the Japanese government has introduced various policies and made efforts to overcome this lack of quantity. Particularly in the field of nursing and even other specialized and technical fields, the Japanese government in practice has carried out economic revitalization, which has also been strengthened through community support, with a praxis that encourages internationalization in Japanese socio-cultural life. In fact, the orientation is to save Japanese civilization, so the government actively encourages the recruitment of foreign workers for special and technical fields [Basic Manpower Action Plan 9 (Cabinet Decree))]. Efendi et al. (2015, p. 5) explain that the IJEPA Indonesia–Japan Economics Partnership Agreement (IJEPA) accommodates the right of Indonesian nurses to work in Japan, because the country experiences inequalities related to the aging society and the birth rate, which has an impact in terms of the loss of productive Japanese human resources. Table 4.1 Countries with the oldest populations (%) Country

2010

2050 (projected)

0–14

15–64

64 and over

15–64

65 and over

Japan

13.2

63.8

23.0

9.7

51.5

38.8

Korea, Rep. of

16.4

72.4

11.1

13.2

54.0

32.8

Italy

14.1

65.6

20.4

14.3

53.0

32.7

Germany

13.5

66.1

20.4

14.5

54.6

30.9

China

19.5

72.4

8.2

13.5

61.0

25.6

France

18.4

64.8

16.8

17.6

57.9

24.9

Canada

16.4

69.5

14.1

16.2

58.9

24.9

Sweden

16.5

65.2

18.2

17.3

58.1

24.6

U.K

17.4

66.0

16.6

17.2

59.2

23.6

Russia

15.0

72.2

12.8

16.9

60.0

23.1

Brazil

25.5

67.5

7.0

14.7

62.8

22.5

U.S.A

20.1

66.9

13.1

18.8

60.0

21.2

India

30.6

64.5

4.9

19.0

67.6

13.5

0–14

Source Statistics Bureau, Ministry of Health, Labour and Welfare, Japan (2014)

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The decline in population in Japan was generally caused by the baby boom phenomenon after World War II in 1947–1949, which the Japanese government responded to by implementing regulations regarding family planning so that, since 1949, many cases of abortions have been performed by families. The second babyboom phenomenon occurred in 1971–1974, during which time the Japanese people were experienced prosperity, because the city residents reached productive age, and had no bitter memories of World War II. The baby boom phenomenon in Japan in 1947–1949 occurred at the wrong time because the government was repairing the country. Family planning was implemented to reduce the birth rate, and in 1971– 1974, Japan was given a demographic bonus, but began to experience bankonka, or a majority of people who are unmarried (Widiandari, 2016, p. 33) The reality of Japanese society that is experiencing a declining population is actually exacerbated because the birth rate had not increased, as shown below (Fig. 4.1). This fact confirms that Japan has experienced a decline in population from time to time, because there is a view that the cost of raising children is so great, especially following the socio-cultural changes as a result of the transition from an agrarian to an industrial society. In fact, these socio-cultural changes have helped to change the view of the productive population towards having children, who were previously a factor to increase production, turned into consumers, because their living, education, and health costs had to be borne. The fact that the view of Japanese society regarding having generations of descendants has changed has had an impact on the accumulation of the Shoushika phenomenon, or the reality is that a decreasing number of children are born to the younger generation, who are the successors of Japanese civilization (Yamada, 2008, p. 30). The reality of Japan’s socio-cultural changes due to the population aging and the change from an agrarian to an industrial society has

Fig. 4.1 Decrease in Japanese population. Source Japan’s National Institute of Population and Social Security Research (2013)

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Fig. 4.2 Demographic composition of Japan. Source Statistics Bureau, Ministry of Health, Labour and Welfare, Japan (2014)

had an impact on the increasing need for productive labor so that Japan can remain a strategic economic power in the world. The gap between the productive and unproductive populations in Japan must be resolved through finding an alternative solution; namely, changing the paradigm of Japanese society’s thinking about the importance of having children, even though not many. As a testator family, wealth, business, culture, and family teachings are able to protect Japanese civilization, so that it will not suffer destruction due to the lack of quantity of the younger generation; but changing people’s views takes a long time and, to be effective, these efforts must be carefully implemented concurrently with the program of recruitment of foreign workers. Coulmas (Widiandari, 2016, p. 34) explains that, in 1950, the number of babies born in Japan reached 35.4% of the population, but by 2003 it had decreased to 14%, which resulted in an increase in the elderly population of 19%, causing them to become a disproportionate number of the Japanese population. The following figure presents more details (Fig. 4.2). Through these scientific predictions, it appears that Japan in 1950 had a promising birth rate, because 35.4% of its population was aged 0–14 years, thus becoming the demographic capital of Japan. In fact, in 2009, this demographic capital was confirmed to have become a productive population of 63.7%, but this was not supported by promising demographic capital, because the population aged 0–14 years or infants in 2009 was only 13.1%, so there was a decrease in the birth rate. This decrease was exacerbated by an increase in the proportion of elderly people reaching 23.3%, from the initial 4.9%. In the context of scientific predictions, the demographics of Japan in 2050 will have experienced a decline in the population; those aged 0–14 years will constitute only 9.7%, and the productive population aged 15– 64 years also will have decreased, to 51.5%, while the proportion of elderly people will continue to grow, to 38.8%. The reality that leads to this prediction becomes both a challenge and an obstacle for the Japanese people to implement an effective strategy so that this reality does not cause a multidimensional crisis.

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The demographic problem experienced by the Japanese people is inversely related to that of the Indonesian people because of the latter’s increasing population. Referring to the Japan’s Statistics Bureau report (2013), it is explained that the total population of Indonesia is 248.8 million people but that 28.55 million of them suffer from poverty, while 15.55 million people experience unemployment. The demographic problem of the Indonesian people, therefore, does not lead to inequality between the productive and unproductive population, but rather to poverty and unemployment. This situation is inversely proportional to the demographic problem facing Japanese society, which leads to inequality between parents and the productive population. Accordingly, the strengthening of diplomatic relations between Japan and Indonesia, based on solidarity and mutual benefit, is an effective solution for overcoming the problems faced by the two countries both now and in the future. Indonesia’s demographic bonus in the form of substantially increased population of productive age must be optimized as effectively and wisely as possible through fostering cooperation between Japan and Indonesia, based on solidarity and mutual benefit, to minimize the poverty and unemployment in Indonesia while at the same time filling the job vacancies that are starting to arise in Japan. Referring to a report published by the Japan’s Ministry of Education and Culture (Kementerian Pendidikan dan Kebudayaan, 2017), by 2045, Indonesia is predicted to have become the fifth strongest economic power in the world, also contributing 38% of the total productive population in the ASEAN region. Indonesia has the opportunity to exercise influence in the Asia–Pacific region, as Japan, Singapore, South Korea, China, and Australia do. The reality of Indonesia’s productive population’s potential increase needs to be managed effectively and efficiently in order to strengthen the bargaining power of the Indonesian people in international cooperation, especially with Japan, which is Indonesia’s strategic partner. Further details about the trend of the increasing population of productive age in Indonesia are presented below (Fig. 4.3). Through these data, it is confirmed that, based on the age-group categorization, the productive age population (15–65 years) will reach 185.22 million, or around 68.7% of the total population in 2045. Meanwhile, the younger unproductive age group (0–14 years) will number 66.05 million, or 24.5%, and the older unproductive age group (over 65 years) will number 18.06 million, or 6.7% of the total population. It can be concluded therefore that the dependency rate of Indonesia’s population is 45%, so Indonesia can still be categorized as a country that has a demographic bonus, because the productive age population outweighs the unproductive population. This may provide an effective solution for Japan, which is facing an aging population, through fostering bilateral relations with Indonesia based on solidity and mutual benefit. By welcoming foreigners to work in special and technical fields, it is necessary to be consistent in the implementation of the determination of population status and to reduce the burden of the procedures for smooth admission [Basic Plan for Immigration and Residence Management (Japan’s Ministry of Justice)] (Permenakertrans No.08/MEN/V12008). Indonesia has a very large population, especially its younger generation, but it is not yet optimal, because many are still unemployed due to the limited job opportunities. The opportunity now is for the immigration office, under

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Fig. 4.3 Trends of productive population in Indonesia. Source Indonesia’s Central Bureau of Statistics (2018)

the aegis of the Japanese Ministry of Justice, to create a new residence status system for foreign technical intern trainees and certain skilled workers, as these opportunities need to be optimized for foreigners who are oriented to work or gain experience working in Japan, especially after being legitimized by the government, which can facilitate access to jobs in Japan. The reality of the aging Japanese population and the increasing population of Indonesians certainly provides an opportunity to strengthen the cooperation between the two countries based on solidarity and mutual benefit as a strategic step to improve the welfare of the people of both countries, because the efforts to overcome the problems experienced by the two countries resonate deeply. The impact of this cooperation is not limited to the goal of meeting the needs of each country, such as enhancing the Japanese workforce, in the context of Indonesia’s need for job opportunities in order to minimize poverty, but is also comprehensive, because it leads to efforts to strengthen the second culture. The practice of the state, is acculturation in the fields of halal tourism, food, traditions, and beliefs, through formal diplomatic relations as well as socio-cultural-based social interactions, although in practice there remain obstacles that must be addressed wisely.

4.2 Research Purposes The aim of this research is to identify and analyze the reality of the cultural exchanges between Japan and Indonesia to study the potential for the emergence of new cultures that might develop, because the practice of acculturation is not only traditional

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but also culinary and involves personalities, as in halal tourism, belief, and other aspects. By evaluating the contribution of Indonesian workers to their country, having worked in Japan, and predicting the future of the Indonesian human resources who have already found employment in Japan, this research is important. Considering that diplomatic relations between these two countries have been established for a long time, this becomes the basis for strengthening Japan’s friendly relations with Indonesia, so that they have values that benefit both countries. This research is also a form of follow-up on Indonesia as a strategic partner of Japan so that efforts to empower and nurture the citizens of these two countries can be made, based on trust and mutual benefit as well as in response to the Japanese government’s policy, which enforces this promising diplomatic policy. Moreover, the reality of the aging Japanese population and the increasing productive population of Indonesia becomes a rational reason for strengthening the relations between Indonesia and Japan, because it is not limited to an orientation regarding labor fulfillment and job availability, but symbolizes the friendly relations between the two countries. With rationalization, it leads to comprehensive results, because it has the potential to become a vehicle for the acculturation of the two countries’ cultures, as a strategic step toward realizing long-term peace, prosperity, and diplomatic relations. The foregoing description reinforces the importance of conducting this research as a scientific effort to strengthen the diplomatic relations between Japan and Indonesia.

4.3 Research Methods This research was conducted based on a quantitative approach, with descriptive methods, the reality of quantitative research that used a positivistic approach and is number-based, designed to prove a hypothesis. Researchers are interested, therefore, in employing this approach to optimize the best Japanese cooperation with Indonesia, efforts to improve the quality of Indonesia’s human resources, as well as examining the potential for the emergence of a new culture due to the process of interaction and acculturation between Indonesian and Japanese people. Sugiyono (2010, p. 8) explains that quantitative research is a method based on the philosophy of positivism and is used to study a specific population or sample. The hypothesis of this study is “Indonesia–Japan cooperation can increase the capacity of Indonesia’s human resources”. The data collection technique employed in this research was to optimize the Likert scale because it is considered to have high capabilities, as well as a tiered score or assessment that can reflect the respondent’s knowledge or attitude towards the research problem. Sugiyono (2010) explains that the Likert scale is used to measure the attitudes, opinions, and perceptions of individuals or communities about social problems. The data analysis in this study used descriptive percentages, strengthened by journals as the primary analysis material and by books and documents as the secondary analysis materials, so that the discussion can be strengthened by scientific research.

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Table 4.2 Descriptive percentages (1)

Respondents in the category of “strongly agree”

× 100%

(2)

Respondents in the category of “agree”

× 100%

(3)

Respondents in the category of “neutral”

× 100%

(4)

Respondents in the category of “disagree”

× 100%

(5)

Respondents in the category of “strongly disagree”

× 100%

Source Nasution (2003, p. 63)

As well, the materials offer scientific recommendations to the parties involved in promoting the diplomatic relations between Indonesia and Japan, especially to the government, job training centers, religious and cultural leaders, legal practice, international relations, and other non-profit sectors. The data analysis that was strengthened by the descriptive percentages can clearly explain the attitude or views of respondents on a topic or problem, and the calculations use the Statistical Package for the Social Sciences (SPSS) application because, in quantitative research, researchers can use modern methods and representative applications to facilitate the process of data analysis. Hasan (2006, p. 22) states that descriptive percentages are practical in nature and have long been used in quantitative research, with high reliability, as follows (Table 4.2).

4.4 Perceptions of Employment for Indonesian Workers in Japan 4.4.1 Descriptive Percentages The frequency of the perceptions regarding the current field of work that matched workers’ expertise before going to Japan: 34.8% Neutral, 26.1% Strongly Agree 21.7% Agree, 13% Disagree, and 4.4% Strongly Disagree (Figs. 4.4 and 4.5). Perceptions that accurate information was provided about work/apprenticeship programs in Japan: 17.4% Neutral, 34.8% Strongly Agree, 43.5% Agree, and 4.3% Strongly Disagree (Fig. 4.6). Perceptions of respondents who had engaged in training or education before moving to Japan for work/apprenticeships 13% Neutral, 60.9% Strongly Agree, 21.7% Agree, and 4.4% Disagree (Fig. 4.7). The perceptions of the respondents that they were well trained/educated at the training venue: 17.4% Neutral, 30.4% Strongly Agree, 47.8% Agree, and 4.4% Disagree (Fig. 4.8). Perceptions that the strategies and curriculum strengthenrf the competence of prospective apprentices/workers at the most comprehensive training places: 34.8% Neutral, 8.7% strongly agree, 47.8% agree, and 8.7% disagree (Fig. 4.9).

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4% 13%

26%

35%

Strongly Agree

Agree

22%

Neutral

Disagree

Strongly Disagree

Fig. 4.4 Perceptions that current fields of work are matched with expertise before going to Japan

4% 17%

35%

44%

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Fig. 4.5 Perceptions that information is provided about the work/apprenticeship program in Japan

The perceptions that the respondents had the ability to speak Japanese before leaving: 34.8% Neutral, 21.7% Strongly Agree, 26.1% Agree, and 17.4% disagree (Fig. 4.10). The frequency of the perceptions about what motivated the respondents to go to Japan:13% Neutral, 52.2% Strongly Agree, and 34% Agree (Fig. 4.11). Perceptions that the respondents intended to work and stay for a long time in Japan: 30.4% Neutral, 26.1% Strongly Agree, 39.1% Agree, and 4.4% Strongly Disagree (Fig. 4.12). The perception that respondents had a life plan after returning to Indonesia: 4.3% Neutral, 52.2% Strongly Agree, and 43.5% Agree (Fig. 4.13). Perceptions that the respondents liked their work: 34.8% Neutral, 39.1% Strongly Agree, 21.7% Agree, and 4.4% Disagree (Fig. 4.14). The respondents’ perceptions of having an important role in doing their job: 39.1% Neutral, 17.4% Strongly Agree, and 43.5% Agree (Fig. 4.15).

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0% 7% 36%

21%

36%

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Fig. 4.6 Perceptions of respondents who attended training/education before going to work/apprenticeships

Fig. 4.7 Respondents need to trained/educated at the training venue

Perceptions that the Japanese people in the respondents’ work environment considered that the respondents’ presence was very important: 30.4% Neutral, 26.1% Strongly Agree, and 43.5% Agree (Fig. 4.16).

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Fig. 4.8 Perceptions that the strategies and curriculum strengthened the competencies of prospective apprentices / workers at comprehensive training sites

Fig. 4.9 Respondents had the ability to speak Japanese before departing Japan

Perceptions that the Japanese people in the respondents’ work environment are not concerned about the presence of the respondents: 17.4% Neutral, 47.8% Disagree, and 34.8% Strongly Disagree (Fig. 4.17). Perceptions that the Japanese people in the respondents’ work environment sometimes make derogatory remarks about them: 30.4% Neutral, 4.4% Agree, 30.4% Disagree, and 34.8% Strongly Disagree (Fig. 4.18).

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Fig. 4.10 Respondent’s had motivation to work in Japan

Fig. 4.11 Respondents intended to work and stay for a long time in Japan

Perceptions that the Japanese people in the respondents’ work environment sometimes feel angry with the respondents: 39.1% Neutral, Agree 8.7%, 26.1% Disagree, and 26.1% Strongly Disagree (Fig. 4.19). The respondents’ perceptions that they knew the cause of their employers’ anger: 39.1% Neutral, 21.7% Strongly Disagree, 26.1% Agree, and 13% Disagree (Fig. 4.20). Perceptions that respondents felt uncomfortable with their leader: 34.8% Neutral, 4.35% Strongly Agree, 4.35% Agree, 39.1% Disagree, and 17.4% Strongly Disagree (Fig. 4.21).

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Fig. 4.12 Respondents had a plan for their lives after returning to Indonesia

Fig. 4.13 Respondents liked their work

Respondents felt uncomfortable with their co-workers: 47.8% Neutral, 21.7% Strongly Disagree, 21.7% Disagree, and 8.7% Agree (Fig. 4.22). Respondents were aware of the reason they felt uncomfortable with their coworkers: 30.4% Neutral, 17.4% Agree, 21.7% Strongly Disagree, and 30.4% Disagree (Fig. 4.23). Respondents were aware of the cause of their discomfort: 30.4% Neutral, 4.4% Strongly Agree, 26.1% Agree, 17.4% Disagree, and 21.7% Strongly Disagree (Fig. 4.24). Respondents believe the company/leader where the respondent works respects their rights: 30.4% Neutral, 17.4% Strongly Agree, 43.5% Agree, and 8.7% Disagree (Fig. 4.25).

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Fig. 4.14 The respondents felt they had an important role in doing a job

Fig. 4.15 The Japanese workers in the respondents’ Work Environment regarded the respondents’ presence as important

Regarding whether the respondents had the right to worship, eat, and take leave: 43.5% Neutral, 21.7% Strongly Agree, 30.4% Agree, and 4.4% Disagree (Fig. 4.26). Respondents felt that having privileges made them uncomfortable: 69.6% Neutral, 13% Disagree, 8.7% Strongly Disagree, 4.35% Strongly Agree, and 4.35% Agree.

4.4.2 Discussion The descriptive percentage Fig. 4.7 confirmed that the environment and labor policies for Indonesian workers in Japan are already categorized as good, because

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Fig. 4.16 Japanese workers in the respondents’ work environment are not concerned about the respondents’ existence

Fig. 4.17 Japanese workers in the respondents’ workplace occasionally make derogatory remarks about the respondents

the respondents agreed with the positive statements available on the Likert scale that the researcher compiled, so this fact is descriptively successful in proving the researcher’s hypothesis, that “cooperation between Indonesia and Japan can improve the quality of Indonesian human resources”. It is scientific and representative, and will be analyzed in depth through research discussions. The descriptive presentation also states that Japan’s policy regarding foreign workers, especially Indonesian citizens, after accommodating human rights, needs to be logical and rationalized to

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Fig. 4.18 Japanese workers in the respondents’ work environment sometimes become angry at the respondents

Fig. 4.19 Respondents know the causes of their employers’ anger

improve diplomatic relations between Indonesia and Japan. Especially in the descriptive presentation, work practices or apprenticeships that are carried out by Indonesian citizens not only have an impact on improving the skills of Indonesian citizens, but also their discipline and commitment, so that all tasks are carried out effectively and efficiently. Based on the descriptive percentage Fig. 4.10, it is emphasized that there are various positive benefits that can be obtained if the government increases the quota of Indonesian workers who go to Japan because it prioritizes skills and character.

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Fig. 20 Respondents’ feel uneasy with their leader

Fig. 4.21 Respondents of feel uneasy with colleagues

Moreover, the reality of mutual need means that Japan needs foreign workers, especially from Indonesia, because of the phenomenon of its aging population. Indonesia, meanwhile, needs employment so that poverty does not occur due to its increasing productive population, so that efforts to overcome these two problems can be based on cooperation with Japan in the spheres of the economy and employment, cooperation that needs to be based on solidarity and mutual benefit. Avivi and Siagan (2020, p. 50) explained that the IJEPA agreement is proof of the strong relationship between Indonesia and Japan because it was established a long time ago, and Japan

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Fig. 4.22 Respondents were aware of their reasons for feeling uneasy with their colleagues

Fig. 4.23 Respondents knew the cause of their discomfort

has consistently been one of the biggest investors in Indonesian development, based on brotherhood and mutual cooperation if there are problems. in either country. Through the descriptive percentage Fig. 4.24, it is emphasized that the cooperation between Japan and Indonesia is based on human rights and has increased the capacity of Indonesia’s human resources, especially after the implementation of the IJEPA or the Indonesia–Japan Economic Partnership Agreement, as an effort to simplify the bureaucratic, administrative, and praxis mechanisms of cooperation between the two countries, especially in the fields of the economy and manpower. This is because

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Fig. 4.24 The company/head of the company where the respondent works has respected their rights

Fig. 4.25 There is respect for respondents’ right to prayer, food, and taking leave time

the Japanese government guarantees to increase the capacity of Indonesia’s human resources through making efforts to hone both soft and hard skills, cultural training, and Japanese language for Indonesian citizens who are interested in registering for work in Japan. This confirms that the Japanese government respects human beings according to their nature, through accommodating programs to improve the quality of human resources, even though they are not Japanese citizens. Wiryawan (2017, p. 640) explained that Japan truly appreciates Indonesian workers, with evidence of providing guarantees to improve the quality of Indonesian human resources. This

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Fig. 4.26 Having privileges makes the respondents uneasy

is manifested through academic, laboratory, and even activist strategies, which have a real impact on the Training Institute (Lembaga Pelatihan Kerja, hereafter LPK) participants and offer various health and safety guarantees. This is not only based on the IJEPA agreement, but also through the latest, more specific Gino Jisshusei (foreign interns) and Tokutei Gino (specified skilled workers) programs, because these agreements and conditions provide clear qualification standards for foreign workers who wish to gain experience working in Japan. Gino Jisshusei is the foreign skill training system that aims to transfer skills, technology, and knowledge to developing countries in order for Japan to play a role as a developed country and develop in harmony with the international community. The purpose is to cooperate regarding “human resource development”, which is responsible for the economic development of the country, while Specified Skill Worker is a residence status that is applicable to foreigners who work in jobs that require considerable knowledge or experience regarding Specified Industry Fields. The system related to this residence status based on “specific skills” aims to respond to the growing labor shortage among small and medium-sized enterprises, even if efforts are made to improve productivity and secure domestic human resources. In industrial fields, where it is difficult to secure human resources, a Japanese company will accept foreigners who have a certain level of expertise and skills and are ready to work (JITCO, 2019). Ogawa (2011, p. 148) states that courses and training are provided through Gino Jisshusei so that foreign workers do not experience culture shock, because working in Japan requires individuals who pay attention to detail, are agile, disciplined, and professional, especially Gino Jisshusei. In general, Gino Jisshusei and Tokutei Gino differ, especially in the substance of the program and the rights people receive, because Gino Jisshusei accommodates foreign workers for internships or practices

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in Japan without special skills. Meanwhile, Tokutei Gino is a program for foreign workers in Japan who have special expertise so, they receive more rights and even tend to be equated with native Japanese workers. Based on the descriptive percentages Figs. 4.6 and 4.9, it is emphasized that (1) Prospective apprentices or workers from Indonesia feel educated while doing job training or apprenticeships and other support training, such as learning Japanese language and culture at the job training center, (2) Their rights are guaranteed and taken care of as prospective apprentices with regard to insurance, facilities, and income by a work training center that has received an operating permit from the Director-General of Binalantas, the Ministry of Manpower. Referring to Permenakertrans No. 08/MEN/V12008 Regarding Licensing Procedures and the Implementation of Apprenticeships Abroad, it was emphasized that apprentices obtain rights, such as guidance from instructors, guaranteed internship agreements, occupational safety, health facilities, an allowance, social security, and internship certificates. This reflects the importance of professionalism and qualifications regarding prospective Indonesian apprentices or workers who will have a career in Japan. Based on the descriptive percentages, it was emphasized that the quality of work training centers is an important factor in the formation of the quality of Indonesian apprentices so that Japanese companies are interested in them. Pitoyo (2006, p. 43) explained that Indonesian apprentices could be trained through the Manpower Office and the LPK or sending organizations (SO) under the new program refer to the organizations/agents that can mediate job applications related to technical internship training from people who wish to become apprentices on behalf of Japanese regulatory bodies and fulfill the requirements set out in Article 25 of the Regulation (JITCO, 2019). The Technical Apprentice Training Program is carried out in accordance with the provisions of the Immigration Control and Refugee Recognition Act (Law No. 319 of 1951, Immigration Control Act) that is applicable in Japan and its legal basis but is linked to the latest provisions of the technical apprenticeship program, namely, the Technical Apprentice Training Act Program and related regulations in force, and most provisions under the Immigration Control Act become provisions of the Technical Apprentice Training Act (JITCO, 2019). Training through the state-subsidized Disnaker made the competition even fiercer, so that prospective apprentices can take advantage of the LPK or SO (Sending Organization) massively, even though at a high cost, but after that, they can earn income in Japan independently. LPK or SO, Okuridashi Kikan is a non-governmental organization that serves as a training forum for prospective apprentices which will then be accepted by the accepting organization (AO) or Ukeire Kikan in Japan, which is expected to become a praxis of the democratization of apprenticeship opportunities in Japan, so that it can be enjoyed by interested Indonesians. The accepting organization is a Japanese nonprofit juridical person that engages in the business of supervising the training based on a license to supervise pursuant to the prevailing laws and regulations of the government of Japan. On the basis of the descriptive percentages shown in Fig. 4.8, it was emphasized that prospective apprentices or Indonesian workers in Japan, the approaching model, and the LPK or SO curriculum to train apprentices were able to improve the soft as well as hard skills related to apprenticeship work. This reality

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is positive, but the cost of apprenticeship training tends to be expensive and burdensome for prospective apprentices, who cannot afford it. Bernadetta (2017, p. 432) revealed that increasing the capacity of the prospective Indonesian apprentices to Japan through the privately owned LPK has more expensive financing, they are not assisted by state subsidies. So that finance is not burdensome, the role of the government in controlling and managing LPK needs to be optimized to create accountability and access for all prospective apprentices. Basically, the capital that the prospective apprentices spend through the LPK or SO channel will quickly return, not assisted by additional financing. Prospective apprentices should take the view that it is not only capital that must be returned, but the apprenticeship is also a means of increasing knowledge and acquiring attitudes, and personal skills as a provision for a future career. For clarity, the procedures for participating in an apprenticeship program in Japan for interested Indonesians will now be briefly described, especially through private LPK or SO(Fig. 4.27). Basically, Indonesian citizens are interested in accessing internships in Japan as part of both the Gino Jisshusei and Toukutei Gino programs. They can take advantage of public channels, through the Office of Manpower (Disnaker), at a relatively low cost, despite the intense competition, and can take advantage of private channels through LPK or SO. In this study, the private LPK and SO pathways will be elaborated further, because they are very popular with prospective apprentices in Japan and serve as a form of the democratization of the apprenticeship opportunities in Japan. Selection through LPK and SO is less strict than through the Manpower Office (Disnaker). Although it is more expensive, it is more desirable. This is because it is more convenient than using the Disnaker route. Suyono (2017, p. 76) states that the existence of private LPK is an alternative for Indonesians who are interested in accessing an apprenticeship in Japan, because the requirements, opportunities,

Premedical

Registration

Filing

Survival Test (height, weight, body proportions)

Basic Mathematics Test

Japanese Language Education (1-3 months)

Physical Test (run, push up, sit up)

Practical Work Test

Interview

Departure

Centralized Training (estimated 3 months)

Medical Checkup

Fig. 4.27 General procedure for the selection of prospective apprentices to go to Japan. Source Developed by author. Hosogaya (2021)

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and training are less complicated than those of Manpower (Disnaker), but they pay more attention to the qualifications of prospective apprentices. In Permenakertrans No. 08/MEN/V12008 concerning Licensing Procedures and the Implementation of Internships Abroad, it is explained that the general procedures for becoming an intern abroad include: (1) recruitment, (2) selection, (3) learning and training, and (4) departure. In the context of more specific procedures, through private channels, between LPK or SO on AO, are: (1) registration, (2) filing, (3) premedical, (4) Japanese Language Education (approx. 3 months), (5) basic math test, (6) fitness tests (height, weight, body proportions), 7 physical tests (running, push-ups, sit-ups), (7) practical work tests, (8) interviews, (9) medical examinations, (10) centralized training (estimated 3 months), and (11) departure. Regarding the costs, each LPK and SO has different standards, but through government supervision, and evaluation that is passed through Permenaketrans No. 08/MEN/V12008, it is estimated that an average training cost at LPK or SO is between Rp. 20,000,000.00 and 35,000,000.00. There must be LPKs whose training costs are lower, but for LPKs that are more expensive than expected, the role of the government can be seen in imposing strict sanctions for revoking both LPK and SO’s business licenses. The various internship costs are displayed in the following Table 4.3. Not only do individuals receive positive benefits, such as soft and hard skills and even the abundant wages offered after finishing working in Japan, but also this capacity can be optimized to advance the Indonesian economy, because it can become capital for funding private employment opportunities through entrepreneurship, thus producing independent citizens. Wood (2018, p. 5) explained that Japanese society is based on the characteristics of discipline, a positive character, and a strong mentality in engaging in a business-based industry and technology, so that it has an impact on the strength of the Japanese economy and even changes in employee behavior at the Japanese company. Based on the description of the presentation, it was emphasized that the behavior and competence of the Indonesian human resources working for Japanese companies has changed, which is expected to have a positive impact on the progress of the Indonesian nation, especially since Japan has long-established, international-quality companies, such as Mitsubishi, Sumitomo, Toyota, and Honda. The descriptive percentages shown in Fig. 4.14 emphasize that Indonesian workers have an important role in working in Japanese companies, so a logical rationalization is required to strengthen the cooperation between Indonesia and Japan. This reality is inversely proportional to the conditions experienced by TKI in Saudi Arabia, because the situation there tends to lead to oppression and violence under inhumane conditions. The frequent reality of oppression, torture, rape, and inhumane acts experienced by Indonesian workers in Saudi Arabia is generally caused by a conservative view that workers are slaves (Puspitasari, 2016, p. 215). Even though their jobs are only as workers, ideally, there is a strong intention to view this profession as the same as other professions, so workers need to be respected and treated the same as other human beings, regardless of their nationality. This striking difference needs to be followed up by the Government of Indonesia, through both the protection of Indonesian labor laws and a review of the cooperation agreements with countries that do not guarantee the rights of Indonesian workers,

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Table 4.3 Differences in training costs at LPK and SO Differences in Training Costs at LPK and SO COST OF DEPARTURE TO JAPAN The following are the differences in the cost of departure to Japan from different sending agencies (sample cost data from several SOs) Name of SO (Sending Agency)

Cost of departure

Educational facilities

Jobs in Japan

Location of Employment SO contract

Hamana

Rp. 30,000,000

Dormitories and meals are provided

Food packing; caregiver

Bandung

(1) 1 year (2) 3 years

Os Rp. 15,000,000–30,000,000 Dormitories, Agriculture, Jakarta and (1) 1 year Selnajaya Meals, and Plantation, and Bandung (2) 3 years training at automotive LPK Bandung Komatsu Training Center

Rp. 25,000,000

Dormitories, meals, and drinks are self-financed

Electronic, Food Packing Caregiver, etc

Bandung

(1) 3 years

Baskoro

Rp. 23,050,000

Dormitories, meals, and srinks are provided

Manufacturing, Yogyakarta (1) 3 years CNC (Computerized Numerical Control), pressman, and welder (Engineering)

MMI

Rp. 30,000,000

Dormitories, meals, and srinks are provided

Manufacturing, Bandung construction, food processing, nursing

Duo Sobat

Rp. 20,000,000–30,000,000 Dormitories and meals are provided

(1) 1 year (2) 3 years

Construction, Majalengka (1) 1 year manufacturing, (2) 3 years nursing, etc.,

Source LPKKappajuku (2019)

and it is necessary to strengthen cooperation with countries that guarantee their labor rights and even increases their capacity as workers, as in Japan. The descriptive percentages in Fig. 4.25 confirm that Japanese leaders or companies highly respect the human rights and beliefs of Indonesian workers, so the government needs to fulfill the labor rights before implementing work practices, especially in Japan, related to both offering a living wage and strengthening soft and hard skill competencies. Moreover, the reality of the qualifications of Indonesian human resources is problematic, because the Japanese government places great emphasis on skills, but this can be resolved through job training programs organized by the Indonesian and Japanese governments, such as through the Ishizuka courses and training institution. Ratna (2015, p. 25) stated that Japan highly values expertise and skills so that the

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competitiveness of human resources in Japanese companies is high. This will motivate Indonesian workers to improve their skills, which will lead to excellence and competitiveness among the human resources. The descriptive percentages in Fig. 4.22 show that the respondents feel comfortable about doing their jobs in Japan, so they may be able to expand their social interactions and increase their capacity to succeed, especially given the availability of the Gino Jisshusei program which molds foreign workers to take up internships or jobs in Japan, even if they lack certain skills, because the concept is to provide training first. The Tokutei Gino program provides more opportunities for foreign workers who have specific skills or expertise to embark on a career in Japan. Milly (2007, p. 5) revealed that the Gino Jisshusei program is a policy of recruiting foreign nationals for internships or jobs in Japan, for a period of three years. Through this program, the apprentices are trained in how to adapt to Japanese work culture and Japanese society. The respondents stated, through descriptive percentages in Fig. 4.22, that there is a need for a logical rationalization for the government to increase Indonesia’s cooperation with Japan, especially after the implementation of the Tokutei Gino policy in the industrial sector, as shown below (Fig. 4.28). Fig. 4.28 Industry Sector for Tokutei Gino. Source Ministry of Foreign Affairs of Japan (2019)

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In the descriptive percentages in Fig. 4.13, it is emphasized that discipline is an important asset when doing a job, because Japanese society demands a high degree of discipline in achieving work goals so, when workers are undisciplined, they will receive a warning from their superior to enable them to improve and be able to fit into the traditional Japanese work environment. Basically, this mental, professional, disciplined, and careful work needs to become habitual in the daily life of Indonesian workers. When they return to Indonesia, this mentality needs to be implemented across Indonesian society, through entrepreneurial efforts, or opening a work training center, so that Japanese companies are interested, because cooperation between Indonesia and Japan focuses on the manufacturing, textile, and labor industries. Mursitama and et al., (2019, p. 116) explained that Indonesia’s economic cooperation with Japan is basically directed at industries, such as manufacturing, textiles, and labor, whose companies operate both within Indonesia and directly in Japan. Through the descriptive percentages in Fig. 4.15, it is certainly emphasized that Indonesian workers have an important role at work and are able to adapt to work with Japanese citizens, so this reality becomes social capital for realizing an Indonesian national movement that can adapt to modernization but does not abandon culture as a national identity. This model has basically been applied by Japanese society. Fatonah (2017, p. 132) stated that Japan is able to collaborate between modernization, technology, and culture so that Japanese values, traditions, and culture continue to exist today. This view of life becomes social capital for Japan to develop, protect the welfare of its people, and become an example for other countries. The descriptive percentages in Fig. 4.26 highlight that Indonesian workers feel respected by having privileges in terms of their rights even though they are in a minority, such as the right to worship, receive paid leave, and rest. The reality regarding the ability of Indonesian workers to speak and communicate in Japanese is a serious concern for the government because, according to Fig. 4.6, the respondents feel neutral about their Japanese language skills. To improve the quality of Indonesian human resources, especially those working for Japanese companies so that they can work effectively and efficiently, the Indonesian government needs to strengthen their Japanese language ability, because the ability to speak Japanese will facilitate communication, foster mutual respect, and even help to nurture more effective emotional relationships. Burress and Peters (2015, p. 12) stated that the ability to speak Japanese will facilitate communication with Japanese people. Learning Japanese culture, work ethics, and skills to harmonize culture with modernization will be the main capital, making Japanese teaching demanded by several countries. In Figs. 4.16 and 4.17 emphasize that native Japanese leaders and employees consider it important to respect the existence of Indonesian workers in Japan in order to make them feel comfortable. This reality confirms the potential for the realization of diplomatic relations between Indonesia and Japan based on solidarity and mutual benefit. It is not limited to increasing the capacity of Indonesia’s human resources through working practices in Japan, but also accommodates the efforts to strengthen the solidarity between countries. Prameswari (2016, p. 82–83) revealed that Japan helped during the tsunami in Aceh and Indonesia helped during the Japanese tsunami,

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which solidarity is proof that the level of relations between Japan and Indonesia is not only pragmatic but also that they became brothers when President Soekarno opened diplomatic relations with Japan in 1958. This spirit ideally needs to be strengthened, especially in today’s modern era, where the needs and challenges of Japan and Indonesia are increasingly dynamic and complex, both to meet the needs of life and to improve the quality of life for Indonesian human resources so that they are superior and competitive. The logical reason is to strengthen the emotional and professional relationship between the two countries. Through this argumentative information, it is emphasized that the relationship between Japan and Indonesia is based on solidarity and mutual benefit, because it has been going on for a long time and leads to an increase in the capacity of Indonesia’s human resources. Because Japanese society is facing an aging population, and Indonesian people are heading for a demographic bonus, the potential for unemployment increases. Leading to poverty, due to a lack of employment opportunities, there is certainly a logical rationalization for strengthening the cooperation between the two countries. As a developed country, Japan needs a young, quality workforce and, as a developing country, Indonesia needs to increase the capacity of its younger generation so that Japan’s and Indonesia’s interests can be harmonized. This reality is social capital for obtaining comprehensive benefits from fostering the diplomatic relations between Japan and Indonesia, which are based on solidarity and mutual benefit, which will not only improve the quality of Indonesia’s human resources but also lead to acculturation in various socio-cultural aspects. Empowering internship alumni in Japan is a strategic step toward improving the quality of Indonesian human resources, who have worked in Japan, to realize economic empowerment and community MSMEs (Micro, small and medium enterprises). Efforts to empower internship alumni or Indonesian workforce alumni in Japan can be carried out based on several concepts, which researchers claim are relevant and even capable of having a significant impact. Fadilah and Fakhruddin (2019. p. 50) revealed that in 2014, the number of Indonesian apprentices migrating to Japan reached 3779, which rose further in 2018 to 6171. During that period, 27,311 Indonesian citizens had participated in the apprenticeship program in Japan. The fact is that the selection and training process for prospective Japanese apprentices is very complex, which affirms that the Indonesian internship alumni in Japan have a promising capacity. This process describes several models regarding the continuation of the career of Indonesian internship alumni who have returned to their homeland or continue to work in Japan. This is because the Gino Jishussei system can accommodate it. The model for the continuation of the internship alumni’s career in Japan is as follows: (1)

Ikatan Pengusaha Kenshusei Indonesia (IKAPEKSI) KAPEKSI is generally a community or association of alumni of Indonesian interns or workers in Japan who continue their careers as businessmen in Indonesia, so IKAPEKSI is a vehicle for businesspeople to start and develop a business so that it will last a long time and can adapt to the needs of society. Referring to IKAPEKSI’s Articles of Association and Bylaws, in Articles 3 and

106

(2)

(3)

(4)

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4, it is emphasized that the IKAPEKSI organization is oriented toward guiding and expanding business relationships in order to create a business system capable of changing in dynamic, complex times. The presence of IKAPEKSI confirms that former Indonesian workers in Japan have an awareness and independence in advancing the Indonesian economy through the community so that they have various advantages. Entrepreneur or Independent Businessman It is acceptable to engage in business or entrepreneurship independently, because these activities are guaranteed by the Indonesian state, which helps them grow the economy of Indonesia and even creates jobs. Financial support and valuable experience after completing an apprenticeship or working in Japan is a logical reason for doing business or entrepreneurship. Oktoriza et al. (2018, p. 282) explained that, after apprentices from Japan returned to Indonesia as alumni, the majority of them opened businesses that were supported by the knowledge, skills, attitudes, and even finances gained from their internship in Japan. Their businesses include tours and travel, catering, livestock, batik, and fisheries. This reality confirms that the apprenticeship program has not just a limited impact in terms of earning a living, but also provides experience and provisions to continue life, because the Ministry of Manpower and Transmigration (Natsir, 2014, p.132) revealed, in 2013, that as much as 70% of the Indonesian intern alumni from Japan return to their homeland and become businesspeople. Continuing a Career in Japan The Japanese government’s policies regarding employment, both Gino Jisshusei, and Toukutei Gino, provide opportunities for job renewal in Japan. Because Gino Jisshusei is an apprenticeship policy in Japan, without having indepth, special expertise, the contract lasts only three years. Only after analyzing progress can it be seen whether an apprentice will qualify for a new work contract as Toukutei Gino or not. Toukutei Gino are given more rights because it is a work contract for skilled foreigners who work in Japan and follow the procedures and requirements, so that they can get a visa to obtain a permission to stay for an extended period in Japan, depending on the contract with the company rather than the state. After implementing the Toukutei Gino policy (recruitment of skilled foreign workers) in April 1, 2019, Gino Jishussei had the opportunity to continue their career in Japan as Toukutei Gino but had to complete their apprenticeship period well, as recommended by the relevant company (Hamaguchi, 2019, p. 5). Continuing a career with Indonesia’s companies Internship alumni to Japan have experience and skills. It is possible to be glimpsed by companies in Indonesia, especially those owned by Japan. This is because their capacity has already been tested. Natsir (2014, p.132) stated that former Indonesian apprentices to Japan are mostly in demand by various industrial companies, such as machinery, electricity, manufacturing, automotive, construction, and textiles because they have expertise that is useful in advancing to related companies. This opportunity is a blessing for internship

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alumni who have qualified expertise, but the Indonesian government hopes that internship alumni will not return to their homeland only to become workers but will also start business, in order to foster the growth of the country’s economy and create jobs. Expertise is gained along with valuable experience that needs to be exploited in order to improve the standard of living of individuals and the surrounding environment, even though not full-time businesspeople, because it is accompanied by working for certain companies. It is not a problem, with rationalization guaranteed by the state, but, at a minimum, contributes toward opening up jobs, so that it is useful for others.

4.5 Perceptions Regarding Japanese Socio-Culture Among Indonesian Workers Working in Japan 4.5.1 Percentage of Descriptive Results The respondents’ perceptions about having a desire to stay a long time in Japan and obtain permanent residence was 39.1% Neutral, 34.8% Agree, 17.4% Strongly Agree, and 8.7% Disagree (Figs. 4.29 and 4.30). The frequency of the respondents’ perceptions about having an opportunity to mingle with Japanese people was 34.8% Neutral, 56.5% Agree, 4.35% Disagree, and 4.35% Strongly Disagree (Fig. 4.31). The frequency of the respondents’ perceptions of fairly good environments and activities was 39.1% Neutral, 34.8% Agree, 17.4% Strongly Disagree, and 8.7% Disagree (Fig. 4.32).

Fig. 4.29 Respondents desire to stay a long time in Japan and obtain permanent residence

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Fig. 4.30 Respondents’ perceptions of having an opportunity to mingle with Japanese people

Fig. 4.31 Respondents’ perceptions of fairly good environments and activities

The frequency of the respondents’ perceptions about having many networks for interacting with Japanese people was 47.8% Neutral, 8.7% Strongly Agree, 26.1% Agree, and 17.4% Disagree (Fig. 4.33). The frequency of the respondents regarding having temporary residence in Japan was 26.1% Neutral, 8.7% Strongly Agree 8.7%, 56.5% Agree, and 8.7% Strongly Disagree (Fig. 4.34).

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Fig. 4.32 Respondents’ perceptions of having many networks for interacting with Japanese people

Fig. 4.33 Perceptions of the respondents of having temporary residence in Japan

The frequency of the respondents’ perceptions regarding living with Japanese people was 43.5% Strongly Disagree, 39.1% Disagree, and 17.4% Neutral (Fig. 4.35). The frequency of the respondents’ perceptions regarding living in special dormitories for Indonesians was 21.7% Neutral, 13% Strongly Agree, 39.1% Agree, 13% Disagree, and 13% Strongly Disagree (Fig. 4.36). The frequency of the respondents’ perceptions about having a close relationship with their Japanese colleagues, even if they are just friends at work, or even spending

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Fig. 4.34 Perceptions of the respondents of Living with Japanese people

Fig. 4.35 Perceptions of the respondents about living in special dormitories for Indonesians

time together outside work, it was found that the respondents feel close to them but only enjoy eating, cooking, vacationing, and watching movies together or even not greeting each other, was 43.5% Agree, 21.7% Neutral, 21.7% Disagree, and 13% Strongly Agree (Fig. 4.37). The frequency of the respondents’ perceptions about feeling pressure from their leaders outside the work context was Neutral, 4.35% Strongly Agree, 4.35% Agree, 43.5% Disagree, and 17.4% Strongly Disagree (Fig. 4.38).

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Fig. 4.36 Respondents’ perceptions of having a close relationship with their Japanese colleagues

Fig. 4.37 Perceptions of the respondents regarding whether they feel any pressure from their leaders outside the work context

The frequency of the respondents’ perceptions about the people around them in their workplace was 30.4% Neutral, 26.1% Agree, 26.1% Disagree, 13% Strongly Agree, and 4.4% Strongly Disagree (Fig. 4.39). The frequency of the respondents’ perceptions about actively participating in social activities in the environment was 47.8% Neutral, 26.1% Agree, 17.4% Disagree, and Strongly Agree 8.7% (Fig. 4.40).

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Fig. 4.38 The perceptions of the people around the respondents

Fig. 4.39 Respondents’ perceptions of participating in social activities in the environment

The frequency of the respondents’ perceptions about feeling motivated to improve the lives of those in their surrounding community was 43.5% Neutral, 26.1% Agree, 13% Strongly Agree, 13% Disagree, and 4.4% Strongly Disagree (Fig. 4.41). The frequency of the respondents’ perceptions about having a role in the activities in their environment was 52.2% Neutral, 16.1% Agree, and 21.7% Disagree (Fig. 4.42). The frequency of the respondents’ perceptions regarding whether they received a positive response from the community was 47.8% Agree, 34.8% Neutral, 13% Disagree, and 4.4% Strongly Agree (Fig. 4.43).

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Fig. 4.40 Respondents’ perceptions about having the motivation to advance the life of the surrounding community

Fig. 4.41 Respondents’ perceptions about having a role in the activities in their environment

The frequency of the respondents’ perceptions regarding showing their identity to the surrounding community was 43.5% Agree, 43.5% Neutral, 8.7% Disagree, and 4.3% Strongly Disagree (Fig. 4.44). The frequency of the respondents’ perceptions about the surrounding community knowing their identity was 43.5% Neutral, 39.1% Agree, 8.7% Strongly Disagree, 4.35% Strongly Agree, and 4.35% Disagree (Fig. 4.45).

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Fig. 4.42 Perceptions of the respondents that their existence receives a positive response from the community

Fig. 4.43 Respondents’ perceptions about showing their identity to the surrounding community

The frequency of the respondents’ perceptions about Japanese people trying to get to know the respondents was 30.4% Neutral, 30.4% Disagree, 26.1% Agree, and 13% Strongly Agree (Fig. 4.46). The frequency of the respondents’ perceptions regarding whether Japanese society does not care about the existence of respondents was 47.8% Disagree, 30.4% Neutral, 8.7% Agree, 8.7% Strongly Disagree, and 4.4% Strongly Agree (Fig. 4.47).

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Fig. 4.44 Perceptions of the surrounding community knowing the respondents’ identity

Fig. 4.45 Perceptions of Japanese society trying to get to know the respondents

The frequency of the respondents’ perceptions about whether Japanese society supports the adaptation of the respondents to the Japanese socio-cultural environment was 39.1% Agree, 39.1% Neutral, 8.7% Strongly Agree, 8.7% Disagree, and 4.4% Strongly Disagree (Fig. 4.48). The frequency of the respondents’ perceptions about Japanese society displaying negative attitudes toward them was 56.5% Disagree, 21.7% Neutral, 17.4% Strongly Disagree, and 4.4% Strongly Agree.

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Fig. 4.46 The respondents’ perception of Japanese society not caring about respondents’ existence

Fig. 4.47 Perceptions that Japanese society supports the respondents’ adaptation to the Japanese socio-cultural environment

4.5.2 Discussion The descriptive percentage shown in Fig. 4.30 emphasizes that the Japanese sociocultural environment positively impacts on the ease with which Indonesian citizens can interact with and adapt to the Japanese socio-cultural environment. The descriptive percentages shown in Fig. 4.42 emphasizes that there is a potential for cultural acculturation between Indonesia and Japan. This potential is a strategic step toward

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Fig. 4.48 The Public’s perception of the respondents

improving the diplomatic relations between the two countries and preserving their traditions and culture in today’s modern era. Culture is an important factor for collaboration among all countries, especially Indonesia and Japan. Moreover, it can maintain peace in the Asia–Pacific region. Openness and communication between Japanese people and Indonesian workers are certainly strategic vehicles for enhancing multicultural life and tolerance so that the strengthening of religious values in the community’s socio-cultural environment can be realized. The awareness and volunteerism of Indonesian workers to advance Japanese socio-cultural life can be a social force in strengthening the relationship between Japanese and Indonesian society. This is due to the efforts made to improve their diplomatic relations based on solidarity and mutual benefit. On the basis of the descriptive percentage Fig. 4.47, it can be confirmed that there is a potential for cultural acculturation between Indonesia and Japan through the social interactions of Indonesian workers with Japanese society. Moreover, this interaction is carried out naturally, based on socio-culture, because culture cannot be forced, including the process of acculturation, between Japanese and Indonesian society. The descriptive percentages shown in Fig. 4.46 confirm that Japanese society accepts the existence of Indonesian workers well, so that becomes a social force for fostering acculturation as an effort to create peace. Nugraha (2017, p. 1138) revealed that the social interaction between Japanese and Indonesian people can become popular and modern culture, such as the Kabuki Theater Festival, Karate, and Judo, favored by Indonesian youth. This fact provides some examples in strengthening the relations between the two countries. The reality of multicultural Indonesian society has an impact on the diversity of values, traditions, and cultures. Despite the fact that the intensity of the application of values, traditions, and culture varies from person to person, at least this view

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of life can be remembered and applied forever. Yuhasnil (2019, p.229) explained that sensitivity to a culture differs from person to person. This difference has an impact on the intensity of the implications of the sensitivity. If values, traditions, and culture are not applied comprehensively, at least cultural views will be remembered and applied, even if not intensely. Moreover, based on the descriptive percentages of the Indonesian workers who are motivated to advance the socio-cultural life of Japanese society, the potential for acculturation will increase due to encouragement, communication, and the political will to advance Japanese socio-cultural life. Indonesia’s diplomatic relations with Japan have existed for a long time, after the government and the House of Representatives (DPR) in 1958 agreed to implement the process of normalizing the relations between Indonesia and Japan. Nainggolan (2017, p. 6) pointed this out after the government and House of Representatives (DPR) implemented the Peace and War Compensation Agreement between Indonesia and Japan in March 1958. Indonesia officially established diplomatic relations with Japan in April 1958. To date, the Japanese people have been good partners to the Indonesian people in all kinds of cooperation, such as education, economic industry, technology, and culture. It is hoped that diplomatic relations will be the best way to improve the quality of Indonesia’s human resources by realizing modernization with cultural collaboration, because, as Fig. 4.48 show, Japanese society is very supportive of the adaptation of Indonesian workers to socio-cultural life which, thus indicating that Japanese society is open to citizens of other countries. Hidayat and Hidayat (2020, p. 95) explained that the acculturation of Indonesian and Japanese cultures was not a new reality, because it had been happening long before Indonesia gained independence. The acculturation can occur in areas of character, tradition, food, beliefs, and others. The acculturation of the media in the modern era can be achieved through technology. Based on the descriptive percentages shown in Fig. 4.37 it can be emphasized that Japanese leaders or employees are professional because they can distinguish between practical communication and interactions during work and outside of work, making the communication more familiar, flexible, and united. The effect of Japanese personal traits, not only at work but also in daily life, makes it easier for Indonesian workers to study and understand productive work strategies. Also, the discipline of Japanese companies provide a model for the transformation toward positive behavior, such as discipline, respect, humility, commitment, and trustworthiness. Working in Japan has positive benefits for Indonesian workers, such as (1) an appreciation of work, (2) a culture and work ethic of “5S”, namely, seiri (concise), seiton (neat), seiso (clean), seiketsu (wellgroomed), and shitsuke (discipline), and (3) benefits to the Indonesian state; namely, increasing foreign exchange and creating new entrepreneurs (Fahreza, 2018, p. 1088). Regarding benefits for the development of Japanese culture, the acculturation of Indonesian culture is brought about by a person or group of workers or migrants who are introduced to Japanese society. Regardless of the extent or impact of acculturation between Indonesia and Japan, this reality can in fact be a social force for promoting the multiculturalism of the Japanese nation. The percentages shown in Fig. 4.43 emphasize that Japanese society is very open and tolerant of the beliefs and habits of Indonesian workers, which will have an impact on acculturation that

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is not limited to culture. Included are accommodating acculturation in the cuisine, halal tourism, architecture, and other areas. Halal tourism is a form of acculturation between Indonesia and Japan, as Indonesia is a predominantly Muslim country so that, in creating a sense of security, comfort, and even attracting Indonesian tourists, Japanese businesses provide halal restaurants and culinary delights (Janti, 2020, p.392). Diplomatic relationship between Indonesia and Japan certainly have an impact on the cultural life of the Japanese people, especially on the reality of mutual respect for religious beliefs, which in Japan play a minor role whereas in Indonesia their role is a major one. Diplomatic relations, which are open and tolerant, have created a strategic step toward bringing about peace (Nuryatno, 2014, p. 454). Based on the percentages shown in Fig. 4.45, Japanese socio-cultural life is open and tolerant, displaying an attitude that respects foreign citizens, including Indonesians, as in the building of places of worship or mosques for Indonesian Muslims. Wahidati and Sarinastiti (2018, p. 16) explained that Indonesia’s diplomatic relations with Japan have had an impact on the increasing number of places of worship in Japan, which has increased to 241 since 2017 and will continue to grow. Tokyo has 20.7% of those, Hokkaido 8.7%, Osaka 6.6%, with the oldest mosque being in Kobe, Hyogo Prefecture (Table 4.4). Table 4.4 List of places of prayer in Japan as of October 2017 No

Prefecture

Non-mosques

1

Tokyo

33

17

50

2

Hokkaido

18

3

21

3

Osaka

14

2

16

4

Aichi

5

9

14

5

Kyoto

11

1

12

6

Chiba

7

5

12

7

Saitama

2

9

11

8

Tochigi

7

4

11

9

Kanagawa

5

3

8

10

Nara

7

-

7

11

Ibaraki

-

7

7

12

Okinawa

6

1

7

13

Hyogo

4

1

5

14

Gunma

-

5

5

15

Shizouka

2

3

5

16

Another Location

21

29

50

Total

142

99

241

Source Wahidati and Sarinastiti (2018) p.16

Mosques

Total

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In the percentages seen in Fig. 4.39, it is shown that the enthusiasm of Indonesian workers and Japanese people to interact socially and adapt to each other’s culture certainly needs to be a logical reason to increase the quota of Indonesian workers in Japan and to help convince the Japanese government to provide Japanese educational assistance to Indonesia’s younger generation. Mubah (2019, p. 46) explained that the Japanese education assistance program provided to Indonesia’s younger generation, and an increase in the quota for the acceptance of Indonesian human resources constitute efforts to introduce culture and facilitate acculturation, but these are hampered by the proportional distortion between the Indonesian younger generation sent to Japan and vice versa. This reality needs to be improved through creating a balance regarding the younger generation being sent for studies, both from Indonesia to Japan and vice versa, and also with regard to the views of the Japanese on the importance of increasing investment in Indonesia. In this way, acculturation and prosperity can be realized optimally because, in the percentages seen in Fig. 4.21 show that a quality environment, both socio-cultural and the related facilities, is a strategic way for Indonesian citizens living in Japan to learn and develop. The process of introducing culture through the interaction of work and industry focuses more on the transformation of values and character, not tradition, so that Indonesian workers need to emulate the work ethic of Japanese society as social capital for a career, in order to enhance their lives (Febiyana & Turistiati, 2019, p. 41). The reality of Japanese socio-cultural life, which is beginning to experience an aging population, is a serious concern for Japanese society. Efforts to overcome problems, such as the social outlook of the elderly regarding the shortage of younger Japanese to take care of the elderly, can be overcome by Indonesia’s cooperation with Japan. Normatively, communication, introduction, and cultural exchange between Japan and Indonesia through The Japan Foundation is not limited to the introduction of culture, but also extends to addressing the strategic problems experienced by Indonesia and Japan (Nuraini and Tjarsono, 2017, p. 3). The percentages shown in Fig. 4.41 emphasize that Indonesian workers are aware that they play an active role in Japanese socio-cultural life and Japanese citizens have an openness to and an awareness of the need to help Indonesian citizens to adapt to Japanese socio-cultural life. This is appropriate in socio-cultural life, including understanding the elderly. Murakami et al., (2009, p. 565) explained that the aging of Japanese society, which in a socio-cultural context is how the social world defines the elderly, can be seen as a burden or they can be respected. This positive socio-cultural view leads to cultural development as a productive, voluntary social movement. Figure 4.36 shows that Japanese socio-cultural life appreciates Indonesian cuisine, and this is promising with regard to cultural acculturation. In addition, cultural acculturation has led to halal tourism and the reality of the increasing construction of mosques, so that social and religious activities can be accommodated. Cuisine can be optimized as an effective diplomatic approach and even has economic value because it covers a basic human need. Moreover, in Fig. 4.30, it is emphasized that Indonesian workers can use their cuisine as a medium for communicating with Japanese people. This has an impact on the closeness and transformation of some Japanese cuisine to better appeal to Indonesian tastes, such as sushi that is fried or grilled before

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consumption. Indeed, there are fundamental differences in the opinions of whether it can be consumed or not. To overcome this reality, adapting this recipe is the perfect solution to suiting the taste of the majority of Indonesians (Ramadhan et al., 2020, p.66). In Fig. 4.48, it is shown that the majority of Japanese people do not have a negative attitude towards Indonesian workers and even help Indonesian workers to adapt to the Japanese socio-cultural environment (Scott, 2019, p. 206). Indonesia and Japan have an interest in realizing an Indo-Pacific area that is open and peaceful and will allow both countries to prosper. A cultural approach is a strategic step to realizing such interests. Moreover, based on the percentages shown in Fig. 4.39, it is clear that the potential for the acculturation of culture can be realized because of the openness between the two societies. This is one way of strengthening culture and creating peace in line with the practical Indo-Pacific vision between Indonesia and Japan. Cultural acculturation in the Indo-Pacific context can lead to coastal communities, such as the reality of the Javanese Hokokai batik as a result of the acculturation of Indonesian and Japanese cultures in coastal areas. Japanese Hokokai batik is produced by the Chinese with patterns and colors influenced by Japanese culture and a background of royal batik patterns. This batik began to develop in Indonesia during the Japanese Occupation. The designs that usually are seen in Javanese Hokokai batik are cherry blossoms, chrysanthemums, dahlias and orchids in the form of a bouquet or lunglungan with the addition of decorative butterflies. There is also a decorative peacock, which is a symbol of beauty and majesty. Javanese Hokokai batik is a coastal batik acculturated with Japanese Susumoyo culture. Susomoyo is a decorative pattern of batik motifs which shows Japanese influence. It is a fringe pattern consisting of decorative flowers and butterflies. The construction starts from one corner, then spreads to each edge of the fabric, but is not consistent with the same motif from the opposite corner like a kimono pattern arrangement (Amira & Ramadhan, 2018, p. 272). Through this analysis, it appears that Japanese and Indonesian diplomatic relations accommodate cultural blending or acculturation in socio-cultural life, due to the openness of Japanese society and the awareness of Indonesian workers to volunteer to advance Japanese socio-cultural life. This power is a way of realizing peace as well as social welfare through adopting a cultural approach, especially since Indonesia and Japan have diverse cultures. Basically, culture is not limited to tradition alone, but is intact, with rationalization leading to halal tourism, belief, education, and even culinary delights. Cultural blending can be brought about by socio-cultural interactions that occur naturally, in order to strengthen the cultural identity in the reality of modernization. It can also arise through diplomatic cooperation in various areas of life, especially education, culture, technology, industry, and defense, so that it can be concluded that Indonesia’s diplomatic relations with Japan have led to acculturation as a socio-cultural reality.

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4.6 Perceptions Regarding Understanding by Non-Japanese of the Laws in Force in Japan 4.6.1 Descriptive Percentages Results The frequency of the respondents’ perceptions regarding understanding the laws that apply in Japan was 56.5% Agree, 21.7% Neutral, 17.4% Strongly Agree, and 4.4 Disagree (Figs. 4.49 and 4.50). Respondents’ perceptions regarding consciously applying the law in their daily lives was 65.2% Agree, 17.4% Strongly Agree 17%, and 17.4% Neutral (Fig. 4.51). Respondents’ perceptions regarding whether the government has provided for the law’s socialization to residents from Indonesia (WNA) was 43.5% Agree, 34.8% Neutral, 17.4% Strongly Agree, and 4.3% Disagree (Fig. 4.52). Respondents’ perceptions regarding whether the Japanese people have assisted the government in socializing the law to non-Japanese was 56.6% Neutral, 26.1% Agree, and 17.4% Strongly Agree (Fig. 4.53). Respondents’ perceptions about having an awareness of maintaining order while living in Japan was; 47.8% Strongly Agree, 39.1% Agree, and 13% Neutral (Fig. 4.54). Respondents’ perceptions regarding the optimal legal protection from the government for Indonesian workers (TKI) in Japan was 60.9% Agree, 21.7% Strongly Agree, and 17.4% Neutral (Fig. 4.55). The frequency of the respondents’ perceptions regarding the optimal legal protection by the government for Indonesian migrant workers in Japan was 73.9% Agree, 13% Strongly Agree, and 13% Neutral (Fig. 4.56).

Fig. 4.49 Respondents’ perceptions about understanding the laws in force in Japan

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Fig. 4.50 Respondents’ perceptions about consciously applying the laws in daily life

Fig. 4.51 Respondents’ perceptions regarding whether the government has provided socialization of law to non-Japanese

Respondents’ perceptions regarding the optimal legal protection of Japanese society for non-Japanese was 73.9% Agree, 13% Strongly Agree, and 13% Neutral (Fig. 4.57). Respondents’ perceptions regarding an interest in understanding the law in Japan, both formal law and common law, was 43.5% Agree, 34.8% Strongly Agree, 17.4% Neutral, and 4.3% Disagree (Fig. 4.58).

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Fig. 4.52 Respondents’ Perceptions regarding whether Japanese society has provided law’s socialization to non-Japanese

Fig. 4.53 Respondents’ perceptions of having a consciousness of maintaining order while living in Japan

Respondents’ perceptions of what is and is not allowed in social interaction in Japanese society, even though respondents do not know the formal rules, was 69.6% Agree, 17.4% Neutral, and 13% Strongly Agree (Fig. 4.59). The frequency of the respondents’ perceptions that the rules in Japanese society are easier to understand than formal law was 65.2% stated Agree, 30.4% Neutral, and 4.4% Strongly Agree (Fig. 4.60).

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Fig. 4.54 Perceptions of the respondents regarding the optimal legal protection for Indonesian migrant workers in Japan

Fig. 4.55 Perceptions of the respondents regarding the optimization of legal protection by the Japanese Government for non-Japanese workers

Respondents’ perceptions that the formal law is easier to understand than the customs in Japanese society was 52.2% Agree, 39.1% Neutral, 4.35% Strongly Agree, and 4.35% Disagree (Fig. 4.61). Respondents’ perceptions about whether Japanese people understand more about formal law than the respondents do was 60.9% Agree, 30.4% Agree, 4.35 Strongly Agree, and 4.35 Disagree (Fig. 4.62).

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Fig. 4.56 Perceptions of the respondents regarding the optimal legal protection of Japanese society for non-Japanese

Fig. 4.57 Respondents’ perceptions of an interesting in understanding Japanese law

Respondents’ perceptions about whether Japanese people better understand the rules for living in Japanese society was 47.8% Neutral, 43.5% Agree, 4.35 Strongly Agree, and 4.35% Disagree (Fig. 4.63). Respondents’ perceptions regarding whether Japanese people obey the law was 34.8% Strongly Agree, 34.8% Agree, and 30.4% Neutral (Fig. 4.64). Respondents’ perceptions regarding whether Japanese people have participated in enforcing justice was 47.8% Agree, 39.1% Neutral, 8.7% Strongly Agree, and 4.4% Disagree (Fig. 4.65).

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Fig. 4.58 Respondents’ perceptions of knowing the rules within Japanese society

Fig. 4.59 Rules about living in Japanese society are easier to understand than formal laws

Respondents’ perceptions about whether Japanese society helps them to understand the applicable laws in Japan was 47.8% Agree, 26.1% Neutral, 13% Strongly Agree, and 13% Disagree (Fig. 4.66). Respondents’ perceptions about whether Japanese society is apathetic toward nonJapanese workers who obey the laws in Japan was 65.2% Neutral, 17.4% Agree, 8.7% Disagree, and 8.7% Strongly Disagree (Fig. 4.67).

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Fig. 4.60 Formal law is easier to understand than the common rules of Japanese society

Fig. 4.61 Respondents’ perceptions that Japanese society better understands formal law

Respondents’ perceptions about whether Japanese society is apathetic toward non-Japanese who violate the laws in Japan was 60.9% Neutral, 26.1% Agree, and 13% Strongly Disagree (Fig. 4.68). Respondents’ perceptions regarding whether Japanese assume that foreigners can understand the laws applicable in Japan: 43.5% Agree, 43.5% Neutral, and 13% Disagree (Fig. 4.69).

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4% 4%

44% 48%

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Fig. 4.62 Respondents’ perceptions regarding Japanese society is more understand common law/living law

Fig. 4.63 Respondents’ perceptions regarding whether Japanese society obeys the law

Respondents’ perceptions regarding whether Japanese believe that non-Japanese can obey the applicable laws in Japan was 60.9% Agree, 34.8% Neutral, and 4.6% Strongly Agree (Fig. 4.70). Respondents’ perceptions about whether formal legal sanctions are more frightening than social sanctions in Japan was 73.9% Neutral, 17.4% Agree, 4.35 Strongly Agree, and 4.35 Disagree (Fig. 4.71).

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Fig. 4.64 Japanese society has participated in upholding justice

Fig. 4.65 Japan helps the respondents to understand Japanese laws

Respondent’s perceptions about whether social sanctions are more frightening than formal legal sanctions in Japan was 73.9% Neutral, 17.47% Agree, and 8.7% Strongly Agree (Fig. 4.72). Respondents’ perceptions about whether positive legal sanctions and social sanctions are equally frightening in Japan was 47.8% Neutral, 30.4% Agree, 13% Strongly Agree, and 8.7% Disagree (Fig. 4.73).

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Fig. 4.66 Japanese society is apathetic towards non-Japanese obeying the laws in Japan

Fig. 4.67 Japanese people are apathetic towards non-Japanese who break the law in Japan

Respondents’ perceptions abo learning how to obey the common Law about behavior in Japanese society was 60.9% Agree, 21.7% Neutral, 13% Strongly Agree, and 4.4% Disagree (Fig. 4.74). Respondents’ perceptions about Japanese society being apathetic about the formal law was 60.9% Neutral, 22.7% Disagree, and 17.4% Agree (Fig. 4.75).

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Fig. 4.68 Japanese believe that non-Japanese are able to understand the laws that apply in Japan

Fig. 4.69 Japanese believe that non-Japanese are able to obey the laws that apply in Japan

Respondents’ perceptions about whether Japanese society is apathetic about the customs that prevail in their society was 65.2% Neutral, 21.7% Disagree, and 13% Agree.

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Fig. 4.70 Formal legal sanctions are more frightening than social sanctions in Japan

Fig. 4.71 Social Sanctions are more frightening than positive legal sanctions in Japan

4.6.2 Discussion As shown in Fig. 4.49, Indonesian workers in Japan have a sound understanding and awareness of the law, both formal law and common law, i.e., the customs that apply in society from generation to generation. This becomes a force for realizing smart, valuable Indonesian citizens, because the realization of this concept is to obey the law and participate in upholding justice, certainty, and legal benefits. Moreover, Fig. 4.58

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Fig. 4.72 Formal legal sanctions and social sanctions are both frightening in Japan

Fig. 4.73 Respondents learn common law regarding how to behave in Japanese society

indicates that Japanese society also has a good understanding and awareness of formal law and common law, so it is logical to create legal education on a socio-cultural basis in Japanese society. In this way, the cooperation between Indonesia and Japan not only improves the quality of Indonesian human resources and realizes cultural acculturation, but also strengthens the awareness and legal literacy of Indonesian workers.

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Fig. 4.74 Japanese society is apathetic about Formal Laws

Fig. 4.75 Japanese society is apathetic about common law in their society

In Fig. 4.50 it is seen that Indonesian workers are able to learn and obey the laws that apply in Japan, both the formal law and the customs that apply in Japanese society, through a process of observing and obeying them. By this means, practical legal knowledge becomes a strategic vehicle for producing Indonesian citizens who have quality legal literacy, especially as Japanese people are known for their obedience to formal law and the customs of society, in order to avoid sanctions, both criminal and social. This should be the basis for Indonesian workers to become literate in the law. Sukaimi and Said (2018, p. 231) explained that Japanese society’s obedience to the law, ethics, and morals is able to shape Japan’s social and cultural structure, which

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naturally leads to the realization of a peaceful, just, and prosperous Japanese life. Basically, there are philosophical and practical differences compared with Indonesian law, but the important factor is to learn about obedience to the law so that Indonesians can become reliable citizens. Of course, migrant workers need to take the view that the citizens’ understanding and awareness of the law is an important factor in realizing justice and order because the objectives of the law can be obeyed by all citizens. In Fig. 4.52, it is seen that Japanese society helps Indonesian workers to understand the existing laws in Japan, both the formal law and the customs that apply in Japanese society. There should be a logical rationalization by the Indonesia’s government to strengthen the diplomatic relations between Indonesia and Japan, so that the sending of workers is not limited to increasing the capacity of human resources but also as an alternative to strengthening the legal literacy of Indonesian society. Sudarsih (2017, p. 61) explains that the obedience of Japanese society to the applicable laws, especially the customs of society, is the basis for morality, to create a civilized life. Although Japanese people strongly value traditions, the values and customs of society, and culture, they have not forgotten about modernization. This has an impact on the adoption of formal legal concepts so that legal certainty, justice, and usefulness can be fully realized. Based on the descriptive percentages, it is emphasized that it is important to study and apply the concept of legal and formal laws in Japanese society in order to promote justice, decency, and order in Japanese socio-cultural life. Taylor et al. (2001, p. 12) revealed the compliance of Japanese society to formal law, as well as the customs that apply in Japanese society because people have been accustomed to complying with these since childhood through formal and family education. This has an impact on the categorization of Japan as one of the safest countries in the world. Referring to the Global Peace Index (2020), it is emphasized that Japan is ranked 9th, the safest country in the world, with the following details (Table 4.5). On the basis of Fig. 4.57, it is emphasized that Indonesian workers have an awareness of the need to study Japanese law and the behavior of Japanese people, who Table 4.5 The safest countries in the world (2020)

Rank

Country

1

Iceland

1.078

2

New Zealand

1.198

3

Portugal

1.247

4

Austria

1.275

5

Denmark

1.283

6

Canada

1.298

7

Singapore

1.321

8

Czech Republic

1.337

9

Japan

1.36

10

Switzerland

1.366

Source Global Peace Index (2020)

Score

Change

1 2

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strive to understand and obey the law, especially as shown in Figs. 4.55 and 4.56. These two figures show that Indonesian workers believe that Japanese law can protect the basic rights of foreign workers. This reality confirms that Indonesian citizens’ rights are protected and that they have an awareness of the need to optimize their rights and responsibilities as global citizens, so that their citizenship competencies and strategic legal issues, such as equality and the protection of women and children, can be honed. The distribution of justice can be executed well. Matsui (2018, p. 82) reveals that the modernization of Japanese law includes accommodating gender equality and strengthening child protection, so that it has an impact on the guarantee of child development by the state through massive financing, and legal protection for women so that it can become a model for other countries. Basically, the concept of human rights, which accommodates the protection of women and children, has become international law, so that Indonesia can imitate its model of protection, and the concept and legal guarantees have been implemented through Law No. 39 of 1999 concerning Human Rights, Law no. 35 of 2014 concerning Amendments to Law No. 23 of 2002 concerning Child Protection, and Law No. 23 of 2004 concerning the Elimination of Domestic Violence. Indonesian workers, as shown in Fig. 4.72, view criminal law sanctions and social sanctions as important matters with specific impacts. This certainly confirms that they are aware of the impact if they do not obey the law. Moreover, they live in a country which, in reality, is one of the safest countries in the world. This becomes the motivation to be aware of and obey the law. Basically, Japanese society feels a high level of responsibility and great shame if it does not carry out its responsibilities because this morality has been imprinted long before the Meiji Restoration. Japanese society feels a high level of social responsibility because of the view that each individual needs to play a role in society, so that this factor also becomes an argument for Japan’s obedience to the law (Wolf, 2013, p. 117). In the context of Japanese people’s response to Indonesian workers who violate the formal laws, however, as well as the customs that apply in Japanese society, Japanese society is more apathetic regarding this matter. In Fig. 4.68, it can be seen that Indonesian workers view Japanese people as apathetic toward Indonesian workers who violate the law, and they also think that Indonesian workers are capable of obeying Japanese law. Violators of the law are viewed as shameful, but it is no longer the responsibility of Japanese society, especially after helping non-Japanese in the process of adapting to the enforcement of the laws in Japan, so it is seen as more apathetic because it regards lawbreaking as a personal matter (Inoue, 2018, p. 225). The World Justice Project (2020) affirms that Japan is ranked 15th out of 126 countries that have the best rule of law index, as follows (Table 4.6). The quality of Japanese society’s legal awareness has an impact on the realization of order and environmental cleanliness, even though Japan is experiencing an aging population, which is the motivation for Indonesian workers to change their minds and paradigm of thinking. Figure 4.73 indicates that the behavior of Japanese people who obey the law becomes a motivation for Indonesian workers, in addition to understanding and obeying the laws in force in Japan, and also increasing individual capacity in terms of knowledge, attitudes, and skills. Lan (2018, p.9) reveals the

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Table 4.6 The 15 countries with the best legal index

Overall score

Global rank

Denmark

0.90

1

Norway

0.89

2

Finland

0.87

3

Sweden

0.86

4

Netherlands

0.84

5

Germany

0.84

6

New Zealand

0.83

7

Austria

0.82

8

Canada

0.81

9

Estonia

0.81

10

Australia

0.80

11

Singapore

0.79

12

United Kingdom

0.79

13

Belgium

0.79

14

Japan

0.78

15

Source World Justice Project (2020)

cultural differences between Japanese and Indonesians, especially regarding the view of work: from the Japanese perspective, work must be disciplined, serious, and based on work ethics, while from the Indonesian perspective, work must be flexible, fun, and process-based, achieved through commitment and consistency. So, there is no need to be completely imitated. The important thing is that there is a process of reviewing and modifying so that the Indonesian people can become more productive and orderly, maintain their environment, and be consistent from the perspective of the Indonesian personality because the Environmental Performance Index (2020) shows that Japan is the 8th cleanest country out of 180 countries, and the cleanest in Asia, as follows (Table 4.7). In Fig. 4.64, it is seen that the respondents take the view that Japanese people are actively involved in realizing justice. This certainly needs to be a logical reason for strengthening the cooperation between Indonesia and Japan, through realizing justice, not only through the role of the government but also the need for community involvement. Moreover, the concept of justice will be realized if it is able to be felt by the community. Indonesian workers who have learned from their involvement in Japanese society to promote justice need to transform their views and practices to other individuals or communities in Indonesia as an alternative vehicle for strengthening the legal literacy of Indonesian citizens. Hamai and Ellis (2008, p. 43) explain that the awareness of Japanese society of being involved in realizing justice is an effort to realize an orderly, peaceful, and prosperous social life so that it becomes a standard of living that will be achieved by the next generation of Japanese youth.

4 Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human … Table 4.7 The 12 cleanest countries in the world

Rank

Country

Score

1

Denmark

82.5

1

2

Luxembourg

82.3

2

i3

Switzerland

81.5

3

4

United Kingdom

81.3

4

5

France

80.0

5

6

Austria

79.6

6

7

Finland

78.9

7

8

Sweden

78.7

8

9

Norway

77.7

9

10

Germany

77.2

10

11

Netherlands

75.3

11

12

Japan

75.1

1

139

Regional

Source Environmental Performance Index (2020)

Through this objective analysis, it is emphasized that there exists the potential for strengthening the legal literacy of Indonesian workers, through social interaction with Japanese society, as a vehicle for practical legal education. Moreover, Indonesian workers have the view that they can understand and imitate the ways or practices of Japanese society to obey the law, both formal law and customary law which exists in society. Basically, Indonesian workers and Japanese society view criminal law sanctions and social sanctions as frightening and shameful, so they try to understand and realize the law, so that it has an impact on the realization of justice, certainty, and the usefulness of the law. This reality is a logical reason for the Indonesian government to help to strengthen the diplomatic relations with Japan, because the impact is not limited to increasing the capacity of Indonesian human resources, and cultural acculturation as capital for peace and even cultural preservation. Another important reason is that it also accommodates the efforts to strengthen the legal literacy of Indonesian citizens.

4.7 Conclusion The phenomenon of the aging Japanese population, which is not balanced by a correspondingly high birth rate, poses a serious problem, so the Japanese government is making it easier for non-Japanese workers to be employed in Japan to meet the industrial needs. The situation is the exact reverse in Indonesia, which is experiencing a demographic bonus, but it is not balanced by the availability of employment opportunities and so has the potential to create unemployment which leads to poverty. Cooperative efforts have been made, therefore, to overcome the problems experienced by the two countries, especially in terms of the economy and manpower. This

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strategic step can be an effective solution, because Japan has met the needs of its workforce so that industry and production remain stable and increase, and Indonesia can minimize the occurrence of poverty, due to the availability of jobs resulting from the cooperation with Japan, especially after the IJEPA agreement, Gino Jisshusei, and Tokutei Gino. The researcher’s hypothesis is proven, through percentage descriptions and theoretical analysis, that the capacity of Indonesia’s human resources can be increased through work or internships in Japan, with 47.8% of the Indonesian respondents stating Agree, 30.4% Strongly Agree 30.4%, 17.4% Neutral, and 4.4% Disagree 4.4% when presented with that statement. The positive benefits of diplomatic relations between Japan and Indonesia are not limited to meeting the needs of each country, but are comprehensive in nature, by referring to various spheres of life. This reality is generally due to the acculturation of culture between Japan and Indonesia, through either formal diplomatic relations or natural social interactions, as a practice of socio-cultural life. The acculturation of this culture has had a real impact, due to the emergence of halal tourism, the development of sites for prayer, and social and religious activities in Japan. In the Indonesian context, the real impact of the acculturation of Japanese and Indonesian culture can be observed in Javanese–Japanese architecture, Hokokai batik designs, and culinary delights. This reality is proven through the descriptive percentages that have been analyzed in light of the theory regarding the acculturation of Japanese and Indonesian culture, where 39.1% stated Agree, 39.1% Neutral, 8.7% Strongly Agree, 8.7% Disagree 4.4%, and Strongly Disagree. Sending Indonesian workers to Japan is not limited to efforts to improve the quality of Indonesian human resources and realize cultural acculturation, but this phenomenon also has the potential to become a strategic vehicle for strengthening the legal literacy of Indonesian workers working in Japan. Citizens’ legal literacy is an important social force for promoting justice, peace, and order in people’s lives, especially as Japan appreciates foreign workers and so their rights will be fulfilled according to their nature as human beings. The motivation of the Indonesian workforce to understand, imitate, and modify the behaviors or efforts of Japanese people to obey and apply the law, both the formal law and the customs associated with living in Japanese society, is because, basically, Japanese obey the law as it has been embedded since childhood and become part of the culture of Japanese society. The government and the various parties involved need to see that the cooperation between Indonesia and Japan is based on solidarity and mutual benefit as an alternative vehicle for strengthening Indonesian citizens’ legal literacy. Polls indicated that Indonesian workers understand and imitate the obedience of Japanese society through their behavior. The result of the data analysis showed that 60.9% agreed, 21.7% were neutral, 13% strongly agreed, and 4.4% disagreed. Notes: The author distributed a questionnaire to Indonesian workers in Japan and received responses from 121 people. These included 15 from Shizuoka, 14 each from Gunma and Aichi, 13 each from Saitama, Tokushima and Osaka, ten each from Hiroshima and Tokyo. The majority of the respondents were female workers, most of whom were either care workers or nurses. The male workers also took up jobs in the fields of agriculture, fisheries and construction as well as care work.

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Chapter 5

Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information Hiroshi Ito

Abstract This chapter considers how the activities of the Japan–China Working Group for the Exchange of Economic Information (abbreviated hereafter to “J-C”) affect the economic policy-making of the Chinese government. It describes the activities of J-C by era. J-C was established in 1980 and has been acting as an organization that advances suggestions to the Chinese government. At the end of the 1970s, when China adopted the reform and opening-up policy, the Chinese government tried to study how to manage their economy from the example set by the United States, Europe, and Japan; J-C bridged China and Japan. J-C has held general meetings once a year lasting for almost a week. Ten to fifteen people from each country attend these meetings, and they exchange their views about specific themes. The attendants were Zhu Rongji (the former Chinese Prime Minister), Gu Mu (the former Deputy Prime Minister), other members of the Chinese government, Saburo Okita (the former Japanese Foreign Minister), Ryoichi Kawai (the former chair of Komatsu Industry) and others from Japan. The minutes of the meeting were directly reported to, for example, Prime Minister Zhao Ziyang from Gu Mu, then used to establish economic policy. Keywords Leadership plan · Special economic zone · Mixed economy · Industrial policy · Social security system · Logistics · Oversupply

5.1 Brief Introduction to This Chapter 5.1.1 Structure of This Chapter J-C was held in Hakone, Japan, first in 1981, and then held alternately in Japan and China. When it was held in China, Shenzhen (Guangdong Province), Ulumuqi (Xinjiang Uygur Autonomous Region), and others were chosen as those cities attracted attention in China at that time. H. Ito (B) Kanagawa, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_5

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In the second section, the author begins by examining the substance of the seminar for Chinese high officials hosted by Saburo Okita, Masao Sakisaka, and Minoru Kobayashi in 1979, which was the forerunner of J-C. At that seminar, based on the statistics available at that time, Japanese experts explained several scenarios for Chinese economic growth as well as the results of their simulations. The Chinese high officials were deeply impressed by the seminar. The author will describe the suggestions of the Japanese members about establishing a Special Economic Zone and how to gain the approval for Official Development Assistance (ODA) from the Japanese government in this section. In the third section, the author will examine the discussions that were held from the first conference in 1981 to the fifth conference in 1985. For instance, he will explore the role of J-C, when Deng Xiaoping created a plan to increase Gross Domestic Product (GDP) four-fold. The Japanese participants also advanced the suggestion that China should abandon the directive plan system in order to adopt the guiding plan system. The Japanese members displayed China’s estimated capital formation throughout the 1980s, and the possibility that China would be able to introduce foreign capital actively. In the fourth section, the author will trace the discussion from the sixth conference in 1986 to the tenth conference in 1990. For example, regarding how to deal with the inflation that occurred in the late 1980s, the Chinese side insisted on controlling the total demand, while the Japanese side resorted to strengthening the supply capacity. The Japanese also suggested how to cultivate the low profitable industry that was needed from the point of view of the total state economic plan. The Japanese also pointed out the importance of establishing a combined transportation system in order to develop the Chinese economy. In the final section, the author will discuss important remarks made by the Japanese participants in each section, and will examine comprehensively how China accepted such remarks to formulate its economic policy.

5.1.2 Aims of This Chapter First, the aim is to consider how J-C, which started operating in 1981, influenced the Chinese government to establish its economic policy mainly from 1981 to 1990. Second, the aim is to record the remarks and arguments expressed at J-C. As some early members of both countries have already passed away without any record of J-C, it is urgent to record their contributions. The top figures of J-C were Gu Mu (former Deputy Prime Minister, China) and Saburo Okita (former Foreign Minister, Japan), and the members from both countries were senior persons. Despite J-C being highly ranked in both countries, its activities were relatively unclear, because China did not wish to disclose the details of the discussion at an early stage. This chapter aims to describe the overall picture of J-C in its first decade.

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5.1.3 Major Members of J-C The Chinese major members were active government officials at that time. The Japanese major members were retired bureaucrats, company executives or CEOs, or scholars.

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Zhu Rongji: Born in 1928. Prime Minister 1998–2003. He wrestled with stateowned enterprise reform, financial reform, and administrative reform. Gu Mu: Born in 1914. Deputy Prime Minister 1975–1982. He directed the construction of the Special Economic Zone and introduced foreign capital as Economic Minister in the first half of the reform and opening-up period. The top Chinese member of J-C. Ma Hong: Born in 1920. Director, Chinese Academy of Social Sciences 1982– 1985. Director (cabinet level), State Council Development Research Center 1986–1993. He was one of the brains at the top of the Chinese Communist Party, like Hu Yaobang and Zhao Ziyang. Sun Shangqing: Born in 1930. Director (cabinet level), State Council Development Research Center 1994–1996. He was also, like Ma Hong, one of the brains at the top of the Chinese Communist Party. Fang Weizhong: Born in 1928. Deputy Director (cabinet level), National Planning Commission 1977–1993. Chief, Economic Committee, National Political and Cooperative Council 1994–1997. He had been in charge of the economic planning of China for many years. Li Hao: Born in 1926. Mayor of Shenzhen city, Guangdong Province 1985– 1990. Managing Director, National People’s Congress 1993–1999. As the top in Shenzhen, he made the Shenzhen Special Economic Zone a model city of reform and opening-up. Liu Hongru: Born in 1930. Deputy Governor, People’s Bank of China 1980– 1989. Director, State Council Securities Oversight Committee in 1992. Deputy Chief, National Economic System Reform Committee in 1993. He mainly directed the financial system reform. Gao Shangquan: Born in 1929. Deputy Chief, National Economic System Reform Committee 1985–1993. He was one of the persons in charge of the economic system reform. Shen Jueren: Born in 1931. Deputy Minister, Ministry of Foreign Economic and Trade 1988–1991. Chairman, Huarun (Group) Company 1991–1996. He flourished mainly in the foreign economic and trade sectors.

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Major Japanese Members Saburo Okita: Born in 1914. After working at the Economic Stability Headquarters, he held various positions, such as Director of General Development Department at the Economic Development Agency. In 1979, he became Foreign Minister in the Ohira Cabinet. Government Representative of Foreign Economic Relations 1980–1981. Chairman, Domestic and Foreign Policy Study Group 1981. He was called a “globalist”. At the top of J-C on the Japanese side. Masao Sakisaka: Born in 1915. Director of General Planning Department at the Economic Development Agency in 1962. Director, Japan Energy Research Institute in 1966. Chairman, International Energy Policy Forum in 1981. He was an expert in industrial policy and energy issues. Kiichi Saheki: Born in 1913. After working at the Economic Stability Headquarters, Director, Defense Research Institute, Japan Defense Agency 1961– 1964. Chairman, Nomura Research Institute in 1965. He was a pioneering government economist. Miyohei Shinohara: Born in 1919. Professor, Hitotsubashi University in 1962. Director, Economic Research Institute, Economic Planning Agency in 1970. He was an economist who held government posts, such as councilor of the Bank of Japan. Isamu Miyazaki: Born in 1923. After working at the Economic Stability Headquarters, administrative vice-minister of Economic Planning Agency in 1979. Chairman, Daiwa Institute of Economic Research in 1982. In 1995, he became Minister of the Economic Planning Agency in the Murayama Cabinet. He was a typical government economist. Atsushi Shimokobe: Born in 1923. After working at the War Reconstruction Agency, he joined the Ministry of Construction. Administrative vice-minister of the National Land Agency in 1977. Chairman, Research and Development Agency in 1979. Chairman, Tokio Marine Institute in 1992. Chairman of the Great Hanshin–Awaji Earthquake Reconstruction Committee in 1995. He was a man of authority in national land planning. Shinji Fukukawa: Born in 1932. Administrative vice-minister of the Ministry of International Trade and Industry in 1986. He held positions such as Senior Vice President and Vice Chairman in Kobe Steel. President, Dentsu Research Institute in 1994. President of Toyo University in 2012. He has extensive knowledge of policymaking. Yousuke Nakae: Director of the Asia Bureau, Ministry of Foreign Affairs in 1975. Ambassador of the People’s Republic of China in 1984. Atomic Energy Commission member in 1987. He was an expert in international relations and foreign affairs. Yoshio Suzuki: Born in 1931. He held positions such as Director, Financial Research Institute, Bank of Japan and director of the Bank of Japan. Chairman, Nomura Research Institute in 1991. He had a seat in the House

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of Representatives 1996–2003. He has extensive knowledge of monetary and economic policy. Ryoichi Kawai: Born in 1917. President of Komatsu in 1964. Chairman of Komatsu in 1982. He turned Komatsu into one of the world’s leading bulldozer makers. He made efforts regarding Japan–Soviet Union trade and Japan– China trade. He held the position of chairman of the Japan–China Economic Association. Akira Chihaya: Born in 1935. He joined Yahata Steel (currently Nippon Steel). President, Nippon Steel in 1998. Chairman, Nippon Steel in 2003. He actively promoted the company’s global strategy. He held positions such as vice chairman of the Federation of Economic Organizations and chairman of the Japan–China Economic Association. Minoru Kobayashi: Born in 1932. He joined the Industrial Bank of Japan (currently Mizuho Bank). Director and general manager of the research division of the above bank in 1984. Managing Director and general manager of the research division of the bank in 1988. He was a typical controversialist using the research division’s analytical ability in the early stage of J-C.

5.1.4 Review of Previous Research Zhang (2008) stated that Saburo Okita’s advice and proposal in January 1979 were extremely refreshing and enlightening for Chinese economists and people involved in policy research. Zhang (2008) also appreciated that J-C was a regular exchange activity, with the longest duration, participants with the highest political status and greatest influence, and produced many helpful ideas about China’s reform and opening-up period. Masuo (2011) stated that J-C made a large contribution to the ideas in bringing about China’s modernization. According to Masuo, Okita was appointed a foreign advisor to the State Council of China, but when he became Foreign Minister in the Ohira Cabinet, he could not continue acting as a foreign advisor to the State Council. Therefore, he convened economic experts, including Atsushi Shimokobe (administrative vice-minister of the National Land Agency) and others, and arranged for the Japanese bureaucracy and renowned scholars to visit areas all across China. They described their experience of high economic growth to China, and continued to advise the Chinese government on macro-managing modernization. Their activities became regulated and formal, and they were named the Japan–China Working Group for the Exchange of Economic Information (J-C) by Deng Xiaoping, which continues to operate to-date. Hattori and Marukawa (2012) indicated that J-C had been continuously held once a year, and the frank exchange of opinions in J-C had a strong impact on the subsequent economic policymaking of China.

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Vogel (2011) stated that “following Deng’s visit to Japan in October 1978, Okita Saburo, who was also an economic planner with experience of assisting Asian countries with their economic development, arrived in China in January 1979 to discuss with Gu Mu plans to set up a Japanese advisory group and, more broadly, to consider the role that Japan might play in China’s development…. Okita arranged with Gu Mu that he would lead a Japanese team of experienced bureaucrats to attend a series of annual meetings with Chinese officials, led by Ma Hong, as Chinese officials were making the transition away from tighter control over the economy…. Indeed, the joint meetings did end briefly while Okita was foreign minister, but resumed in July 1980, after he left office. The Japanese advisory team that joined Okita included Shimokobe Atsushi, former leader of the National Land Agency, who told the Chinese how the Japanese government had helped to promote regional expansion in a balanced, sustainable way by building institutions and ensuring that the necessary resources were available. The advisory group continued to meet with Chinese economic officials until 1992”. All of the above research places a high value on the significance of J-C, but failed to investigate what kind of effect it had on the economic policy making of China. Therefore, this chapter explores all of the annual reports of J-C from 1981 to 1990 in detail and, at the same time, through conducting interviews with related individuals, clarifies the role played by J-C and its impact more specifically and in detail. In that way, the author would like to shed light on important aspects of the modern history of the economic exchange between Japan and China.

5.1.5 Material Used in This Chapter 5.1.5.1 (1)

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The 3rd Conference Report of the Japan–China Working Group for the Exchange of Economic Information (1984). Japan–China Economic Association. From the 4th through the 10th Conference Report and related material. (various years).

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Conference Report and Material Prepared by the Chinese Side

China–Japan Working Group for the Exchange of Economic Information (1982). The 2nd Conference Report of the China–Japan Working Group for the Exchange of Economic Information. China–Japan Working Group for Exchange of Economic Information (1985). The 5th Conference Report of the China–Japan Working Group for the Exchange of Economic Information.

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According to the author’s research, the 1st Conference Report has been found in neither Japan nor China. Therefore, when discussing this 1st conference, the author has depended on the Okita Report: Increased Wind Pressure and Expectations for Japan (1984).

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Interviews with Individuals Concerned

Isamu Miyazaki Hitoshi Matsuoka (former head of the secretariat of J-C on the Japanese side, Chairman of the Japan Research Institute) Ling Xingguang (early participants of J-C) Kyoko Kobayashi (Minoru Kobayashi’s wife) Masahiro Hirano (former Industrial Bank of Japan China General Representative, Beijing Branch General Manager) Mr. A from the Chinese side Mr. B from the Chinese side Mr. C from the Chinese side.

5.2 The Night Before the Inauguration of J-C: Saburo Okita and His Juniors In order to visualize a concrete image of the target period of the section, the historical background (main events) of that period will be listed at the beginning of each of the following sections. In addition, the Consumer Price Index (CPI) increase rate and Gross Domestic Product (GDP) growth rate are also presented as typical economic indicators after the 3rd section (Table 5.1).

5.2.1 Saburo Okita’s First Visit to China After World War II (April 1972) To explore the formation of J-C, let us review the relationship between Saburo Okita, the first counsel from the Japanese side, and China. His first visit to China after World War II took place between Nixon’s visit and Kakuei Tanaka’s visit to China. In April 1972, Okita was invited by Takeo Miki of the Liberal Democratic Party to visit China with diplomatic critic Kazushige Hirasawa. Okita was born in Dalian

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Table 5.1 Historical background of the 2nd section Main events from 1977 to 1980 (1977) Approval of the independence of the production group in the agricultural collectives and the free cultivation of farmland by farmers (1977) The removal of the usual principles heretofore in effect at state farms and the introduction of the piece-wise wage system (1978) The raising of the average unified procurement prices for agricultural products such as grain by 24.8% (1978) The ratification of the Japan–China Peace and Friendship Treaty, sign of a Japan–China long-term trade agreement (1978) The Central Committee of the Chinese Communist Party’s proposed delegation of economic system management authority to local governments (1978) The introduction of “household contracting” or the “household responsibility system” in Anhui Province, among others. The start of the rural reform (1979) The second conference of the 5th National People’s Congress approved the China–Foreign Joint-Stock Company Law (1979) The Chinese government applied for the suspension of plant import contracts, such as those by Nippon Steel (1979) The Japanese government decided to provide the first ODA loan to China (1980) Approval to set up a Special Economic Zone in Shenzhen, Zhuhai, Shantou, and Xiamen (1980) The conversion of basic construction investment from financial expenditure to bank loans (1980) Japan–China joint oil exploration begins in Bohai Bay Sources Iechika (2004) and Kong (2008)

and lived there until he went to elementary school. Okita worked for the North China Office of East Asia Development Board1 at Beiping from 1939 to 1942 (Ono, 2004). Miki, Okita, and others met Zhou Enlai for dinner to discuss normalization of Japan–China relations on this visit to China. During the meeting, regarding Japan’s postwar economic reconstruction and high growth, Prime Minister Zhou, when inquiring about Japan’s oil import volume and agricultural population, deliberately added that “Mr. Okita was involved” (Ono, 2004). Considered an economic expert, Okita was asked by the Foreign Trade Department, Xinhua News Agency, and others to deliver a lecture on the Japanese economy. Okita explained the reason for high growth as follows: that it was the integrated economic system of the public and private sectors, in which the vitality of the private sector was the main constituent which, supplemented by the governments plans, exerted its power. During that process, the entrepreneurial spirit of challenge and existence of a high-quality workforce also played a major role. As for China, in order to expand trade, it is necessary to modernize industry and improve productivity. Those attending the lecture questioned Okita in an attempt to learn the secrets of Japan’s economic growth (Ono, 2004).

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A Japanese government agency, established in 1938, that oversaw the political affairs and development of the occupied territories during the Sino-Japanese War. It had a local organization as the North China Office. In 1942, it was merged with the Ministry of Exploitation and part of the Ministry of Foreign Affairs to become the Ministry of Greater East Asia.

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Okita was the first to deliver a full-scale lecture on Japan’s postwar economy, which later led to frequent visits to China by invitation from China (Ono, 2004). From the perspective of China, Okita, who had served as the Director of the Economic Planning Agency’s Comprehensive Planning Bureau and Director of Comprehensive Development Bureau, seemed to be a specialist in economic planning and a person who knew the secret of high economic growth.

5.2.2 Dispatch of an Overseas Study Team by the Chinese Government and Its Summary There was a period of preparatory work and exchange of opinions between the top leaders before China set out its opening-up policy as its basic policy. As part of the preparations, in the late 1970s, China dispatched several survey teams overseas with the goal of introducing the advanced technologies required for modernization by developed countries. For example, from March to April 1978, a Chinese economic delegation, headed by Lin Hujia, the deputy chairman of the Shanghai Revolutionary Commission, visited Japan. This delegation included two deputy heads of the National Planning Commission, Duan Yun and Fang Weizhong. Lin said that, in the future, China intended to conduct processing trade and compensation trade2 to support various payment methods. In addition, Lin also conducted a survey of the export processing zones that South Korea and Taiwan were creating to introduce foreign capital. After returning to China, Lin and his colleagues reported to Deng Xiaoping what had happened and received high praise (Masuo, 2011). In early 1978, the Party Central and State Council decided that Deputy Prime Minister Gu Mu would lead a delegation on a visit to Europe. This was the first government economic delegation that the Party Central sent to Europe after the founding of the People’s Republic of China. Before departing, Gu Mu was instructed by Deng Xiaoping to make extensive contact with the other party, conduct detailed research, and study the subject in depth (Gu, 2009). On returning to China, Gu Mu summarized the impression of the visit by the delegation as follows. First, after World War II, the economies of the European capitalist countries had certainly made great progress. In particular, science and technology were progressing day by day, and the application of electronic technology was remarkable. Second, Western European countries showed great interest in developing economic relations with China. They believed that China was an important stabilizing factor in the world, and that the presence of a mighty Europe in addition to a mighty China would have a positive effect on world stability.

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A method of paying for imported equipment with products produced using imported equipment (Todou et al., 1985).

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Third, in terms of foreign economic development, internationally popular trading methods could also be adopted in China. That is, for postponed payment, credit provision, compensation trade, and so on, goods could be received via a post-payment method. In addition, it was possible to accept direct investment from overseas (Gu, 2009). In late June 1978, Gu Mu held a briefing session on a tour of Europe, presided over by Hua Guofeng, with the participation of Ye Jianying, Nie Rongzhen, Li Xiannian, Wulanfu, Wang Zhen, et al. The session lasted from 3:30 p.m. to 11:00 p.m. In response to Gu Mu’s report, the participants suggested that they should maintain an unaided policy, introduce advanced technology from overseas, and promote economic cooperation with foreign countries (Gu, 2009). After the briefing session, Deng Xiaoping called on Gu Mu to discuss the methods for reform, opening up, and economic development. In light of the development of the world economy after World War II, the rise of Japan and Germany was spectacular. After a dozen years of effort to rebuild from the ruins, the two countries had grown to become the second and third largest economies in the world. “Most probably the most important reference for China is Japan, because both Japan and China belong to the Oriental cultural zone and have many similarities in culture,” commented Gu Mu. Deng Xiaoping ordered Gu Mu to search for talented people from around the world to become economic advisors to the State Council. Deng Xiaoping said, “When we lack experience, we can borrow the wisdom of others” (the Japan–China Working Group for the Exchange of Economic Information, 2010). In July 1978, at the State Council’s theoretical review meeting, the top officials basically agreed that they would take out loans from foreign countries and accept investment by foreign companies. At that time, France and West Germany had announced their intention to offer loans. The problem was to find a preferential loan with a low interest rate. For a while, the Japanese-friendly Ichizo Kimura (former president of the Japan International Trade Promotion Association’s Kansai Headquarters) stated that the Japanese government provided low-interest, long-term loans to developing countries through the Overseas Economic Cooperation Fund. The terms of the loans were as low as 1.875–4.75%, the deferral period was 5 to 10 years, and the repayment period was 20–30 years. However, although China could apply for a loan, it was necessary for the Chinese side to initiate the negotiations. Since the Japan–China Peace and Friendship Treaty was signed in August of that same year, the conditions for advancing this matter were set. Furthermore, in October 1978, Deng Xiaoping visited Japan to exchange ratification documents regarding the Japan–China Peace and Friendship Treaty. During his visit to Japan, Deng took the Shinkansen (“bullet train”) and visited Nissan Motor’s Zama factory, Nippon Steel’s Kimitsu factory, Matsushita Electric Industrial’s Ibaraki factory, and others, to see Japan’s scientific and technological capabilities. Originally, Deng, who had a long military and political career and knew little about economics, during the negotiations to conclude the Japan–China Peace and Friendship Treaty in 1975 before its downfall, tended to capture relations with Japan, mainly from the political standpoint that he should oppose the Soviet Union. On the other hand, Deng had been paying close attention to Japan’s economic and technological strengths since

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he had continued his efforts to introduce science and technology since its revival in 1977 (Masuo, 2010).

5.2.3 Lecture by Okita, Sakisaka, and Kobayashi (January 1979) Under these circumstances, China invited Okita et al. to Beijing. The background was as follows. In December 1978, Yoshihiro Inayama, Nippon Steel Chairman (and chairman of Keidanren), called Okita, and said, “When I met Deputy Prime Minister Gu Mu in Shanghai, I was asked to send an appropriate person because he would like to study Japan’s postwar economic planning and experience of economic development during the policy change of China. I want you to go to China” (Okita, 1992). At the end of January 1979, at the invitation of Deputy Prime Minister Gu Mu, Okita visited Beijing with Masao Sakisaka, President of the Research and Development Organization and Minoru Kobayashi, Deputy General Manager of the Research Department at the Industrial Bank of Japan. In China, January 28 was the Lunar New Year and the following three days were holidays. During the New Year holiday, a daily study session was held that was attended by Deputy Prime Minister Gu Mu and other executives3 in charge of the economic planning and policy planning of the State Council and the Chinese Academy of Social Sciences. Okita and his colleagues were also asked for their views on China’s economic plan. As it happened, at the Center for Japanese Economic Research, the Study on Japan–China Economic Relations, which was compiled by Sueo Sekiguchi, had recently been completed. Okita gave his opinion while referring to it. It was later heard that the opinions of Okita et al. had exerted a considerable influence on the subsequent adjustment policy of China (Okita, 1992). Because the issues that were discussed at this time made a strong impression on the Chinese side, which triggered the establishment of J-C, let us take a closer look at the remarks of Okita et al. Incidentally, the content of the lecture was translated into Chinese at that time and delivered to Deng Xiaoping.4 (1)

Why was the Japanese economy able to achieve high growth? According to Okita, the causes were as follows:

3

The main participants were Gu Mu, Gan Ziyu (Deputy Director of the National Planning Commission), Qiu Chunfu (Deputy Director of the National Economic Commission), Li Hao (Deputy Director of the National Construction Commission), and Ma Hong (Deputy Director of the Chinese Academy of Social Sciences). 4 From an interview by the author of Mr. A, a person involved in J-C, August 30, 2016.

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1.

2. 3.

4.

5. 6. 7.

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During the early postwar period, the economic development had a sense of postwar reconstruction and occurred quickly because of the small cardinal number of Gross National Product (GNP). The share of military spending within GNP decreased compared to the 1930s. The composition of the working population had changed. In the 1950s, the agricultural population accounted for 45%, but now it was 12%. In other words, the rural labor force had moved to the industrial sector. Even before World War II, public education was widespread and, coupled with the development of postwar education, the quality of the workforce was high. Therefore, workers had the ability to digest and absorb modern technology and management know-how. Governments and banks provided the construction funds needed by companies. The government implemented policies to promote economic development, depending on the stage of economic development. From the 1950s to the 1970s, the world economy was booming and Japan’s export market expanded. Japan also introduced and digested a large amount of advanced technology from Europe and America (Institute of Economic Research, Chinese Academy of Social Sciences, 1979). How did Japan solve financial problems in order to promote economic development?

Japan invested a large amount of money in the process of economic development. For example, the investment in the heavy industry sector in 1955 was 320 billion yen but, in 1961, this increased to 1.6 trillion yen. It was the industry’s internal reserves that were primarily used for these investments. For example, in 1968, the industry’s internal reserves were $23 billion, the corporate financing (government and bank lending, bond issuance, etc.) was $9.5 billion, and foreign investment was only $400 million. This was due to the “virtuous cycle”. For reasons (1) to (7) above, after production increased sharply, the consumption level improved a little later, and the difference could be used as an economic construction fund. In other words, companies expanded their production and earned money, mainly based on retained earnings. Shortly afterwards, wages increased and consumption expanded. In this way, a virtuous cycle of increased production and increased consumption occurred. Next, Okita explained the following formula: Economic growth rate = investment rate (or savings rate)/capital coefficient. The higher the investment rate, or the lower the capital coefficient (a number that indicates how many units of construction funds must be invested to increase one unit of income), the higher the economic growth rate. The investment rate could not be increased indefinitely because it was restricted by the consumption level. On the other hand, there was plenty of room for lowering the capital coefficient. According to Okita, Japan’s capital coefficient was 3 while China’s was almost 4. In order to lower the capital coefficient, it was necessary to grasp new technologies

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and raise the management level to improve the production efficiency and investment effect. (3)

Okita’s view of China was as follows: 1.

2. 3.

(4)

China lacked development funds. According to China’s 10-year plan, industrial growth was 10% and agricultural growth was 4%. In that case, at least 1 trillion yuan would be needed, according to Okita’s calculations. Still, there was a possibility of a shortage of about 30%. The countermeasures: (a) increase the investment efficiency and lower the capital coefficient, (b) reduce consumption appropriately and increase the savings rate, and (c) introduce funds from abroad. If these measures could not be taken, there was no choice but to slow down economic development. China’s resources seemed abundant in the short term, but not necessarily in the long term. You should buy a lot of “chickens” rather than a lot of “eggs”. According to Sakisaka, Japan did not buy a lot of equipment (eggs) but bought manufacturing technology and patents (chickens). Even if a Japanese company introduced equipment from overseas, it bought the first unit, but manufactured the rest itself from the second unit onwards (Institute of Economic Research, Chinese Academy of Social Sciences 1979).

Furthermore, Okita offered the following proposals: 1.

2.

3.

4.

To connect the machine industry more effectively with the industry that uses it. Import machinery would be installed in the first factory, and the auxiliary equipment would be built by that factory. The second factory would make most of the equipment, and the third factory would make all of the equipment. To avoid raising steel production targets too high. By cultivating the machinery industry, the steel industry and other industries could be further developed after 1985. To strive to increase exports. At first, it was inevitable to begin by exporting raw materials, but it was necessary to gradually improve the degree of processing of exported products. When introducing technology, to start from the current situation in China. Indeed, the introduction of advanced technology could generate profits that were up to ten times the investment amount. However, China had a large population, low salaries, and a lack of construction funds. Therefore, it was unnecessary for all of the technologies introduced should be cuttingedge. Moreover, once a technology had been introduced, it needed to be continuously improved. Even if advanced technology was introduced, unless it was improved, it would become obsolete within five years. Japan

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5. (5)

introduced the technology and then enthusiastically improved it. Therefore, Japan was able to surpass other countries quickly. This experience was worth learning from. To control consumption appropriately. By doing so, savings could be increased.

After that, Okita et al. explained international loans:

The World Bank lending rate was 7–8% and the repayment period was 15 years. Apart from this, there was a low-interest loan, the interest rate was only 0.75%, and the repayment period was 50 years. However, this was for the poorest countries, with a per capita income of $375 or less, and so was inapplicable to China. In Japan, there was an organization called the Overseas Economic Cooperation Fund, which offered loans to developing countries. These loans were small, less than $200 million, but the interest rate was 3.5% and the repayment period was 25 years or more (Institute of Economic Research, Chinese Academy of Social Sciences 1979). (6)

Next, Okita explained the five options proposed by the China Studies Group, Center for Japanese Economic Research, to solve China’s financial problems. 1.

2.

3.

4.

5.

Option 1: Based on the indicators of the 10-year plan promulgated by the 5th National People’s Congress, it was assumed that industrial production would grow by 10% annually and that agriculture would grow by 4% annually. The capital coefficient, estimated based on the economic indicators from 1955 to 1976, was 3.8, and the consumption rate was 79.5%. In this case, there would be a deficit of $236.4 billion in the next eight years. Option 2: The industrial and agricultural growth rates were assumed to be the same as in Option 1, but the capital coefficient would be reduced from 3.8 to 2.5 by increasing the investment efficiency. In this case, there would be no shortage of funds but some margin (the specific numbers were currently being verified). Option 3: If the other conditions were the same as in Option 1, and the consumption rate in the industry was reduced from 75 to 60%, it would solve the problem of the lack of funds and generate a surplus of $75.6 billion. Option 4: If the other conditions were the same as in Option 1, and if the industrial growth rate was reduced from 10 to 7%, the lack of funds could be alleviated, but they still would run short of $20.6 billion. Option 5: If the other conditions were the same as in Option 1, and if the agricultural growth rate was reduced from 4 to 3%, the funds would be short of $197.4 billion.

In the opinion of Okita et al., it would be better to increase the investment efficiency and reduce consumption inside the industry, as in Option 3. To that end, it would be necessary to raise the level of business management significantly (Institute of Economic Research, Chinese Academy of Social Sciences, 1979).

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Okita et al. outlined the direction and order of investment that China should adopt, as follows: 1.

2.

Depart from the then-existing characteristics of China. China had a large population, a large market, and abundant resources. However, there were restrictions in terms of funding, technology, and management levels. Therefore, first of all, a labor-intensive, lowinvestment, fast-earning industry should be developed. Judging from the three-dimensional structure of industry, first, light industry would be developed and heavy industry would be developed appropriately. In the light industry, China should start with food, wood, fiber, and stone as the raw materials, then proceed to light processing, such as canning, furniture, books, underwear, and construction. Thereafter, this would be developed into high-level processing, such as high-grade foods, crafts, and luxury clothing. In terms of product quality, the focus would be on labor-intensive industries with small technical level differences and low investment, such as textiles, wood processing, food, underwear, metal products, and electric wires. For industrial sophistication, industrialized countries like Japan are situated close by, so it is possible to learn advanced technologies and management methods through joint ventures. This method was also a key point in Japanese industrial development. Understand the supply and demand situation by conducting in-depth research into both the domestic and international markets.

Due to the constant development of the economy and technology, the market was changing significantly. For example, in Japan, the increase in national income caused a decrease in the demand for rice, but a sharp increase in the demand for beef. The demand for underwear increased only slightly, but the demand for outerwear increased dramatically. Japan attached great importance to domestic and overseas market research as well as supply and demand forecasts. This guaranteed the investment effect and competitiveness. Each company had set up a specialized department to study and grasp the changes in supply and demand over the following few years. Based on that, China had been preparing new products for several years. Because China had a planned economy, people assumed that, if the plan was achieved, the work was completed. The absence of unemployment, bankruptcy, and competition was an excellent aspect, but it also impaired people’s independence. Also, China had poor capabilities for market research, forecasting, and adaptation. Japanese experts proposed building a market-sensitive system in China.

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Regardless of which industry was developed, a strict responsibility system should be adopted.

In Japan, when making an investment, the person who promotes it was responsible for repaying the loan and making a profit after a certain period. If this proved impossible, they would be subject to sanctions, such as demotion and a reduced salary. If China did not do so, the investment effect and production efficiency would be affected (Institute of Economic Research, Chinese Academy of Social Sciences, 1979). As mentioned above, the explanation by Okita et al. is extremely detailed and based on sufficient preparation. It can be seen that the background of Japanese economic development was explained, based on which, recommendations were made to China. According to Masahiro Hirano, on the final day of the lecture, Okita was scheduled to deliver a lecture in front of many state executives and state-owned enterprise executives, but suddenly developed a fever and had to rest. Minoru Kobayashi gave a lecture as a substitute, but it seems that he did not have enough time to write a speech. Mr. Kobayashi made the following statement at the launch: “I visited several companies in China. As a banker, I did not wish to lend to any of the companies. If I did, I would be held accountable.” The audience screamed for a moment, but after a while they calmed down. After that, Kobayashi explained the factors related to the importance and urgency of reforming the economic system, such as business and finance, for the economic development of China. Deputy Prime Minister Gu Mu and other executives seemed highly impressed with Mr. Kobayashi’s candid, clear speech.5 Furthermore, when Okita and his colleagues visited China in January 1979, Gu Mu heard about the borrowing from the Overseas Economic Cooperation Fund from Okita, in response to instructions from the party center. In May of that same year, the deputy governor of the People’s Bank of China, Bu Ming, proceeded with a loan meeting involving various parties. After that, it was decided to send Gu Mu to Japan after the discussions between the party center and the State Council (Gu, 2009).

5.2.4 The Yen Loan Negotiations and Establishment of J-C Preparations for the establishment of J-C and introduction of Japanese ODA loans occurred concurrently. In other words, there was a close relationship between the establishment of J-C and the start of yen loans. (1)

Negotiation of Japanese ODA Loans

On September 1, 1979, Gu Mu arrived in Tokyo with Wang Yaoting, the director of the International Trade Promotion Association, and Xie Beiyi, the deputy director of the National Construction Commission. On September 3, he met with Prime Minister Masayoshi Ohira before meeting Foreign Minister Sunao Sonoda about a 5

Confirmed by the author in a written interview with Masahiro Hirano, October 17, 2020.

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loan to China. Sonoda revealed that the Japanese government was ready to provide 50 billion yen in 1979. He stated that the Japanese government wished to make a formal decision when Prime Minister Ohira visited China at the end of that year. In a series of talks, Prime Minister Ohira said, “As for the economic relations between Japan and China, we will develop private exchanges and the Japanese government will provide all possible support.” Foreign Minister Sonoda said, “This time, Deputy Prime Minister Gu Mu’s visit to Japan will serve as an opportunity to move one step closer to an intimate relationship between Japan and China, centering on Japan’s support for China’s modernization.” (Gu, 2009). Gu Mu also met with former Prime Minister Tanaka during this visit to Japan. Tanaka commented, with frankness and kindness, “Gu Mu and the others should have come earlier and we’ve been waiting for a while. After World War II, the economic development of some nations used foreign capital. In today’s world, it’s common to borrow money from foreign countries to build a nation, and you don’t have to feel that it’s awkward.” (Gu, 2009). After that, they held a substantive meeting on a loan from the Overseas Economic Cooperation Fund, and officially decided to borrow 50 billion yen during Prime Minister Ohira’s visit to China in December 1979. The conditions were an annual interest rate of 3% and a repayment period of 30 years. This was the first longterm, low-interest loan that China had obtained from a foreign government since the reform and opening up. The loans from Japan expanded over the years. Throughout the 1980s, Japan became a major loan donor to China (Gu, 2009). Moreover, Japan’s ODA loan to China continued until 2007, amounting to approximately 3316.5 billion yen (Ministry of Foreign Affairs website. Accessed November 15, 2016).6 (2)

Okita and His colleagues’ Return to China and the Establishment of J-C

In October 1979, three people, Okita, Sakisaka, and Kobayashi, revisited China for a fortnight. China requested them to visit factories making automobiles, machinery, textiles, etc. in Beijing, Shanghai, and Hangzhou and give their opinions about these (Ono, 2004). Deputy Prime Minister Gu Mu asked Okita et al., after they returned from their inspection, to deliver a lecture on “What principles should be used to modernize the economic structure?”. Okita explained as follows: The basis of economic development is the development of productivity. Without production, there is no consumption. For this purpose, it is necessary to: (1) improve the production systems such as organization and technology, (2) absorb advanced knowledge from overseas and scientific research on statistics and planning methods, (3) enhance social capital, (4) improve the workforce quality (general education/specialized education/workplace training), and (5) streamline the corporate management.

6

In addition to yen loans, Japan has provided a total of 157.5 billion yen in grant aid and 183.2 billion yen in technical cooperation, up to FY2014.

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Another important factor is to balance the national economy, specifically by balancing: (1) savings/investments (savings, investment rates), (2) the labor force (quality/quantity, training of engineers/specialists), (3) foreign capital, (4) industry (production goods/consumer goods/basic materials), (5) the regions, etc. [text partly omitted] The modernization of China would have to include the mechanism of the market economy in the planned economy and tackle each of the above issues steadily in turn (Ono, 2004). While visiting China in October 1979, Okita offered advice that would later lead to the establishment of the special economic zone.7 In the first place, as mentioned above, a survey on special economic zones was urgently carried out when the Deputy Chairman of the Shanghai Revolutionary Commission, Lin Hujia, visited Japan in March 1979 (Masuo, 2011). After that, in late April of that same year, at the meeting of the Economic Construction Work Conference held by the Chinese Communist Party Central, the Guangdong Provincial Party Committee requested the establishment of export processing zones in Shenzhen, Zhuhai, and Shantou, while seeking to grant foreign economic autonomy (Gu, 2009). Subsequently, the Party Central and State Council approved the “report on the implementation of the external economy by special policies and elastic measures” by Guangdong and Fujian provinces, as a result of which the door to the establishment of a special economic zone was opened. According to Mr. A, a person involved in J-C, Okita offered the following advice: “During the Edo period, Japan established something like a free trade zone in Dejima, Nagasaki. Dutch merchants also came there, and could perform actions that were not permitted inland. Although it did not affect the whole country, Dejima was only liberalized. If China is worried about implementing a market economy, why not choose a few places and implement it there first?”. According to what Gu Mu told Mr. A, Gu Mu submitted to the State Council a proposal for a special economic zone and 14 open coastal cities, based on Okita’s advice. Then, on May 16, 1980, the Party Central and State Council approved the establishment of special economic zones in Shenzhen, Zhuhai, and Shantou, Guangdong, and in Xiamen, Fujian. In October 1979, at a meeting with Okita, Gu Mu stated: “The lectures and advice of the three teachers are very informative and some have already been adopted in our economic policy. It is also a great stimulus to economic experts. We look forward to your continued guidance.” Okita responded as follows: “For me, I’ll do my best to cooperate. I think this is a lifelong job. Let’s increase the number of people a little more and regularly hold meetings between economic experts from both Japan and China.” Gu Mu agreed with this proposal. This marked the beginning of the ongoing J-C, which is held annually, alternately in Japan and China (Ono, 2004).

7

From an interview by the author with Mr. A, a person involved in J-C, August 30, 2016.

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5.3 Proposal Regarding the “Oversupply Economy”: From the 1st Annual Meeting to the 5th Annual Meeting In order to visualize a concrete image of the target period of this section, the historical background (main events) of that period will be listed here at the beginning. In addition, the CPI increase rate and GDP growth rate are also presented as typical economic indicators (Table 5.2). In this section, the author will review the content of the J-C from the 1st annual meeting to the 5th annual meeting and explore the challenges to the Chinese economy at that time. At the same time, the author will consider the advice of the Japanese side on the issues of the Chinese economy and the policy response of the Chinese side based on it. Before turning to the details of each session, we will consider how the discussions at the annual meetings progressed in order to understand the overall picture of these Table 5.2 Historical background of the 3rd section Main events from 1981 to 1985 (1981) The Chinese government requested the Japanese side to cancel the second phase of the construction of the Baoshan Steel Works (1981) The Sino-Japanese oil development company succeeded in exploring an offshore oil field in Bohai Bay (1981) The Chinese Communist Party 11th Period 6th Central Committee General Assembly decided on a policy of “Mainly a planned economy and secondary market regulation” (1982) The “plant manager responsibility system” was initiated under the leadership of the Communist Party Committee (1982) The Chinese Ministry of Foreign Affairs protested against Japanese social studies textbook certification (1983) For state-owned enterprises, there was a change from a profit-based payment system to a tax payment system (first step in the tax reform) (1983) Regarding agriculture, the production contract system was approved, and the private employment and transportation industry of farmers were recognized (1983) The liquidity of state-owned enterprises was changed to unified management by the People’s Bank of China (spending by the government ceased and changed to bank loans) (1984) The Chinese Communist Party 12th Period 3rd Central Committee Plenum resolved that the reform of rural areas was in place and that the focus of the reform was to shift to the cities (1984) The State Council approved “Some provisional provisions for improving the planning system,” directive planning was reduced, and leadership planning and market adjustments were expanded (1984) Daihatsu began producing automobiles in Tianjin (1984) Japan–China Friendship Hospital opened in Beijing with Japanese grant aid (1985) Once again, the basic construction fund changed from financial expenditure to bank lending (1985) Free price sales of production materials were allowed that exceeded the planned, full-scale “price reform” (1985) The Yangtze River Delta, Pearl River Delta, and Fujian Southern Delta were designated “Coastal Economic Open Zones” Sources Iechika ed. (2004) and Kong (2008) (Table 5.3)

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Table 5.3 Changes in China’s consumer price increase rate and gross domestic product growth rate (1981–1985)

Year

CPI increase rate (%)

GDP growth rate (%)

1981

102.5

105.1

1982

102.0

109.0

1983

102.0

110.8

1984

102.7

115.2

1985

109.3

113.4

Sources China Statistical Yearbook (2016) and IMF-World Economic Outlook Databases (April 2017 Edition)

meetings. First, they are scheduled to last about a week, of which about three days are devoted to discussion and summary. In addition, there are courtesy visits to government officials and factory inspections. Usually, the annual meeting is held in the form of a subcommittee and, at the beginning, both Japan and China expressed their views on the “world politico-economic situation.” On the Japanese side, Saburo Okita and Kiichi Saheki often spoke, and on the Chinese side, Ma Hong mainly spoke. Discussions that were unrelated to the Chinese economy are omitted from this section. Subsequently, a “Current Situations and Challenges of the Chinese and Japanese Economy” subcommittee was held, at which experts from both Japan and China, including Isamu Miyazaki, spoke. This section will review the discussion, focusing on the Chinese economy. Next, a subcommittee on “Japan–China cooperation” was held. For this part as well, we will select important aspects of the discussion and examine the contents. At the end of the annual meeting, a summary session was held, after which the next venue and topics to be considered were discussed. Let us start with the first annual meeting.

5.3.1 First Meeting: May 1981, 1st Annual Meeting The participants at this annual meeting were as follows (Table 5.4):

5.3.1.1

Introduction by the Japanese Members

According to Okita, the Japanese side reported on topics such as “Macroscopic Japanese economic development” (Isamu Miyazaki), “Japan’s growth process from corporate management” (Ryoichi Kawai), “The Development of International Division of Labor in Asia” (Miyohei Shinohara), “The Steel Industry seen internationally” (Tsutomu Kono), and “Japan’s economic cooperation policy” (Okita). In particular, Shinohara received a lot of attention, reporting “The trade pattern in the Southeast Asian region is rapidly changing from the conventional vertical division of labor to the horizontal division of labor, where transactions among industrial

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Table 5.4 J-C 1st annual meeting roster (May 1981 1st annual meeting in Hakone, Japan) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (Foreign economic relations representative of the Japanese government)

Representative Ma Hong (Deputy director, Chinese academy of social sciences)

Representative Masao Sakisaka (chairman, international energy policy forum)

Counsel Xue Muqiao (counsel, national planning commission)

Kiichi Saheki (chairman, nomura research institute)

Liao Jili (member of the national planning commission)

Ryoichi Kawai (president, Komatsu industry)

Li Hao (member of the national import and export control committee)

Miyohei Shinohara (Chairman, Asian economic research institute)

Xue Baoding (director, basic construction economic research institute, national construction commission)

Atsushi Shimokobe (chairman, research and development agency)

Jiang Yiwei (deputy director, institute of industrial economy, Chinese academy of social sciences)

Isamu Miyazaki (former administrative vice-minister of economic planning agency)

Lin Senmu (Deputy Director, Basic Construction Economic Research Institute, National Construction Commission)

Tsutomu Kono (general manager, research department, Nippon steel)

Jiang Zhenyuan (deputy researcher, institute of industrial economy, Chinese academy of social sciences)

Minoru Kobayashi (deputy general manager, research department, the industrial bank of Japan)

Dai Youzhen (World economic institute, Chinese academy of social sciences) Ben Chun (secretary of Xue Muqiao, the national planning commission) Ling Xingguang (group leader, the Japanese economic research group, world economic institute, Chinese academy of social sciences) Li Jianguo (international trade institute)

Sources Okita (1984) and Chinese delegation roster (1981)8

products are the main components. China should also study this point.” (Okita, 1984). On the other hand, the Chinese side explained that the “coordination policy” that is currently being implemented is intended to correct the mistakes caused by past economic policies. The inefficiency of the economy as a whole and imbalance between the economic sectors were caused by the faulty policy of “aiming for high growth in the short term” due to a lack of patience (Okita, 1984).

8

Provided by Ling Xingguang in April 2016.

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5.3.1.2

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Highlights of the 1981 First Annual Meeting

Because this was the first annual meeting as J-C, it seems that the purpose was to introduce the current state of the economy while deepening the parties’ mutual understanding of each other. The Chinese side frankly acknowledged past mistakes by describing the policy around 1981 as a “coordination policy”. This was reflected as follows in the memorandum to the conference on the Japanese side9 : “At the meeting, firstly, both countries explained the ‘economic status quo and problems’ of each country. Various questions were asked from both sides and the current situation was confirmed mutually. During this discussion, it was found that there existed a considerable difference between the economic terminology of the two countries due to their different systems and statistical methods. It was confirmed that this led to misunderstandings. By the end of the first meeting, both countries had agreed to clarify the differences between their respective definitions of economic terms through exchanges between experts and to consider ways to unify these definitions. My impressions of having attended this meeting are as follows. The current state of the Chinese economy, which was undergoing economic adjustment, was not in a critical situation, as some claimed. Rather, based on the recognition that the conventional planned production method aimed at high growth had caused various imbalances, in the future, there would be a shift to production management, which prioritizes meeting the needs of the people. The series of economic policy revisions is a trajectory revision to shift towards steady economic construction.

Regarding the differences in economic terms, the two countries attempted to solve these by compiling a dictionary of economics terms centered on the members participating in J-C. As a result, in 1983, the Modern Sino-Japanese Economic Encyclopedia (Type A/Modern Chinese Economic Encyclopedia, Type B/Modern Japanese Economic Encyclopedia) was published, edited by Atsushi Shimokobe and Ma Hong. The Modern Chinese Economic Encyclopedia was written by the Chinese side and the Japanese side translated the manuscript into Japanese. The Modern Japanese Economic Encyclopedia was written by the Japanese side and translated into Chinese by the Chinese side. The latter was said to have been intended to serve as a guide for Chinese economics practitioners wishing to study the capitalist economy in the 1980s and 1990s (Japan Research Institute, 2011). According to Ling Xingguang,10 who acted as an interpreter at the first J-C meeting, the content of the discussion was transmitted within the Chinese government as follows: “There is no doubt that it was reported to Prime Minister Zhao Ziyang at 9

A handwritten memo on Industrial Bank of Japan stationery. It is presumed that Minoru Kobayashi of the Industrial Bank of Japan drafted the memo that Mr. Okita, the counsel, or Sakisaka, the representative, made the remarks at the conclusion of the conference. 10 Born in Japan in 1933, in 1953, he dropped out of Hitotsubashi University and joined the Shanghai Institute of Finance and Economics. In 1978, he joined the World Economic Research Institute of the Chinese Academy of Social Sciences, and subsequently served as chief of the advanced countries economic research department, remaining until 1993. After that, he was professor at Kanazawa University, and chairman of the Japan–China Science and Technology Culture Center.

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the time. It was Lin Senmu, who was a subordinate of Deputy Prime Minister Gu Mu at the time, who recorded it at the venue. Lin reported to Prime Minister Zhao Ziyang via Gu Mu. Lin could not speak Japanese, so I think Li Jianguo helped. Regarding the reporting route, Gu Mu was directly connected to the Prime Minister without needing a go-between. From a certain time, the recorder changed to Zhang Yunfang. The completed report was distributed to executives of a certain rank or higher”.

5.3.2 “Priority Inclination Policy” and Technology Reform: May 1982, 2nd Annual Meeting The participants at this annual meeting were as follows (Table 5.5):

5.3.2.1 (1)

Introduction from the Japanese Members

Saburo Okita offered the following points regarding the priority inclination policy in the postwar reconstruction process of the Japanese economy.

Table 5.5 J-C 2nd annual meeting roster (May 1982, 2nd annual meeting on a ship going down the Yangtze river, China) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Counsel Gu Mu (state council member of state affairs)

Representative Masao Sakisaka (chairman, international energy policy forum)

Representative Ma Hong (director, chinese academy of social sciences)

Kiichi Saheki (chairman, nomura research institute)

Xue Muqiao (counsel, national planning commission)

Ryoichi Kawai (president, Komatsu industry)

Qiu Chunfu (counsel, national economic commission)

Miyohei Shinohara (chairman, Asian economic Li Jingzhao (counsel, ministry of construction research institute) and environmental protection) Atsushi Shimokobe (chairman, research and development agency)

Liao Jili (member of the national reform committee, deputy secretary general)

Isamu Miyazaki (chairman, Daiwa institute of economic research)

Li Hao (member of the national economic commission, deputy secretary general)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Xue Baoding (director, China urban and rural construction economic research institute)

Minoru Kobayashi (general manager, research department, the industrial bank of Japan) Source China–Japan Working Group for the Exchange of Economic Information (1982)

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“While I was working at the Research Bureau of the Ministry of Foreign Affairs (around October 1946), Prime Minister Shigeru Yoshida hosted a luncheon for several economists. At this luncheon, the attendees discussed how to restore the Japanese economy. At the table, Hiromi Arisawa, a professor from the University of Tokyo, came up with the idea of a ‘priority inclination production method.’ As many industries were in danger of shrinking reproduction, it was impossible to restore them fully. The only choice was to focus on one industry and concentrate the materials and policies on this to ensure recovery. The priority area was the coal mining industry, so the focus should be on increasing coal production to support the steel industry. Next, the iron produced would be sent to the coal industry to increase coal production. In this way, a virtuous cycle would be created between the “coal industry” and “steel industry,” that would gradually expand to other industries. ‘In every country, there are major obstacles that are unique at some point. If efforts are concentrated and the problems solved, the whole economy will benefit. Even in China, it may be possible to improve the situation by solving problems, such as transportation and finance, to increase coal production. ‘In Japan, after the economic recovery, the price policy and inflation measures became the focus of the policy-makers. During this process, the method of managing economic activity gradually changed from direct to indirect control. Indirect control refers to fiscal policy, tax revenue policy, monetary policy, and so on. However, with regard to foreign currencies, since they were the key to Japan’s expanded reproduction at that time, they were centrally managed for a considerable period of time. ‘In terms of external economic policy, Japanese worked to maintain a single fixed exchange rate and reduce the price difference between the domestic and overseas prices for similar products. Japanese reduced the number of fields with high domestic production costs and developed those with low domestic production costs; that is, areas with international competitiveness. In this process, the market mechanism was fully utilized”. After that, State Council Member of State Affairs Gu Mu asked, “Did you focus only on coal production in the priority inclination policy? What else did you focus on besides coal?” Okita replied, “The focus was on coal and, after increasing coal production, we prioritized its distribution to the steel industry to increase steel production. Furthermore, priority was given to railway transportation and fertilizer production, and the development of agricultural production was promoted.” (China–Japan Working Group for Exchange of Economic Information 1982). (2)

Ryoichi Kawai offered the following advice:

“In 1960, Tatsunosuke Takasaki, head of a delegation, was asked by Prime Minister Zhou Enlai to give his thoughts on China. At that time, a member of the visiting group had commented that the products of Anshan Steel Works were almost treated as scrap products in Japan. When Takasaki frankly communicated this remark to Prime Minister Zhou, he said, “In future, our activities will always emphasize product quality over production volume.” This comment impressed me.

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‘After that, Komatsu Industry began to help to improve the quality control of the Beijing Internal Combustion Engine Factory. Today, I wish openly to point out the problems. ‘The inside of the Beijing Internal Combustion Engine Factory is very dirty. The ground is littered with random items, including high precisions components. This is shocking so the first step is to clean and tidy up the factory. ‘Secondly, strict quality inspection is not performed regarding each process. As a result, parts that are defective in the first place flow through the process one after another, and eventually become scrap, resulting in a tremendous amount of waste. ‘Third, Chinese factories have few specialists who link the research, planning, designing, testing, and product improvement activities with concrete production process reforms. ‘Achieving a certain level of production index is necessary but, if you continue to make products as usual, it will be easy. On the other hand, in order to improve a product, various tests are performed and the cycle of commercialization is laborious. Chinese factories, which are not exposed to market competition, do not take these risks because there is no possibility of going bankrupt. However, if this trend continues in the long term, great waste will be created throughout China. You need a lot of money to run the above cycle, but I am convinced that, if you do it decisively, you will achieve great results. ‘If one factory makes improvements, this can be spread to other factories. First of all, it is necessary to improve the flow of work and products in the process to which you belong, and gradually expand it (China–Japan Working Group for Exchange of Economic Information, 1982)”. (3)

Minoru Kobayashi made the following statement, entitled “Discussing the market control of product production and centralized management of fund allocation”.

“From a medium- to long-term perspective, we consider the principal issue of what kind of economic management system should be established to benefit future economic development in China. 1.

Clarify the purpose of rebuilding the economic management system.

The purpose of rebuilding is to achieve a ‘virtuous cycle.’ To do so, we should respect the economic principles and start preparing to create an economic system that can promote technological progress and capital investment at the same time. ‘After setting the goals, each economic entity should be given certain powers and responsibilities. We would like to create an organization that can respond promptly to specific problems arising in each job. ‘It is necessary to create a mechanism to evaluate the results of each economic entity accurately. Companies should focus on R&D and improving new product quality as well as forecasting supply and demand. 2.

The basic concept of product production management is as follows:

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To modify the current directive planning economy and introduce a leadership plan for certain commodities. By doing so, production activities are carried out based on the supply and demand needs of society. The problem facing socialist states, including China, is that product production does not meet the demands of society. With the development of society, demand becomes increasingly complicated and diversified every day, but the Soviet-style command-oriented planned economy cannot cope with the change. Products should be produced to meet the needs of society, not to fulfil the plan. Specifically, assuming that the profit target is achieved, it is better for the producer and consumer (or seller) directly to negotiate and determine the production amount. ‘Except for commodities (the main food stuffs such as staple foods, and the main raw materials, such as coal and oil, steel), which are extremely important for the state to secure production, it is sufficient to produce based on the leadership plan. 3.

Emphasis on the planning and management of fund expenditure.

Currently, too much money is being wasted in China due to, for example, increased inventories, delayed construction, the low utilization of equipment, and so on. Therefore, the importance of the proper allocation and effective use of funds cannot be overemphasized. ‘First of all, personnel exchanges between the People’s Bank of China and the National Planning Commission, among others should be stimulated, the operational capabilities of the bank staff should be improved, and the functions of the banks should be gradually strengthened (China–Japan Working Group for Exchange of Economic Information, 1982)”.

5.3.2.2 (1)

Discussion

Remodeling of the existing companies Questions from the Chinese members.

1. 2. 3. 4.

In what order should companies undergo remodeling in their respective industries? What did Japan do? How can the introduced technology be used effectively? How did Japan handle the relationship between the introduction of technology and equipment and the protection of the domestic machinery industry? How should Japan and China cooperate in the process of remodeling Chinese companies? The Japanese members’ responses included:

1.

When modifying a company’s technology, the foundation should first be solidified. Start by tidying up inside the factory, and then proceed to quality control. On that basis, you should proceed with the modification of the product design. Product design modification facilitates companies’ technology modification.

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3. 4. 5. 6.

(2)

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Make each company enthusiastic about technological modification. In Japan, there is intense competition between small and medium-sized enterprises (SMEs), so each enterprise is extremely active regarding technological innovation. In China, it is good to bring out the positivity of companies through education and material (financial) incentives. Companies should have the necessary renovation funding. It is unnecessary to update all of the equipment when the technology is modified. It is advisable to systematically move equipment from large companies to SMEs. Society’s needs should be the basis for selecting priorities regarding technological innovation. The domestic production of equipment and parts should not be rushed. Generally, it is necessary to complete three phases: the introduction period, transition period, and domestic production. In the Japanese steel industry, the introduction period lasted a decade, from 1951 to 1960, with the following 5 years being the transition period (China–Japan Working Group for the Exchange of Economic Information, 1982). Protect the domestic industry and promote domestic production

In Japan, industries such as steel and automobiles have developed through the governments protection and training measures. Large-scale technology introduction is necessary, but its proper control is also essential. First, it is important to select a company with the ability to digest technology and high potential for development, and permit technology introduction. At the same time, it is necessary to make efforts to develop our own technology, and only through our own technology can true industrialization be achieved. Domestic production should proceed step by step, and not urgently seek results. Japan in the 1950s handled the relationship between equipment imports and domestic production relatively effectively. When importing equipment, Japanese introduced manufacturing technology into the factories that manufacture the equipment at the same time, and co-produced it with foreign factories. For example, regarding thermal power-generation equipment, even if the first unit was imported, the second unit partially produced it and imported the rest. For the third unit, Japanese factories made everything ourselves (China–Japan Working Group for Exchange of Economic Information, 1982). (3)

Planned economy and market regulation

The Japanese participants stressed the importance of using inductive planning and economic means. According to Saburo Okita, the governments involvement with the economy in postwar Japan changed from direct to indirect control. In any society, the demand is determined from bottom to top, not from top to bottom. Regarding the link between plans and markets, Isamu Miyazaki stated that a bond exists between the two, even in capitalist societies, which is called a mixed economy. Miyazaki argued that the action of market mechanisms should be expanded in the

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medium to long term. In addition, Miyazaki said that China had neglected the effects of the price mechanism. That is, when a problem occurred in the planned economy, it appeared as a price problem. In Japan, people often say, “If you don’t understand, ask the market.” That means investigating consumer trends. The consumer’s intention is reflected in the price. It is an intelligent approach to entrust price management to the market mechanism and, at the same time, to change administrative means to economic means (China–Japan Working Group for Exchange of Economic Information, 1982).

5.3.2.3 (1)

Highlights of the 1982 2nd Annual Meeting

Important recommendations from the Japanese side

There were important introductions and recommendations from the Japanese side at this annual meeting including, for example, the introduction of the “priority inclination production method” by Okita, the indication that “Chinese factories have few specialists who link the work of research, planning, designing, testing, and product improvement with concrete production process reforms” by Kawai, and the proposal by Kobayshi that “Directed planning economy should be revised and leadership planning should be introduced for some products”. How were these introductions and recommendations utilized in China’s economic policymaking? For example, in terms of phenomena, Kobayashi’s proposal appears to have influenced the trend whereby, on October 4, 1984, the State Council approved the “Some Provisional Provisions for Improving the Planning System,” drafted by the National Planning Commission, in which it announced the reduced scope of the directive plans and expansion of market regulation. By the time of that year’s annual meeting, in 1982, for example, Chen Yun stated, during a round-table discussion of the National Planning Commission, the aim to “Maintain the planned economy and use market regulation as a supplement.” Contrary to Chen Yun’s remarks, the foresight of Kobayashi’s proposal (except in the case of certain products, such as food, the leadership plan should be adopted) is clear. (2)

Points of focus during the discussion

As for “Protect domestic industry and promote domestic production,” the Japanese side explained that it is necessary to select companies that have the ability to digest technology and have high development potential, permit technology introduction, and embrace the merits of gradually aiming to self-improve the technology. In this regard, the Chinese government seems to have made use of this recommendation in selecting key companies for automobile production. For example, in 1987, the Chinese government sought to introduce technology from foreign car manufacturers by selecting FAW Motor, Dongfeng Motor, and Shanghai Automotive Industry, which are state-owned enterprises with large production scales as automobile producers. However, at that time, the difference in the technology level between the Chinese companies and foreign companies was so large that the former could not aim for their own technology development, and so tried to introduce the technology

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by establishing a Sino-foreign joint venture. As a result, the profitable joint venture contributed to the Chinese parent company in the form of paying dividends, but its own technological development did not progress very much (Marukawa, 2013a). On the contrary, local automobile companies, such as Chery Automobile, showed a tendency toward technological development, such as improving durability and pursuing convenience of repairs (Shioji, 2011). It is also noteworthy that Isamu Miyazaki introduced the mixed economy and promoted the importance of the price mechanism. How was this recommendation applied in China? According to Mr. A, who was involved in J-C, the mixed economy developed as follows. “As of January 1979, when Mr. Okita first arrived, China had a planned economy and no idea about the market economy. Therefore, Mr. Okita said that it was better to develop a ‘mixed economy’ first. When I reported this to the top, the reaction was ‘Is that so?’ Then, in the mid-1980s, the following discussions took place in the theoretical circles in China. The idea of a socialist market, which connects planning with the market, was proposed. In the early 1990s, that idea changed into the theoretical framework of the socialist market economy. This was greatly influenced by Mr. Okita, who was first mentioned in the lecture. It was not an original idea of the Chinese economic theory circles”.11 According to Mr. A, the recommendations offered by Okita and Miyazaki at JC influenced the theory or philosophy of China’s reform and opening up policy. Naturally, Okita’s recommendations were not the only triggers for promoting the market economy. It is considered that, when the Chinese government officials took a step away from the planned economy, they supported policy enforcement from the side. Column: the GDP quadrupling plan and J-C China’s GDP quadruple plan (the expression used at that time to indicate the plan to quadruple the national annual agricultural and industrial output of 1980 by 2000) was the overall struggle for economic construction, which was confirmed at the 12th National Congress of the Chinese Communist Party, held in 1982. Deng Xiaoping explained this goal as follows: “The goal of the 12th party congress is to quadruple the total agricultural and industrial output in twenty years. Twenty years means from 1981 until the end of this century. These 20 years have been divided into two major stages: the first decade will solidify the foundation, and the second decade will achieve high growth” (Deng, 2006). On the other hand, Mr. A, who was involved in J-C, explained the circumstances behind the fourfold increase in GDP as follows: “China’s GDP quadrupling plan is actually inspired by the report “about Japan’s income doubling plan (the original source was the National Income Double Plan (1961–1970) by the Economic Planning Agency),” sent by Gu Mu to Deng Xiaoping. Furthermore, the method for achieving a fourfold increase in two stages was proposed to Mr. Deng Xiaoping when Mr. Okita visited China with Prime Minister Ohira in 1979”.12

11 12

From the author’s interview with Mr. A, a person involved in J-C, August 30, 2016. See Footnote 11.

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5.3.3 Proposals for the Future of China: May 1983, 3rd Annual Meeting The participants at this annual meeting were as follows (Table 5.6):

5.3.3.1 (1)

Introduction from the Japanese Members

Minoru Kobayashi made the following statement:

“I would like to comment on the problems that will arise if the Chinese economy continues to prosper. ‘In view of Japan’s experience of high growth, I think that the steel consumption per GNP will continue to rise in China, rather than decline. In the future, I feel that there will always be a shortage of materials and energy. Table 5.6 J-C 3rd annual meeting roster (May 1983, 3rd annual meeting, in Nagasaki, Japan) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Representative Ma Hong (director, Chinese academy of social sciences)

Representative Masao Sakisaka (chairman, international energy policy forum)

Li Jingzhao (counsel, ministry of construction and environmental protection)

Kiichi Saheki (chairman, nomura research institute)

Li Hao (member of national economic commission, deputy secretary general)

Ryoichi Kawai (president, Komatsu industry)

Pu Shan (director, institute for world politics and economics, Chinese academy of social sciences)

Miyohei Shinohara (chairman, Asian economic Yao Yunfang (director, institute of research institute) international finance, bank of China) Atsushi Shimokobe (chairman, research and development agency)

Lin Zili (researcher, economic research institute, Chinese academy of social sciences)

Isamu Miyazaki (chairman, Daiwa institute of economic research)

Dong Feng (managing director, China economic system reform study group)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Yang Xianbai (researcher, economic research institute, Chinese academy of social sciences)

Minoru Kobayashi (general manager, research department, the industrial bank of Japan)

Li Chongwei (executive secretary, economic research center, state council)

Takeshi Inoue (chairman, Japan–China economic association)

Lin Senmu (deputy director, China urban rural construction economic research institute) Wang Guiwu (director and senior process master, China economic system reform study group)

Source Japan–China Economic Association (1984)

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‘China is currently researching ways to make better use of finance to increase material production without increasing energy consumption. This needs to be further promoted. ‘On the other hand, I would like China to study how to utilize effectively the large amount of extra equipment that developed countries have. For example, relocating overseas to China used aluminum production facilities. For petrochemical plants that are difficult to relocate, consignment production or long-term import contracts may be considered (Japan–China Economic Association, 1984).” (2)

Ryoichi Kawai made the following statement regarding the future of Japan– China technical cooperation:

“This time, I am pleased to hear that the scope and conditions for establishing a joint venture in China have been expanded and flexible. I believe that this change will be extremely effective if it is advanced in conjunction with technological changes. In the past, implementing joint venture plans was difficult. According to the Japanese experience, technology introduction, technical cooperation, and license purchase were far more effective than the establishment of a joint venture for the development of the machinery industry. ‘Komatsu has also spent about $100 million on technology and royalties in the past. As a result, it now exports over $1 billion a year, with almost no foreign payments. ‘At the first annual meeting, we discussed quality control, but at that time, we mainly focused on production. Originally, quality control in Japan was a general term for production control, not only for production, but also for technology, sales, and overall corporate management. Although it is called “overall quality control,” it means that quality control is, in other words, company management. ‘The first goal of quality control is to investigate what needs customers have and how to obtain customer satisfaction. Since we design, produce, and sell products that meet the needs of our customers, it goes without saying that the products sell well and the companies make a profit. ‘Therefore, once the customer’s needs are understood, an appropriate design must be created for them. Then comes the process of producing good quality or at a low cost and rationally selling. What kind of quality the customer wants is the most important issue. ‘Looking back at the time when we were studying quality control, the most regrettable thing is that the products that the manufacturing side (our company) made in the belief that the customers would be pleased, generally failed. That is the point. On the other hand, if your research shows that a customer needs something and then you make it, you will definitely succeed. No matter how technically superior, a product that does not meet the needs of the customer must fail as a product. ‘When Komatsu provided technical cooperation for quality control to the Beijing Internal Combustion Engine Factory, I heard that there is no market research in China. Market research will be a very important issue in the future, so I hope you will incorporate it in China (Japan–China Economic Association, 1984).”

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Atsushi Shimokobe commented on China’s economic policy as follows:

“First of all, China will become a new member of the global economy by quadrupling its economy by 2000. By that time, it is important for China to have taken on the task of constructing international trading ports. At present, it can be said that China has no port capable of handling international trade. Therefore, the construction of an international trading port is a very important issue for China. At the same time, it is an important issue for future economic development, for both Japan and the world. Furthermore, in the twenty-first century, considerable freight transportation may be replaced by air transportation, so it is necessary to consider this measure. ‘Second, there is the youth problem. According to my predictions, in 2000, one quarter of the world’s youth population will be Chinese. Young people will gradually become more interested in education and culture. They will demand the freedom to go to school and have a job, and freedom of movement. It will be important for young people around the world to work to promote and communicate with different cultures. ‘The third issue is large-scale projects at the global level. As for China, there are issues such as how to develop and maintain the Yangtze River and the Yellow River, how to stop the desertification of the land, and how to maintain the loess plain. I think that the whole world needs to work together to solve these challenges (Japan–China Economic Association, 1984).”

5.3.3.2 (1)

Discussion

Problems Concerning Japan–China Technical Cooperation and Future Plans

Li Hao: I would like Mr. Kawai to outline how Komatsu introduced foreign technology, digested it, and created excellent products. This is the most important problem facing China. Kawai: I am planning to visit China on a mission of the Japan–China Economic Association this fall, so if there is an opportunity, I would like to talk about that then. Wang Guiwu: Mr. Kawai has explained to us the true meaning of quality control. If possible, please explain how you are implementing total quality control (TQC) of your products during the distribution process from wholesale to retail. Kawai: TQC has just begun in Japan and has finally spread from the manufacturing industry to the financial and construction industries. TQC in commerce is under research and is not yet organized specifically. Yao Yunfang: Since implementing the policy of opening up to the outside world, we have studied the experience of the high growth of the postwar Japanese economy as well as economic development in many developing countries. Comparing Japan’s experience with that of developing countries, Japan has mainly focused on technology introduction, but developing countries have mainly established joint ventures with foreign capital. The reason is that developing countries have

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less experience of the technical infrastructure and business management compared to Japan. Experience suggests that it is difficult to raise the level of technology management by introducing technology as Japan did, so China is advocating the establishment of a joint venture. China wishes to improve the level of technology and management through joint ventures. Based on the above assumptions, please tell us how Japan introduced the technology, how it was digested, and how the quality of the product was improved. The method of introducing technology in Japan is great, but China is still weak in terms of technology, so it is impossible immediately to adopt a policy like Japan’s. Please tell us what kind of technology introduction policy we should adopt in response to the current situation in China. Kawai: Certainly, Japan had some technical level peculiar to Japan, so it was possible to develop through technical cooperation without requiring a joint venture. Mr. Li Hao recently mentioned that the conditions for joint ventures in China have become flexible, and it is now possible for joint ventures to produce products for sale in China. In that case, it is more likely that Japanese companies will establish joint ventures with the Chinese side (Japan–China Economic Association, 1984). Kawai: If a joint venture with a Chinese company becomes possible, we are very worried about whether it will be possible to provide the labor management and factory management that China wants by the Japanese representatives in a society where the political system is very different from Japan’s. Therefore, I believe that technical cooperation is most desirable for Chinese companies that have a certain level of basic technological capabilities and Chinese companies that have modern business management skills. For companies that wish to learn about business management in addition to technology, a technical partnership regarding business management with a Japanese company can be considered. In short, it may be possible to consider flexibly whether to create a technical alliance only, or a technical alliance and a corporate management alliance, depending on the situation of the target company. Yao Yunfang: Mr. Kawai stated that, in order to create a good product, we had to do market research in advance, but how does market research help to make good products? Conducting market research in the domestic market is not difficult, but it is very difficult to carry it out overseas. When conducting market research abroad, by the time you know your customers’ needs and have created a design based on them, and then made a product, it’s already obsolete. In this way, there were many cases where the product was not produced in time. Please tell us what kind of market research is effective for exported products. Kawai: When exporting, it is necessary to carry out thorough market research as in the domestic market. Half-finished market research will always fail, so even if it costs a considerable amount of money, I think that thorough market research is a condition for successful exports. To give an example, we mobilized staff from Komatsu’s overseas offices and sent dozens of engineers overseas to conduct a followup survey of 700 bulldozers (made by Komatsu or foreign-built) that were actually in operation. As in considering a person’s history survey, we looked at when a customer

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bought the product, how long it worked, when it broke, what parts were restocked, and what it was like at that time (Japan–China Economic Association, 1984). (2)

Challenges faced by the Chinese materials industry and their countermeasures

Ma Hong: A certain amount of energy consumption is required to increase the GNP per unit. Is there a coefficient of energy for GNP? The energy coefficient tends to decrease sharply with an increase in GNP. Is it the same in the materials industry? Kono: Looking at the change in energy intensity, which means how much energy is required to produce crude steel, the level in 1973 was 100 and the level in 1982 was 85, showing a consistent decline. Looking at the change in steel consumption per 100 million yen of GNP, it was 40.7 t in 1970, but since then has consistently declined, and the estimated volume in 1981 was 26.6 t. There are various possible causes for this decrease, but one of the reasons is the saving. Ji Chongwei: Is there a production quota for each company in the structural recession of industry? If there is a quota for output, is it due to government guidance or cooperation between companies? If the utilization rate of production equipment declines, how will the excess workers be treated? Kono: In the case of the steel industry, the government sets a production target called a guidepost every quarter, and each private company voluntarily determines the production amount accordingly. Kawai: In the case of the petrochemical industry and aluminum industry, the government does not give instructions, and each company voluntarily decides the production volume. When each company consults on the output, it violates the antitrust law. For this reason, the “Act on Temporary Measures for Structural Reform of Specific Industries” was enacted to enable the consolidation of companies, disposal of equipment, and adjustment of production volume. Ma Hong: If the production facility is not operational, will the idle workers be paid? Kawai: The salaries are paid unless the company goes bankrupt. Ma Hong: If a company goes bankrupt, is it necessary to get a government permit? Kawai: If a company goes bankrupt, government approval is not required, but a court decision is required to apply the Corporate Rehabilitation Law. Yao Yunfang: How will the wages of the workers be covered when the corporate performance is sluggish? Kawai: Companies borrow money from banks and pay the wages for the workers. In the market economy, companies may be in the red depending on the phase of the business cycle. When the economy is bad, banks preferentially fund and protect companies. When structural problems occur, legal measures must be taken. When paying wages for idle workers, bonuses and overtime pay are not paid, but the basic salary is paid (Japan–China Economic Association 1984).

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Highlights of the 1983 3rd Annual Meeting

At this meeting, some notable comments were presented by the Japanese side. Minoru Kobayashi pointed out the shortage of materials and energy supply in the future, and Ryoichi Kawai described the importance of technology introduction and TQC. Atsushi Shimokobe raised the international trade port construction and youth issues. Each of the challenges they presented were serious, but how were they dealt with in China after that? Regarding the international trading port construction pointed out by Mr. Shimokobe, Mr. B, who was involved in J-C, made the following comments: “Shimokobe’s proposal was in line with the Chinese governments intention to open the door to the world and build an international trading port. Report it to the top and the Chinese government will decide to do it. At the recommendation of Mr. Shimokobe, we have not begun to build an international trading port. Shortly after Deng Xiaoping launched the opening-up policy, the government announced plans to build international trading ports. Mr. Shimokobe’s proposal has the effect of prompting the Chinese governments decision and backing up its decision, and that is the role of J-C”.13 In other words, Mr. B found the role of J-C in that the proposal played a role of promoting the decision and implementation of the Chinese government, rather than the content of the proposal itself. Looking back at the discussion, the challenges of China at that time were highlighted. That is, the Japanese side advised China to introduce technology, while the Chinese side requested the technology transfer by establishing a joint venture. The Japanese side believed that it would be difficult to establish a joint venture company with funding in China at the time because the social system was different and the legal system inadequate. The idea of the Japanese side was, “Even if you pay the technology usage fee or royalty now, you can make many times more profit later, so you should introduce the technology.” It seems that the Chinese side, who were not confident about their technical level, did not listen. In addition, the Chinese side described the difficulty of undertaking market research when developing overseas markets. That was exactly the problem China faced. Komatsu’s thorough overseas market research, introduced by Kawai, served as a model for China. As an aside, Samsung Electronics later carried out thorough market research by country in the smartphone market, and has jumped to having the top market share in the global market. It can also be seen that the Chinese side is also suffering due to the measures to deal with the structural recession industry, and is looking for options, such as corporate bankruptcy and wage payments for idle workers. However, it takes time for the Chinese government to take concrete action, and the “Corporate Bankruptcy Law (Trial)” was adopted only in 1986 by the Standing Committee of the People’s

13

From an interview by the author with Mr. B, a person involved in J-C, August 30, 2016.

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Congress of the People’s Republic of China, when the path to the bankruptcy of the state-owned enterprises was opened. Column Minoru Kobayashi: The personality of the youngest member of J-C Remarks by Kyoko Kobayashi (Minoru Kobayashi’s wife)14 : My father-in-law was born in China. My brother-in-law who is considerably older than my husband also lived in China. He has told me about his actual experience in China. However, my husband had a relationship with China after joining the Industrial Bank of Japan, especially after visiting China with Mr. Okita and Mr. Sakisaka in 1979. It seems that the head of the Industrial Bank of Japan was telling him that it was now the Age of China, so why didn’t he try to work in China? He gradually deepened his research on the Chinese economy and, as a result, more people from China came to consult him. Gradually, he seemed to become absorbed in and devoted to China. After joining the Industrial Bank of Japan, he was assigned to the Human Resources Department and then worked in Shikoku. After that, he moved to the Research Department relatively quickly and was pleased about that. I often made clean copies of his papers. He wrote more and more papers, but it seems that he needed to read them calmly later. When I woke up in the morning, my husband repeatedly said, “You don’t have to do housecleaning, so please read this and make a clean copy of it.” He rarely made a clean copy by himself. He said, “I’ll make a mistake if I make a clean copy myself.” Remarks by Mr. C, a person involved in J-C15 : “As time passed, I began to think that Mr. Kobayashi was a great person. He was an official member of J-C, and that is natural. Of the original participants, he passed away early. Before his death, Mr. Kobayashi decided that a part of his estate (70 million yen) would provide a fund for China (the Qinghua University Economic Management Institute, Minoru Kobayashi China Economic Research Fund). The chairman of the fund was Wu Jinglian, a prominent economist. I have visited Mr. Kobayashi’s house, which contains a large number of rooms, but is not a luxurious mansion. Under such circumstances, making a significant donation means having a special feeling toward China. This is also very impressive. Mr. Kobayashi, from the standpoint of China, understood the situation in China at that time, and then pointed out the problems of China without hesitation. We accepted it because it is an international rule for discussion. Mr. Kobayashi had a very rigid personality. He was sincere in his treatment of China. He was the youngest at the beginning, but his suggestions and proposals to us were excellent. He worked as hard as he could. I am honored to have been a close friend of his. It’s a pity he died young.” Remarks by Mr. Masahiro Hirano16 : Apart from J-C, Mr. Kobayashi was often invited by Mr. Gu Mu and Mr. Zhu Rongji to visit China to attend meetings. As far as I recall, an article about the meeting was published on the front page of The People’s Daily at least twice, together with a picture of Mr. Kobayashi. One day, when I was shopping with Mr. Kobayashi at a department store in downtown Beijing, a group of student-like young people stopped and said, “Oh, there’s Minoru Kobayashi.” I jokingly said, “It seems that your description is circulating.” Mr. Kobayashi laughed, “I can’t hang around the city looking scruffy”

14

From an interview of Mrs. Kobayashi by the author, August 7, 2013. From an interview of Mr. C by the author, September 1, 2016. 16 Recorded by the author from a written interview of Mr. Masahiro Hirano, October 17, 2020. 15

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5.3.4 Demonstrate Foresight: May 1984 4th Annual Meeting The participants at this annual meeting were as follows (Table 5.7):

5.3.4.1 (1)

Introduction of the Japanese Side

Masao Sakisaka stated the following regarding the promotion of the Japan– China joint venture.

“Japanese companies were able to increase their market share and profits through the management and technical efforts of the companies in the fierce postwar competition. Various efforts by companies have been rewarded in the form of increased profits. ‘For Japanese companies, investment in China involves risks. Against those risks, corporate efforts in the socialist economy are less rewarded, so Japanese companies’ investment in China is not very active. ‘One of the reasons why Japan’s investment in China has been delayed is that the information required by Japanese companies is not sufficiently provided. The decision-making by Japanese companies is said to be “bottom up.” When formulating a business plan, the mid-level executives of a company thoroughly investigate the business potential, then report it to the top of the company to make a decision. Therefore, they seek more information from China. In addition to that, there is the problem that the law on joint venture management is not well established. ‘Therefore, I would like to propose the following three points: ‘First, why not set up a “China Investment Information Center” with cooperation between Japan and China? This organization would provide investment and industry information, undertake feasibility studies, and assist negotiations with Chinese companies. Dispatching an investment research delegation to China and holding an investment seminar in Japan are also included in the scope of business. ‘Second, how about launching a full-scale joint venture model between Japan and China? We would like to establish a joint venture in a core industry so that we can introduce government funds as a national project. ‘Third is the establishment of new special economic zones in Dalian, Tianjin, and other cities. Since it is said that 14 coastal cities will be opened to the outside world, the direction of the implementation is already visible (Japan–China Economic Association, 1985a).” (2)

Additional Comments from the Japanese Side (Speakers were unclear on the record)

Comment 1: Regarding non-price competition, for example, the material value of a tie is about 1000 yen but, depending on the brand, there is added value. A high value is 30,000 yen and, in the extreme case, it is 100,000 yen. In other words, nonprice competition is extremely important and China should consider it. For example, cashmere in the Xinjiang Uygur Autonomous Region is a very good raw material, but even if it is made into a product and branded as “Tianshan,” it does not sell very

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Table 5.7 J-C 4th annual meeting roster (May 1984 4th annual meeting at Shenzhen, China) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Counsel Gu Mu (state council member of state affairs)

Representative Masao Sakisaka (chairman, international energy policy forum)

Representative Ma Hong (director, Chinese academy of social sciences)

Takeshi Inoue (chairman, Japan–China economic association)

Xue Muqiao (executive secretary, economic research center, state council)

Kiichi Saheki (counsel, nomura research institute)

Li Hao (Deputy Secretary General of the State Council)

Miyohei Shinohara (chairman, Asian economic research institute)

Liao Jili (counsel, national economic system reform committee)

Hitoshi Miyazaki (President, Arabian Oil)

Wei Yuming (deputy minister, ministry of foreign affairs and trade)

Atsushi Shimokobe (chairman, research and development agency)

Liu Hongru (vice president, People’s Bank of China)

Isamu Miyazaki (chairman, Daiwa institute of economic research)

Pu Shan (director, institute for world politics and economics, Chinese academy of social sciences)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Li Chongwei (executive secretary, economic research center, state council)

Minoru Kobayashi (general manager, research Rong Fengxiang (director, 2nd department, department, industrial bank of Japan) ministry of foreign affairs and trade) The following were temporary members:

Dong Shaohua (chief, policy research office, national economic commission)

Tamaki Nakagawa (head, nippon steel Shanghai Baoshan works cooperative)

Zhang Peiji (director, international trade institute, ministry of foreign affairs and trade)

Jun’ichi Nishio (general manager, Asia department, Hitachi)

Yao Yunfang (general manager, overseas bank department, bank of China)

Tamio Shimakura (general manager, research planning office, Asian economic research institute)

Zhang Ge (chief, special economic zone construction group, state council public office) Lin Senmu (deputy director, China urban rural construction economic research institute) Fang Sheng (vice president, Shenzhen university) Gu Nianliang (director, Hong Kong–Macau economic research center) Liang Xiang (Mayor of Shenzhen city) Zou Erkang (secretary general,special economic zoneof Shenzhen) Yuan Geng (chief, Shenzhenspecial economic zoneMerchandising Bureau Shekou industrial zone management committee) Chen Zhihan (deputy mayor of Xiamen city) (continued)

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Table 5.7 (continued) Japanese participants (position)

Chinese participants (position) Lu Zufa (deputy secretary-general, the communist party of Shenzhen city)

Source Japan–China Economic Association (1985a)

well. Therefore, why not entrust the product design of “Tianshan” to a cashmere designer in France or England? Then, there is a possibility that sales will improve in the Japanese market. My concern is how likely it is that high-tech products will be consumed in large quantities in China in terms of consumption rather than production. China covers a vast land area, so it is necessary to make full use of the new information technology. Moreover, in terms of agriculture, the development of seeds should be promoted by making use of the results of biotechnology research. In addition, the need for rare metals will increase with the development of science and technology, and attention will be paid to how much rare metal there is in China. Comment 2: I would like to suggest using the leasing system more for equipment and machinery. For example, for the supply boats (workboats) required for offshore oil development, two supply boats are required for each rig, but if you invest in all of them on your own, it will be a huge investment amount. On the other hand, many supply boats have been constructed in Europe and America in the past, and it is more rational to charter (lease) these. Even for companies expanding into Shenzhen, leasing equipment will save capital. Comment 3: While the advanced technology of the 1970s is difficult to transfer, the advanced technology of the 1990s has a high possibility of technology transfer. Therefore, it is possible that China could succeed in transferring advanced technology (digital technology) in the 1990s and surpass Japan. Comment 4: In the steel industry, it is important to maintain equipment. At the Usiminas Steel Works in Brazil, problems began to appear two to three years after the Japanese engineer repatriated the site. After that, as a result of the continuing technical cooperation for about a decade, stable operation became possible. Comment 5: To supplement Usiminas, Nippon Steel receives a technology fee of several hundred million yen every year, but technology transfer requires consideration. Technology is also considered a type of resource (Japan–China Economic Association, 1985a).

5.3.4.2

Controversial Topics

Regarding technological progress, Saheki Kiichi stated, “One of the issues is that the Japanese side should strive to maintain a friendly relationship between Japan and China until the twenty-first century, as Japan must always stay one step ahead of

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China in terms of technology and industrial structure.” There was a series of protests by the Chinese side. The Chinese side made the following objection: “When considering the economic relationship between China and Japan, why will the Sino-Japanese relationship be unable to maintain long-term stability unless Japan consistently has a technological advantage?” “I do not think that Japan must have a technological advantage in order to maintain long-term cooperation. In the future, Japan’s technological advantage will not be a prerequisite or basic condition for Japan–China economic cooperation. Even if China becomes dominant in some technological fields, it can still fully cooperate with Japan”. Saheki’s remarks were made with the former US–Japan relationship in mind. According to him, when the United States was confident that it was superior to Japan in many ways, the US was also generous about opening markets and transferring technology. When the US feared that it might lose to Japan in the field of advanced technology, Japan–US relations began to become very tense. Given the Japan–China relations, China has something that Japan cannot match in terms of resources, manpower, or the size of the country. In short, China basically outstrips Japan in terms of its potential, scale, and quantity. Therefore, if Japan wishes to stand on an equal footing with China, without Japan’s confidence that Japan will be one step ahead of China in terms of its qualitative advantages, specifically technology and industrial structure, Japan cannot be free or generous regarding technology transfer. This was Saheki’s way of thinking. Saheki thought as follows: “If Japan is confident, the technology transfer will proceed smoothly, so it is necessary for Japan itself to continue its efforts.” On the other hand, the Chinese side received Saheki’s remark as “a theory of a fixed technology gap.” Finally, the Chinese side said: “We fully understand Mr. Saheki’s remark. China must learn from the spirit of the Japanese people to do their best. We admire the spirit of the Japanese people,” and this discussion ended (Japan–China Economic Association, 1985a).

5.3.4.3

Highlights of the 4th Annual Meeting in 1984

At this year’s meeting, the Japanese side offered a number of notable comments and suggestions. For example, (1) Establish a Japan–China Investment Information Center, (2) Emphasize non-price competition, (3) Promote new seed development by utilizing biotechnology, (4) Consider the importance of rare metals, (5) Utilize a leasing system, (6) Look toward the possibility of Chinese economic development through advanced technology (digital technology) in the 1990s, and (7) Provide investment information necessary for bottom-up decision making. First, proposal (1) resulted in the establishment of the Japan–China Investment Promotion Organization in 1990, and the China–Japan Investment Promotion Committee was also established on the Chinese side. Regarding the importance of rare metals mentioned in (4), after the 2010 collision of the Senkaku Islands’ offshore fishing vessels, China restricted exports of rare metals to Japan. In 2010, China became aware of the strategic importance of rare metals, as Japan sought a

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stable supply of rare metals from the public and private sectors (Marukawa, 2013b). (6) noted that digital technology is easy to transfer and pointed out that it will lead to economic development in China. This suggestion predicted the emergence of “the world’s factory, China,” in the future.

5.3.5 The Effective Use of Capital and a New Industrial Revolution: May 1985 5th Annual Meeting The participants at this annual meeting were as follows (Table 5.8):

5.3.5.1 (1)

Introduction of the Japanese Side

Minoru Kobayashi delivered the following report, entitled “The role of the loan function in China”. 1.

“The effective use of capital” is essential for the Chinese economy.

The Chinese economy can be defined as an “economy with conditions that require a large amount of capital investment”. He said: Let us refer to the capital coefficient (a number that indicates how many units of construction funds must be introduced to increase one unit of income) as a measure of “the effective use of capital.” During Japan’s high-growth period (1955– 1960) and that of Korea in the 1970s, the capital coefficient was less than 3. During these periods, Japan and Korea achieved high economic growth with a lower accumulation rate (Japan: 25%, South Korea: 27%) than China (China: 30–33%). On the other hand, from 1971 to 1983, the capital coefficient of China was 4–6. As described above, China has an economic characteristic that requires a lot of capital, so it is difficult to lower the capital coefficient as in the case of Japan and Korea. However, it is possible to make effective use of capital by taking the following measures. First, allocate capital to the most urgent investment projects for China. Second, the construction of urgent investment projects will be advanced in a timely manner, and the construction will be completed within a short period, thereby shortening the idle period for the investment funds. Third, increase the operating rate of the completed factories and equipment. In order to carry out the above, it is necessary to have an awareness that you are entrusted with the important resources of the nation regarding the capital you use, and to cultivate an awareness that you will pay a certain price as the usage fee. In other words, it is necessary to clarify the position of the “financing function” in the Chinese economy.

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Table 5.8 J-C 5th annual meeting roster (May 1985 5th annual meeting in Karuizawa, Japan) Japanese participants (position)

Chinese participants (Position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Representative Ma Hong (Director, Chinese Academy of Social Sciences)

Representative Masao Sakisaka (chairman, international energy policy forum)

Li Hao (deputy secretary-general of the state council)

Takeshi Inoue (chairman, Japan–China economic association)

Liao Jili (counsel, national economic system reform committee)

Kiichi Saheki (counsel, nomura research institute)

Li Jingzhao (counsel, ministry of urban rural construction and environmental protection)

Ryoichi Kawai (chairman, Komatsu industry)

Pu Shan (director, institute for world politics and economics, Chinese academy of social sciences)

Hitoshi Miyazaki (president, Arabian oil)

The following were temporary members:

Atsushi Shimokobe (chairman, research and development agency)

Wu Junyang (deputy secretary-general, economic research center, state council)

Isamu Miyazaki (chairman, Daiwa institute of economic research)

Liu Zhuofu (deputy secretary-general, price research center, state council)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Li Chongwei (executive secretary, economic research center, state council)

Minoru Kobayashi (director and general manager, research department, the industrial bank of Japan)

Li Boxi (group manager, general group, technology and economic research center, state council)

The following were temporary members:

Wu Jinglian (Senior Researcher, Economic Research Center, State Council)

Takemochi Ishii (Professor, the university of Tokyo)

Lin Senmu (deputy director, economic research institute, ministry of urban rural construction and environmental protection)

Ken’ichi Imai (Professor, Hitotsubashi university)

Zhu Yuening (deputy chief, research department, public office, state council)

Nobuhiko Shimada (deputy general manager, China sales division, Hitachi)

Tian Yuan (Executive Secretary, Price Research Center, State Council)

Tamio Shimakura (general manager, research planning office, Asian economic research institute)

Ren Junyin (general manager, research department, people’s bank of China)

Haruo Suzuki (chairman, Showa Denko)

Ling Xingguang (chief, international relations office, institute of world political economy, Chinese academy of social sciences)

Yoshio Suzuki (director, institute of finance, bank of Japan) Tamaki Nakagawa (Nippon steel Shanghai Baoshan works cooperative head) Takafusa Nakamura (Professor, the university of Tokyo) (continued)

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Table 5.8 (continued) Japanese participants (position)

Chinese participants (Position)

Masanori Moriya (general manager, industrial technology research department, Nomura research institute) Source Japan–China Economic Association (1985b)

2.

Estimate the future capital formation in the Chinese economy.

Estimate China’s domestic capital accumulation from 1981 to 2000. We assume that the real economic growth rate will be around 8%, and that the savings rate will rise from 29.5% to 34.5% as income levels rise. The estimated result was 1981–1985: 687.9 billion yuan, 1986–1990: 1112.7 billion yuan, 1991–1995: 1913 billion yuan, and 1996–2000: 3462.9 billion yuan. The cumulative total from 1981 to 2000 amounted to 7176.7 billion yuan. In the future, if efforts are made to improve the quality of the economy and are continued, there is a possibility that considerable capital accumulation will be possible after the 1990s (Japan–China Economic Association, 1985b). 3.

Possibility of introducing foreign capital

The recent situation surrounding China is as follows. (a) Major financial institutions around the world are enthusiastic about lending to emerging countries due to the weak demand for funds in developed countries. (b) As the cost of constructing the plant increased significantly, huge funds were needed to carry out large-scale projects. (c) China has little cumulative debt and is highly evaluated by the international financial institutions. Given these circumstances, China may be flexible regarding its dependence on foreign capital. According to D. Avramovic’s developing country debt repayment model,17 temporary cumulative debt in developing countries is unavoidable. The point is how to manage the maximum amount of foreign capital introduction, in general, so making a judgment based on the Debt Service Ratio (hereinafter abbreviated to DSR) is convenient. DSR = (principal required to be repaid in the current year + interest payment amount)/foreign currency ordinary income in the current year. Note: Foreign currency ordinary income refers to income from exports/extra-trade and transfers. Generally speaking, if the DSR is 20% or less, there is no problem but, in view of the difficult situation in Latin American countries, it is important to maintain this at around 15%.

17

Dragoslav Avramovic (1920–2001), was an economist from the former Yugoslavia. He had served as Chief Economist for Latin America and the Caribbean in the World Bank, Director of the same Bank’s Economic Department, and President of the Central Bank of Yugoslavia.

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I estimate that, by strengthening the export power and raising the exchange rate of the renminbi to some extent, a foreign currency loan of $100 billion will be possible by the year 2000. It is true that 100 billion dollars is a huge amount, but, in comparison with the aforementioned domestic capital formation (domestic accumulation), the dependence on foreign capital is about 3% (Japan–China Economic Association 1985b). (2)

Ken’ichi Imai made the following statement entitled “Industrial Policy for Japan’s Advanced Industries”. 1. 2. 3.

Technology development is not a sudden but a continuous cumulative process, and it is important to learn it as a system. The direction of the “initial kick” that initiates the effective accumulation process is crucial. It is important to combine the market and the organization.

A concrete example of (3) is the “VLSI Technology Research Association.” The association jointly developed manufacturing equipment and elemental technology, and the participating companies added their own know-how, so active competition developed. The guidance policy implemented by Japan can be summarized as follows. 1. 2. 3.

Regarding technological development, strategically prioritize areas with high potential. Based on the outlook, perform a priming “initial kick” in the direction of increasing the intensity of technological development. After that, promote information exchange and aim to create a broad agreement. It is also important to familiarize these to local areas and transfer technology to related companies.

Through this process, the development investment of private companies will be promoted, the productivity of other industries will be improved, and new integrated technologies will be developed. As a result, the range of impact will expand (Japan–China Economic Association, 1985b). (3)

Takemochi Ishii explained the microelectronics revolution as follows:

The microelectronics (hereinafter abbreviated as ME) revolution is the trigger of the information revolution that is composed of “computers” and “communication.” In the mid-1990s, a revolutionary next-generation computer will come into practical use, and will cause a large, wide-ranging avalanche phenomenon in society. For example, in the field of machine production by programming, productivity will increase 100fold. Japan’s role in the ME revolution is to specialize in the production of non-military consumer electronics while taking advantage of the characteristics of traditional Japanese society, which respects human relationships. He introduced Japanese word processors, VTR, and high-definition television as symbols of the ME revolution (Japan–China Economic Association, 1985b).

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Masanori Moriya delivered the following report, entitled “Japan’s Development Direction and Role in the New Industrial Revolution”:

Japan’s technological strength is increasing rapidly, and has surpassed that of the United States in terms of consumer technology and large-scale trade products. This is the reason for Japan’s large trade surplus. However, further imbalance expansion is undesirable, and the direction of development centered on product exports will be forced to change. On the other hand, the United States has many technologies that are far superior to those of Japan. However, Japan and the US are very different in terms of their direction. An international comparison of technologies will be made in the following four fields: 1. 2. 3. 4.

Military, space development, aircraft, nuclear power, and so on Advanced technology: VLSI, optical communication, computers, biotechnology Application fields of advanced technology: computers, word processors, printers, VTRs, NC machine tools, robots, and similar areas Conventional technology: steel, shipbuilding, automobiles, industrial machinery, textiles, and so on

The United States is focusing on (1), but Japan is doing little. Both Japan and the US are focusing their efforts on (2) and Europe is slightly behind. In (3), there is little effort being made in either Europe or the US. In terms of technology, Japan is overwhelmingly strong. In (4), while Europe and the US have been cutting corners, Japan is making every possible effort to improve its technology. Incidentally, the protagonists of the new industrial revolution are not (1) but (2) and (3). In particular, the role of the application field of (3) is great. This is because, in the future, society will move toward being highly information-oriented, and the key to its development is that sophisticated information equipment will be abundantly located in factories, offices, and homes. Japan, which has overwhelming technological capabilities in this field, will greatly expand the export of these devices. However, it is undesirable for the imbalance in the trade balance to expand further than its current state, and it will hinder Japan’s development potential. Therefore, it is necessary to increase the ratio of local production, technology exports, engineering software export, and so on. (Japan–China Economic Association, 1985b).

5.3.5.2 (1)

Discussion

About the economic management system

Haruo Suzuki: Macroeconomic management is not enough with the management of production and distribution of goods alone, and even with value management alone. In Japan, the Economic Planning Agency, Ministry of Finance, Bank of Japan, and Ministry of International Trade and Industry managed the entire economy through

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a division of labor, and succeeded. With the maturity of the Japanese economy, the control of the above institutions has relaxed, and the competition among private companies has become noticeable. Saburo Okita: In Japan, when formulating the income-doubling plan, the economy was divided into three areas. In other words, they combined the plan with the market by dividing it into (1) the field where the government plans and is also responsible for these plans’ execution, (2) the field where the government plans and guides privatesector activities, and (3) the field which entrusts the private sector with free competitive activities. Although the above categories have changed with the development of the economy, this idea is still inherit in Japan’s economic policy. Wu Jinglian: China’s shift from the management of production and distribution of goods to value management does not intend to deny the plan itself. The consensus is that the government will control the macro aspect and liberalize the micro aspect to revitalize it. However, in China, the macro and micro categories are different from the capitalist economy. While the daily decisions on production and sales are left to the company, there is debate about whether the long-term investment of a company belongs to the micro or macro arena. The point is how to stick to macro policies in actual economic management. Under the socialist system, there exist all of the required conditions to do it well. That is, socialism has the advantage that, (1) the state is the owner of a state-owned enterprise, (2) the market can be adjusted through the combination of administrative means and economic leverage, and (3) it can induce economic activity by distributing investment funds. Of course, we are also studying Western economics and assessing the Dodge Line18 and Erhard19 economic policy (Japan–China Economic Association, 1985b). (2)

About the New Industrial Technology Revolution

Li Boxi: China has a basic policy of integrating new technology with traditional technology. Looking at the contribution rate of technology to the economy, China is far lower than the United States, Japan, and the Soviet Union, and it is necessary to improve this situation. Takemochi Ishii: Human resource development is the most important factor in developing microelectronics (ME). Japan will continue to focus on basic research and, at the same time, reform the education system in order to develop originality. China needs to balance its basic research with applied/practical technologies, and international cooperation is also required over basic research. ME has the characteristic that technology transfer is easy. From the perspective of expanding the base of technology, I think it would be good to create a place like Akihabara in China. 18

The economic liberalization policy was implemented in Japan by Joseph M. Dodge, a GHQ economic advisor in 1949. 19 Ludwig Erhard (1897–1977), a former West German statesman, served as Minister of the Economy and Deputy Prime Minister under Prime Minister Adenauer. The social market economy policy he adopted facilitated the miraculous reconstruction of West Germany.

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In that way, the public can directly access the ME products and SMEs can procure parts there. Ken’ichi Imai: Regarding “systematicity” and “continuity,” it is easy to connect both. It is important to make the “machine industry” field, which is suitable for accumulating partial improvements, “the center of technological innovation.” In order to promote technological innovation vigorously, it is important to expand the autonomy of companies and to develop the core companies that can participate in international competition. Furthermore, it is important for the organization to create a “corporate coalition” that focuses on the vertical division of labor in the industry (Japan–China Economic Association, 1985b). (3)

About investment and finance Ren Junyin:

1.

2. 3.

What are the ways of controlling the money supply? How can we determine an appropriate inflation rate when controlling the money supply? What is the intrinsic relationship between the amount of currency issued and the economic growth rate? How can a financial/capital market that is effective in macroeconomic management be created? How can we think about the relationship between finance and the economy in order to implement stable macroeconomic management and foster financial markets?

Yoshio Suzuki: First of all, it is advisable to introduce the idea of independent profitability into financial institutions and to give financial institutions incentives to manage their surplus funds in an advantageous manner. Furthermore, why not introduce the effect of leveraging interest rates and create a mechanism for lending to companies with good performance and efficient projects under a comprehensive credit and lending plan? In addition, for the horizontal flow of funds, that is, the development of the financial market, the development of the interbank market is the most important aspect. Regarding the fostering of the capital market, a shortcut would be to create a secondary market for government bonds. To determine and manage an appropriate amount of money supply, in the case of China, the figures from 1979 to 1983, when the economy grew without inflation, are one reference (Japan–China Economic Association, 1985b). Minoru Kobayashi: Recent problems, such as the overheating of investment, a sharp decrease in foreign currency, and the rising prices in China, should not be neglected. On the other hand, these problems should be embraced positively, as they demonstrate that the Chinese economy has entered the stage of full-scale takeoff. Currently, foreign currency management and cash management are important, and it is necessary to shift from the management of production and distribution of goods to an investment management economy. In investment management, it is important to clarify each company’s investment plan and that the focus of the industrial policy is clear.

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Regarding the price problem, I agree with the introduction of market functions in the consumer goods field but, in the materials field, in view of the current supply shortage, it is necessary to expand the production capacity and curb consumption by raising prices. Expanding the production capacity requires lead time and a huge amount of money (Japan–China Economic Association, 1985b).

5.3.5.3

Highlights of the 5th Annual Meeting in 1985

In the comments from the Japanese side, Minoru Kobayashi pointed out: “China’s ability to form capital” and the “Possibility of foreign loans” based on it were useful suggestions that could have a quantitative outlook for China. Although China had already used foreign loans, such as ODA yen loans, Kobayashi’s proposal provided the Chinese government with a sense of reassurance regarding the introduction of foreign capital and was one basis for accelerating it. Ken’ichi Imai pointed out that technological development is not a sudden phenomenon but a continuous cumulative process, and that the learning process as a system is important. Takemochi Ishii stated that the ME revolution would dramatically improve productivity in the mid-1990s, and have an “avalanche” effect on society. Masanori Moriya explained that the “application of advanced technology and peripheral fields” has great potential for development. Were their explanations applied to the subsequent policymaking in China? For example, with regard to the semiconductor industry in China, before 1978, it mainly produced products for military purposes, such as radars, missiles, and military aircraft. Around 1978, mainly Japanese-made TVs were imported and gained popularity, so demand for consumer-use semiconductors centering on domestic TV parts increased in China. Therefore, the Chinese government actively led the introduction of technology. In 1986, the Seventh Five-Year Plan (1986–1990) and the “1986– 2000 Long-term Science and Technology Development Plan” were formulated. In those plans, specific measures were taken to develop the semiconductor industry as a priority industry, such as financial and tax incentives and the designation of national priority projects (Marukawa, 2000). As of 1985, the Chinese government was fully aware of the importance of the semiconductor industry, and explanations by Imai, Ishii, and Moriya are thought to have helped to reinforce it.

5.4 The Ability to See the Future Born from Demonstrated Events: From the 6th Annual Meeting to the 10th Annual Meeting In order to visualize a concrete image of the target period of this section, the historical background (main events) of that period will be listed at the beginning of the section.

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Table 5.9 Historical background of the 4th section Main events from 1986 to 1990 (1986) The state council promulgated the “Interim Ordinance on Bank Management,” clarifying the roles of the central bank and specialized banks, as the beginning of the financial reform (1986) The standing committee of the national people’s congress adopted the “Land Management Law,” and the land use right was established as a legal right (1986) The 4th conference of the 6th national people’s congress adopted the “Foreign Enterprise Law” and authorized foreign investors to start business in China (1986) The standing committee of the national people’s congress adopted the “Corporate Bankruptcy Law (Trial),” which was expected to be applied to state-owned enterprises and others (1987) The Kouka dormitory20 caused friction between Japan and China (1987) The Shanghai municipal Government promulgated the “Shanghai Land-Use Rights-Paid Transfer Rule” and approved the transfer of land-use rights for the first time in China. Tianjin, Shenzhen, Guangzhou-and Hainan Province followed Shanghai (1987) At the 13th national congress of the Chinese communist party, the conversion to a “diversified ownership system” was approved (1988) The Japan–China investment protection agreement was signed (1988) The “Temporary Ordinance for Private Enterprises” was adopted at the executive committee of the state council, legally approving private enterprises with eight or more employees for the first time (1989) The Tiananmen tragedy occurred (1989) The Berlin wall was removed in Germany (1990) The Chinese communist party central and state council announced the Shanghai Pudong area development plan (1990) General Secretary Jiang Zemin emphasized patriotic education (1990) Trial production started at an offshore oil field, jointly developed by Japan and China (1990) The stock exchange opened in Shanghai, and the stock boom began Sources Iechika, ed. (2004) and Kong (2008)

Table 5.10 Changes in China’s consumer price increase rate and gross domestic product growth rate (1986–1990)

Year

CPI increase rate (%)

GDP growth rate (%)

1986

106.5

108.9

1987

107.3

111.7

1988

118.8

111.2

1989

118.0

104.2

1990

103.1

103.9

Sources China Statistical Yearbook (2016) and IMF–World Economic Outlook Databases (April 2017 Edition)

In addition, the CPI increase rate and GDP growth rate are also presented as typical economic indicators (Tables 5.9 and 5.10).

20

Kouka dormitory was a Chinese student dormitory located in Kyoto. China disputed the Osaka High Court’s ruling that Taiwan owned the dormitory, which caused tension between Japan and China. In 2007, the Supreme Court remitted the judgment to the Kyoto District Court (Table 5.10).

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5.4.1 Former Prime Minister Zhu Rongji Joined: August 1986 6th Annual Meeting The participants at this annual meeting were as follows (Table 5.11).

5.4.1.1 (1)

Introduction by the Japanese Side

Miyohei Shinohara made the following statement regarding the cumulative debt problem:

Analyzing the cumulative debt problem of Latin American countries reveals the following factors:

Table 5.11 J-C 6th annual meeting Roster (August 1986 6th annual meeting at Urumqi, Xinjiang Uygur autonomous region, China) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Counsel Gu Mu (state council member of state affairs)

Representative Masao Sakisaka (chairman, international energy policy forum)

Representative Ma Hong (secretary general, development research center, state council)

Atsushi Shimokobe (chairman, research and development agency)

Du Xingheng (former secretary general of the state council)

Kiichi Saheki (counsel, nomura research institute)

Sha Bi’er (vice chairman, people’s government of Xinjiang Uygur autonomous region)

Miyohei Shinohara (chairman, Asian economic research institute)

Zhu Rongji (deputy director, national economic commission)

Takeshi Inoue (chairman, Japan–China economic association)

Liu Hongru (deputy governor of People’s Bank of China)

Isamu Miyazaki (chairman, Daiwa securities research institute)

Sun Shangqing (deputy secretary general, development research center, state council)

Minoru Kobayashi (Director and General Manager, Research Department, the Industrial Bank of Japan)

Li Jingzhao (counsel, ministry of construction and environmental protection)

Yoshio Suzuki (director, financial research institute, Bank of Japan)

Shen Jueren (assistant minister of foreign affairs and trade)

Nobuhiko Shimada (deputy general manager, china sales division, Hitachi)

Li Boxi (managing director, development research center, state council)

Tamaki Nakagawa (Nippon steel Shanghai Baoshan works cooperative head)

Pu Shan (director, world political economy institute, Chinese academy of social sciences) Lin Senmu (director, urban rural economic research institute, ministry of construction and environmental protection)

Source Japan–China Economic Association (1986)

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The hypothesis that the remote cause of the cumulative debt problem was the preceding inflation was almost confirmed. The higher the rate of increase in the money supply, the higher the central government deficit rate. In general, countries with higher inflation rates tend to have a higher debt service ratio (DSR)21 as a result.

Even in the Asia–Pacific region, Korea, whose prices have increased 100-foldin the last 30 years, has far more accumulated debt than Taiwan, whose prices were stable before the oil shock. In other words, the present debt crisis, or the cumulative debt balance behind it, is the aftereffect of the preceding “inflationary overheating”. Even developed countries can become debtors. The sharp rise in the US trade deficit is due to a surge in the federal budget deficit. Potential inflation in the United States was blocked by the capital exports from Japan but, in the end, the United States became a debtor from being a huge creditor (Japan–China Economic Association, 1986). (2)

Minoru Kobayashi delivered the following report, entitled “Economic Planning and Private Enterprises”:

The theme of the 6th J-C was “Plan and Market”. In order for China’s economic system reform to succeed, many industries would have to overcome the challenge of shifting from conventional shortages of supply to excess supply. In particular, in the equipment industries, such as steel, petrochemicals, and electric power, a large amount of capital and long construction period would be required to expand production capacity. Because China had a huge population, the consumption demand was likely to grow significantly as income levels rose. Therefore, it was essential to prepare from an early stage for the future expansion of the demand for basic materials and communication means. When transitioning to oversupply, it is impossible to rely solely on the market mechanism to allocate funds, and necessary to make efforts to build a system and know-how for optimal allocation. In China, companies should give more weight to their contribution to the national economy, and profit should be used as a stimulant as part of the reward for their contribution. It is better for companies to avoid profit-based capital allocation. Funds should be allocated by banks based not only on the profits earned by companies, but also based on the national goals. Therefore, it is important to instill the national goals in the people. In terms of product production, in order accurately to grasp the needs of the diversifying markets and quickly incorporate the production technology, the system that seeks approval from the central government should be revised, and companies DSR = (the principal required to be repaid in the current year + interest payment amount)/foreign currency ordinary income in the current year. 21

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should be given the authority to plan and execute business development themselves. However, business owners must be responsible for the consequences of their actions. In order to instill a sense of urgency to take responsibility as a result, it is appropriate to aim to foster an “internationally competitive company.” According to the experiences of Japan, Korea, and Taiwan, fostering the export industry is a top priority, and the resulting improvement in foreign currency acquisition capability has also attracted foreign direct investment. Regarding the self-financing of companies, the freedom of self-use is allowed. Priorities in investment plans should be controlled through the allocation of additional funds. Regarding foreign currency management, it is necessary to introduce capital goods and technology for the time being in order to improve the international competitiveness in the process of promoting the “four modernizations.” In doing so, firstly, the development of the export industries should be given the highest priority and, secondly, competitive import restrictions should be imposed. If this policy is successful, the confidence in the Chinese economy will increase and it will be advantageous to attract foreign loans and direct investment. The “plan” is a means to show the aim of the leader, and that the “market” is a place where the hopes of the masses are expressed. It is desirable that the people agree on the big goals of the nation, and in detail, various different ways of thinking are included in society, which are skillfully utilized to divide roles (Japan–China Economic Association, 1986). (3)

Yoshio Suzuki delivered the following report, entitled “The Role of Currency and Finance in Economic Planning and Market Adjustment”.

The proper growth rate of the money supply is the sum of the economic growth rate and the inflation rate, plus the trend rate of decline in currency circulation speed (the trend rate of rise in the Marshall k22 ). In Japan, the impact of money supply growth on “nominal growth” (the sum of the “economic growth rate” and “inflation rate,” measured by the GNP deflator23 ) is measured over the next two years. Therefore, if the two-year moving average of the money supply growth rate is always stable, the nominal growth rate will also remain stable. In a market economy, money usually flows to companies with high profitability. Even in economic planning, the industries or companies that should receive more funding should be those that produce products that are in short supply, or those whose production costs are reduced by rationalization. However, from the perspective of economic planning as a whole, some industries and companies with low profitability must be provided with sufficient funds and be developed. 22

Devised by British economist Alfred Marshall for determining whether the money supply is appropriate for the GDP and an indicator of the economic scale of a country. It shows how many times the money supply GDP is, assuming GDP is 1. The transition and deviation from the trend line are more important than the figures themselves. 23 The price index used to calculate the real GNP from the nominal GNP. In addition, at that time, it was common to measure the economic scale of a country by GNP instead of GDP.

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There were two methods adopted by Japan to fund such sectors. First, governmentaffiliated financial institutions provided low-interest loans to a certain extent only to specific sectors. Second, while limiting the loans from private banks to such specific sectors, the government provided a certain amount of interest to the companies that received the loans. By doing so, it was possible to supply funds at a low interest rate to a specific sector without overwhelming the profits of the private banks. In order to achieve both the macro control and micro revitalization of finance, it is important to utilize the principle of the leverage of interest rates in the financial system. If the interest rates are raised for the purpose of macro control and credit provision to the private sector is restrained, only companies with high profit margins and vitality can withstand the high interest rates and receive loans, so micro revitalization is maintained (Japan–China Economic Association, 1986).

5.4.1.2

Highlights of the 1986 6th Annual Meeting

Zhu Rongji, who would later become prime minister, participated in this year’s meeting under the title of the Deputy Director of the National Economic Commission. According to Hitoshi Matsuoka, who attended the conference as a secretary, “Mr. Zhu Rongji rarely attends the two-and-a-half-day conference itself. He appeared only at the dining table. He seemed to have had an in-depth meeting with the local government leadership in Urumqi. I got the impression that he was explaining the policy of the central government and hearing opinions from local governments. He appeared at only a few sessions, and I was surprised to hear Mr. Gu Mu’s introduction to Zhu Rongji. Although other members were in the Deputy Minister’s class, Mr. Gu Mu purposely named Zhu Rongji and said, “Comrade Zhu Rongji cannot easily attend the meeting due to a meeting with the local government. However, the Chinese side will inform Comrade Zhu of the content of this discussion. Comrade Zhu is very busy with many important tasks.” At that time, Zhu Rongji spoke of the importance of ensuring that the central government conveyed the policy details to the local governments”24 Zhu Rongji was elected as a candidate for the Central Committee of the Party in 1987 and became the mayor of Shanghai in 1988. At that time, however, his skills and ability were already highly evaluated and his promotion was clearly confirmed.

24

From interviews of Mr. Hitoshi Matsuoka by the author, July 24, 2013.

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Column: Domestic discussion on foreign capital introduction Remarks by Mr. Hitoshi Matsuoka: When J-C is held in China, some executive candidates of the Chinese government will surely participate as observers. There was a glimpse of this at the Urumqi conference, but it seems that there was controversy within China regarding whether and how to proceed with the reform and opening up. One participant said, “Mr. Gu Mu and his colleagues have been provided with the knowledge from the Japanese side and are also receiving financial support. Therefore, they need to gain an economic track record. They are fighting with other forces day and night.” In response to this statement, the Japanese side asked a question to confirm its true meaning. At that time, there was a person who sent a signal to the Chinese speaker, “Stop doing that.” However, Mr. Gu Mu urged the speaker further, saying, “You have a responsibility to explain properly to the Japanese side.” The speaker was frozen and, after that, was unable to say a single word. Mr. Okita managed to recover the situation.

5.4.2 The “West Pacific Economic Area” and China: April 1987 7th Annual Meeting The participants at this annual meeting were as follows (Table 5.12):

5.4.2.1 (1)

Introduction by the Japanese Side

Masao Sakisaka proposed the “Pacific Coal Flow” as follows:

The aim of this concept is to promote coal utilization in the region and create an efficient coal supply system through economic and technical cooperation regarding the construction of coal-fired power plants in the Pacific Rim countries by expanding the Pacific Coal Flow. For example, in developing countries that require electricity, we propose to position “overseas coal-fired power-generation business development” by Japanese electric power companies and their affiliated companies as a new financial and technical assistance system, and provide financial support. The coal consumption of the four countries in East Asia, including China and Japan, currently exceeds 1 billion tons per year and is predicted to rise to 1.5 billion tons towards the twenty-first century. In this region, a huge amount of fossil fuel is consumed along with oil and natural gas, and research and development on pollution-prevention technology and the conversion of coal to liquid fuel will become increasingly important in the future (Japan–China Economic Association, 1987a). (2)

Yoshio Suzuki made the following remarks on correcting the current account imbalance:

With the Plaza Accord in 1985, developed countries tried to reduce the current account deficit in the United States by relying on exchange rate manipulation, but the flow is changing.

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Table 5.12 J-C 7th annual meeting roster (April 1987 7th annual meeting in Kanazawa, Japan) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Representative Ma Hong (secretary-general, research center for economic, technological and social development, state council)

Representative Masao Sakisaka (chairman, international energy policy forum)

Fang Weizhong (deputy director, national planning commission)

Kiichi Saheki (counsel, nomura research institute)

Sun Shangqing (deputy secretary-general, research center for economic, technological and social development, state council)

Takeshi Inoue (chairman, Japan–China economic association)

Li Jingzhao (council, ministry of construction and environmental protection)

Miyohei Shinohara (chairman, Asian economic research institute)

Li Boxi (managing director, research center for economic, technological and social development, state council)

Hitoshi Miyazaki (chairman, Arabian oil)

Lin Senmu (director, economic research institute, ministry of construction and environmental protection)

Atsushi Shimokobe (chairman, research and development agency)

Chen Bolin (counsel, china social science publishing company)

Isamu Miyazaki (chairman, Daiwa Securities research institute)

Lu Bing (director, general bureau, national economic commission)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Zhang Peiji (director, institute of international trade, ministry of foreign affairs and trade)

Yoshio Suzuki (director, financial research institute, Bank of Japan)

Song Tingming (bureau director, national economic system reform committee)

Minoru Kobayashi (director and general manager, research department, the industrial Bank of Japan)

Qi Yang (director, sichuan economic research center)

Tamaki Nakagawa (Nippon steel Shanghai Baoshan works cooperative head)

Lu Qinzhi (deputy chief of public affairs office, and chief of policy research office, ministry of transport)

Nobuhiko Shimada (deputy general manager, China sales division, Hitachi)

Liu Minglang (deputy director, Liaoning economic research center) Zhang Yunfang (deputy chief of public affairs office, research center for economic, technological and social development, state council) Ling Xingguang (chief of economic group, institute of world political economy, Chinese academy of social sciences)

Source Japan–China Economic Association (1987a)

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In the United States, there is concern that the weakening of the dollar will raise the emotion to expect inflation as well as the long-term interest rates, causing a recession. On the other hand, in Japan and Germany, the surplus in the trade balance has narrowed and the economy has begun to slow down. As a result, Japanese, US, and German policymakers have realized that it is difficult to reduce the current account imbalance simply by adjusting the foreign exchange rate. Suppressing the domestic demand in deficit countries and expanding the domestic demand in countries with a surplus are indispensable requirements for correcting the current account imbalance (Japan–China Economic Association, 1987a). (3)

Tsutomu Kono described the actions that he expects from China when conducting the international division of labor as follows:

The essential requirements for the partner countries when conducting the international division of labor are: (1) cost competitiveness, (2) quality improvement and, and (3) the observance of delivery deadlines. The first thing we expect from China is an improvement in the production control and quality control systems in Chinese factories. It is necessary to shift from the production-first principle due to the supply shortage towards establishing an optimal production system and focusing on quality control. Next, because China’s production plants are often located inland, it is necessary to establish an integrated transportation system, such as truck > railway > port cargo handling > sea transportation (Japan– China Economic Association, 1987a). (4)

Minoru Kobayashi made the following statements regarding the rise of the Western Pacific economic zone and the outlook for the Chinese economy:

According to the forecast by the research department of the Industrial Bank of Japan, in the world economy in the latter half of the 1980s, only the Western Pacific economic zone (Japan, China, NIES, ASEAN) will secure steady economic growth. This region’s contribution to world economic development is expected to be 23%. In addition, the contribution to world trade growth is expected to exceed 40%. The basis of the above forecast was, firstly, the revitalization of Asian countries due to the appreciation of the yen (the expansion of exports to Japan, increase of direct investment from Japan, etc.). The economy of this region has a “three-tiered structure” of (1) Japan, (2) NIES, and (3) China and ASEAN countries, and it is easy for the economies that are at different development stages to be stimulated by each other. The second point to note is China’s economic construction. China’s economy lacks a supply capacity and suffers from technological underdevelopment in many industrial fields. It is a structure that requires many imports as the economy develops. Of course, China needs to have the ability to earn foreign currency but, if the economy is steadily constructed, it is likely that China’s actions will have a considerable impact on the future outlook of the Western Pacific economic zone around 1990. In a sense, the strong yen is an opportunity for China. As Japan’s industrial structure changes, some of the unnecessary equipment may be used in China, and the possibility of direct investment by Japanese companies has increased (Japan–China Economic Association, 1987a).

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Takeshi Inoue made the following statement regarding Japan–China trade:

A big problem these days is how to eliminate the imbalance between imports and exports and how to seek the path of expansion equilibrium. In September 1986, the Japan–China Trade Expansion Council (Chairman: Ryoichi Kawai, Chairman of the Japan–China Economic Association) was established and, as a corresponding organization in China, the China–Japan Economic and Trade Work Coordination Group (Group Leader: Shen Jueren, Assistant to Minister of Foreign Affairs and Trade) was established (Japan–China Economic Association, 1987a). (6)

Tamaki Nakagawa and Nobuhiko Shimada made the following comments on the ideal methods for investing in China and technical cooperation.

Japan’s investment in China is second only to that of Hong Kong and is increasing. However, as a matter of fact, the percentage of investment in the total economic cooperation is 20%, of which 79% is investment in the non-manufacturing industry. Most of this sector comprises service industries, such as hotels. This shows an abnormal tendency compared with the actual investment situation in other Asian regions. There are very few fields of advanced technology and large-scale manufacturing, and this point is similar to the tendency of Western countries regarding investing in China. Most of the manufacturing industry in China today is supported by the old, existing production facilities. There is an urgent need to improve the technology in the vast number of existing plants in order to improve the product quality and expand the variety of products. In this area, the technical cooperation of Japanese SMEs is in line with the current situation in China. When promoting big projects in the equipment industry, it is essential that substantial economic assistance, such as agreements between governments and the provision of finance, are provided, as so-called national projects (Japan–China Economic Association, 1987a).

5.4.2.2

Highlights of the 1987 7th Annual Meeting

First of all, what is attracting attention from the Japanese side is Masao Sakisaka’s proposal for the “Pacific Coal Flow.” This concept was originally proposed by the Government of Japan at the 1st Pacific Energy Cooperation Conference, held in March 1986 (attended by ASEAN countries, the United States, Australia, Canada, and others.). It aimed to reduce the oil dependence and expand the coal trade in the Pacific region. In 1987, the “Pacific Coal Flow Promotion Committee” was established as a body to promote the concept in the private sector, and surveyed the status of coal endowment. The focus of the activity was on ASEAN countries and Australia, while the activity in China was unremarkable.

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Secondly, Tsutomu Kono proposed to build an intermodal transportation system starting inland but, since 1990, the system within China has been gradually established. Japanese transportation companies, such as Nippon Express, Nisshin Transport Warehouse, and Sankyu, also cooperated in this. Regarding the logistics system, Mr. B, an official from the Chinese side of J-C, stated, “The talk about logistics was also very useful to China. In the early stages of the reform and opening up, there was almost no concept of logistics in China, and it was vague25 ”. Third, Minoru Kobayashi predicted that China’s trends would be important in the Western Pacific region around 1990, and that was exactly what happened. Fourth, Takeshi Inoue reported the establishment of a response organization regarding the elimination of trade imbalances between Japan and China, and the heads of their respective organizations (Ryoichi Kawai and Shen Jueren) were both members of J-C. Here too, the contacts of J-C were utilized. Fifth, according to Tamaki Nakagawa and Nobuhiko Shimada, Japan’s investment in China was increasing, but the focus was on the service industries, such as hotels, and the number of advanced technology fields was extremely small. This tendency is common among Western companies and unavoidable at a time when 100% foreign investment is not permitted. If a Chinese joint venture were to be established to promote technological reforms at that time, it seems that the foreign-affiliated partners were limited to SMEs in view of the necessary technology.

5.4.3 “Japanese Management” and Mismatches in Joint Ventures: May 1988 8th Annual Meeting The participants at this annual meeting were as follows (Table 5.13):

5.4.3.1 (1)

Introduction by the Japanese Side

Tsutomu Kono proposed the following in connection with China’s industrial policy:

It will be an extremely important task in the future to distinguish industrial fields that rely on the vitality of the private sector from fields that should be allocated resources as a priority by utilizing the advantages of the planned economy and also to promote consistent industrial policies. As a basic idea related to industrial policy, industries should be divided into the following four industrial groups and the measures should be planned: 25

From an interview of Mr. B. by the author, August 30, 2016. In the first place, there were almost no logistics service industries in the urban areas of China in the early 1980s. Each company had a transportation department called a “fleet” inside the company, which was in charge of transporting the raw materials and equipment used by the company.

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Table 5.13 J-C 8th annual meeting roster (May 1988 8th annual meeting at Dalian, China) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Gu Mu (deputy chairman, national people’s political and cooperative meeting)

Representative Atsushi Shimokobe (chairman, Representative Ma Hong (secretary general, research and development agency) state council development research center) Kiichi Saheki (counsel, nomura research institute)

Fang Weizhong (deputy director, national planning commission)

Ryoichi Kawai (chairman, Komatsu industry)

Gao Shangquan (deputy director, national economic system reform committee)

Takeshi Inoue (counsel, Japan–China economic association)

Liu Hongru (deputy governor of People’s Bank of China)

Miyohei Shinohara (chairman, Asian economic research institute)

Sun Shangqing (deputy secretary-general, state council development research center)

Yosuke Nakae (member of Japan atomic energy commission)

Li Boxi (managing director, state council development research center)

Isamu Miyazaki (chairman, Daiwa Securities research institute)

Lin Senmu (director, national planning commission urban economic research institute)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

The following were special participants

Minoru Kobayashi (managing director and general manager, research department, Industrial Bank of Japan)

Li Changchun (governor, Liaoning province)

Nobuhiko Shimada (deputy general manager, China sales division, Hitachi)

Wei Fuhai (mayor of Dalian city)

Ryozo Shimozawa (general manager, research department, Nippon steel) Toshio Watanabe (professor, faculty of engineering, Tokyo institute of technology) Source Japan–China Economic Association (1988a)

1. 2. 3.

4.

Infrastructure-related: electricity, energy, water, logistics (ports, railways, roads) Materials: steel, cement, aluminum, plastic, paper, fertilizer, etc. Assembly-related: TVs, washing machines, refrigerators, automobiles and other durable consumer goods, construction machinery, machine tools, trucks, agricultural machinery and other production goods Immediate export relations: textiles, light industrial products, agricultural products, etc.

1. is a field that the National Planning Commission and the National Economic Commission should actively respond to, because the sterilization period of capital is long and the investment amount is large. It is possible to rely on international loans, such as from the World Bank, for financing in this area. 3. is an area where the private demand is strong and profits can be easily secured, so the government need only guide the direction of investment.

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2. and 4. are areas where resources should be preferentially allocated in order to increase the future supply capacity. Especially for (2), the investment period is long and a vast amount of funds is required for incidental equipment, such as logistics facilities. With regard to (4), if the limit of economic growth lies in the “ceiling of the balance of payments”26 that Japan has experienced, a policy is necessary that constantly considers what the next export industry should be. For the time being, even if we focus on textiles, light industrial products, and agricultural products, it is necessary to set targets and guide companies in order to actively develop the industries that will produce the next export products (Japan–China Economic Association, 1988a). (2)

Minoru Kobayashi made the following statement regarding corporate revitalization and “Japanese management”: 1.

The mechanism that supported the rapid development of the postwar Japanese economy

Japan, during its developing stage, made vigorous capital investments, which caused the Japanese economy to flourish. A virtuous cycle of the economy was realized by saving a large part of the income and using it for the future expansion of capital investment. As a result, it was possible to avoid the path whereby inflation was generated because the allocated income was mostly spent on consumption. The first factor in “successful investment” is that the investment and market development are combined highly effectively. The following mechanism worked there. In anticipation of the rising income levels of consumers, investments are under way to increase the production of products that will become the best-selling products in the future. Then, due to the intense competition over new products, the prices of new products also dropped, and the new products became popular with more consumers. The second factor that supported “successful investment” was that there were many cases where new technologies were actively adopted when implementing capital investment. The third factor that underpins “successful investment” is that the external conditions of the companies have improved, particularly the support from the policy side. The purpose of industrial policy should not be to protect domestic industries. In order to strengthen the international competitiveness of domestic industries, for example, by creating a “trade and capital liberalization plan” and creating a schedule for forcing participation in the international competition, it was logical to allocate a certain amount of time for the rationalization of the companies. Through excessive protection, the companies in the country rely on protection policies and fail to rationalize. That is a mistake that is made by many developing countries. 2. 26

The meaning and limit of “Japanese management”

In Japan, until the 1960s, when the domestic economy improved, imports expanded and the foreign exchange reserves were almost exhausted. This forced the economy to tighten, which was called the “ceiling of the balance of payments.” This phenomenon was resolved by increasing exports in the mid-1960s and the surplus in the trade balance.

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In terms of the essence of a stock company, the Western style (i.e., the shareholders have a strong say in the business, and the company is managed under the consignment of the shareholders) is the original appearance. The Japanese style entailed the formation of a special type of “employee group control,” with some denial of shareholder rights. The development of the Japanese economy was achieved based on the revolutionary method of “employee participation,” which can be said to deny the essence of a corporation. It can be said that it is the use of a kind of socialist method. 3.

The role of firms in China’s socialist commodity economy

In order for the commodity economy to function, it is necessary to assume that (a) All industries will create an oversupply situation and companies that do not make efforts will suffer from poor performance, (b) Company leaders quickly read the market changes and take responsibility for introducing new products and technologies at their own risk (Japan–China Economic Association, 1988a).

5.4.3.2

Highlights of the 1988 8th Annual Meeting

First, in explaining the Japanese style of management, Minoru Kobayashi sought sympathy from the Chinese side, as he called for the “coupling of investment and market development” as the factor that would lead to investment success. In addition, Kobayashi advised that, as a measure for strengthening the international competitiveness of domestic industries, it should promote corporate change while allowing a certain time limit for the rationalization of the companies. This point was accepted by the Chinese side, which was studying the failures of developing countries. However, looking at the subsequent development of the automobile industry, the changes on the company side were not always smooth. Within the automobile industry, the stateowned enterprises have chosen to receive higher dividend income than to innovate through joint ventures. In addition, Kobayashi advised that companies should be revitalized through an oversupply in all industries, as in the past. This was a proposal based on Kobayashi’s belief that, in an economy lacking goods, improvements in the technological levels and selection of companies are unlikely to occur. Second, Tsutomu Kono urged the Chinese government always to consider what the next export industry should be and operate a policy that sought to foster it. This point was well understood by the Chinese side, and the goals were clarified in the subsequent five-year plan.

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5.4.4 Correction of the Regional Disparities and Inflation: May 1989 9th Annual Meeting The participants at this annual meeting were as follows (Table 5.14):

5.4.4.1 (1)

Introduction by the Japanese Side

Atsushi Shimokobe delivered the following report, entitled “Economic Development and Regional Disparities”.

In Japan, the first comprehensive national land development plan was formulated in 1962, the second in 1969, the third in 1977, and the fourth in 1987, to establish the basis for comprehensive land management policies. Throughout this period, the goal was to achieve consistent, balanced development throughout the country. In other words, a great deal of attention was paid to reducing the regional disparities. As a result, as far as the regional income is concerned, the disparity improved significantly but, since 1980, the situation has changed and the disparity in regional income has tended to widen. Considering this in a little more detail, in the first plan, in order to achieve the planned income doubling,27 it was a major policy issue to improve social capital and correct the regional disparities. The second plan sought to rebuild the structure of the new land for the twenty-first century by fundamentally reconstructing the social capital that had been built up during the modernization of Japan after the Meiji Restoration. In the 3rd plan, improvements to both the quality of life and the environment had become issues in the transition process from the high-growth period to the stable-growth period. In the 4th Plan, the challenge was to plan a new national structure in consideration of internationalization and computerization at the turning point of the Japanese economy under the severe international environment (Japan–China Economic Association, 1989a). Table 5.15 presents a summary of the policies adopted to reduce the regional income inequality. (2)

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Minoru Kobayashi made the following statements regarding China’s economic development strategy in the 1990s. What should be emphasized when formulating a development strategy for the Chinese economy is that the biggest challenge facing the Chinese economy is not the existence of an excessive demand, but the lack of a supply capacity in the basic sector. Therefore,

A long-term economic plan, formulated by the Hayato Ikeda Cabinet in 1960, to double the nominal national income to 26 trillion yen in 10 years from 1961, which was, in fact, achieved within in about 7 years.

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Table 5.14 J-C 9th annual meeting roster (May 1989 9th annual meeting in Sapporo, Japan) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Representative Ma Hong (secretary general, research center for economic, technological and social development, state council)

Representative Atsushi Shimokobe Fang Weizhong (deputy director, national (chairman, research and development agency) planning commission) Kiichi Saheki (counsel, nomura research institute)

Liu Hongru (deputy governor of People’s Bank of China)

Ryoichi Kawai (chairman, Komatsu industry) Sun Shangqing (deputy secretary-general, research center for economic, technological and social development, state council) Takeshi Inoue (counsel, Japan–China economic association)

Gao Shangquan (deputy director, national economic system reform committee)

Miyohei Shinohara (chairman, statistical research association)

Li Jingzhao (council, ministry of construction and environmental protection)

Hitoshi Miyazaki (counsel, Arabian oil)

Li Boxi (managing director, research center for economic, technological and social development, state council)

Yosuke Nakae (member of Japan atomic energy commission)

Lin Senmu (director, investment research institute, national planning commission)

Isamu Miyazaki (chairman, Daiwa securities research institute)

Surrogate members below:

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Liu Xiangdong (director, policy department, ministry of foreign affairs and trade)

Yoshio Suzuki (director, Bank of Japan)

The following are temporary members:

Minoru Kobayashi (managing director and general manager, research department, the Industrial Bank of Japan)

Lin Zili (senior researcher, state council rural development research center)

The following are expert members

Zhang Yunfang (deputy chief of public affairs office, research center for economic, technological and social development, state council)

Emon Ichikawa (secretary general, Japan–China midterm long-term trade consultation committee)

Yang Tao (deputy director, economic research center, Fujian province)

Ryozo Shimozawa (general manager, research department, Nippon steel)

Zhou Chuan (deputy director, economic research center, Guangdong province)

Masayuki Yamada (general manager, external Zhang Siping (deputy director, research center relations, overseas business department, for economic, technological and social Hitachi) development, Hainan province) Special participation below

Ling Xingguang (chief of office, institute of world political economy, Chinese academy of social sciences)

Takahiro Yokomichi (governor of Hokkaido) Ken’ichi Abiko (deputy governor of Hokkaido) (continued)

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Table 5.14 (continued) Japanese participants (position)

Chinese participants (position)

Iwao Takamukai (general manager, Sapporo Branch, Bank of Japan) Source Japan–China Economic Association (1989a)

Table 5.15 Summary of the policies adopted to reduce regional income inequality Policy

Policy content and goals

Result or effect

Distribute industrial producers (1) The heavy chemical nationwide industry should be distributed in the Pacific belt area, and advanced electronics related to microelectronics should be distributed within 300 km of Tokyo (2) Tax and financial incentives should be implemented and social capital should be allocated preferentially

The policy cannot be said to have succeeded because industrial production has not been distributed nationwide. Unsurprisingly, the government cannot interfere with companies seeking more favorable location conditions

Financial redistribution

Assisted in the resolution of the deficit to maintain the benefits of the railway, food, medical care, etc

Redistributed via local allocation tax28

Labor productivity improvement

(1) Agricultural and industrial labor productivity improved more than expected, and the outflow of the population to the large cities increased the per capita income in rural areas (2) The outflow population was employed in the service industry and construction industry, and the younger generation was enrolled in the higher education institutions. As a result, the depopulation of the local areas has progressed, and appropriate measures have been taken (3) Even so, concentration in Tokyo is under way

Source Japan–China Economic Association (1989a)

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A local fiscal adjustment system, aimed at adjusting the uneven distribution of financial resources of local governments. Of the national tax, some of the income tax, liquor tax, corporate tax, consumption tax, and local corporate tax are used as the source of funds.

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The Chinese government should pay attention to the balanced expansion of the supply capacity levels by industry. Without improving productivity, raising the living standards without inflation cannot be realized. In China, the supply shortage in the basic sector, such as basic materials, energy, and transportation, is extremely serious. It is necessary to prioritize “savings” in order to obtain the funds to resolve this situation. From an industrial policy perspective, it is necessary to indicate clearly the principle of allocating limited funds and foreign currencies based on priority. We encourage you to concentrate your efforts on improving the business management system rather than speeding up the technological development (Japan–China Economic Association, 1989a).

Ryoichi Kawai delivered the following report, entitled “Promotion of joint ventures in the manufacturing industry”.

According to the “Field Survey on Procurement of Forged and Cast Parts in China,” conducted by the Komatsu Industry, the following problems were found: Case 1 When you purchase steel, the chemical composition table (MILL SHEET) of the delivered steel is delivered together with the steel. When we investigate the composition of steel and compare it with the MILL SHEET, it may not match. When I asked a factory how to deal with this, he said, “We haven’t checked the ingredients. Even if you return the product due to a mismatch, a replacement product will not arrive, which will hinder production. Therefore, we stopped returning it. We also stopped checking the steel and the MILL SHEET”. Case 2 In order to outsource cast-iron products, we asked a factory to make some samples. Since the sample products were passed, we requested production again. However, the quality of all of the cast–iron products delivered was unacceptable. When we looked into why it was different from the sample, we found that the sample had been made by the contractor in his own factory, but the ordered product had been subcontracted to another factory. Problems and countermeasures. Overall, quality is neglected. Above all, the quality improvement and stability of steel materials are important. Since the quality of the products and parts is greatly influenced by the quality of the materials, such as steel materials, it is desirable to improve the level of the basic industry. Quality improvement and stability can be achieved only if the people involved in each production process adopt the “useroriented” way of thinking: that production is done for those who use it (Japan–China Economic Association, 1989a). (4)

Takeshi Inoue described the changes in exports from China to Japan as follows:

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Processed products are growing significantly along with food products. Their growth rate is 67.7%, which is higher than that of Korea, Taiwan and Hong Kong. Among processed products, the ratio of machinery is small and that of textile products is high. China’s share of textiles was 22.9%, second only to Korea’s 30.5%. On the other hand, the share of machinery and equipment is only 0.6% (Japan–China Economic Association, 1989a). (5)

Tsutomu Kono made the following comments related to infrastructure development:

Since 1987, the economy has become overheated and accelerated inflation has become a problem. The reason is, firstly, that the supply capacity is insufficient due to the increase in purchasing power. The assembly and processing industry has been significantly enhanced in terms of facilities; this is due to an increase in demand for durable consumer goods. As a result, there is a shortage of supplies of industrial materials, such as steel and plastics. Second, with the industrialization of southern China, energy supply shortages, especially problems with the electricity supply, have arisen. Therefore, it is necessary to control the total demand but, in the current economic adjustment period, it is necessary to improve the infrastructure in preparation for future development. Given Japan’s experience, the focus should be on the railways, ports, and roads, as well as investing in increasing power generation (Japan–China Economic Association, 1989a).

5.4.4.2

Highlights of the 1989 9th Annual Meeting

The first topic to be noticed was Japan’s “regional gap correction measures” by Atsushi Shimokobe. In 1989, coastal development was prioritized in China, and the regional disparities were not the focus of attention, but it is certain that will emerge as an important issue in the near future. For example, in 2000, the “Western Great Development” concept was proposed at the National People’s Congress. Shimokobe’s remarks can be regarded as anticipation of China’s policy issues. Second, Minoru Kobayashi and Tsutomu Kono were paying attention to the rising inflation in China but, as a countermeasure to it, in addition to curbing the total demand, they emphasized the need to strengthen the supply capacity in the basic sector and infrastructure development. Third, Takeshi Inoue pointed out that the export items from China to Japan are changing, and said that the weight of textile products is increasing. This was proof that exports from China had begun to shift from primary products, such as crude oil and coal, to industrially processed products, indicating that China’s industrial sophistication had started.

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Column: The Tiananmen Tragedy and Isamu Miyazaki Remarks by Isamu Miyazaki:29 I visited China in July 1989, one month after the Tiananmen Incident occurred, and met with senior officials from the Chinese Ministry of Foreign Affairs. This was a visit to China with the idea of J-C as the background. I also went to China at that time because I was insensitive. I’m not a national representative or anything. The Japanese Ministry of Foreign Affairs said, “It’s too much trouble to move freely.” Since Japan and China are neighbors, I visited China with the simple idea that there is no need to fight. Despite the Tiananmen incident, I did not think it would be appropriate for Japan to impose sanctions.

5.4.5 China After the Tiananmen Tragedy: May 1990 10th Annual Meeting The participants at this annual meeting were as follows (Table 5.16):

5.4.5.1 (1)

Introduction by the Japanese Side

Minoru Kobayashi delivered a report entitled “Development of the Western Pacific Economic Zone and China’s Development Strategy in the 1990s” 1.

Factors related to the Western Pacific Economic Zone development

The factors that bring about economic and industrial development are not only the amount of capital and technology accumulation, but also the endowment of the resources necessary for industrial development and the superiority of the location conditions. Furthermore, the quality of the people who work there and the degree of development of the management system of the company, which is the unit of economic activity, also exert an influence. As the background to the acceleration of the development of the Western Pacific economic zone since the 1970s, first of all, it should be noted that the progress of shipping technology has changed the Pacific Ocean from a “trading obstacle” into a “trading passage.” Since then, unprofitable exports to the United States have been reassessed as an advantageous business. Secondly, it is also important to note that, during this period, the industrialization of industrialized countries was strongly aware of “informatization” and prioritized as “soft” rather than “hard” to increase the weight of the service industry in the economy. The “manufacturing industry” of developed countries actively expanded overseas, and the movement to relocate the production base there increased. 2.

29

Challenges and development direction of the Chinese economy

From an interview of Mr. Miyazaki by the author, July 17, 2013.

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Table 5.16 J-C 10th annual meeting roster (May 1990 10th annual meeting at Xiamen, China) Japanese participants (position)

Chinese participants (position)

Counsel Saburo Okita (domestic and foreign policy study group chairman)

Representative Ma Hong (director, state council development research center)

Representative Atsushi Shimokobe Fang Weizhong (Deputy Director, National (chairman, research and development agency) Planning Commission) Kiichi Saheki (counsel, nomura research institute)

Liu Hongru (deputy director, national economic system reform committee)

Takeshi Inoue (counsel, Japan–China economic association)

Sun Shangqing (deputy director, state council development research center)

Miyohei Shinohara (chairman, statistical research association)

Gao Shangquan (deputy director, national economic system reform committee)

Yosuke Nakae (member of Japan atomic energy commission)

Zhang Ge (deputy director, state council special economic zone/Taiwan office)

Tsutomu Kono (senior managing director, Sankyu Co., Ltd.)

Li Boxi (Forecasting Department Manager, State Council Development Research Center)

Yoshio Suzuki (deputy chairman, Nomura research institute)

Lin Senmu (Director, Investment Research Institute, National Planning Commission)

Minoru Kobayashi (managing director and general manager, research department, the Industrial Bank of Japan)

Shen Jueren (deputy minister, ministry of foreign affairs and trade)

The following were expert members:

Li Cong (director, world political economy institute, Chinese academy of social sciences)

Naoaki Suzuki (councilor, Nippon steel)

The following were temporary members

Masaaki Sasaki (general manager, engineering department, overseas business division, Hitachi)

You Dexin (deputy governor, Fujian province)

Masahiro Hirata (general manager, economic Zou Erjun (Mayor of Xiamen city) research department, Daiwa institute of research) Source Japan–China Economic Association (1990a)

In China, there were insufficient measures taken to improve the efficiency of the industrial sector so, in the process of industrial development, unbalanced development by industry was left unchecked, and the success of economic development led to new problems. The austerity policy, that focused on restraining demand for the past 1–2 years, is an emergency evacuation measure, which does not set the Chinese economy on a path of development. In developing economies, the challenge is to balance “expanding supply capacity of basic industries” and “promoting international competitiveness in the processing industry” to generate the funds and foreign currency to support the former. First, the key to advancing the “supply expansion of basic industries” is how to build a system that achieves the “centralization of funds and foreign currency.” Basic

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industries refer to those that supply energy and basic materials, the transportation industry, and so on. Increasing the supply capacity of these sectors requires huge investment and a long gestation period of capital, so those who wish to achieve results quickly are unwilling to take on this responsibility. For this reason, it is vital that the central government exerts leadership and develops this systematically. It is necessary for local governments to understand this fully. Also, when focusing on the enhancement of basic industries, it is difficult to achieve results compared to investment, so you should be careful not to rush the growth of the national economy. In Japan, the following methods have been used as a means of concentrating funds centrally, and the objective has been achieved: (a) Centralize taxes. (b) It is the responsibility of the state to establish a social security system and centralize the funding for it. (c) Utilizing long-term financial institutions, we converted people’s deposits into long-term funds through financial bonds and invested in priority industries. These methods differ from the current methods employed in China (Japan–China Economic Association, 1990a). (2)

Tsutomu Kono made the following comments about China’s expansion of trade:

The focus of China’s trade expansion is biased toward economic powers such as Japan, the United States, Europe, and the Soviet Union. This is rational and understandable but, when considering the future, trade with Southeast Asian countries, Middle Eastern countries, and Eastern European countries is an urgent issue. China depreciated the yuan in 1989, so it has a considerable advantage in terms of price competitiveness. What is important here is to strengthen the “non-price competitiveness.” Quality reliability and on-time delivery must be achieved first, and design, packaging. and customer satisfaction (making people feel happy about buying Chinese products) must be improved (Japan–China Economic Association, 1990a). (3)

Naoaki Suzuki said the following about the development of the steel industry:

The modernization of the Japanese iron and steel industry began in the 1960s, starting with an annual production capacity of 30 million tons. Judging from the strength of the company, the investment limit was set to about 15% of sales, and the investment for modernization began. However, since then, in the face of the rising demand (15% annually) and wages (12% annually), the scale of investment in the latter half of the 1960s expanded to 22–23% of sales. Technological innovation and huge investment have dramatically increased the production and productivity, achieving the goal of modernization. On the other hand, however, the steel industry had fallen into overinvestment, then suffered from overcapacity and debt for many years.

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In the 1970s, investment was limited to 10% of sales; investment for renovation, computerization, cost reduction, and quality improvement was implemented but, from the middle of the 1970s, investment increased due to pollution control. In the 1980s, the soaring crude oil prices required investment in energy saving and R&D investment to upgrade products, but we made an investment within the range of depreciation costs. The challenges facing the Chinese steel industry in the 1990s are wideranging, such as variety expansion, quality improvement, production capacity expansion, facility renewal, energy-saving, production management, and transportation enhancement. China fully faces the challenges that Japan has tackled for several decades. If you do not focus as much, you will be short of money. It is difficult to increase production and modernize the existing equipment in parallel, and a huge amount of money is required. Based on Japan’s experience, if we make a bold proposal, the scale of investment should be at the midpoint between Japan’s 1960s and 1970s; that is, 15–16% of sales. The important thing is to stick to the policy of rigorously selecting priority items and solving the lack of funds through technological development, despite the limited investment scale (Japan–China Economic Association, 1990a).

5.4.5.2

Highlights of the 1990 10th Annual Meeting

First, it should be noted that, even after the Tiananmen Tragedy in 1989, J-C was held as usual. It seems that it would have been easy to suspend J-C under the sanctions against China by foreign countries at that time, but the parties concerned thought that J-C should be held at such times. In the introduction by the Japanese side, firstly, a number of suggestions by Minoru Kobayashi are striking. For example, it is important to note that exports to the United States became profitable as the Pacific Ocean changed from a “trading obstacle” to a “trading passage” as a result of advances in shipping technology. Also, the argument that “strengthening the supply capacity of basic industries” and “strengthening the international competitiveness of the processing industry” should be balanced was also useful for China at that time. In addition, the introduction of aspects of the Japanese experience, such as the “centralization of taxes by the central government” and “strengthening the central government’s finances to establish a social security system” may have been utilized in the subsequent policymaking. Second, Tsutomu Kono proposed that Southeast Asian and Middle Eastern nations should be recognized as China’s trading partners. In fact, as a result of the development of intra-regional trade in Asia, a decade later, in 2000, Japan, Korea, Singapore, and Taiwan entered the top ten destinations for China, while Japan, Taiwan, Korea, Singapore, Malaysia, and Thailand were among the top ten import destinations for China (Ministry of Economy, Trade & Industry, 2011). Thirdly, Naoaki Suzuki proposed that the scale of investment in the steel industry should be 15–16% of sales. Although it is difficult to confirm the effect of this

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proposal, he provided a useful indicator of the investment rate of sales in the important steel industry, based on the Japanese experience.

5.5 Conclusion So far, we have reviewed the history of J-C over a decade, from the eve of J-C in 1979 up to 1990. To conclude this chapter, the author would like to return to the research question, which was “to consider how J-C, which started in 1981, affected China’s economic policymaking, mainly between the 1980s and 1990.” The answer to this question is as follows.

5.5.1 Examples of Japanese Proposals that Are Thought to Have Influenced Chinese Policymaking (1)

The following recommendations are almost certain to have helped the Chinese side: 1.

Recommendation to establish a special economic zone (October 1979, before the establishment of J-C)

Saburo Okita recommended that Gu Mu should establish a special economic zone, taking Dejima in Nagasaki during the Edo period as an example. It supported Deputy Prime Minister Gu Mu’s proposal to establish a special economic zone and the establishment of 14 open coastal cities. In special economic zones such as Shenzhen, and in designated coastal open cities, such as Shanghai, Dalian, Tianjin, and Guangzhou, many foreign-affiliated companies have made direct investments as a result of preferential treatment, such as tariff reductions and exemptions. This greatly contributed to China’s export growth and employment expansion. 2.

GDP quadrupled (December 1979, before the establishment of J-C)

Saburo Okita recommended that Deng Xiaoping should quadruple GDP in two stages, the first half and the second half. Then, at the 12th Chinese Communist Party Congress in September 1982, it was proposed to quadruple GDP and realize this in two stages. This policy was positioned as China’s most important policy and became the basis of economic management up until 2000. 3.

Establishment of China Investment Information Center (4th J-C).

Masao Sakisaka proposed that Japan and China should jointly establish a China Investment Information Center to provide investment information and conduct feasibility studies. As a result, the Japan–China Investment Promotion Organization was

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established in Japan in 1990, and the China–Japan Investment Promotion Committee was also established as a corresponding organization on the Chinese side. The Japan–China Investment Promotion Organization still holds seminars to explain the foreign capital policy of the Chinese government and delivers lectures that incorporate the latest trends on a wide range of themes, such as trade, finance, accounting, taxation, legal affairs, and personnel and labor affairs to those in charge of operations in China or those who will be assigned to China. (2)

The recommendations that are presumed to have helped the Chinese side are as follows: 1.

Buy chickens rather than eggs (January 1979, before the establishment of J-C)

Masao Sakisaka stated that Japan once bought manufacturing technology and patents (chickens) without buying a lot of equipment (eggs) and that, when introducing equipment from overseas, Japanese companies buy the first one, but make their own from the second one onward. Following that, China also bought the first unit when introducing machines and plants, but sought to manufacture the second unit independently. Deng Xiaoping also paid attention to this point and sympathized with it (Chinese Communist Party Central Literature Office, 2004). 2.

Recommendation of a mixed economy (2nd J-C)

Isamu Miyazaki recommended that Gu Mu and others should implement a “mixed economy.” After that, the idea of a “socialist market economy that integrates planning and market” was raised in the Chinese theoretical world, which changed to the theoretical framework of the “socialist market economy” in the early 1990s. The idea of a “mixed economy” is also practiced in China today. 3.

Recommendation about a leadership plan (2nd J-C)

Minoru Kobayashi recommended reducing the scope of the directive plan and introducing a leadership plan. Then, in October 1984, the State Council approved “Some Provisional Measures for Improving the Planning System” formulated by the Planning Committee and set out to reduce the directive plan and expand market regulation. The reduction in the directive plan and the introduction of the leadership plan were important policy changes that determined the direction of economic policy during the reform and opening up period. Kobayashi’s recommendations appeared to be pioneering in China at the time and supported China’s policy shift. 4.

Construction of an international trading port (3rd J-C)

Atsushi Shimokobe proposed the construction of an international trading port as a measure necessary for quadrupling the GDP. Originally, there was a similar plan on the Chinese side, and Shimokobe’s proposal supported it. 5.

Estimating China’s capital formation of power (5th J-C)

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Minoru Kobayashi estimated China’s domestic capital accumulation from 1981 to 2000, and stated that it would be possible to gather cumulative capital of 7176.7 billion yuan. He explained that China could bear $100 billion in external debt by 2000. These estimates provided an opportunity for the Chinese government to become more positive about foreign loans. For example, looking at Japanese ODA loans, which accounted for the majority of China’s overseas loans, the first (1979–1984) totaled 330.9 billion yen, and the second (1984–1989) totaled an increase to 540 billion yen. 6.

Development of an integrated transportation system (7th J-C)

Tsutomu Kono proposed that freight transportation should be developed quickly and efficiently by combining transportation means in a complex manner without distinguishing between marine transportation, land transportation (railway/truck), and air transportation. As a result, the Chinese side deepened their understanding of the concept of “logistics,” which was ambiguous in China at that time. After that, with the cooperation of Nippon Express, Nissin Transport Warehouse, Sankyu, etc., the complex integrated transportation system was gradually developed. Kono continued to conduct useful activities, such as introducing a heavy-duty truck weighing ten tons or more into the transportation industry and proposing to improve the efficiency of land transportation. In fact, the Chinese truck industry developed according to Kono’s recommendations and so supported the logistics. 7.

Correcting the regional disparities (9th J-C).

Atsushi Shimokobe explained Japan’s measures for correcting the regional disparities from the perspective of national land development. At that time, in 1989, the development of the coastal areas was prioritized in China, so correcting the regional disparities was not the focus of attention but, in 2000, the “Great Western Development” concept was proposed by the National People’s Congress. (3)

Although important, it remains unclear whether or not the following recommendations helped the Chinese side: 1.

Changes in the trade patterns (1st J-C)

Miyohei Shinohara reported that the trade pattern in Southeast Asia was rapidly shifting from the traditional vertical division of labor to a horizontal division of labor, and suggested that the Chinese side should study this point. Although the Chinese side paid attention to this statement, no direct or indirect effect of it can be confirmed. 2.

“Priority Inclination Policy” (2nd J-C)

Saburo Okita introduced the “Priority Inclination Policy” by Professor Hiromi Arisawa of The University of Tokyo, and explained that the development of the economy as a whole can be promoted by concentrating on and solving the main obstacles peculiar to a certain period. The direct or indirect impact of this recommendation cannot be confirmed. Rather, China itself had the experience of normalizing

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rail transport, which had been confused at first, and increasing coal transport in order to solve the energy problem in 1975. 3.

Importance of overseas market research (3rd J-C)

Ryoichi Kawai explained the importance of thorough market research and understanding customer needs in overseas markets based on the actual experience of Komatsu. Although no direct or indirect effect of this can be confirmed, it was a very concrete proposal and highly persuasive. 4.

Youth issues (3rd J-C)

Atsushi Shimokobe pointed out that, in the future, young people will seek the freedom to study, freedom of employment, and freedom of movement. Although no direct or indirect effects of this can be confirmed, it seems to have predicted the Tiananmen Tragedy in 1989. 5.

Rare metals (4th J-C)

The Japanese side pointed out the importance of rare metals and that there will be more interest in how much rare metals exist in China. Twenty-six years after this indication, China restricted the export of rare metals to Japan until 2015, following the 2010 Senkaku Islands offshore fishing boat collision. 6.

Transfer of digital technology (4th J-C)

The Japanese side pointed out that, while advanced technology in the 1970s was difficult to transfer, advanced technology (digital technology) in the 1990s was easily transferable, and that it is possible that China will succeed in transferring advanced technology (digital technology) in the 1990s and surpass Japan. Although no direct or indirect effects can be confirmed, the situation actually unfolded in line with this statement. 7.

Recommendation regarding an oversupply economy (8th J-C)

Minoru Kobayashi suggested that all industries should create a situation of oversupply and that a mechanism to encourage the exit of companies that do not make efforts should work. Although no direct or indirect effects can be confirmed, a situation of oversupply began to emerge during the latter half of the 1990s. 8.

Expansion of trade with Southeast Asian and Middle Eastern countries, and Eastern European countries (10th J-C)

Tsutomu Kono looked ahead and proposed not only trade with developed countries but also trade expansion with Southeast Asia and other areas. After that, as a result of the development of intra-regional trade in Asia, the weight of the Asian region increased within China’s imports and exports by 2000. 9.

Presenting the return on investment in sales in the steel industry (10th J-C).

Naoaki Suzuki suggested that the Chinese steel industry’s return on investment in sales in the 1990s should be 15–16%. Although no direct or indirect effects can be confirmed, one useful index was shown, based on Japan’s experience.

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5.5.2 Minoru Kobayashi and J-C Looking back on the achievements of J-C, the author noticed that Minoru Kobayashi’s existence was outstandingly brilliant. The following is a summary of what Kobayashi’s proposals were, and what supported Kobayashi’s efforts toward China. (1)

Outline of Minoru Kobayashi’s recommendations

From the 1st J-C in 1981 to the 10th J-C in 1990, Minoru Kobayashi of the Industrial Bank of Japan made the most positive proposals. The thrust of those proposals was as follows: 1.

2nd J-C

China should reduce the scope of its directive plan and introduce a leadership plan. Then, in October 1984, the State Council approved “Some Provisional Measures for Improving the Planning System”, formulated by the Planning Committee, and set out to reduce the directive plan and expand market regulation. The reduction of the directive plan and introduction of the leadership plan were important policy changes that determined the direction of economic policy during the reform and opening-up period. 2.

3rd J-C

China would face raw material and energy shortages in the future. China was currently exploring how to increase raw material production, provided that it did not increase its energy consumption. The research in this area should continue to be strengthened. In addition, how China would utilize the production capacity of developed countries should be considered—for example, by importing used production equipment or outsourcing the production of certain raw materials to developed countries. 3.

5th J-C

According to my estimation, China was expected to have a nominal accumulation of 856.8 billion yuan by 2000, and would have the ability to make large-scale investments after the 1990s. Considering the use of foreign capital, if the debt service ratio (DSR) could be kept below 15%, even if an unexpected situation occurred, the situation whereby foreign financial institutions interfered with China’s domestic economy would not occur. Given the increase in exports and fluctuation in the yuan rate, the DSR would not exceed 15% even if foreign capital of 100 billion dollars were introduced by 2000. Social capital and industrial capital should be managed separately, and interest should be paid, especially for the provision of industrial capital. In China, the banking function should be fully utilized. 4.

6th J-C

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In order for China’s economic system reforms to succeed, many industries would have to overcome the challenge of shifting from traditional shortages to oversupply. Particularly in the equipment industry, such as steel, petrochemicals, and electric power, a large amount of capital and long construction period would be required to expand capacity. China had a huge population and, as the income levels rose, the consumption demand would tend to swell significantly, so it would be important to prepare for the future expansion of demand for basic materials from an early stage. 5.

7th J-C

According to the outlook of the research department of the Industrial Bank of Japan, in the world economy in the latter half of the 1980s, only the Western Pacific economic regions (Japan, China, NIES, ASEAN) would secure fairly favorable economic growth. The next thing to note would be China’s economic construction. China had a shortage of supply capacity and technological underdevelopment in many industrial fields, and also a structure that required a large amount of imports as its economy developed. Of course, China needs to have a decent ability to earn foreign currency but, if China maintained steady economic construction, without rushing, perhaps around 1990, China’s movements would have a considerable influence on the outlook for the Western Pacific economic zone. 6.

8th J-C

Japan made vigorous capital investment during the development stage, which caused the Japanese economy to flourish. A virtuous cycle of the economy was realized by absorbing a large proportion of income into savings and using it as funds for the subsequent expansion of capital investment. As a result, it was possible to avoid the path whereby most of the allocated income was spent on consumption and would lead to inflation. 7.

9th J-C What should be emphasized when formulating a development strategy for the Chinese economy is that the biggest challenge facing it was not the existence of excess demand, but the undersupply capacity of the infrastructure sector. Therefore; (a)

(b)

(c) 8.

Attention should be paid to the balanced expansion of the supply capacity levels by industry. A rise in living standards without inflation could not be achieved without increased productivity. The supply capacity shortage of the core sectors, such as basic materials, energy, and transportation, was extremely serious. It would be necessary to emphasize “savings” in order to obtain funds to solve it. Efforts should be encouraged to improve the business management system rather than rushing to develop engineering technology.

10th J-C.

First of all, it should be noted that the progress of shipping technology had changed the Pacific Ocean from being a “trade barrier” into a “trade passage” as a background

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to the acceleration of the development of the Western Pacific economic zone since the 1970s. Exports to the United States, which had been unprofitable up until then, had been reconsidered as an advantageous business. Secondly, it cannot be overlooked that “informatization” was strongly promoted in the industries of developed countries during this period, “software” was emphasized rather than “hardware”, and economic service conversion was promoted. The “manufacturing industry” of developed countries had aggressively expanded overseas, and the movement to relocate production bases had intensified. (2)

The source of Minoru Kobayashi’s activities toward China

Regarding Kobayashi’s activities, Hitoshi Matsuoka (Chairman of the Japan Research Institute), who belonged to the secretariat of J-C at that time, made the following comments: “From the opening of the Okita office to May 1981, the office seemed to be devoted to preparing for J-C. During that time, Mr. Kobayashi was acting as secretary-general. The Industrial Bank of Japan, to which Mr. Kobayashi belonged, also had some Chinese experts. Since the Industrial Bank of Japan was a large bank, it also had know-how about managing international conferences and logistical experience. I think that Mr. Kobayashi spent most of his time and energy in China from 1979 until his death. At the first six J-C, Mr. Kobayashi expressed his opinions most frankly, compared to other members. Although he was the youngest member present, he also clearly stated what touched the Chinese members directly. It seems that some of the Japanese members thought, “You don’t have to say that much,” but the Chinese side often listened to Mr. Kobayashi’s opinions. I think it was because of the interaction with Li Hao and others since 1979”.30 Furthermore, according to Matsuoka, Kobayashi had emerged as an expert on the Chinese economy, and he commented as follows: “I think the source of what Mr. Kobayashi can talk about frankly is his knowledge of the Chinese economy. The Industrial Bank of Japan, including President Ikeura, had a strong interest in China, and the research department was also highly capable. Several people from the research department backed him up. Mr. Kobayashi was able to see a report on Chinarelated matters prepared by the research department and a research report on how foreign countries viewed the Chinese economy. Mr. Kobayashi created a “Kobayashi memo” based on these issues and showed it to Mr. Okita and Mr. Sakisaka. He has been an advanced expert on the Chinese economy for several years, since 1979. Mr. Okita, Mr. Sakisaka, Mr. Miyazaki, and Mr. Shimokobe are specialists in certain fields, such as diplomacy, energy, the economy, and national land planning, but they are not experts on China. Among them, Mr. Kobayashi was confident as an expert on the Chinese economy. Mr. Kobayashi’s sincerity was conveyed to Mr. Gu Mu and others via Mr. Ma Hong, the representative of the Chinese side. When someone interrupted Mr. Kobayashi’s remarks or Mr. Kobayashi himself stopped, Mr. Ma Hong usually urged him on, saying, “Mr. Kobayashi, please say everything you want to say.” 30

From an interview with Mr. Hitoshi Matsuoka by the author, July 24, 2013.

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In addition to the annual meeting, the Industrial Bank of Japan often held small study groups and debriefing sessions for China, according to Ling Xingguang. At that time, it was necessary to solve specific problems promptly, and the Industrial Bank of Japan, including Kobayashi, responded to that.31 According to Masahiro Hirano (formerly the Industrial Bank of Japan China General Representative, Beijing Branch General Manager), the points that Kobayashi insisted on at J-C were as follows32 : “One is financial reform. Mr. Kobayashi recommended the establishment of a specialized financial institution to promote largescale projects, industrial promotion, or trade. It came to fruition in the form of the establishment of the China Development Bank and the China Export–Import Bank. The second is corporate structure reform. In this field, Mr. Kobayashi insisted on fostering the automobile industry and privatizing the state-owned enterprises. Regarding the automobile industry, the Industrial Bank of Japan accepted five young researchers from the Development Research Center of the State Council and others. They visited not only automobile manufacturers but also several automobile parts manufacturers, the traffic control center of the Metropolitan Police Department, driving schools, gas stations, parking lot systems, related organizations, and repeated hearings. In the first place, Mr. Kobayashi emphasized the importance of promoting the automobile industry at successive J-Cs. He explained that the automobile industry covered a wide range of industries, such as parts, interiors, and the fuel supply; had an extensive job creation effect; and had a large effect in terms of introducing technology. He emphasized that the planned development of the automobile industry was important because it would play an important role in the future development of the Chinese economy. Regarding the privatization of the state-owned enterprises, Mr. Kobayashi dispatched experts from the securities department and industrial research department of the Industrial Bank of Japan to Beijing in response to a request from the Gu Mu/Ma Hong. In Beijing, in the presence of Mr. Kobayashi, based on the experience of privatization of Japanese National Railways and the Nippon Telegraph and Telephone Public Corporation, the idea of privatization, the progress process and points to keep in mind were presented to a very small number of top Chinese government departments and top state-owned enterprises (Chairman Chen Jinhua of SINOPEC, and others.)”. Many people recall that Kobayashi responded sincerely to China, and his statement at the 11th exchange meeting symbolizes this. Although outside the scope of this chapter, Kobayashi looked back on the development prospects of the Chinese economy presented at the 5th J-C and made the following comment: “Cumulative capital formation in the latter half of the 1980s far exceeded the forecast (748.1 billion yuan) and reached 1196 billion yuan (inflation-adjusted). The reason was that the economic growth rate was higher than expected and the savings rate remained far higher than expected. Capital accumulation in the 1990s is expected to be 20–30% 31 32

From an interview of Mr. Ling Xingguang by the author, April 8, 2016. From a written interview of Mr. Masahiro Hirano by the author, October 17, 2020.

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higher than previously expected.” Examining one’s own analysis and outlook may seem like a trivial act, but it is not easy to do so when the prediction was wrong. Kobayashi’s sincere attitude should be highly evaluated.

References China-Japan Working Group for the Exchange of Economic Information. (1982). Zhongri jingjizhishi jiaoliuhui di 2 ci nianhui ziliao huibian (China–Japan working group for the exchange of economic information 2nd conference report). China-Japan Working Group for the Exchange of Economic Information. (1985). Zhongri jingjizhishi jiaoliuhui di 5 ci nianhui ziliao huibian (China–Japan working group for the exchange of economic information 5th conference report). Chinese Communist Party Central Literature Office. (2004). Deng Xiaoping nianpu 1975–1997 (Shang) (Deng Xiaoping yearbook 1975–1997 one). Zhongyang Wenxian chubanshe. Gu, M. (2009). Gu Mu huiyilu (Gu Mu memoirs). Zhongyang Wenxian chubanshe. Iechika, R. (Ed.) (2004). Zouhoban Ch¯ugoku kingendai seizishi nenpy¯o (Augmented Chinese modern and contemporary political history chronology). K¯oy¯o Shobo. IMF-World Economic Outlook Data bases (April 2017 Edition). Institute of Economic Research, Chinese Academy of Social Sciences. (1979). “Riben jingji zhuanjia zuotang yijian (1) (2) (3) (4).” Jingji Yanjiu Cankao Ziliao di 30 qi (Economic research reference material 30th term). Zhongguo Shehui Kexue chubanshe. Japan–China Economic Association. (1984). Dai 3 kai Nich¯u keizai chishiki koury¯ukai kaisai houkokusho (Report: Japan–China working group for the exchange of economic information 3rd conference). Japan–China Economic Association. (1985a). Dai 4 kai Nich¯u keizai chishiki koury¯ukai kaisai houkokusho (Report: Japan–China working group for the exchange of economic information 4th conference). Japan–China Economic Association. (1985b). Dai 5 kai Nich¯u keizai chishiki koury¯ukai kaisai houkokusho (Report: Japan–China working group for the exchange of economic information 5th conference). Japan–China Economic Association. (1986). Dai 6 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 6th conference). Japan–China Economic Association. (1987a). Dai 7 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 7th conference). Japan–China Economic Association. (1988a). Dai 8 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 8th conference). Japan–China Economic Association. (1989a). Dai 9 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 9th conference). Japan–China Economic Association. (1990a). Dai 10 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 10th conference). Japan–China working group for the exchange of economic information. (2010). Kokorozashi: Souritsu 30 sh¯unen kinenshi (Principle: Magazine commemorating the 30th anniversary of founding).

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Japan Research Institute. (2011). Zaidan houzin Nihon sougou kenky¯usho no 40 nen: Rekishi to mirai no setten wo misuete (Looking at the point of contact between history and the future: 40 Years of Japan research institute). Kong, L. (2008). Gendai Ch¯ugoku keizaishi nenpy¯o (Chronology of modern Chinese economic policy). Nihon Keizai Hy¯oronsha. Marukawa, T. (Ed). (2000). Ikouki Ch¯ugoku no sangy¯o Seisaku (Transitional China industrial policy). Institute of Developing Economies. Marukawa, T. (2013a). Gendai Ch¯ugoku keizai (Contemporary Chinese economy). Yuhikaku. Marukawa, T (2013b). Chain¯ızu dor¯ımu: Taisy¯u shihonsyugi ga sekai wo kaeru (Chinese dream: Mass capitalism changes the world). Chikuma Shobo. Masuo, C. (2010). Ch¯ugoku seiji gaikou no tenkanten: Kaikaku kaihou to dokuritsu jishu no taigai seisaku (A turning point in Chinese political diplomacy: Reform and opening up and “Independent foreign policy.”) Tokyo Daigaku Shuppankai (University of Tokyo Press). Masuo, C. (2011). Ch¯ugoku gaikou no sekai senryaku: Nichi-Bei-Ajia tono koubou 30 nen (Global strategy for China’s diplomacy: 30 years of offense and defense with Japan, the United States, and Asia). Akashi Shoten. Ministry of Economy, Trade and Industry. (2011). “Sangyou katsudou bunseki (Heisei 23 nen 4–6 gatsuki)” (“Industrial Activity Analysis (April-June 2011)”). Ministry of Foreign Affairs. (2016). http://www.mofa.go.jp/mofaj/gaiko/oda/files/000142129.pdf. Accessed November 15, 2016. National Bureau of Statistics, People’s Republic of China. (2016). Zhongguo tongji nianjian 2016 (Statistical yearbook of China 2016). Zhongguo Tongji chubanshe. Okita, S. (1984). Nihon e takamaru h¯uatsu to kitai: Okita rep¯oto (Increasing headwinds and expectations for Japan: Okita report). Kokusai Kaihatsu Jornal. Okita, S. (1992). Keizai gaikou ni ikiru (Live in economic diplomacy). Toyo Keizai Shinpo. Ono, Y. (2004). Waga kokorozashi wa senri ni ari: Hyouden Okita Saburo (My ambition is in thousand miles: Critical biography Saburo Okita). Nihon Keizai Shinbun. Shioji, H. (Ed.) (2011). Ch¯ugoku jidousha sangyou no bory¯umu Z¯on (Volume zone of Chinese automobile market). Showado. Todou, A., Kougo, T., Shaode, C., & Katsuaki, H., (Eds). (1985). Saishin Ch¯ugoku jouhou jiten (Dictionary of New Chinese words). Shougakukan. Vogel, E. (2011). Deng Xiaoping and the transformation of China. The Belknap press of Harvard University Press. Deng, X. (2006). Deng Xiaoping wenxuan di 3 juan (Deng Xiaoping selection volume 3). Renmin chubanshe. Zhang, J. (Ed). (2008). Zhongri youhao jiaoliu 30 nian (1978–2008) (30 years of friendship between China and Japan (1978–2008)). Zhongguo Kexue Wenxian chubanshe.

Additional Bibliography (Not Cited in the Chapter Text But Provided for Reference for the Readers) Japan–China Economic Association. (1985c). Dai 5 kai Nich¯u keizai chishiki koury¯ukai Nihongawa houkoku shiry¯o (Japanese side report material: Japan–China working group for the exchange of economic information 5th conference). Japan–China Economic Association. (1987b). Dai 7 kai Nich¯u keizai chishiki koury¯ukai Ch¯ugoku gawa houkoku shiry¯o (Chinese side report material: Japan-China working group for the exchange of economic information 7th conference). Japan–China Economic Association. (1988b). Dai 8 kai Nich¯u keizai chishiki koury¯ukai Ch¯ugoku gawa houkoku shiry¯o (Chinese side report material: Japan–China working group for the exchange of economic information 8th conference).

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Japan–China Economic Association. (1989b). Dai 9 kai Nich¯u keizai chishiki koury¯ukai Ch¯ugoku gawa houkoku shiry¯o (Chinese side report material: Japan-China working group for the exchange of economic information 9th conference). Japan–China Economic Association. (1990b). Dai 10 kai Nich¯u keizai chishiki koury¯ukai Ch¯ugoku gawa houkoku shiry¯o (Chinese side report material: Japan-China working group for the exchange of economic information 10th conference). Li, L. (2008). Tuwei: Guomen chukai de suiyue (Breakthrough: The year when the national gate first opened). Zhongyang Wenxian chubanshe. Xiaolin Shi China Economic Research Fund. (2002). Shenqie de huainian: Xiaolin Shi jinian wenji (Deep memories from the bottom of my heart: Kobayashi minoru memorial collection). Changcheng (Hong Kong) Wenhua chubangongsi.

Chapter 6

The Formation of Chinese Networks: An Analysis of a Hong Kong Family’s Reunion Activities Mariko Tanigaki

Abstract It is often pointed out that one of the characteristics of overseas Chinese is that they form a network. The Guan family in Hong Kong is a case of how Chinese people formed networks in the absence of a family business. The Guan family in Hong Kong began with the couple Guan Yuanchang and Li Amei because of the couple’s fame and family size. Yuanchang was one of the first licensed Chinese dentists in Hong Kong. The 2016 Guan Family Record consisted of 1,368 members. The first generation were educated in the church around the time of the Opium War. The second generation also received a Western-style education and spread over mainland China and Southeast Asia from Hong Kong. Many of the third generation pursued their studies abroad. In 1949, when the PRC was established, the majority of family members migrated to the North America. In the 1990s, the family record book was updated and the custom of holding global family reunions began in 2003. This chapter considers the process and reason why the family launched and continues to hold these family reunions. Keywords Chinese network · Hong Kong · Christianity · Republican China · Family cord · Family record · Reunion activities In the summer of 2009, the author participated in an Alaska Reunion Cruise of a Hong Kong family. Reunion activities can be traced back to the reunion of separated family members. Traditionally, on New Year’s Eve, during the Dragon Boat Festival and at the Mid-Autumn Festival, family members who live far from home return and have a meal together. This occasion is called the “Reunion Meal” (tuanyuan fan). The Alaska Reunion was an activity for the family members to get together and to bring them closer. In this chapter, the author first puts the focus on the Kwan family’s reunion activities. Secondly, the process of the preparations will be documented. Thirdly, the

M. Tanigaki (B) Department of Area Studies, Graduate School of Arts and Sciences, University of Tokyo, 3-8-1 Komaba, Meguro-ku, 153-8902, Tokyo, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_6

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M. Tanigaki

author will analyze why reunion activities continue. The author participated in the Guan family’s 2009 Alaska Union and 2012 Singapore Reunion. The author basically uses the Pinyin system in this chapter. However, Guan Yuanchang’s descendants use “Kwan Yuen Cheong” for the family reunion, while Yung uses “Kwan Yuen-cheung”, using the Yale romanization of Cantonese. Kwan family reunion activities will be used instead of Guan family reunion activities. Public figures, such as Sun Yat-sen, will also be referred to by the familiar spelling of their names. The name of the author of a book or paper will be given according to their own spelling.

6.1 Previous Studies It is often pointed out that one of the characteristics of overseas Chinese is that they form a network. It is not only overseas Chinese who form networks, but family gatherings can also be observed in Japanese society. However, the size of family members is shrinking in Japan. An acquaintance of mine, who taught sociology at a university, told me that, during a class, he had asked his students to discuss the activities they engage in with their relatives in order to explore the concept of the family. The astonishing fact was that the students did not know the names of their grandparents. In comparison, it was not uncommon in Chinese families to be able to recite the names of one’s great-grandparents. Some of them kept track of their members by compiling and updating family records. The family in whose reunion activities the author participated facilitated a family historian. Yung Ying-yue, a member of the No. 8 Branch, has been conducting research on how the family has been creating family networks. She documented the first and second generations of her family and the development process of her global family, including her generation, who started large-scale reunion activities. The former was pursued in a book entitled The Opening of Hong Kong Port and the Kwan Family, published in 1997. This chapter is indebted to Yung’s research (Yung, 1997, 2002, 2004, 2014, 2015, 2018). In Japan, there are several publications based on the research on Chinese networks. Takeshi Hamashita documented the concept of the Chinese network based on the tributary system (Hamashita, 1996). He also published a book on Hong Kong, conceptualizing it as a network city in Asia, which was translated into English. Akira Suehiro conducted interviews with the owners of family businesses in Thailand (Suehiro, 2006). Chen Tien-shi’s publication, based on her Ph.D. thesis, focused on the Chinese Diaspora. Chen conducted interviews in Southeast Asia, Japan, and North America. She also administered questionnaire surveys in Malaysia, Hong Kong, and Singapore. She focused on the fact that Chinese merchants operated across national borders, arguing that Chinese merchants should be seen as members of the global society (Chen, 2001).

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The case study of the Guan Yuanchang family (1832–1912) may give us a new image of Chinese networks. His descendants include medical professionals, such as doctors, dentists, and midwives, and also technical professionals, such as engineers and architects. This case shows the lack of business motivation to retain these networks.

6.2 The Formation of the Guan Yuanchang Family 6.2.1 The Migration to Guangdong Province The Guan Family Record Book, compiled in 1937, recorded that the family originally lived in Jianning, Fujian Province (Kwan and Yung, 1997, 2002). During the Song Dynasty, Guan Zhaoye, a member of the family, passed the civil service examination in the capital at the age of 18 and was appointed as a junior official during the Song bureaucracy. After seven years of service, he was transferred to a post in Gangzhou County, present Xinhui County, Guangdong Province, for a minor charge of discourtesy. Zhaoye eventually recovered his former position. After retiring, Zhaoye settled in Gangzhou and lived there for the remainder of his life, and an ancestral hall was built in Xiaomazhan, in the City of Guangzhou. Two of Zhaoye’s brothers also migrated from Fujian to Guangdong and settled in Jiujiang of Nanhai County and Huanglian of Shunde County, respectively. Zhaoye was considered the first generation of the Guan family in Guangdong. Guan Yuelong, the 14th generation of the Guan family in Guangdong, migrated with his two sons, Wenyou and Liyou, because of unrest caused by bandits, from Guangzhou to Xilang Village in Punyu County of Guangdong Province. Yuelong also established an ancestral hall in Xilang Village and was considered the first generation of the Guan family in Xilang Village.

6.2.2 The First Generation, Yuanchang and Li Amei Guan Yuanchang (1832–1912) was the 18th generation in Yuelong and was considered the first generation of the Guan family in Hong Kong (Kwan and Yung, 1997, 2002). The genealogy started from Yuanchang and his wife, Li Amei (Lai Amui, 1840–1902). The reason that the Guan family in Hong Kong started from Yuanchang is probably because of the couple’s fame and family size. Yuanchang’s father, Guan Ri (1797–1863), was believed to have converted to Christianity at a very early stage of the Protestant missionary work in China, and to have been an early disciple of Robert Morrison, who was sent to China by the London Missionary Society to spread Christianity in China (Yung, 1997, pp. 7–8). Because of discrimination by their fellow-villagers for their being Christians, Guan

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Ri took his family to Hong Kong from Xilang Village. Ri’s family was originally from a low socio-economic class and they lacked traditional ladders. Guan Yuanchang worked as a printing assistant in the printing section of the Anglo-Chinese College, later learning Western dentistry from a Western missionary and becoming one of the first Chinese dentists to be licensed by the Hong Kong government. At the same time, he was also a leading figure in founding the To Tsai Chapel (Daoji Huitang), the first independent church of Chinese converts in Hong Kong. Li Amei was a professional woman, unlike her contemporaries. She acquired Western knowledge and skills through the church. During the Taiping Rebellion, she became separated from her parents during the turmoil and was brought up by a British officer, probably by a then Registrar General of Hong Kong, and his Chinese wife. The couple took her to Hong Kong and brought her up. Amei was fluent in English. At that time, there were still very few people in the Chinese community in Hong Kong who were fluent in English, and Amei worked as a teacher, interpreter for the government courts, and matron of Alice Memorial Hospital. When she died in 1902, she was the first Chinese person to be allowed to be buried in the British cemetery, and a military band sent by the governor of Hong Kong played at her funeral. The couple were Christians and their marriage was arranged through the network of the London Missionary Society. Guan Yuanchang and Amei remained in Hong Kong until 1870. Seven children were born during this period, from the first to the seventh branches. Guan Yuanchang practiced dentistry in Guangzhou in 1870, and returned to Hong Kong in 1887. The whole family lived in Guangzhou. Amei also took a teaching job at the church school, and later the eighth child helped her mother with the teaching. Eight children, from the eighth to the fifteenth branches, were born in Guangzhou and spent their early years there. The family returned to Hong Kong before the sixth child entered Imperial Medical College in Tianjin in 1890. The first generation of Yuanchang and Amei were educated in the church around the time of the Opium War, which formed the basis for their subsequent professional careers. In contrast, by the time the second generation was being educated, the Qing Dynasty itself had begun to adopt Western knowledge and techniques under the Self-Strengthening Movement.

6.2.3 The Second Generation Yuanshang and Amei had ten sons and five daughters. The fifteen children belonged to the second generation of the Guan family. Of these fifteen children, except for those who died before reaching marriageable age, those who never married, those who married but did not have any children, and those whose children passed away unmarried, the descendants of these eight children are still living. As of February 2016, 1368 members were listed in the family records. In Christianity, all people are equal before God, and the couple was keen to educate their children without distinction of sex. The Christian idea of equality between men

6 The Formation of Chinese Networks: An Analysis … Table 6.1 Branch size (February 2016)

231

Branch

Son/Daughter

Number

1

D

2

2

S

195

3

S

1

4

S

1

5

D

28

6

S

153*

7

S

397

8

D

233

9

S

143

10

D

1

11

D

9

12

S

111

13

S

28

14

S

67**

15

S

Total

1 1370***

Source Yung (2018, p. 249) Notes “S” symbolizes a son and “D” a daughter. *6–11 was adopted by Branch 12. The actual number should be 152. **14–1 was married to 11–1. The actual number should be 66. ***After deducting the above double counts, the actual total is 1368

and women could be seen in the Guan family’s genealogical record. Usually, Chinese family records include only patrilineal descendants, but the Guan family included both sons and daughters. In the second generation, both the sons and daughters created branches (Table 6.1). In other words, the 15 children are the founders or ancestors of the 15 branches of the present Guan family. The second generation was at the frontline of the Self-Strengthening Movement, such as the Navy, tax and maritime customs services, medical services, and mining. Standing at the frontline and serving the nation was consistent with the family maxim given by Yuanchang: “May my descendants continue to be devoted Christians, and live their lives with Christian spirit to aid the poor in the community and as medical doctors to save lives, or as engineers to make help the country strong”. (Yung, 2015, p. 43). The history of the Guan family is detailed in the book The Opening of Hong Kong Port and the Kwan Family by Kwan Shiu Shek and Yung Ying-yue, and also in the research conducted by Yung Ying-yue. The author uses their contribution and classifies the members of the second generation according to their occupations. Of the 15 children, the fourth child and third son, the founder of Branch No. 4 (1864) died at the age of four months (Yung, 1997, p. 13).

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A brief introduction to the founders of each branch, based on the remaining 14 children of the second generation, is outlined below:

6.2.3.1

Medical Service and Its Related Administration

Of the 15 children, four sons studied medicine, with three graduating from the Imperial Medical College in Tianjin and one graduating from the Hong Kong College of Medicine for Chinese. One pursued further studies at the Hong Kong College of Medicine for Chinese after graduating from the Imperial Medical College; and two out of the five daughters were licensed midwives by the Hong Kong government. (1)

Branch No. 6: the sixth child and fourth son (1867–1919).

Graduated from the Imperial Medical College, Tianjin, in 1890, and was appointed chief of a naval hospital and physician-in-attendance to the Empress Dowager (Yung, 1997, p. 24). Was a member of an official mission sent abroad by the Qing Court to study constitutionalism, and another for naval affairs. After the fall of the Qing Dynasty, he lived with his family in Tianjin until his sudden death from pneumonia in 1919 (Kwan, 1997a, p. 50; Kwan, 1997b, p. 75). Was buried in Tianjin (Yung, 2015, p. 41). (2)

Branch No. 7: the seventh child and fifth son (1869–1945).

Graduated from the Diocesan Boys’ School in Hong Kong and entered Hong Kong College of Medicine for Chinese. Sun Yat-sen, known as the revolutionary and National Father of the Republican China, was his classmate at the College (Kwan, 1997a; b, p. 54). Sun signed the marriage certificate for the seventh child (Yung, 1997, p. 13), who settled in Kowloon Tong, Hong Kong (Kwan, 1997a; b, p. 50). Remarried after the death of his first wife, who was introduced by Sun (Yung, 1997, p. 24). He and his two wives were buried in Hong Kong (Yung, 2002, p. 5). (3)

Branch No. 8: the eighth child and third daughter (1870–1962).

Was a teacher at the church’s private school with her mother, Amei, since the age of 13, and was a Western-style midwife, licensed by the Hong Kong government (Yung, 1997, p. 23). Also became the first female elder of the Hong Kong To Tsai Chapel (Daoji Huitang). Married Yung Hoy (1865–1933), the younger cousin of Yung Wing. Lived in Singapore and Hong Kong after the death of her husband in Shanghai (Yung, 1997, p. 24). The couple were buried in Zhuhai, the hometown of Yung Hoy, in Guangdong Province (Yung, 2018, p. 246). Yung Wing is known as the first Chinese graduate of the American university. He launched the Chinese Educational Mission (CEM) program, which sent a group of young students to be educated in the United States. Yung Hoy was the third detachment of CEM, was recalled to China in 1881, and entered the Tianjin Naval Academy, but went into the tea trade instead of joining the Navy. Yung Hoy met Sun Yat-sen through his marriage to the eighth child and third daughter.

6 The Formation of Chinese Networks: An Analysis …

(4)

233

Branch No. 11: the eleventh child and fifth daughter (1875–?).

Was licensed as a midwife by the Hong Kong government. The third daughter took her to births as an assistant and trained her. Married, but her husband passed away at the age of 28 years. They had only one son and were buried in Hong Kong (Yung, 2018, p. 246). (5)

Branch No. 12: the twelfth child and seventh son (1877–1955).

Initially entered the Hong Kong College of Medicine for Chinese but, on the advice of the sixth child, transferred to the Imperial Medical College, Tianjin, graduating from there in 1900. Was appointed director of the Public Health Office at Yingkou, Tianjin. Became a diplomatic attaché to Tang Shaoyi’s mission to India for the negotiation of Tibet’s status with the British representative. In 1913, at the request of Sun Yat-sen, the twelfth child was appointed Inspector-General for Salt Control in Guangdong Province. Received awards twice for successfully preventing plagues, in 1916 and 1919. He married the sister of Yang Heling, one of Sun Yat-sen’s early comrades. They adopted the eleventh child from Branch No. 6 (Kwan, 1997a, b, p. 71; Yung, 2018, pp. 246–247). The twelfth child lived in Tianjinand Guangzhou, and settled in Kowloon Tong. (6)

Branch No. 14: the fourteenth child and ninth son (1880–1947).

Graduated from the Imperial Medical College in Tianjin in the fourth batch and pursued further study at the Hong Kong College of Medicine for Chinese, contrary to the sixth and twelfth children. Obtained a medical license in Hong Kong. Was appointed Branch Director of Hong Kong Hospital, and Medical Director of the Kailuan Mining Department, later working at various railway offices. In 1913, was sent to the United States to investigate the medical checks of Chinese immigrants required for entry. Married and settled in Tianjin (Yung, 2002, p. 8; Yung, 2018, p. 247).

6.2.3.2

Navy and Customs Service

Two sons joined the Navy and both transferred to the Customs service later. Another son started his career with the Imperial Customs Service. (1)

Branch No. 2: the second child and first son (1860–1923).

Graduated from the Nanyang Naval Academy in 1860. Served in the Fujian Fleet and was sunk by the French in the Fuzhou War, but narrowly escaped capture (Yung, 1997, p. 61). Transferred to the Customs Office, and then worked for the China Merchants’ Steam Navigation Company. Settled in Suzhou, Jiangsu Province (Yung, 2015, p. 40). (2)

Branch No. 3: the third child and second son (1862–1889).

A naval officer in the Fujian Fleet and later a smuggling prevention Custom Officer. Died unmarried at the age of 27 years (Yung, 2015, p. 40).

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Branch No. 9: the ninth child and sixth son (1873–1923).

Graduated from Queen’s College, Hong Kong, in 1892 and joined the Imperial Customs Service. Served at various ports, such as Hankou, Tianjin and Shanghai. Retired and was buried in Shanghai (Yung, 1997, p. 24; Yung, 2004, p. 5) His wife (1873–1940) moved to Singapore with their sons during the Sino-Japanese war (Yung, 1997, p. 24; Yung, 2018, p. 246).

6.2.3.3

Mining and Engineering

Two sons went to Europe and the United States to study and obtained degrees in mineralogy and civil engineering, respectively. (1)

Branch No. 13: the thirteenth child and eighth son (1878–1948).

Graduated in mineralogy from Peiyang University in 1900 and pursued graduate studies in England and the United States, finally obtaining a Ph.D. degree in mineralogy from Cornell University. After being appointed head of the Department of Commerce and Industry, moved to the private sector and worked for Loke Yew, a famous tin miner in Malaya. Loke Yew highly valued the thirteenth child’s hard work and ability. The thirteenth child married one of his daughters. Later, the Republican government appointed him Head of the Department of Business of Guangdong Province. Settled and retired in Kowloon Tong, Hong Kong (Kwan, 1997a, b, p. 51; Yung, 2018, p. 247). Although the thirteenth child chose to retire to Hong Kong, he took with him his nephew, his niece and her husband from Branch No. 7 to Kuala Lumpur. Both worked at the Kwong Yik (Selangor) Banking Cooperation, the founding of which, Loke Yew, played a leading role. They became the first Guans to settle in Malaya (Yung, 2015, pp. 45–46). The nephew married in Kuala Lumpur and raised a big family. On the other hand, the niece took her children and some of her brother’s children back to study in Hong Kong and live in the house of her uncle, Yuanchang’s thirteenth child with two aunts, Yuanchang’s tenth child who was a missionary, and Yuanchang’s eleventh child, whose husband passed away while young. In the 1930s, the children left Hong Kong for mainland China, such as Shanghai, and stayed with Guan relatives (Yung 2014, pp. 364–365). (2)

Branch No. 15: the fifteenth child and tenth son (1883–1943).

Graduated from Diocesan College in Hong Kong then pursued further studies in Europe and the United States. Later obtained a degree in civil engineering in the United States. Served as director of the Department of Highways in Swatow and Commissioner of the Canton Municipal Government. Never married, and lived in Guangzhou and Hong Kong (Yung, 2015, p. 42; Yung, 2018, p. 247).

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6.2.3.4

235

Missionary and Church Activities

Of the five daughters, one became a missionary, and two were deeply involved in church activities. (1)

Branch No. 1: the first child and first daughter (1858–1913). Married, but did not have any children and was very active in the church. Was buried in Hong Kong (Yung, 2002, p. 8; Yung, 2015, p. 40).

(2)

Branch No. 5: the fifth child and second daughter (1865–1899). Was a student of Harriet Newell Noyes at the True Light Girl’s School in Guangzhou. Married the son of the head of three independent churches for Chinese converts. Their only son died young. Was an active member of Zhenjiang local Christian church for 11 years. Was buried in Hong Kong. Her husband was the second detachment of the Chinese Educational Mission described in Branch No. 8, who remarried the aunt of the three Soong sisters1 (Yung, 1997, p. 13; Yung, 2015, p. 4).

(3)

Branch No. 10: the tenth child and fourth daughter (1874–1942).

Devoted her life to missionary activities and never married. Lived in Tianjin with the family of the eldest son of the sixth child (Yung, 1997, pp. 14, 24). Was buried in Hong Kong.

6.2.3.5

The Features of the Second Generation

The first generation of Yuanchang and Amei were educated in the church around the time of the Opium War, which formed the basis for their subsequent professional careers. In contrast, by the time the second generation was being educated, the Qing Dynasty itself had begun to adopt Western knowledge and techniques under the SelfStrengthening Movement. As is shown in the family maxim, of the nine sons who grew to adulthood, seven received a tertiary-level education. One of the remaining two sons graduated from Queen’s College and the other may have received a naval education judging from his occupation. Of the five daughters in the second generation, three had their own professional career as midwives and a missionary, and the remaining two were deeply involved in church activities. It is obvious that the second generation spread over the mainland of China, from Hong Kong to treaty ports, such as those dispersed on the mainland in Suzhou, Zhenjiang, Shanghai, Tianjin, and also to Beijing and Guangzhou according to their own or their spouse’s profession. The thirteenth and fifteenth children studied overseas. Yung’s research also revealed the place of burial for seven cases; four members were buried in Hong Kong, one in Tianjin, one in Shanghai and one in Zhuhai. The thirteenth child developed his career in Malaya, but chose to retire in Hong Kong and was buried there. The settlement overseas could be observed in the third generation, as in the case of the nephew and niece’s husband of the thirteenth child. 1

The three Soong sisters were Soong Ai-ling, Soong Ching-ling, and Soong Mei-ling, who married K’ung Hsiang-hsi, Sun Yat-sen, and Chiang Kai-shek, respectively.

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M. Tanigaki

6.2.4 The Third and Later Generations The children of the third generation remain active today. Compared with the second generation, the information related to the third and fourth generations is not disclosed in the research. A historian for the Guan Family, Yung Ying-yue, wrote: The second generation continue to bring up their own children with a Western-style education. Many of the third generation had the opportunity to study abroad. In spite of the fact that China was never able to break free of the turmoil of the first half of the twentieth century, those who studied abroad opted to return to China to take up jobs that would help to strengthen China in the face of a Western threat, as expressed in the maxim that Yuen-cheung gave to his family…(CMI)…. However, the Communist takeover in China in 1949 marked a turning point. The third and later generations migrated and dispersed to different regions overseas (Yung, 2015, p. 43).

The family’s tendency to send their children overseas to study may be observed in the case of Branch No. 8 (Yung, 2014, pp. 359–361). The eighth child of Yuanchang’s second generation married Yung Hoy and had eight sons and three daughters. Of these eleven children, one son passed away at the age of 16. Of the remaining ten children, four sons and three daughters went to the United States to study. One son had to abandon his plan to study medicine in Germany due to the outbreak of World War II and instead helped out with his father’s business. Another son studied at the Peking Union Medical College, established by the Rockefeller Foundation. The migration destinations were largely divided between Southeast Asia, North America, and Oceania.

6.2.4.1

The Push and Pull Factors for Migration

Unlike the Chinese diaspora in the nineteenth century represented by coolies, the majority of the Guan family migrated on a voluntary basis and were able to “find respectable jobs and lead well-to-do lives on foreign soil, due to their educational background and their adaptability to foreign environments” (Yung, 2018, p. 251). The migration is explained from both push and pull factors. The establishment of the People’s Republic of China was one of the biggest push factors for the Guan family (Yung, 2015, p. 50). Firstly, the Communist attitude toward religion showed a low acceptability to their family tradition as devotion to Christianity. Secondly, the family had close relations with the Nationalist government. Yuanchang’s seventh child was a close friend of Sun Yat-sen. Yuanchang’s twelfth, thirteenth, fourteenth, and fifteenth children had experience of serving for the Nationalist government. In the third generation, the eighth child of Yuanchang’s eighth child was the chief medical officer of the Ministry of Health of the National government in Nanjing. After he decided to resign from his government post and leave China, he was in Geneva attending the World Health Assembly as the Deputy Chief of the Chinese Delegation in 1948. He was able to obtain an appointment to the WHO Epidemiological Intelligence Unit and his family moved to Singapore and settled there (Yung, 2015, p. 46).

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Another push factor was Hong Kong’s 1997 issue. Most of the Guan family members evacuated to Hong Kong from China around 1949. Only a family of the first child of Branch No. 8 stayed in mainland China. They are the only family who adopted Pinyin, the PRC style of spelling, in the 2003 Guan Yuanchang Family Record, which will be quoted later. Yuanchang’s seventh, twelfth, and thirteenth children built a few houses in Kowloon Tong, one of the most expensive residential areas in Hong Kong. As the sharing of food and lodgings was a family tradition, many Kwans2 of the same branch and others had the experience of staying there3 when they fled from China owing to the Japanese invasion in the 1930s or after the Communist takeover, until they were able to find a means of livelihood on their own (Yung, 2015, p. 56).

In the post-World War II period, Hong Kong’s stability was always challenged by the uncertainty of its future. As China became internationally isolated after the Korean War in 1950, the stability of China’s domestic politics was directly linked to the future of Hong Kong, so the Cultural Revolution in 1966–1976 and the Hong Kong riots of 1967 increased the anxiety about Hong Kong’s future. This structure continued even after the 1984 Sino-British Joint Statement decided that Hong Kong would be returned to China in 1997 and governed under the “one country, two systems” formula. On the other hand, the pull factor is the change in the immigration policy of the destinations. The change in the surrounding political environment facilitated a change in the immigration policy for Chinese people: in the United States, the US Congress repealed the Chinese Exclusion Act in 1882, when the United States allied with China against Japan in 1943; in 1952, the McCarran-Walter Act made Chinese immigrants, many of whom had lived in the United States for decades, eligible for citizenship; the 1965 amendments to the Immigration and Nationality Act abolished the national origin formula and removed the barriers to non-European immigration to the United States ( Kido, 2017, p. 361). Among the participants, there were some members who could migrate only after the first development in 1943. The second development in 1962 and Hong Kong’s uncertainty led Guans to migrate to the United States. The migration during this period was inspired by the fact that Hong Kong’ s future was being determined and the anxiety caused by the 1989 June 4th incident (Yung, 2014, pp. 367–368). The Guan family members seem to have settled in the United States because of the increase in the number of US-born members (Table 6.2). In Canada, the Chinese Immigration Act of 1923, which halted an influx of Chinese immigrants into Canada for 24 years, was amended in 1947; in 1967, the Immigration Act was amended to eliminate racial discrimination and provide for the introduction of a points system (Morikawa, 2017, p. 352). Table 6.3 shows that migration to Canada was pushed by the change in the immigration policy in 1967 among participants. 2 3

It means the Guan family members, i.e., Guans. A few houses in Kowloon Tong built by Yuanchang’s seventh, twelfth and thirteenth children.

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Table 6.2 Branches and period of migration to the US at the 2003 Asilomar reunion Branch

Period 1

2

0

Period 2 1

Period 3 7

Period 4 0

US born 0

Unknown 0

6

3

7

0

7

16

0

7

0

2

3

3

6

2

8

0

0

0

0

0

0

12

1

1

1

1

2

3

14

0

0

0

0

0

2

D

0

0

0

0

0

1

Total

4

11

11

11

24

8

Source Yung (2004, p. 5) Notes Period 1: up to 1947, Period 2: 1948–1961, Period 3: 1962–1978, Period 4: 1979–2003. The numbers represent the number of households

Table 6.3 Branches and periods of migration to Canada at the 2003 Asilomar reunion Branch

Period 1

Period 2

Period 3

Period 4

Canada born

Unknown

2

0

0

1

1

0

2

6

0

1

0

0

2

0

7

0

0

4

0

0

0

8

0

0

0

0

0

0

12

0

0

1

1

0

0

14

0

0

0

0

0

0

D

0

0

0

0

0

0

Total

0

1

6

2

2

2

Source Yung (2004, p. 5) Notes Period 1: up to 1947, Period 2: 1948–1961, Period 3: 1962–1978, Period 4: 1979–2003. The number represents the number of households

In Oceania, the Australian Commonwealth Immigration Restriction Act of 1901 controlled the decline in the number of Chinese people migrating to Australia. The Act formed the basis of the White Australia Policy, which limited immigration to Australia by non-Anglo-Saxon people until the 1970s, when Australia shifted from White Australiaism to “multiculturalism” and started to receive a large Asian population (Masuta, 2017, p. 420).

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6.3 The Kwan Family Reunion The Guan family celebrated Guan Yuanchang’s 80th anniversary on 30 December 1911 (Yung, 2014, p. 355). The memorial picture shows that all of the second generation, who were still alive at the time, including their spouses and children, participated in the ceremony. That was the year of the Xinhai Revolution, and the Qing Court fell in the following year (1912).

6.3.1 Creation of a Family Record The Family Record is the database for building the family networks. The creation of the first family history began in 1917 (Kwan, 1997a, b). A daughter of Yuanchan’s sixth child recollected the whole story: This started when her uncle, Yuanchang’s thirteenth child, stayed at Yuanchang’s sixth child’s home in Tianjin for two months. The thirteenth child was weak and suffered from asthma. After the fall of the Qing Dynasty during the Xinhai Revolution, the sixth child lost his position at the Qing Court and spent time with his family at home in Tianjin. At the time, her father and uncle (the thirteenth child) said that more of the third generation went to the United States, Canada, and Australia for their education. Her father and uncle feared that, if this trend continued, the family would gradually drift apart, and that the next generation would not know how to relate to one another and would not know the joy of family contact. The solution to this problem was the creation of the Guan family record. During his time in Tianjin, he decided what information should be included in the genealogy, and set up a specific work plan. Although not specifically mentioned as a recollection, it was likely that her father worked on the family record in Tianjin, while her uncle worked on it in Hong Kong. First, they had to collect the names and birth dates of their close relatives, and then they had to check the collected data against the existing family genealogy. Then they had to collect photographs of the family members, and arrange the tables and records that would naturally be part of a family history. By the end of the first phase, two years had already passed. The second phase of the work was halted in December 1919, when her father died of pneumonia. The thirteenth child asked the third child of Yuanchang’s seventh child, who had returned to Hong Kong from Malaya, to help him by visiting the ancestral hall in Xilang Village of Panyu County and copying all of the characters on all the mortuary tablets and all pairs of scrolls. Having brought back all of the materials, the thirteenth and third children of Yuanchang’s seventh child worked together to create the family record. At that time, Yuanchang’s seventh, tenth, and twelfth children were living in Hong Kong, and therefore it was assumed that the thirteenth and third child of Yuanchang’s seventh child stayed in touch with other family members living in Hong Kong to organize the materials. When the Family History was completed in 1937,

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more than ten years had passed. This was the year that the Second Sino-Japan war occurred.

6.3.2 The Updating of the Family Record The family record was updated in the 1980s. Since the completion of the 1937 edition, China and Hong Kong suffered from the Japanese invasion, civil war and political turmoil. Since 1937, Beijing, Tianjin, and Shanghai, where the Guan family lived, were occupied by the Japanese military force. Hong Kong, the place of the family’s origin, was also attacked and occupied by Japanese troops in December 1941 and experienced a Japanese military administration for three years and eight months of Japanese military rule. After the end of World War II, the People’s Republic of China was established in 1949, and the family began a mass exodus to North America, as stated in Sect. 6.2.4. In the 1950s and 1960s, the Kwan family unity declined, as many members migrated overseas to find new lives. Those who stayed in Hong Kong still remained close, but those overseas gradually drifted apart from the Hong Kong and China Kwans, as they had to adjust to their new social environments. Those in their 50s and 60s had to cope with economic survival and paying college tuition fees for their children. Those in their 30s and 40s were working to provide for their basic needs, and busy raising young children. Those in their 20s were studying and trying hard to blend into their local peer groups. Therefore, it was not easy to maintain contact with the Kwans in other parts of the world. As for the younger members who were brought up in North America, they were neither aware of the family history nor had mastery of the Chinese language, and thus had even fewer ties with their Asian relatives (Yung, 2015, p. 50).

At that time, migrating abroad meant settling in the destination country and returning to the homeland was a rare event. In the 1950s and 1960s, there was little interaction between the Guan family abroad and the rest of the family in Hong Kong. However, in the 1970s, with the jumbo jet and the lower cost of overseas travel, the situation changed rapidly. Hong Kong’s return to China emerged as an actual issue at the end of the 1970s, and China’s reform and opening door policy were launched. Some of the Guan family members living in Asia migrated to North America out of a fear of living under the Communist regime. Under these circumstances, the updating of the Guan family history began. (1)

The Yung Family Record in 1982

Yung Chi-tung in Hong Kong, ex-president of the Chung Chi College of Chinese University of Hong Kong, compiled a family history of Branch No. 8, entitled The Yung Family Record, which was different from the traditional family history, as it included both sons and daughters (Yung, 2018, p. 256). (2)

English Translation of 1937 edition

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Peter Kwan of Branch No. 7 in Malaysia, had begun to translate the 1937 edition of the Family Record into English (Yung, 2018, p. 16), as some of the younger generation of the family no longer understood Chinese. Due to ill health, the translation work was not completed. The half-finished edition in English was printed privately and distributed by him in 1982 (Yung, 2018, pp. 256–257). Furthermore, in the 1990s, the spread of the Internet made it much easier for families scattered around the world to keep in touch with each other. Through a single email, it was possible to contact hundreds of relatives in an instant. At this time, many of the fourth generation had reached retirement age and had more spare time. (3)

English Translation of The Yung Family Record

Richard Yung of Branch No. 8 in Singapore updated and revised the 1982 edition of the Yung Family Record into a bilingual edition in 1999. In August 1999, when a workshop on Yung Wing was held in Connecticut, USA, all of the branches of the Yung Wing family and Yung Hoy were invited to attend. (4)

A Book on Family History

Kwan Shiu-shek of Branch 12 in Hong Kong collected written materials and photographs, and published a book entitled The Opening of Hong Kong Port and the Kwan Family in co-authorship with Yung Ying-yue in 1997.

6.3.3 The Family Code and the Bilingual Family Record The Kwan Family Code was created during the preparatory work for the 2003 Asilomar Reunion. The family code was a means of identifying one’s place in a group of more than a thousand people. As already shown in Sect. 6.2.3, the Guan Yuanchang Family does not follow the Chinese tradition and allows both sons and daughters of Yuanchang’s children to create branches. The number indicates the birth order of the lineage, separated into the generations in descending order. Thus, Guan Yuanchang’s children will have a one-digit code. The third generation, the children of the second generation, will have a two-digit code (Yung, 2015, p. 43). For example, 5-4-3 means that the person’s grandfather/grandmother was the fifth child of Guan Yuanchang, whose father/mother was the fourth child of their grandfather/grandmother, and is the third child of their father/mother. Family codes were also given to spouses. The “S” at the end of the family code indicates the relevant member of the family. Thus, the Guan family membership was expanded beyond the traditional Chinese concept of the family. By applying the family codes, the 1982 edition of the English translation was completed by Richard Yung and other members (Yung, 2018, pp. 256–257). The 2003 edition included all 15 branches of the Guan Yuanchang family and Branch No. 4 of Guan Yuanchang’s younger brother. The updating work was conducted by Richard Yung, and Yung Ying-yue later.

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M. Tanigaki

6.3.4 Kwan Family Reunion The direct impetus for the Guan Family Reunion came from the reunion held by Branch No. 6 in 1999 (Yung, 2015, p. 50). At that time, about 50 people participated, and it was very enjoyable for the cousins who had known each other only by name to meet in person, exchange words, and spend time together. After that, the participants talked about how much fun it would be if all of the members of the Guan family got together, since it was so much fun for the 6th cell alone to engage in reunion activities. It took three years to select a location for the reunion, and 18 months to contact all of the branches of the family, as far as possible. The first reunion was held at the Asilomar Conference Grounds in Pacific Grove, California, USA, from 31 July to 3 August 2003. The Asilomar Reunion was facilitated by Branch No. 6, who lived in North America. A total of 227 descendants of Guan Yuan Chang gathered together (Yung, 2009, p. 94; Tanigaki, 2011, pp. 7–8). Table 6.4 shows the Guan family members who participated in the 2003 Reunion Activities not only from North America, but also from Asia and Oceania. It also shows clearly that the Guan family was dispersed across North America, Asia, and Oceania. The outcome of the Asilomar Reunion was the compilation of a new family code and the confirmation that the reunion activities would continue (Yung, 2009, p. 94). It was confirmed that reunion activities would be held every three years in North America and Asia on a reciprocal basis. Since then, reunions have taken place in Hong Kong (2006), on an Alaskan Cruise (2009), in Singapore (2012), on a Table 6.4 Branch and place of residence of the 2003 Asilomar reunion Branch

US CA

US other

Canada

Hong Kong

Singapore

China

Others

2

9

0

3

0

0

0

1

6

25

8

3

0

1

0

2

7

4

12

4

0

0

0

2

8

0

0

0

1

1

0

1

12

4

5

1

1

0

1

1

14

2

0

0

0

0

0

0

D

0

1

0

1

0

0

0

44

26

11

3

2

1

7

Total

Source Yung (2004, p. 3) Notes US CA = State of California, US other = States other than California; Others = Japan, Malaysia, Australia, New Zealand, and El Salvador. “D” designates descendants of Guan Yuanchang’s younger brother. The number displays the number of households. A questionnaire prepared by Yung Ying-yue was given to each household instead of to individuals

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Caribbean Cruise (2013), on land and on a Vancouver Cruise (2015) and in Hawaii (2018).4 The Asilomar Reunion set the framework for the Guan Yuan Chang family reunion. Since then, every reunion continued to have presentations from the branches and church services. The activities of the Reunion could be divided into two main categories: “to interact with more clans” and “to know the recent situation of the clans and their history”. The Hong Kong Reunion was an inauguration that touched on family history (Yung, 2009, p. 95) and was hosted by Branch No. 7. For the first time, members of the family who were born and brought up overseas visited the tombs of Guan Yuanchang and his wife Li Amei, and the tombs of the second generation, visited the Chinese United Hall, which is closely associated with the family, and visited the Guan family ancestral hall near Guangzhou. The Church of Christ in China Hop Yat Church was developed from To Tsai Chapel, where the church activities of Yuanchang and Amei were based, and still has close links with the family members who live in Hong Kong. At the Hong Kong Reunion, it was difficult to keep track of the whole group’s activities. The Alaskan Reunion was organized as a seven-night, eight-day boat trip, embarking from Seattle, hosted by Branch No. 2. The reason for choosing to travel by boat was probably due to the large number of people attending the Reunion: with more than 100 people meeting, it would have been a challenge for the organizers to secure a meeting place, a place to eat and transport to and from the meeting place. On a ship, it was easier to secure meeting rooms and meals than on land, and there was no need to think about transport between the meeting rooms and the accommodation. As many of the participants were retired, it was also good to travel by boat, which is well equipped for disabled people. At the Singapore reunion, which was hosted by Branch No. 9, the participants chose the hotels by their preference. The tour to places related to Sun Yat-sen were arranged. The Hawaii reunion, probably hosted by Branch No. 7, chose to book a big hotel, so that all of the participants could easily take meals together.

6.4 What Prompted the Reunion Activities? Finally, we should consider why the Guan family is so enthusiastic about holding family reunions. Why are the members so willing to be connected? One possible answer is because they are so special, so they want to be connected. This reason might be applied to the reunion activities conducted by the descendants of Sally Hemings. She was a slave owned by Thomas Jefferson, the third President of the United States. She was the half-sister of his wife, Martha Jefferson, and bore six children to Thomas Jefferson. The fact that Hemmings’ descendants inherited 4

Yung 2015, p. 53. The author also heard about the 2013 and later reunions in an interview with Yung Ying-yue on June 06, 2021.

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M. Tanigaki

Jefferson’s DNA was verified by DNA testing in 1998. In 2000 the Thomas Jefferson Memorial Foundation announced that the nation’s third president probably fathered at least one and as many as six of Sally Hemings‘ children just one month before the Jefferson-Hemings descendants planned a reunion (Grace, 2000). If it were Guan Yuanchang’s 80th anniversary, it would be possible. Three different networks can be observed among the Guan family; the Christian family network, the network of the revolutionary group, and the Chinese Educational Mission. Firstly, until the early Republican era, being a Christian must have meant that there were many differences between them and others, especially regarding funerals, cemeteries, and ancestral worship. The marriages of the second generation were mainly between Christian families. A Christian woman had to marry a Christian man. As the absolute number of Christians was small, their circle of friends was limited, and as a result marriage partners were chosen from within the circle of Christian families who knew each other well. When Yuanchang’s fifth child died at the age of 34, the surviving husband remarried a woman from a Christian family. The episode of the marriage of Yuanchang’s sixth child also revealed the difficulty for Christians to find a marriage partner in those days. The episode is like a family history among the descendants of Yuanchang’s sixth child, and whether it actually happened or not has not been confirmed. The mother of the wife of the sixth child turned down an offer to marry her daughter to the sixth child, simply because the sixth child was a Christian. At that time, her husband, the father of the wife of the sixth child, had already passed away and the mother raised her daughter by dress-making jobs. Secondly, Yuanchang’s seventh child was a close friend of Sun Yat-sen, so a network of revolutionaries was added to the network of the Guan family. The seventh child did not take part in the revolutionary activities directly, but he formed the “Manchu Queue Cutting Association”, which symbolized his opposition to the Qing Dynasty. The wife of Yuanchang’s twelfth child was a sister of Sun Yat-sen’s early comrade who was killed by the Qing Court. The Guan member who was most deeply involved in the revolutionary movement was Yung Hoy, who supported Sun Yat-sen’s activities financially. Thirdly, Yung Hoy was the third batch, and the husband of the fifth child was the second batch. However, in the 1980s, these three networks may not have been influential on their decisions. Being Christian was no longer seen as a negative factor. The connection with Sun Yat-sen may also have given the family a historical honor. The Guan family was special in terms of their capability as professionals. Daily exchanges between relatives might have more meaning for them than economic benefit. Basically, the Guan family did not have a family business and attained high status through their professional skills. As stated with reference to the process of creating the Family Record, the Guan family welcomed family members to stay at home. Unmarried members and widows stayed with other family members. When necessary, children were adopted within the family. The eleventh child of Branch No. 6 was adopted by Branch No. 12, who were not blessed with children for a long time. When the couple from Branch No. 6 fell ill, the mother of the eleventh

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child was worried about leaving her child behind, and decided to leave her eleventh child to Branch No. 12 so the 11th child of Branch No. 6 changed into the first child of branch No. 12. Another case is the first child of Branch No. 11. The husband of this branch passed away early. The first child married the first child of Branch No. 14 and listed his name in that branch. In order to analyze the background of the Guan family network, the concept of social remittances proved useful to the author. Peggy Levitt of the Harvard Migration Research Institute launched the concept of “social remittances”, whereby not only money but also ideas, practices, social capital, and identities circulate between the sending and receiving communities (Levitt, 2000). These iterative circulatory exchanges reinforce and are reinforced by the sending and receiving communities (Levitt, 2013). With such close relations, the author speculates whether valuable information would be circulated. As the concept of social remittances suggests, these close relations enabled frequent exchanges and, as a result, valuable information may have circulated. Yung Ying-yue wrote of gratitude and the meaning of being a part of Guan Family; Right after the 9.0-magnitude earthquake and tsunami that struck Japan in March of 2011, and the resulting leak of radioactive material came to be known, the author of this paper received, one after another, offers from relatives around the world to stay in their houses in order to escape from Japan. These offers came from her siblings living in Hong Kong and Malaysia, from first, second, and even distant cousins living in Singapore, North America, Hawaii and England. A cousin who lived in Hawaii and worked for a travel agency, told the author that she could use her free air ticket to deliver whatever was needed for daily life to Narita, upon hearing of the shortage of food and petrol in Tokyo. Cousins who lent their help included some whom the author had met only once or twice. For the very first time, the author realized how grateful and meaningful it was to be a member of a global family.

It could be observed that; many relatives offered to provide Yung a place to live and were eager to send supplies to Japan upon hearing of the shortage of goods, including food and fuel. Yung has expressed her gratitude for all of this. It would be natural to assume that she spoke to her relatives and exchanged views with them when she replied to their offers. Many of her family members are professionals and many are medical professionals. She would have benefited from these opinions on how to cope with radiation. This could be interpreted as an example of social remittances.

6.5 Conclusion In the late Qing Dynasty, the family was a Christian family, and in the new environment of North America after the establishment of the People’s Republic of China, the family was perceived as a trustworthy group. In modern history, China was a country of continuous warfare, and the family was the first trusted partner. This unconscious recognition might have been inherited to the present day as if it were hidden DNA. However, the Guan family is not a closed group that does not mingle with the local society in their place of immigration. The third generation grew up in the United

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States and did not necessarily choose someone of Chinese descent as their spouse. Indeed, there are some cases where the Guan family members chose a non-Chinese spouse. When you have a big family, travelling becomes a fun adventure, because everywhere you go, there are aunts, uncles and cousins who are your relatives. My house, on the other hand, is like a hotel, and my relatives are always coming to visit me.

What she is talking about here is the pleasure of having all of her relatives together. The same applies to the creation of the first family record in 1937: “We want to create a framework for the next generation that will make the pleasure of meeting relatives possible”. As an open family, the Guan family seems to have successfully retained its cohesion as a clan. For example, the common language of the family reunion was English. First-generation immigrants who immigrated when they were children may not have been fluent in Cantonese, their original mother tongue. Many members of the family emigrated to North America, outnumbering the Guan family who lived in Asia. It was natural for them to communicate in English. As a result, the Guan Yuan Chang clan seems to have acquired a sense of unity as the Kwan Yuen-cheong Family, regardless of their place of origin or lineage. Finally, let us put the Guan family in the recent situation of Southeast Asia. It raises the question of how globalized Chinese, like Guan family, will behave in Southeast Asia—that is, the ASEAN community. Historically, ethnic Chinese have been playing an important role in the economy. Since World War II, ethnic Chinese in Southeast Asia have been becoming increasingly localized, although their ethnicity has been a sensitive issue to nation building. In the midst of China’s economic rise, will the ethnic Chinese use their ties to China to enhance their domestic position, or will they identify themselves with China? In the increasing entrenchment of China’s presence, the ethnicity should not easily be judged as their unconditional affiliation with China, the circumstance should be analyzed from plural angles.

References Chen, T. (2001). Kajin Diasupora: Kash¯o no nettow¯aku to aidentiti (Chinese Diaspora: Network and Identity of Chinese Merchants). Akashi Shoten, Tokyo. Grace, F. (2000). Jefferson-Hemings Reunion CBC News 07 February 2000. Retrieved on June 16, from https://www.cbsnews.com/news/jefferson-hemings-reunion/ Hamashita, T. (1996). Honkon:Ajia no nettow¯aku toshi (Hong Kong: A Hub City of Asia. Chikuma Shob¯o, Tokyo. Kido, Y. (2017). Amerika no Kaky¯o Kajin: Amerika kara mita Kaky¯o Kajin (Chinese in the United States: View observed by the United States). In: Kaky¯o Kajin no Jiten hensy¯u iinkai (Editorial Committee of Dictionary for Overseas Chinese) (Ed.) Kaky¯o Kajin no Jiten (Dictionary for Overseas Chinese) (pp. 360–361). Maruzen Shuppan (Maruzen Publishing), Tokyo. Kwan, S., & Yung, Y. (1997). Xianggang kaibu yu Guanjia (The opening of Hong Kong Port and the Kwan family). Guangjiaojing chubanshe (Wide Angle Press), Hong Kong.

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Kwan, S. (1997a). Zhonghua yayi zhi fu yu Guofu Sun Zhongshan. In: Kwan, Shiu-shek and YungYing-yue. Xianggang kaibu yu Guanjia (The opening of Hong Kong Port and the Kwan Family) (pp. 47–60). Hong Kong: Guangjiaojing chubanshe (Wide Angel Press). Kwan, S. (1997b). Huihuai Yishu(Sheaf of Memories). In: S. Kwan & Y. Ying-yue. Xianggang Kaibu yu Guanjia (The opening of Hong Kong Port and the Kwan Family) (pp. 62–83). Guangjiaojing chubanshe (Wide Angle Press), Hong Kong. Levitt, P. (2000). The transitional villagers. University of California Press. Levitt, P., & Rajaram, N. (2013). The migration-development nexus and organizational time. International Migration Review, 47(3), 483–507. ¯ Masuta, A. (2017). Osutoraria no Kaky¯o Kajin (Chinese in Australia). In: Kaky¯o Kajin no Jiten Hensy¯u iinkai (Editorial Committee of Dictionary for Overseas Chinese) (Ed.) Kaky¯o Kajin no Jiten (Dictionary for Overseas Chinese) (pp. 420–421). Maruzen, Tokyo. Morikawa, M. (2017). Kanada no Kaky¯o Kajin” (Chinese in Canada) In: Kaky¯o Kajin no Jiten hensy¯u iinkai(Editorial Committee of Dictionary for Overseas Chinese) (Ed.) Kaky¯o Kajin no Jiten (Dictionary for Overseas Chinese) (pp. 352–353). Maruzen, Tokyo. Suehiro, A. (2006). Famiri Bijinesu Ron:Kouhatu K¯ogy¯o-ka no Ninai-te (Family Business Theory: Leaders of Late Industrialization). Nagoya Daigaku Shuppankai (University of Nagoya Press). Tanigaki, M. (2011). Kanton Kan Gensh¯o ichizoku no riyunion katsud¯o (The Reunion Activities of the Kwan Yuen Cheong Family from Guangdong Province) Ch¯osen-zoku Kenky¯u Gakkai-shi. Journal of the Association for the Korean-Chinese Studies, 1–15. Yung, Y. (1997). Xianggang kaibu yu Guanjia (The opening of Hong Kong Port and the Kwan Family). In: S. Kwan & Y. Yung (Eds.), Xianggang kaibu yu Guanjia (The opening of Hong Kong Port and the Kwan Family) (pp. 5–30). Guangjiaojing chubanshe (Wide Angle Press), Hong Kong. Yung, Y. (2002). The formation of a Chinese diaspora family: The case of the Guan Family. In: Ajia Kenkyu Series (Asian Studies Series) (Vol. 42, pp. 1–13). Ajia Daigaku (Asia University). Yung, Y. (2004). The dispersion of a Chinese diaspora family: The case of the Kwan family in America. In: Ajia Kenkyu Series (Asian Studies Series) (Vol. 51, pp 1–9). Ajia Daigaku (Asia University). Yung, Y. (2009). Aru Diasupora lazoku no mono-gatari (A Story of a Diaspora Family) (pp. 87–95). T¯oa Gekkan (East Asia Monthly). Yung, Y. (2014). Chiiki teki Kirisuto-k”y¯o-sha Kazoku kara Guro-baru Kazoku eno Tenkai (Transformation from Regional Christian Families to Global Families: The Case of Kwan, Yung and Cheung Families). In: M. Tanigaki, H. Shiode, Hirokazu, & Y. Yung (Eds.), Heny¯o-suru Kanan to Kajin Nettow¯aku no Genzai (The Morphing South China and Contemporary Chinese Networks) (pp. 351–380). F¯uky¯osha, Tokyo Yung, Y. (2015). The global migration of a Chinese family: Kwan Yuen-cheung and his descendants. Ajia Daigaku Gakujutsu Bunka Kiy¯o. Journal of the Society for General Academic and Cultural Research, 27, 37–58. Yung, Y. (2018). Global migration of a Chinese Family: Kwan Yuen-cheung and his descendants. In C. Ho, R. Mak, & T. Yue-him (Eds.), Voyages, migration, and the maritime world: On China’s global historical role (pp. 243–261). Institute of Developing Economies.

Chapter 7

The Political Uses of Japanese Pop Culture in Hong Kong Chun-wah Chin

Abstract It is well known that Japanese pop culture is important for Japan’s domestic economy and international image. However, its political impacts are relatively unexpected and unpredictable, especially when we notice that Japanese cultural products have become highly globalized and accepted and interpreted differently by local consumers all over the world. Figuring out the whole picture of the political impacts of Japanese pop culture on the world is as complicated as solving an enormous jigsaw puzzle, as this process is in constant flux. Yet, specific and updated case studies help us to catch a glimpse of the picture. In this chapter, the case of Hong Kong in the 2010s will be discussed. Keywords Japanese pop culture · Hong Kong · Social movement · Collective memory

7.1 Literature Review Culture is usually part of politics. In particular, postwar Japanese pop culture, which is considered a kind of soft power of Japan, plays an important role in other East or Southeast Asian countries or areas. To examine the politics of Japanese pop culture, scholars often focus on why and how the Japanese government manipulates it. For instance, Iwabuchi (2001) indicates that, in response to the anti-Kakuei Tanaka (64th and 65th Prime Minister of Japan) demonstration held in Jakarta and Bangkok in 1974 due to Japanese economic exploitation, Takeo Fukuda (67th Prime Minister) started to encourage cultural exchanges between Japan and Southeast Asian countries to promote economic activities. This initiative was part of Japan’s foreign policy, that later became known as the Fukuda Doctrine. Since the 1990s, cultural policy has even become a way of reconstructing Japan’s national identity. Iwabuchi (2001) analyzes that Japan had to reconstruct its national identity, in which the desire to lead and connect with Asia re-emerged, when Japan was facing the end of the cold war, the C. Chin (B) The University of Tokyo, Tokyo, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_7

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economic development of the Asian area as well as cultural globalization. Alongside the amendment of the Broadcasting Act in 1994, international broadcasting started and developed during the 1990s. The Ministry of Economy, Trade and Industry instituted the “Japan Brand” concept in 2004, and set up a new Creative Industries Promotion Office known as “Cool Japan Shitsu” in 2010. As Iwabuchi (2007) concluded, Japanese cultural power, such as the anime or game industries, drew attention to the importance of the media culture in the fields of national economy and diplomacy as well as cultural nationalism, which was followed by Japanese government support and realized through national policy making. Secondly, scholars have examined the politics of Japanese pop culture through the acceptance of the world. Taiwan, in particular, attracts attention because of the colonial history in the past and process of de-Sinicization in recent years. When Lee (2017) examines the acceptance of Japanese pop culture in Taiwanese society, she indicates that the “Japan image” constructed by Japanese pop culture encompasses the “brand effects” such as “elegant” and “advanced”, but that those emotions toward “Japan” do not necessarily refer to Japanese thought or politics or even Japan itself. Still, as Chang (2020) indicated, Japanese pop culture connects the image of an “advanced Japan” and the counter-consciousness toward China among Taiwanese. That is, through the case of Taiwan, the connection between Japanese pop culture, the identity problem, and cross-strait relations has become apparent. This kind of research topic enriches and deepens our knowledge regarding the political impacts exerted by Japanese pop culture. In contrast, it seems that the case of Hong Kong cannot provide such a wide, deep space for discussing the relation of Japanese pop culture with the East Asian area since Hong Kong does not have a long history of Japanese rule, as does Taiwan. Still, studies of the acceptance of Japanese pop culture in Hong Kong show how the export of Japanese pop culture succeeded in the East Asian area. Lim (2010) indicates that the term hari, referring to those being enthusiastic about Japanese pop culture, was created by the Taiwanese but the phenomenon of hari first appeared in Hong Kong. It is because Hong Kong was the only market occupied by Japan but Japanese cultural products were not excluded by the local authorities (Lim, 2010). The cultural exchange of the film industry between Hong Kong and Japan revived in the early 1950s. Japanese pop music has officially explored the Hong Kong market since the 1970s. During the same decade, as the first area to broadcast Japanese TV programs after World War II, TVB, a free-to-air terrestrial television broadcasting company, started to screen Japanese anime in 1976 (Lim, 2010). In 1960, Daimaru, a Japanese department store opened in Hong Kong. It was the first Japanese department store to open in postwar Asia. In the 1980s, there were nine Japanese department stores in Hong Kong. Although the case of Hong Kong shows the early success of Japanese pop culture in East Asia, scholars like Ishii et al. (2001) analyze that the consumption of Japanese pop culture among Hong Kong’s younger generation does not necessarily lead to an interest in Japan itself. In light of the above studies, it seems that, in order to study the case of Hong Kong, it is not enough to measure the political impact of Japanese pop culture in

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East Asia, unlike the case of Taiwan. However, since the 2010s, with the growing conflict between Hong Kong society and the local/mainland Chinese authorities, the role of Japanese pop culture has changed rapidly and obviously. It has become a “little tool” which is not indispensable, however, as, to some extent, it is helping some Hongkongers to express their political ideas widely and effectively. From the 1970s to the 2010s, over 600 Japanese anime were broadcast by TVB Jade, a Cantonese free-to-air terrestrial television channel, in Hong Kong. Almost every day, Japanese anime were broadcast and audiences could access them freely. Especially for those born between the late 1980s and early 2000s, Japanese anime is their collective memory. It is true that Japanese anime is a globalized product which audiences around the world commonly enjoy. However, localization makes the cultural content, as a collective memory, different from other countries/areas. In Hong Kong, if local audiences watch anime via public channels, like TVB Jade, all of the anime are dubbed into Cantonese and many of them have Cantonese opening songs. In the 2010s, the younger generation, born between the late 1980s and early 2000s, have become major participants in different social movements, such as the Umbrella movement in 2014 and the 2019 Protests. Japanese anime, as their collective memory, have been used as a “little tool” to express their political ideas. For example, Chin (2020) indicates that Doraemon became a symbol of missing “the old Hong Kong”, where people were able to enjoy a high degree of freedom. Also, Hong Kong elements such as Li Syaoran (a character depicted “from Hong Kong”), who appeared in Cardcaptor Sakura, helped some Hongkongers to reconfirm their Hong Kong identity. The attack on Titan became a metaphor for Hongkongers (human) and the mainland authorities (Titan) for those who feel angry at the influx of mainland Chinese tourists. In the 2019 Protests, Japanese anime were used relatively frequently as promovement promotional materials among protesters. Cheung (2020) explains that local and overseas cultural symbols are unsuitable to employ as cultural capital for the protests. For instance, the film production of McDull, a pig cartoon character with strong Hong Kong characteristics, lost some of its local fans because the series explored the mainland Chinese market, making it appear less local. Hong Kong movie stars like Chow Yun-fat, although he does not show support for the local/mainland authorities like Alan Tam Wing-lun (famous singer and actor), maintains a silence about the protests, which has disappointed some pro-movement Hongkongers. Cheung also analyzes that protesters cannot find common values in Korean pop culture, unlike in Japanese anime, where the characters share a common tragedy of knowing the futility of doing something yet doing it anyway. Some articles on the internet also describe how protesters are inspired by Japanese pop culture in different protests. For example, some protesters practiced Naruto Run, a running form appearing in the ninja manga/anime Naruto, in a protest in Yuen Long on August 21, 2020 (Awei, 2019). These previous studies help us to realize the new development of the acceptance of Japanese pop culture in Hong Kong. Through the case of Hong Kong, we can reconsider the unexpected political impacts brought by Japanese pop culture. For

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Hong Kong people, particularly the younger generation, Japanese cultural content can be a “little tool” to resonate with each other and widely spread their messages, since the content is familiar and interesting to them. At the same time, for the local/mainland authorities, the use of Japanese cultural content by Hongkongers may be a “little trouble”. This is because using cultural content, to some extent, helps Hong Kong people to spread their political beliefs, which the authorities would probably be unwilling to hear. The role played by Japanese pop culture, as a “little tool” for some Hongkongers and as a “little trouble” for the local/mainland authorities, may probably not have been intended originally by Japanese creators or government officials, who expected economic benefits and improvements to Japan’s image in the first place. In addition to the case of Taiwan, the case of Hong Kong can portray a more multilayered picture of the acceptance of Japanese pop culture in East Asia. Thus, it is important to understand the formation and patterns of using Japanese pop culture politically in Hong Kong. This chapter will examine how and why Hong Kong’s non-establishment camp1 and their supporters produce political discourse by using Japanese pop culture. The following paragraphs will discuss five cases, including Animal Crossing: New Horizons, Demon Slayer: Kimetsu no Yaiba, Freedom Gundam, Hikaru no Go and Digimon. The literature that examines how cultural content can be used politically by Hongkongers is mainly based on discourses that can be found on social media, including Facebook, Twitter, YouTube, and gaming forums, among others. Online mainstream newspapers also help to show how the political discourse assisted by Japanese cultural content spread both locally and internationally. In some cases, the cultural content itself (produced by Japanese companies or adapted from Japanese content) will be analyzed in order to discuss how and why a political discourse is embedded in these works.

7.2 The Case of Animal Crossing: New Horizons Animal Crossing: New Horizons, Nintendo’s life-simulator video game for the Nintendo Switch, was released on March 20, 2020. In New Horizons, players on an uninhabited island are allowed to explore their environs by fishing, planting, collecting items, building houses, decorating rooms, designing the appearance of characters and so on. Also, the game allows multiplayers, so the host of the island can invite other players to visit them. More importantly, the function of custom designs provides immense flexibility for the players to create, upload, and share various images. That is, custom designs allow players to insert political slogans and 1

The non-establishment camp includes the pro-democracy camp and other political camps which are not pro-Beijing but tend to criticize the pro-democracy camp and their supporters. One example is Civic Passion.

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posters, which appear similar to those that protesters widely used during the 2019 Hong Kong Protests.

7.2.1 Starting the “International Front Line” by Japanese Pop Culture Shortly after the release of New Horizons, sporadic cross-border political actions began. For instance, a player, who introduces himself as a Hongkonger, posted a few screenshots of his island feature on Bahamut, a Taiwanese gaming forum on March 24 (Bahamut, 2020). The first uploaded screenshot shows the Statue of Liberty, and the second shows the popular protest slogan “FREE HONG KONG, REVOLUTION NOW”. He also uploaded the custom design of the slogan and attached a QR code for other players to download. On the same page, another player soon uploaded his/her island feature, using the same custom design of the slogan and commented “Hands and Feet, thanks for the custom design” (Bahamut, 2020). “Hands and Feet” is one of the common terms shared by protesters. It conveys the idea of unity and is similar to “comrade” or “brother”. TIME magazine further explains that the term means “when the hands and feet of a protestor are injured, other protestors feel his or her pain” (TIME, 2019). From the above example, it seems that players who feel sympathy for the protests actively used New Horizons to express their political messages with local and overseas players or forum users shortly after the release day. Other than the Taiwanese gaming forum, Facebook was also an important platform for spreading New Horizon’s screenshot with political messages. On March 25, a Facebook user with the Black Profile Photo, one of the protest symbols designed to express sympathy at the death of protesters or anger at police brutality as well as the local/mainland authorities, posted five games’ screenshots on his/her personal Facebook account. Those games’ screenshots included the slogan “FREE HONG KONG, REVOLUTION NOW”, “Not One Less” (referring to “Five Demands Not One Less”2 ), yellow umbrella, yellow helmets, black clothing, black gas masks, and a photo of the Chinese vice president Xi Jin-ping with funeral decorations (Lee, 2020). These symbols show sympathy for the protests and also criticism of the local/mainland authorities. In the screenshot showing the slogan “Not One Less”, there are five players wearing the same black clothing and black masks and holding a yellow umbrella. Obviously, they were using the multiplayer function. The Facebook user also typed “Many Hands and Feet” with the emoji of “a raised hand with fingers splayed” (five fingers raised) and “white up-pointing index” (one finger raised), referring to “Five Demands Not One Less”. The post gained more than 3000 reactions, including Like, Haha, and Love. That is, political messages have started to spread from the private sphere (single player or multiplayer) to the public sphere (an 2

The five demands of the protesters include the withdrawal of the Extradition Bill, for the protests not to be characterized as a “riot”, amnesty for arrested protesters, an independent investigation into alleged police brutality and the implementation of complete universal suffrage.

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open access Facebook account) using New Horizons, a famous video game, released worldwide. The breakthrough in the political effect produced by New Horizons was the participation of Joshua Wong Chi-fung, a representative Hong Kong pro-democracy activist, born in 1996, former secretary-general of the party Demosist¯o and former founder of the student activist group, Scholarism, who appeared on the cover of TIME magazine’s international edition in 2014. International news brands, such as the BBC, CNN, Fox News, and The Economist, and mass media in Japan like NHK and Asahi Shimbun, have also introduced or interviewed Wong. This made Wong one of the spokespersons for the Hong Kong democratic movement, who was able to play a key role in lobbying in foreign countries. Wong also connected international societies through SNS, such as Facebook and Twitter. Wong’s Facebook page (@joshuawongchifung) has over 523,000 followers and his Twitter account (@joshuawongcf) had 731,700 followers as of November 2020. On March 27, 2020, Wong shared two of the above-mentioned games’ screenshots, showing the slogan “Not One Less” and five players wearing the same black clothing and black masks and holding yellow umbrellas, as well as the photo of the Chinese vice president, Xi Jin-ping, with funeral decorations, on his Twitter account and typed “HKers are really creative!” (Joshua Wong [Twitter], 2020a). On April 1, USgamer, a video game news and editorial site, updated an article entitled “Animal Crossing: New Horizons is Fast Becoming a New Way for Hong Kong Protesters to Fight for Democracy” and interviewed Wong. During the interview, Wong clearly explains his idea that New Horizons should be a platform for the protest movement. For lots of people around the world who play this game, they have to put their ideal life into the game and, for Hong Kongers, we have to put our protest movement and our protest sites inside the game. (USgamer, 2020)

Wong tweeted “Animal Crossing is Fast Becoming a New Way for Hong Kong Protesters to Fight for Democracy!” on April 2 with a screenshot of his island, showing the slogan “FREE HONG KONG, REVOLUTION NOW” and shared the URL of the USgamer’s article (Joshua Wong [Twitter], 2020b). He also repeated his comments made during the USgamer’s interview in the reply column below, with another screenshot, including one of six players using a bug net to strike the image of Carrie Lam Cheng Yuet-ngor, Chief Executive of Hong Kong since 2017. On April 5, Wong shared the same USgamer article and repeated his comment from the interview again on his Facebook page (Joshua Wong [Twitter], 2020c). This time, he added the hashtag “International Front Line”.3 The above evidence shows that Wong encouraged people to use New Horizons to spread their support for the Hong Kong democratic movement and dissatisfaction with the local/mainland authorities intentionally. On April 10, China’s biggest e-commerce site, Taobao, banned sales of New Horizons. In fact, New Horizons has not been officially released in mainland China 3

“International Front Line” means a series of strategies, including gaining attention from the worldwide media and gaining support from international society and foreign governments and legislature.

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because of the strict regulation. Thus, mainland Chinese gamers tend to purchase the overseas digital versions informally via an e-commerce site like Taobao. When they try to access the game and connect with overseas players, or buy tools, Hong Kong-based game servers and pay systems are usually used. However, some Chinese netizens have criticized Hong Kong players, who spread political messages during the game. Wong was even bombarded with dead threats. It is unclear whether the Chinese authorities’ censorship apparatus has been used to ban the game due to Wong or other Hong Kong players’ “virtual protests”. However, the ban on sales attracted the attention of the mass media worldwide. The worldwide-released famous video game, the well-known representative Hong Kong activist’s political actions, coupled with the removal of sales on websites in mainland China, attracted the attention of international society. This is exactly what Hong Kong protesters welcome and call the strategy of “International Front Line”. As a result, the strategy succeeded. Since the ban in China, at least ten English news stories or related reports can be found on the internet as of November 2020 by well-known news brands, such as BBC, The Guardian, TIME, DW and France24. In Japan, NHK, Nikkei, Sankei, Toyokeizai, Fuji News Network, and other, smaller online media companies also reported the story in Japanese. Despite the fact that lots of famous news brands’ articles are discussing the protest in New Horizons and the ban in China, there is no doubt that the political effects are limited and temporary. Still, the incident of New Horizons successfully pushed Hong Kong issues onto the international news agenda again, during the Covid-19 pandemic era and retreat of the social movement in Hong Kong.

7.2.2 Remembering and Resonating New Horizons not only became a resource of the “International Front Line” temporarily, but also a tool for Hongkongers to remember the protest with their “Hands and Feet”. On April 5, 2020, a YouTube channel called “Miss S. Liangzhi wuji” (literally, a conscience is priceless), uploaded a video entitled “Glory to Hong Kong—Guide of “Animal Crossing” Isabelle’s A Cappella|Guide of Animal Crossing town tune|Super cute|Soothing”. On New Horizons, players can customize their town tune. Isabelle, the dog character from the Animal Crossing series, can actually sing the town tune after players compose the melody. On the YouTube video, Isabelle sings Glory to Hong Kong, a protest anthem that has been sung frequently since the beginning of September, 2019. The video had had over 65,000 views as of November 2020 (Miss, 2020). On July 1, the 23rd Hong Kong handover anniversary, another YouTube channel called “Gugee Crossing” uploaded a video entitled “[HK Series] Hong Kong Kowloon Walled City RECREATED!—ACNH Island Tour #3|Gugee Crossing”. In this video, the narrator visits an island which is decorated in the “Hong Kong style”. Similar to the above-mentioned examples, in this video, there are lots of

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political messages and decoration showing support for the 2019 Protests and Hong Kong democratic movement. For instances, the posters state “Free HK” and “加油” (add oil: an exclamation expressing encouragement or support) and display a yellow ribbon. The island owner also created an area where around 35 umbrellas are lined up. It is unclear whether the concept of the area came from the 2019 Protests or the Umbrella movement in 2014 when protesters widely used umbrellas to defend themselves against the police’s tear gas gun, batons, and so on. Nevertheless, the narrator says: “Does this place represent our long years of protests? Let me take out my umbrella too. It is quite meaningful to put all umbrellas here to represent our protests. It’s heavy-hearted.” At the end of the video, the narrator adds: “No one knows the future of Hong Kong. Hope everyone safe. Be water.4 Add oil” (Gugee Crossing, 2020). In other words, the multiplayer function of New Horizons provides an opportunity to commemorate the 2019 Protests or even other protests, like the Umbrella movement, with other players. Through visiting and sharing, visitors also interpret the decoration, although the host may not have intended to include any political messages. In addition, the video is open access on YouTube and viewers are allowed to add comments. It makes the scale of remembering and resonating larger. For example, some viewers commented: “Great. I was sad today. The future is really unknown. But after watching your video, I feel better now” and “The game has just started. Let’s be water!”.

7.2.3 From Virtuality to Reality Compared with “International Front Line”, as well as remembering and resonating, the interaction between New Horizons and “Yellow Economic Cycle” is more practical. “Yellow Economic Cycle” means that the supporters of the 2019 Protests and other Hong Kong democratic movements boycott shops or companies that are on the side of the local/mainland authorities, at the same time consuming more products and services from those businesses that showed sympathy to the protests and other Hong Kong democratic movements. Where Hongkongers purchase New Horizons is considered as helping the “Yellow Economic Cycle” or not. LIHKG, a Hong Kong forum website which played an important role in promoting the protests in 2019, has a post advising people where they should buy New Horizons (LIHKG, 2020). Prowellasia, an agent wholesaler, sells authorized-dealer imports of New Horizons in Hong Kong. However, the company was labelled a “blue shop” for supporting the Hong Kong Police. In the post on LIHKG, the original poster encourages people to buy the game from AEON or Fortress where they can place a direct order with Nintendo (Hong Kong) without 4

“Be water” was widely adopted as a philosophy in the 2019 Protests. It means being flexible and creative and incorporates the belief about being leaderless. Other than being a mobile, fluid form of street protests, people effectively used social media or forums to spread their political messages and organize protests and fundraising.

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the participation of Prowellasia. Buying parallel products from Amazon or digital versions from an e-shop is also encouraged. Moreover, there was a special campaign connecting New Horizons with “Yellow Economic Cycle” during the 2020 Golden Week. The campaign, called “Let’s gather! 5.1 Golden Week”, was organized in a Telegram channel (@HKGWKAC). Organizers raised “funds” to collect virtual valuable resources, including Bells (the currency employed in the game), Gold Nuggets, Nook Miles Tickets and Presents. These donated resources became gifts for the campaign participants. The participants were required to consume in vilified “yellow shops” (subject to the Yellowbluemap5 ), spending more than HKD100 from April 30 to May 3. Then, they needed to submit a Google form with receipts or relevant records for registration. The participants are also required to make “the most yellow comment” (the most supportive of democratic movements or critical of the local/mainland authorities), “the most creative comment”, “the toughest comment”, or “the best suggestion for an Animal Crossing event” in order to compete for gifts.6 The channel’s administration claimed that there were 320 registrations and they generated HKD 200,000 revenue in the end. Of course, even if the numbers are credible, the economic scale is small and no certain economic or political impacts could be expected. Nevertheless, New Horizons was used as a “little tool” to share political messages again and further connect with a small social movement located somewhere between virtuality and reality.

7.3 The Case of the Demon Slayer: Kimetsu no Yaiba Similar to New Horizons, Demon Slayer is also one of the world’s most popular Japanese cultural products, which gained astonishing popularity during the Covid19 pandemic. Needless to say, excluding the effect of Covid-19, the series of Animal Crossing before New Horizons attracted numerous supporters from all over the world. The TV series of Demon Slayer had been also highly evaluated even before the pandemic. This time, in Japan, the movie version of Demon Slayer, Demon Slayer: Kimetsu no Yaiba the Movie: Infinite Train, premiered on October 16, 2020, mobilized 3.4 million people on its opening weekend and recorded a box office of $44 million in just three days (Japan Times, 2020). In Hong Kong, it premiered on November 12 and generated $1.9 million in just four days (Apple Daily, 2020).

5

The Yellowbluemap, created by a Facebook community (@yellowbluemap), shows the location of shops considered “yellow” (pro-democracy) or “blue” (pro-Beijing) in Hong Kong. Yellowbluemap. https://www.facebook.com/yellowbluemap/ (accessed on January 12, 2021). 6 At first, the organizers planned to hold a lucky draw to distribute the prizes; however, there may be some restrictions due to the Hong Kong Gambling Ordinance. Thus, the participants were required to write recognized comments to win the prizes.

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7.3.1 From Non-politicization to Politicization Initially, Hongkongers enjoyed Demon Slayer without linking it to political issues. The first reason is that Demon Slayer has been accepted by Hong Kong readers or audiences for only a short period. The original manga of Demon Slayer was first serialized in Shueisha’s magazine, Weekly Shonen Jump, from February 2016 and its 26-episode anime television series aired in Japan from April to September 2019. The translated Chinese version of the manga was published on January 8, 2018, in Hong Kong. The copyright of the anime version in Hong Kong was bought by ViuTV but audiences needed to pay for membership to access the anime. Although some Hongkongers may access the anime through uncopyrighted websites, the spread of Demon Slayer remains limited. As Chin (2020) pointed out, anime that have been aired over several decades, like Doraemon, are usually regarded as a collective memory for some Hongkongers, particularly those born between the 1980s and the first half of the 2000s. That is why Doraemon can be used to represent freedom and the sadness of losing Hong Kong in some local cultural products. Therefore, the limited time for accessing Demon Slayer meant that Hongkongers did not make political use of it. Secondly, there is no doubt that the Attack on Titan faced a similar limitation in Hong Kong; however, it still became a tool for expressing political messages. This is because, at the beginning of story, the image of a small city-state and invasion of man-eating Titans are full of images that encourage some Hongkongers to discuss the conflict between Hong Kong society and the Chinese government. By contrast, it seems challenging to use Demon Slayer in the same way. The Demon Slayer Corps and Demons are relatively well-matched in strength, compared with the human military and the monster Titans in Attack on Titan. There are no walls, city-states or invaders either. However, Demon Slayer was used as a tool to criticize the Hong Kong Police Force soon after the premiere of Demon Slayer: Kimetsu no Yaiba the Movie: Infinite Train. On November 13, 2020, the day after the premiere of the film, the Hong Kong Police’s official Facebook page posted an image of its mascot called “The Little Grape” to promote an anti-fraud campaign (Hong Kong Police [Facebook], 2020). Yet, this time, the mascot has obviously cosplayed the main character called Tanjiro Kamado in Demon Slayer. The Hong Kong Police insisted that the image is “The Little Grape”, although “The Little Grape” carries numerous features—dressed in a green and black checked outfit, carrying a black sword, with a scar on the left side of its forehead—which resembles Tanjiro. In the top left of the image, it states “Blade of Destruction of Fraud”. Also, the description written above the image reads “Anti-Fraud Breathing”. These special phrases refer to the Japanese title of Demon Slayer and the breathing styles (swordsmanship styles), such as “Water Breathing”, practiced by the Demon Slayer Corps. Hong Kong netizens have started to criticize this post in the comment box. This criticism mainly accuses the Hong Kong Police Force of infringing the copyright of Demon Slayer. Some have ridiculed the Police Force for being as bad as mainland

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China, where the problem of copyright infringement often arises. Some have claimed that the Hong Kong Police should practice “Ice Breathing”, referring to the news on May 7, 2020, when a station sergeant and constable were arrested for possessing more than $1.9 million worth of crystal meth (South China Morning Post, 2020). A Facebook page called “Hong Kong Popo” uploaded a new image resembling the Tanjiro cosplayed version of “The Little Grape”. The ridiculed image states “Bing zhi huxi” (Ice Breathing) and “Xidu zhi yin” (Addiction to Drug Abuse), in which “yin” is a homophone of “ren” in Cantonese. The post received 14,000 positive responses, such as Haha and Like.

7.3.2 The Start of “International Front Line” On November 16, Agnes Chow, a Hong Kong pro-democracy activist and also a former member of Demosist¯o and former spokesperson of Scholarism, born in 1996, tweeted “It is sad that Demon Slayer has become propaganda for the Hong Kong Police Force…”. She also shared the image of the Tanjiro cosplay version of “The Little Grape” on her Twitter account (Chow, 2020). Chow has over 561,000 followers on Twitter as of November 2020. Also, she often appears on Japanese mainstream media, such as NHK, TBS, and Nippon TV. Chow’s tweet received 17,000 Hearts and was retweeted over 7000 times as of November 2020. On November 17, TBS and Nippon TV broadcast the scandal on their terrestrial television programs Asachan and ZIP! The TBS program, Asachan, quoted Chow’s tweet with her previous video. Both Yomiuri and Asahi reported it on their news websites as well. On the same day, a popular pro-democracy Facebook page (@100most) run by 100most magazine, with more than 1.4 million followers, posted a message stating that the Japanese media had reported the scandal and that the Hong Kong Police Force had been “put on the map again” (100most, 2020b). The post had received 10,000 Haha and 5000 Likes as of November 2020. The development of this scandal is slightly different from the case of New Horizons. In the above-mentioned New Horizons incident, initially, Japanese popular cultural products were politicalized by Hongkongers, including Joshua Wong, a political star in Hong Kong and international society. Then, the game was banned in mainland China for unclear reasons. Finally, the top news brands reported it and Hongkongers were encouraged to continue their “virtual protest”. This time, the Demon Slayer incident was sparked by the local authorities. Then, several Hongkongers blamed the Police Force’s copyright infringement with accumulated anger and hate, which can be traced back to the police brutality that has occurred since the 2019 Protests. Afterwards, Agnes Chow, the famous activist in Japan, shared the scandal in Japanese on her Twitter account. Next day, the scandal was reported by the mainstream media in Japan. The suspicion of the Police Force’s copyright infringement spread to Japan which is the birthplace of Demon Slayer and the heartland of Demon Slayer’s fans.

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7.3.3 Hot Cultural Products and the Conditions of the “International Front Line” Despite the fact that the process of these two incidents differs, we can conclude that the crucial conditions of starting a temporary and topical “International Front Line” are (1) the participation of numerous local users on social media, (2) the participation of political activists who are well known overseas, (3) the actions or reactions of the local/mainland authorities, as well as (4) attention paid by international society. Once these four conditions are fulfilled, protests will be exported from the local to the international arena then re-imported from the international to the local arena on a larger scale. Interestingly, popular Japanese cultural products, which are taking the world by storm, often stimulate and connect all four conditions, since the topicality and popularity of such hot cultural products ensure public attention, which is crucial for the activists as well as the mass media. That is why hot Japanese cultural content, such as New Horizons and Demon Slayer, can be politicalized both locally and internationally as well as drawn into the conflict between Hong Kong society and the local/mainland authorities.

7.4 The Case of Freedom Gundam Freedom Gundam is a Mobile Suit appearing in Japanese anime the Mobile Suit Gundam SEED and the sequel Mobile Suit Gundam SEED Destiny, piloted by Kira Yamato, the main character in both works. Freedom Gundam is described as a crucial force for stopping the war between the Earth Force and the PLANTs in Gundam SEED. Especially in the sequel, Kira, as a member of the neutral force, Archangel battleship, drives Freedom Gundam to interfere in the fighting between ZAFT and the Earth Alliance’s faction and destroy the mobility of others’ mobile suits without killing their pilots. It is symbolic that a person who refuses to take sides or join the regular army (meaning that he will be treated as a kind of “terrorist” by sovereign states) uses a weapon called Freedom to stop war and cherish peace. Mobile Suit Gundam SEED was broadcast in Japan in 2002 and 2003, and the sequel followed in 2004 and 2005. Each had 50 episodes and the highest viewing rating recorded was 8% (Animeanime, 2004). In Hong Kong, TVB Jade broadcast both series between 2004 and 2007. Besides the anime itself, “Gunpla” (a Gundam plastic model) is popular among model enthusiasts in Japan and all over the world, including Hong Kong. Similar to other Japanese cultural products, the stories themselves of SEED and SEED Destiny, the songs, the characters, the Mobile Suits, the Japanese or Cantonese dubbing and “Gunpla” are a collective memory for some Hongkongers. On July 11, 2020, Sunrise Inc., a subsidiary of Bandai Namco Holdings, announced its latest project, called “Gundam China Project”, taking advantage of the Gundam 40th anniversary celebration. It plans to head a life-sized Freedom

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Gundam, the world premiere of a 1:1 scale Gundam outside Japan, in Mitsui Shopping Park, and in LaLaport, Shanghai, China. Similar to New Horizons and Demon Slayer, some Hongkongers, who feel dissatisfied with the Chinese government, will not ignore any chance provided by their well-known Japanese cultural products to express their political ideas.

7.4.1 Memory Contents and Dispersive Local Virtual Protests Like Japan (Hong Kong) Limited provides travel and cultural information about Japan as well as being an agent for booking hotels and so on. Its Facebook page, Like Japan (@likejpn), shared the news of the “Gundam China Project” on July 11 (Like Japan, 2020a). After a new official promotional video was uploaded on October 30, Like Japan again introduced the project and shared the video on November 3 (Like Japan, 2020b). Neither post contains obvious political messages, however, the comment box is full of political messages created by local users. In the comments box for the post dated July 11, there were 278 comments as of November, 2020. Almost all of the comments are mocking in tone. The most common pattern is “Freedom Gundam in a place where there is no freedom”. Some are more creative, rather than talking about freedom directly. For instance, several comments make fun of the official model’s name, ZGMF-X10A Freedom Gundam, such as “the inspection may be passed without naming the model”, “On the mainland, it may only show the model number ZGMF-X10A”, and “It is 404 Gundam”, as a satirical reference to the fact that the Chinese authorities might not allow the name and symbol of “Freedom” to appear in mainland China. Some comments connect the topic of the conversation with Hong Kong issues, like “if the mainland were Freedom, then Hong Kong would be Justice” (referring to Justice Gundam, a Mobile Suit featuring in the same series), as a satirical reference to the fact that mainland China has no freedom and Hong Kong has no justice. There are also a few comments that mention key words related to the Hong Kong national security law, which commenced on June 30, 2020. They laugh at the “foreign force”, Freedom Gundam, who violates the law through “subversion”, “secession”, and “terrorism”. Moreover, copyright infringement problems are picked up as well. In 2010, a 15m-tall golden robot statue, which resembles the original illustration of the RX-78-2 Gundam in the Mobile Suit Gundam series, appeared in Floraland Park in Chengdu, Sichuan Province, China. In Japan, an 18-m-tall, life-size RX-78-2 Gundam was erected in Shinagawa, Tokyo, in 2009 and in Shizuoka in 2010. Sotsu Co., the Tokyo company managing the copyright of Gundam, started legal action against the infringement by the amusement park. The park withdrew the robot statue but erected another robot which resembles the previous one with characteristics of MS07B Gouf, also a mobile suit featured in the Mobile Suit Gundam series. In the comment box to the post of Like Japan, commenters ridicule the copyright scandal, share the photo of the golden robot and state “China had a Gundam years ago”.

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Furthermore, anti-Japanese nationalism in mainland China is ridiculed by some users as well. For instance, the comments include: “The freedom of China is given by Japan”, “Where is the promised anti-Japanese movement? Is the Nanjing Massacre forgotten?”, “Collusion with Japan, intention to subvert state power… I suggested that nationals of China should be banned from visiting Japan”. Similar mocking patterns can be found in the post on November 3 as well as on other topics related to Japanese cultural content and mainland China. Without doubt, compared with the global new release of New Horizons and Demon Slayer, which are considered a hot topic or even social phenomenon, the “Gundam China Project” is big news for fans but minor news for the general public. It led to indifference among political activists and the mass media. That is why the case of Freedom Gundam was not upgraded to become a tool of “International Front Line” and this mockery that appeared on Facebook and other websites was dispersive. Still, Freedom Gundam, as Japanese cultural content which is popular worldwide and considered a collective memory among some Hongkongers, has been taken advantage of in order to present a political discourse again.

7.5 The Case of Hikaru no Go Similar to the case of Freedom Gundam, Hikaru no Go, a 2020 Chinese web series adapted from the manga of the same name, was used to ridicule the mainland authorities and express political ideas. The manga or anime version of Hikaru no Go is a story about the main character, Hikaru Shindo, born in 1986, who gradually became a Go master under the teaching and accompaniment of the spirit of Fujiwara-no-Sai, a Go player from the Heian era. The anime was first broadcast in Japan between 2001 and 2003. In Hong Kong, Hikaru no Go was broadcast in 2004. Like the Mobile Suit Gundam SEED series, it was broadcast by TVB Jade. The anime is a collective memory, especially among Hongkongers who were children, teenagers, or young adults when it was broadcast. The Chinese web series has been streamed by iQIYI, a Chinese online video platform based in Beijing, since October 27, 2020. On October 24, the Hong Kong popular pro-democracy Facebook page (@100most) shared a still of the web series, compared it with a picture of the Japanese anime version (100most, 2020a). The former shows two Chinese actors playing the role of Shiguang (adapted from Hikaru) and Chuying (adapted from Fujiwara), while the latter shows Hikaru and Fujiwara in the anime version. The post reads “Have no choice but to feel surprise. Products of the great power can always keep its scared level”, mocking Chuying’s unnatural makeup. The post evoked about 13,000 reactions as of November 2020.

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7.5.1 The Use of Japanese Cultural Content and Chinese Official Permission On October 28, just a day after the premiere, the drama attracted the attention of some Hongkongers, again on the internet. In the first episode, the story started on June 29, 1997, two days before the handover of Hong Kong on July 1. The title of this episode is “Huigui”, (translated in the subtitles as “Comeback”). The Chinese government and HKSAR government officially use “Huigui”, usually translated as “Reunification” in English, to refer to the Handover of Hong Kong in 1997. In this episode, “Huigui” has a double meaning. First, it means the return of Chuying, who was a Go master from Southern Liang (502–557) whose spirit returned in 1997. The second meaning is “the Return of Hong Kong”, matching the political messages interspersed throughout the episode. On October 28, the popular Facebook pages (100most, Like Japan, and Stand News(@standnewshk)), run by online pro-democracy media, each shared screenshots of the first episode. There were lots of elements related to the Handover of Hong Kong, such as the national flag of China and the regional flag of HKSAR, shown in the screenshots of the episode. In the posts of 100most and Stand News, they both quoted “after a hundred years of vicissitudes, Hong Kong will return to the embrace of the motherland”, a radio announcement that can be heard during the episode. It is common for some Hongkongers to mock and express their political ideas through a text that is highly related to Japanese pop culture. Similar to the above cases, such as Animal Crossing: New Horizons, Freedom Gundam and Demon Slayer, people reacted critically and cynically to the Chinese drama adapted from Japanese manga. For example, in the comment box of Stand News’ post, there was a comment that “(June 30 was) the day when every Hongkonger started to know that Hong Kong has early-stage cancer”, a cynical reference to the conversation in which Chuying asks Shiguang “What day is it today?” and Shiguang replies “Today is a happy day for every Chinese person” in the episode (Stand News, 2020). Another comment mocks the anti-Japanese sentiment in mainland China, saying “Fujiwara (the original character of Chuying) and Hikaru (the original character of Shiguang) are Japanese. Does the Handover of Hong Kong have anything to do with them? (Stand News, 2020). It seems that the case of Hikaru no Go is nothing new when we focus on the political discourse produced by Hongkongers via social media. However, looking at the first episode itself, it is obvious that “the Return of Hong Kong” is not only an occasional element for explaining the historical background of the story, but also well-organized propaganda that exploits the popularity of Japanese manga or anime. Table 7.1 shows the structure of the propaganda embedded in the episode. There are seven scenes containing shots with political symbols (for total of about three minutes) in its 55-min episode. The political symbols depicted in those shots, such as the national flag, regional flag, and caption stating “Celebrating the Return of Hong Kong”, are repeatedly emphasized. In particular, in the classroom scene, the Bank of China Tower and lots of skyscrapers in Victoria Harbour, decorated with sunflowers,

Voice (radio announcement)

BGM

NA

19:05–19:13

NA

A schoolchild holds a national NA flag. A further two schoolchildren hold a regional flag

NA

NA

“To celebrate the handover of “Pearl of the Orient” Hong Kong, on June 30, all A regional flag of HKSAR and a national flag of China on a bicycle primary and middle schools in the city get a half-day holiday. Please Both flags are on the head of the arrange your schedules bicycle and another national flag accordingly. TV stations will is on top of a taxi broadcast the handover of Hong A regional flag and a national flag Kong live. Don’t miss the chance standing near the driver’s seat of to celebrate the grand event together. The song “Pearl of the the taxi. Another two flags are Orient” describes our expectancy also hanging on a wall of a for the return of Hong Kong. Now, building. A red banner with yellow words reads “Celebrating there is only one day left before the Chinese government resumes the return of Hong Kong” its sovereignty over Hong Kong. NA Tomorrow, Hong Kong will officially return.”

Shots with political symbols NA

05:48–06:10

05:40–05:43

05:37–05:39

05:25–05:36

Classroom during break time

School gate and the street nearby

04:48

05:19–05:24

Scene

Time

Table 7.1 Scene breakdown of “Comeback”, the first episode of Hikaru no Go (Chinese drama)

(continued)

264 C. Chin

19:56–20:04

The whole of the blackboard is clearly shown

Same as above

19:50–19:52

20:12–20:19

The whole of the blackboard is clearly shown. On the middle of it is written “Ode of Celebrating the Return of Hong Kong. The Return of Hong Kong”

19:47

Part of the blackboard (Tiananmen, “Hong Kong” and sunflowers) is shown

On the left side of the blackboard is drawn Tiananmen and sunflowers

19:46

20:07–20:08

Same as above

19:35–19:36

Classroom after school

Same as above Same as above

19:31

Same as above

19:18

Shots with political symbols On a blackboard at the back of the classroom has been drawn the Bank of China Tower and lots of skyscrapers in Victoria Harbour, decorated with sunflowers, white doves and fireworks

Scene

19:14–19:15

Time

Table 7.1 (continued)

NA

Voice (radio announcement)

NA

BGM

(continued)

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Looking at the playground from the classroom. The background of the quiz can be seen The blackboard in the classroom is shown again Part of the blackboard (“Return”, the Bank of China Tower, other skyscrapers, sunflowers and a white dove) is clearly shown Looking at the playground from the classroom. The background of the quiz is clearly shown Part of the blackboard (the Bank of China Tower, other skyscrapers, sunflowers and a white dove) is clearly shown Same as above

20:29–20:31

20:32–20:35

20:36–20:38

20:39–20:42

20:43–20:45

20:49–20:50

The background of the quiz NA shows “Celebrating the Return of Hong Kong” with symbols of the national flag and regional flag

A quiz is held in the school playground

Voice (radio announcement)

20:22–20:28

Shots with political symbols Part of the blackboard (Tiananmen, “Hong Kong” and sunflowers) is shown

Scene

20:20–20:21

Time

Table 7.1 (continued)

NA

BGM

(continued)

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The symbol of a regional flag, dove and skyscrapers are clearly shown The symbol of a regional flag is clearly shown “Celebrating the Return of Hong Kong” is shown, written in the background NA

21:44–21:48

21:51–21:52

21:55–21:56

23:25–24:06 A few small national flags are located on a table outside a toy store

Same as above

21:38–21:39

Two main characters are chatting while walking downstairs then on a street

The design of two doves and skyscrapers in the background of the quiz are clearly shown

21:28–21:29

24:07–24:10

The background of the quiz is clearly shown in the middle of the screen

21:25–21:27

Shots with political symbols Part of the blackboard (the Bank of China Tower, other skyscrapers, fireworks and a white dove) is clearly shown

Scene

20:54–20:56

Time

Table 7.1 (continued)

NA

Voice (radio announcement)

NA

BGM

(continued)

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Two main characters are walking on the street

48:43–48:48 The flags are shown more clearly Same as above NA Same as above

48:49–48:56

48:57–49:59

49:00

49:01–49:02

BGM

In 5 h and 30 min

NA

“The handover will be held at NA Hong Kong Convention and Exhibition Centre. Both the ceremonial guard of China and the UK will…President Jiang Zemin…after a hundred years of vicissitudes, Hong Kong will return to the embrace of the motherland. This signifies that the people of Hong Kong will now be the real owners of the motherland…”

Voice (radio announcement)

A few regional flags and national NA flags hang outside buildings

NA

On a bus

24:15–25:38

Shots with political symbols The above-mentioned small national flags are shown. A regional flag hangs outside a building

Scene

24:11–24:14

Time

Table 7.1 (continued)

(continued)

268 C. Chin

A TV shows several Chinese people walking in Lo Wu, the border area between Hong Kong and mainland China, with the subtitle “Every tear seems to speak your dignity”, the lyrics of “Pearl of the Orient” Regional flags hang outside buildings Shiguang is singing “river flows into the sea”, the lyrics of “Pearl of the Orient” Chuying asks Shiguang “What day is it today?” A regional flag is behind Chuying Shiguang replies “Today’s a happy day for every Chinese person” Chuying asks “Then I should be happy too?”

49:09–49:10

49:11–49:14

49:19–49:20

49:21–49:22

49:23–49:25

49:26–49:27

49:15–49:18

NA

49:06–49:08

Shots with political symbols NA

Scene

49:03–49:05

Time

Table 7.1 (continued)

NA

Be the real owners of the motherland. The growth of Hong Kong will now enter a new era”

The people of Hong Kong will now…

Will return to the embrace of [the] motherland. This signifies that…

After a hundred years of vicissitudes, Hong Kong…

Voice (radio announcement)

“Pearl of the Orient”

(continued)

The TV broadcast the song, “Pearl of the Orient”. Shiguang follows it and sings

BGM

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Shots with political symbols

Chuying says “I am” Shiguang replies “That’s great.” A few regional flags hanging outside buildings are shown A regional flag is shown behind Chuying

49:31

49:32–49:34

49:35–49:38

Shiguang replies “Of course. Aren’t you happy that you’ve won?”

Scene

49:28–49:30

Time

Table 7.1 (continued) Voice (radio announcement)

BGM

270 C. Chin

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white doves, fireworks, and Tiananmen, with the caption “Ode of Celebrating the Return of Hong Kong. The Return of Hong Kong” are drawn on a blackboard. Furthermore, in the school playground scene, there is a quiz entitled “Celebrating the Return of Hong Kong” with symbols of the national flag and regional flag.

7.5.2 A Top-Down Model of the Politicization of Japanese Cultural Content Emily Dai-ying, vice president of iQIYI and producer of Hikaru no Go, when interviewed by HuffPost Japan, tried to explain why “the Return of Hong Kong” was inserted into the episode. “Hikaru no Go is a mysterious series and we want to recreate it in a realistic way. Therefore, we want to let Chinese audiences understand the story’s background as fast as possible. For audiences, the Return of Hong Kong in 1997 is a memorable event so it is easy to add it into the story”, Emily Dai-ying stated (Takahashi, 2020). However, it is obvious that iQIYI’s official answer does not explain why symbols of “the Return of Hong Kong” are interspersed throughout the whole episode instead of using just one or two shots to remind viewers about the background. It is also difficult to explain why the starting point of the story is exactly June 29 and 30, 1997, rather than just adding “1997” by Telop. Alternatively, as Emily Dai-ying mentioned in the interview, the Personal Handy-phone System (PHS) and Mini 4WD (a battery-powered plastic model racing car), which were popular in the 1990s, can also remind the audiences when the story started (Takahashi, 2020) so why were the symbols and reminders of “the Return of Hong Kong” necessary in the episode? According to Zhou Lai-you, a journalist and celebrity from mainland China who now works in Japan, when interviewed by HuffPost Japan, film and TV work in mainland China have to pass the censor and so interspersing elements linked to “the Return of Hong Kong” probably made it easier to gain permission to air the drama (Takahashi, 2020). Zhou Lai-you’s explanation is more reasonable than the official one. However, considering the scale of these political messages in the episode, it seems that “the Return of Hong Kong” played an extra-important role in getting past the censor and conveying another political mission to Chinese audiences. The column for Voice (the radio announcement) in Table 7.1 shows what radio announcements were inserted into the episode. These are quoted below: To celebrate the handover of Hong Kong, on June 30, all primary and middle schools in the city get a half-day holiday. Please arrange your schedules accordingly. TV stations will broadcast the handover of Hong Kong live. Don’t miss the chance to celebrate the grand event together. The song “Pearl of the Orient” describes our expectancy for the return of Hong Kong. Now, there is only one day left before the Chinese government resumes its sovereignty over Hong Kong. Tomorrow, Hong Kong will officially return. The handover will be held at Hong Kong Convention and Exhibition Centre. Both the ceremonial guard of China and the UK will…President Jiang Zemin…after a hundred years

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of vicissitudes, Hong Kong will return to the embrace of the motherland. This signifies that the people of Hong Kong will now be the real owners of the motherland…. In 5 hours and 30 minutes, after a hundred years of vicissitudes, Hong Kong will return to the embrace of [the] motherland. This signifies that the people of Hong Kong will now be the real owners of the motherland. The growth of Hong Kong will now enter a new era.

Similar to the official Chinese stance, the handover of Hong Kong is described as a wonderful historical moment, full of emotional phrases, such as “the embrace of the motherland” and “be the real owners of the motherland”, without mentioning the restlessness or fear existing among Hongkongers prior to 1997. The BGM “Pearl of the Orient” is also symbolic. The handover of Hong Kong is interpreted through nationalism. The lyrics are “Sea breeze fans five thousand years. Every tear seems to speak your dignity” and “Please don’t forget the face of me, permanent yellow”. There are various interpretations of “Pearl of the Orient” and the lyrics may not necessarily be nationalistic or patriotic but, in the episode, it is interpreted in that way, considering others’ political messages throughout the episode. As a tool for getting past the censor, it is believed that the 2019 Protests in Hong Kong and the emotion of distrust toward the Chinese government among protesters are important reasons why the positive image of “the return of Hong Kong” became the most powerful and needed symbol to prove its loyalty and political correctness to the authorities. Furthermore, if iQIYI simply wanted to get past the censor, it may not have been necessary to have such a structure for talking about Hong Kong, as we can see in Table 7.1. Other than political symbols, the radio announcement and BGM are in the background and do not require the participation of the characters, at 49:19–49:34, when the two main characters are directly talking about “the Return of Hong Kong”. The conversation is as follows: (Shiguang is singing “river flows into the sea”, the lyrics of “Pearl of the Orient”.) “What day is it today?” Chuying asks Shiguang. “Today’s a happy day for every Chinese person,” Shiguang replies. “Then I should be happy too?” Chuying asked. “Of course. Aren’t you happy that you’ve won?” Shiguang replies. “I am,” Chuying says. “That’s great,” Shiguang replies.

Through the above conversation, the message is clear that “the Return of Hong Kong” is a happy day for every Chinese person because it marks a victory for them. If iQIYI wanted to use “the Return of Hong Kong = a happy day for every Chinese person” to pass the censor, the political symbols, radio announcement and BGM are sufficient to fulfil their requirement. Still, the message, which is completely unrelated to the story, the remaining episodes and character description, was put into the actors’ lines. One possible reason for this is that iQIYI not only passively reacted to the censorship, but also actively spread political ideas to mainly Chinese audiences through the episode. No matter what was the actual aim of iQIYI, the Chinese officials approved the political message, “the Return of Hong Kong = a

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happy day for every Chinese person”, which is conveyed by the episode through the shots, voice, BGM, and even the actors’ lines. The effect is that the officially approved political message can be widely spread. This is because, firstly, as the first episode of a local drama adapted from one of the most famous Japanese manga or anime among Chinese audiences, the size of the audiences can be ensured. Secondly, the episode can be accessed online freely in mainland China and the rest of the world, with English subtitles. At this point, the case of Hikaru no Go provides a new horizon for understanding the roles of Japanese cultural content in Hong Kong politics. From the cases of Animal Crossing: New Horizons, Freedom Gundam and Demon Slayer, although the local/mainland authorities participated in the politicization of Japanese cultural content, either intentionally or unintentionally (such as the ban on the sales of New Horizons, the approval of erecting a life-size Freedom Gundam in Shanghai, and the Tanjiro cosplay version of “The Little Grape” created by the Hong Kong Police are an accelerator for some Hongkongers to create and spread political messages), however, the local/mainland authorities did not produce political messages through Japanese cultural content by itself. In the case of Hikaru no Go, although iQIYI cannot be considered one of the authorities itself, it is reasonable that censorship in China checked and approved the episode and its political messages, which will be accessed online freely by audiences in both China and the rest of the world. That is, there is no evidence to claim that the authorities used a drama based on Japanese manga to spread propaganda; still, it is considered that the authorities allowed it to be a way of reacting to the Hong Kong problem. In contrast to the bottom-up model, the case of Hikaru no Go shows a top-down model of the politicization of Japanese cultural content.

7.6 The Case of Digimon The Digital Monsters media franchise is a Japanese media franchise that makes LCD toys (monsters called Digimon living in the Digital World are compressed onto the small screen of a mobile device), first released in 1997. Two years later, Digimon Adventure, the first television anime series, with 54 episodes, was broadcast in Japan. In Hong Kong, TVB Jade broadcast the first series in May, 2000, immediately after the series ended in Japan. Digimon Adventure 02, the sequel to the first series, was broadcast in Japan from 2000 to 2001. TVB Jade again bought and broadcast the series immediately, in 2001. The next two series, Digimon Tamers and Digimon Frontier, were also aired in the same way in 2002 and 2003 by TVB, respectively. The opening music to all four series have Cantonese lyrics and were performed by famous local and international singers, such as Dior Cheng Yee-kin and Andy Lau Tak-wah. It is also uncommon that TVB Jade bought all four series of the same anime series and broadcast them continuously within three years. This not only helped the children in Hong Kong to keep up-to-date with the Japanese market, but also nurtured a collective memory for those born mainly in the late 1980s and early 1990s.

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This collective memory was mainly based on the stories of the anime. Furthermore, it is important that the anime series were all dubbed into Cantonese with Chinese subtitles, and many children bought the LCD toys that appeared in each series. That is, the stories, opening music, characters’ voices, characters’ names, some important or repeated scenes, and the physical memory (players have to shake the LCD toys continuously and powerfully when their monsters fight or need to move) constructed the collective memory among those children in Hong Kong.

7.6.1 The Use of Childhood Memory by Social Movements There is a term, the DigiDestined (“Chosen Children”) in the anime series, that refers to children who have been selected to save the human and Digital Worlds from evil forces. This term, unexpectedly, has been used by young activists or protesters to describe themselves in the 2010s, a decade that has witnessed historic political changes, such as the outbreak of the Umbrella movement, the 2019 Protests, the wave of disqualifications of Legislative Council candidates and elected legislators, as well as the launch and implementation of the Hong Kong national security law. On October 21, 2014, midway through the Umbrella movement, the Hong Kong Federation of Students (HKFS) and HKSAR government held a meeting on constitutional development. Five principal officials, including the then Chief Secretary for Administration, Mrs. Carrie Lam, attended. During the meeting, one of the student representatives, Lester Shum, deputy secretary-general of HKFS, made the following remarks: Many people say that we are the children chosen by the times, we are the students chosen by the times. But I believe that the same saying is also suitable for SAR officials. You are the officials chosen by the times. To be a responsible, energetic and staunch official to promote Hong Kong democratic constitutional development, or to become a sinner who quashes the future and the democratic constitution of Hongkongers, is up to the officials, secretaries and Chief Executive Leung Chun-ying.

It is unclear whether or not Lester Shum’s idea about “chosen children”, “chosen students” or “chosen officials” came from the DigiDestined (“Chosen Children”) in the anime series. Nevertheless, people of the same generation read Shum’s saying in that way. On October 24, 2014, Eason Chung Yiu-wah, secretary of the HKFS, who also attended the meeting, said in Hammer Out, an online program produced by Apple Daily, that “When we were kids, we watched Digimon Adventure. Chosen children will fight the boss with their monster partners in each series”. Chung said that Shum’s saying evoked his memory of Digimon Adventure (Apple Daily, 2014). Joshua Wong also reacted in a similar way. He shared a YouTube link to the Cantonese version of the opening song of Digimon Adventure on his Facebook page on October 30, 2014, and wrote: “Previously Lester Shum told Carrie Lam that ‘we are the children chosen by the times’ and it made me recall this song. That’s right. In this adventure, Hongkongers keep evolving” (Joshua Wong [Facebook], 2014). Joshua Wong further reused the concept of “adventure” and “evolution” (Digital Monsters

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can keep evolving to become more powerful to fight their enemies) in the anime series to refer to modern Hong Kong politics. The terms “Chosen Children”, “Chosen Kids”, “Chosen one” or other similar usages have been widely used since the Umbrella movement began. Although it may not necessarily have been a quote from Digimon in the first place and people who use the term recently may not even know what Digimon is, it is believed that some young people may think like Eason Chung Yiu-wah and Joshua Wong. The “Digimon interpretation” also helps to improve the circulation, affinity, and receptivity of the usage of the word “chosen” in the mass media. For example, even up until March, 2020, when Chris Tang Ping-keung, Commissioner of Police of the Hong Kong Police Force, said: “The times have chosen me” on a news program, he was ridiculed, and it was questioned “whether he quoted Lester Shum or he watches Digimon” by Now News (2020). Also, in January, 2015, a Chinese book was published. It related the protesters’ experiences, who were interviewed and recorded by 24 media people from the Umbrella movement. This book was ranked the top 100 bestseller of Eslite Hong Kong in 2015 (Eslite@HK, 2016) and its second edition was published in May, 2015. Chris Patten, Hong Kong’s final British governor, even recommended this book, and wrote: “Hong Kong has written the first paragraphs in the next chapter on human dignity and the invincible cause of freedom under just law”. Interestingly, this bestseller was entitled Those of us who have been chosen by the times. Other than the 2014 Umbrella movement, during the 2019 Protests, the memory of Digimon was again used by some protesters. On August 7, 2019, protesters sang the Cantonese version of the opening song, Digimon Adventure, in front of the Hong Kong Space Museum, Tsim Sha Tsui. On August 8, Joshua Wong shared on his Facebook page a video showing protesters singing the song and wrote the climax of the lyrics. The opening song was called “Automatic Win Let’s Fight” in Chinese and “Butter-Fly” in the original Japanese version. The lyrics at the climax of the Cantonese version are: “When we face an enemy, we evolve. A stronger enemy makes me feel good. I’m ready to fight when I’m enraged. Slug it out quickly. Don’t want to put it off. The best must be trained. Fight back and destroy them. Oh, let’s fight”. Joshua Wong added “Hong Kong Police” after “when we face an enemy” (Joshua Wong [Facebook], 2019). On September 7, several protesters sang the same song at Prince Edward Station (Sound of Hope, 2019) in response to “The 31 August Prince Edward Station incident”.7 Based on the above examples, it is considered that the song, “Automatic Win Let’s Fight” encompasses the message of “being brave against enemies and fighting them by yourself”. The story of the anime also simply distinguishes between “justice” and “evil”. Therefore, the memory is easy to apply to the 2019 Protests, in which many people acquiesced or appreciated using some degree of violence in order to confront the police. 7

On the night of August 31, 2019, the Hong Kong police stormed a train at Prince Edward Station, striking passengers with batons and dispersing pepper spray. The police also closed the station and arrested people who were allegedly protesters. A mourning vigil with flowers was set up outside one of the exits of the station because some citizens believe that people died that night.

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The collective memory of Digimon, as a political resource, was used again by Hongkongers in 2020. Digimon Adventure: Last Evolution Kizuna, a Japanese anime film, which is the series finale of the original Digimon Adventure story, was released in Japan on February 21, 2020, and in Hong Kong on May 16. From May 16 to June 30, the anime film recorded a box-office of HKD 12,967,751 (Hong Kong Box Office Limited, 2020). The “Chosen Children” in the story are around 22 and 21 years old, although the setting of their birthyear was about 1988 or 1989, near to the audiences who are in their late twenties or early thirties in reality. The anime film is about the last adventure of those “children” and their monster partners. Monsters will disappear when their children partners grow up and became adults because adults are considered as having no “infinite potential”. At the end of the story, the monster partners, Agumon and Gabumon, disappeared and separated from their partners, Taichi and Yamato, forever. The main themes of the film are about growing up, with divorce, depression, death, and facing uncertain adulthood as well as partnerships and friendship. It is easy for audiences who watched the television anime series in their childhood to empathize with the characters in the film. Commentary articles or derivative works mainly show empathy with those themes. However, some Hongkongers did not interpret the film in such a personal way. For instance, Ho Ming, a writer in Hong Kong, added a post to his Facebook page (@homing0624) on May 16, 2020, after watching Digimon Adventure: Last Evolution Kizuna. After discussing his experience and feelings regarding watching the film, he added at the end of the post: …Hands and Feet, no matter how hard the challenge we’re facing is, we’re together. Keep possibility…we’ll definitely win eventually. (Homing, 2020)

The post had over 9500 reactions and 4200 shares as of November 2020. Ho Ming did not directly mention the 2019 Protests or any other Hong Kong political issues in the post. Also, there were over 1,700 comments but most of them were name tags to share the post with their friends. Comments that mentioned personal feelings mainly talked about how touching they were. Still, a few comments mentioned “Bao di jian” (“let’s meet at the bottom of the pot”, meaning the promise by protesters or supporters to celebrate in the protest zone in the Legislative Council Complex when the protest is over and justice has come”), “the last year of Hong Kong” or “revolution of our times”. It is unclear whether Ho Ming’s last sentence encompasses a political meaning, but his pro-democratic stand in the 2019 Protests may be related to this.

7.6.2 Japanese Cultural Content Related to the Conflicts Among the Non-establishment Camp A relatively clear interpretation was Dream Law’s post. Dream Law Ting-fai is a member of Northlinkhk, a localist electoral alliance in the North District of Hong Kong. In the 2019 Hong Kong local elections, Law gained 2219 votes, losing to

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Young Ka-on, a pro-Beijing candidate with 2221 votes in Ping Shan North, Yuen Long District Council Election. On May 20, 2020, Law commented on the film in a post on his Facebook page (@lawtingfai): 1. Valiant camp is minor forever. Only Taichi and Yamato fight and others watch. 2. People who have been successful in their career and life and waiting for a return, as well as Hongkongers who are politically stupid will not fight alongside you… 3. The villain, Menoa, constructed a wonderful world where many people want to stay, instead of protest again the regime at any cost. Only Taichi, the NEET, doing a part-time job in pachinko, will really want to fight at any cost. Quite realistic~ . (Dream Law, 2020)

Law’s interpretation is a typical example, showing how localists have criticized the pan-democracy camp in recent years (some criticism can be applied to the pro-Beijing camp as well). His interpretation is about the conflict among the non-establishment camp, “the valiant” and “Wo Lei Fei Fei” (an abbreviation for “peaceful, rational, non-violent and foul-language free”). Often, they are considered as being equal to the localist and pan-democracy, respectively. The former believes that there is no choice but to level-up the protests with some degree of violence in order to confront the regime, while the latter insists that the social movement should be processed in a non-violent way and that the participants should be responsible for their legal liability. In the 2019 Protests, the conflict between both sides was masked by the anger at the police brutality. However, the conflict remains and re-emerged after the Protests quietened down. In fact, many localists criticize that Hongkongers are lodging peaceful protests against the government without being prepared to confront the Police Force in the streets or give up their middle-class affluent life, as self-satisfied behavior. Localists argue that those Hongkongers support the 2019 Protests but keep themselves in a safe position while “the valiant” sacrifice their studies, health, future and even life to confront the Police Force. Some middle- or upper-class adults (the pan-democracy camp or pro-Beijing camp) claim that young people protest radically just because they are the NEET who make no contribution and are a burden on society. Surely, Hong Kong’s younger generation, among the pan-democracy camp and particularly the localist, disagree with such a judgment, which ignores the political, economic, and social problems. The example of Law’s interpretation shows how Digimon, a Japanese cultural product, can be used to express a political idea which concerns a relatively detailed controversy among the non-establishment camp. In fact, in the case of Demon Slayer, Japanese pop culture also became a small face-off between the localist and pan-democracy camps. As mentioned above, the Hong Kong Police’s official Facebook page posted an image of its mascot called “The Little Grape” as part of an anti-fraud campaign; however, this time, “the Little Grape” resembled the main character in Demon Slayer, Tanjiro Kamado. A Facebook page called “Hong Kong Popo” uploaded an image which looks like “The Little Grape” with “Bing zhi huxi” (Ice Breathing) and “Xidu zhi yin” (Addiction to Drug Abuse) to ridicule the previous drug-related crime as well as the suspected copyright infringement by the Hong Kong police. The post received 14,000 thousand positive responses, such as Haha and Like.

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However, some localists think differently. Chung-Tai Cheng, a member of the Legislative Council and chair of Civic Passion, a localist political party, questioned the “re-derivative work” shared by “Hong Kong Popo”. On Chung’s Facebook page (@chengchungtai) on November 20, 2020, he shared a photo which shows the Police’s version of “The Little Grape” and the “re-derivative work” broadcast by the Japanese television program. The Telop on the screen writes “criticism of the copyright infringement by the Hong Kong Police” without mentioning the source of either work. It seems that the Japanese media did not realize that one “Grape” was created by the Hong Kong Police Force but the other by Hong Kong netizens. On the same post, Chung writes “picture on the left: KOL (key opinion leaders) of yellow ribbon criticize that Popo’s Grape is copyright infringement and urge the copyright holder of Demon Slayer to rebuke and follow the legal process; picture on the right: yellow ribbon’ Facebook page made the yellow Grape, a re-derivative work, to ridicule Popo’s Ice Breathing. Question: what is the difference between them? Yellow ribbon replied: damn HOT DOG! (the nickname of Civic Passion) Notes: it seems that Japanese cannot distinguish the “color” of both Grapes. So sad” (Cheng, 2020). Chung did not deny the suspicion of copyright infringement in “the Little Grape” created by the Hong Kong police, yet he challenged the legitimacy and legality of the “re-derivative work” shared and supported by “Hong Kong Popo” and some Hong Kong people (Chung defines them as the “yellow ribbon”, pan-democracy camp, in this case). There are more than 200 comments in the comment box, with many people criticizing Chung for being the “dog of the Communists” (subordinate to the Chinese Communist Party) and tearing Hongkongers apart. Other than emotional comments, some users indicate that the Hong Kong Police Force, as an official department with public power, obviously applied the design of Tanjiro to “the Little Grape” but denied it, while the purpose of the “yellow Grape”, shared by netizens, is to criticize the Police Force through civil society; therefore, the latter is legitimate. This chapter will not discuss the legitimacy of derivative work or “re-derivative work” but the politicization of Japanese pop culture as a small battleground among the non-establishment camp in Hong Kong. Through the case of Demon Slayer and Digimon, it is considered that hot Japanese cultural content or content, with a long history in the local markets, provides opportunities for people not only to express political ideas to the local/mainland authorities but also to criticize each other within the same non-establishment camp.

7.7 Conclusion Through the analysis of the five cases, it is considered that there are three models that are relatively common. The most common one is the bottom-up model, which includes local virtual actions, international virtual actions, and local actions in the physical world (refer to Table 7.2). Local virtual actions are the most common partner

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Table 7.2 Patterns of the politicization of Japanese pop culture and its conditions Animal Crossing: New Horizons

Demon Slayer: Kinmetsu no Yaiba

Freedom Gundam

Hikaru no Go

Digimon

Local virtual actions

◯

◯

◯

◯

◯

International virtual actions

◯

◯

×

×

×

Local actions in the physical world

◯

×

×

×

◯

Top-down

Propaganda in the virtual world

×

×

×

◯

×

Bottom-bottom

Conflicts among the non-establishment camp

×

◯

×

×

◯

Conditions

Japanese cultural content as an international hot topic

◯

◯

×

×

×

Japanese cultural content as a collective memory among particular groups of society

×

×

◯

◯

◯

The participation of local people

◯

◯

◯

◯

◯

The participation of international famous activists

◯

◯

×

×

◯

The participation of local/mainland authorities

◯

◯

◯

◯

×

Bottom-up

and can be observed in all five cases. It is reasonable since people can easily participate in local virtual actions in which they need only an electronic device with which to access social media and express their political ideas by talking about Japanese pop culture, which is famous in the present or past. On the contrary, international virtual actions require a Japanese cultural content, as an international hot topic shared by people and the mainstream media. Also, the more active the participation of local people, international famous activists and local/mainland authorities, the larger the scale of the virtual actions as well as the level of politicization of the Japanese cultural content. Compared with virtual actions, the threshold of actions in the physical world is higher. For example, in the case of Digimon, due to singing the opening song at the demonstration, there must be a demonstration and protesters must risk being

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arrested. In the case of New Horizons, people connected the video game and “Yellow Economic Cycle” to support businesses which are considered “pro-democracy”. Yet, the organizers needed to spend time and money and risk a possible violation of the law. On the other hand, the case of Hikari no Go shows the possibility of a topdown model where the mainland Chinese authorities permitted the use of an online free access television drama (adapted from a famous Japanese manga) to serve as propaganda for singing the praises of “the Return of Hong Kong”. It is unclear whether the use is sustainable or just a one-off strategy. Nevertheless, the case shows the possibility of using Japanese pop culture in East Asian politics. It is noticed once again that the role of Japanese pop culture in Hong Kong politics should not be overemphasized at this stage. As this chapter discussed, Japanese pop culture is commonly used by Hongkongers in various patterns. Their actions can sometimes attract the attention of the international mainstream media because of the newsworthiness of Hong Kong issues and hot Japanese cultural content, as well as the participation of the local/mainland authorities and international famous activists. However, other than producing and sharing the political discourse locally or internationally, as well as limited actions in the physical world, the political uses of Japanese pop culture have not directly led to outbreaks or continuations of large social movements or any policy changes yet. This is why this chapter calls it “a little tool”. Still, it is worthwhile studying the case of Hong Kong, as a piece of the jigsaw puzzle of the whole picture of Japanese pop culture in East Asia politics.

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LIHKG. (2020). “Gouyuan” Rentiantang Xianggang daili lan dao fahei (Prowellasia, the agent wholesaler of Nintendo in Hong Kong, is super pro-establishment). March 26, 2020. https:// lihkg.com/thread/1944002/page/1. Accessed January 12, 2021. Like Japan. (2020a). July 11, 2020. https://www.facebook.com/likejpn/posts/2913003478809541. Accessed January 12, 2021. Like Japan. (2020b). November 3, 2020. https://www.facebook.com/likejpn/posts/323334040677 5845. Accessed January 12, 2021. Lim, C. (2010). Hari, Qinri, Lianri? “Bianchui Dongya” de “Riben qingjie” (Hari, Japanophilia, Being in love with Japan? “Japan Complex” of “East-Asia Periphery”), Reflexion 14th. Lianjing Chubanshe(Linking Publishing Company). Miss, S. L. (2020). Yuan rongguang gui Xianggang - «Dongwu Senyouhui» Jiaoxue Xishihui qingchang | Dongsendaoge jiaoxue | Chaokeai | Liaoyu (“Animal Crossing” Isabelle’s A Cappella|Guide of Animal Crossing town tune|Super cute|Soothing). April 5, 2020. https://www. youtube.com/watch?v=HahP5q-T3Wg. Accessed January 12, 2021. Now News. (2020). “Zhengqing wangshang xing” bei shidai xuanzhong de... (“Zhengqing wangshang xing” ...Chosen by the times). March 7, 2020. https://news.now.com/home/local/player? newsId=383352. Accessed January 12, 2021. Sound of Hope. (2019). Taizizhan wai da hechang “Wujin” “Shuma baolong” (Large chorus of Wujin and Digimon outside Prince Edward station). September 7, 2019. https://www.youtube. com/watch?v=gq0IgWu5pAY. Accessed January 12, 2021. South China Morning Post. (2020). Two Hong Kong police officers arrested for possessing HK$12 million in drugs, which the force believes were stolen from record crystal meth haul a week earlier. May 7, 2020. https://www.scmp.com/news/hong-kong/law-and-crime/article/3083290/ hong-kong-police-officer-arrested-hk1-million-drugs. Accessed January 12, 2021. Stand News. (2020). October 28, 2020. https://www.facebook.com/standnewshk/posts/359446524 0639070. Accessed January 12, 2021. Takahashi, F. (2020). “Hikaru no Go” Ch¯ugoku de jisshakasarete daihitto. Honsuji ni kankei nai “Honkon henkan” no by¯osha no o¯ sa, ittai naze? (Hikaru no Go adapted into a live action movie in China and is a big hit. Why are there many descriptions about “the Return of Hong Kong” which are unrelated to the main plot?). November 20, 2020. https://www.huffingtonpost.jp/entry/story_ jp_5fa4dad8c5b6f21920d9bd5d. Accessed January 12, 2021. TIME. (2019). Hong Kong’s protestors have their own special slang. Here’s a glossary of some common terms. September 6, 2019. https://time.com/5668286/hong-kong-protests-slanglanguage-cantonese-glossary/. Accessed January 12, 2021. USgamer. (2020). Animal crossing: New horizons is fast becoming a new way for Hong Kong protesters to fight for democracy. April 4, 2020. https://www.usgamer.net/articles/animal-cro ssing-new-horizons-is-fast-becoming-a-new-way-for-hong-kong-protesters-to-fight-for-dem ocracy. Accessed January 12, 2021. 100most. (2020a). October 24, 2020. https://www.facebook.com/100most/photos/a.403536496440 670/3307610282699929/. Accessed January 12, 2021. 100most. (2020b). November 17, 2020. https://www.facebook.com/100most/posts/337277559951 6730. Accessed January 12, 2021.

Chapter 8

Conclusion Mariko Tanigaki

We have discussed in this book the mutual influence of politics, economics, and culture in China, Hong Kong, the Philippines, Indonesia, and Japan. We have reviewed the past interactions between Japan and Asia, providing details on how these have enriched both sides. Here, in the conclusion, the editor would like to discuss the Asian Community and Japan. A lecture series on the formation of the Asian Community has been organized since 2012 at The University of Tokyo for first- and second-year students. The course has been funded by the One Asia Foundation, Japan, which was later renamed the Eurasia Foundation from Asia. Two colleagues collaborated with the editor: Masaru Tonomura conducted research on the Korean community in Japan while Takashi Mitsui studied the language and cultural policy in colonial Korea. 1.

East Asian community (April–July 2012)

2.

Tadashi Kimiya was in charge of the course, which examined an East Asian Community with a focus on Japan–Korea relations. Recognition of History (October 2013–January 2014)

3.

Masaru Tonomura was in charge of the course and discussed issues related to the recognition of history with reference to the exchanges between the citizens and multicultural conviviality. Migration to and from East Asia (September 2015–January 2016) After a one-year break from the second session, Mariko Tanigaki took charge of the course, which focused on migration to and from East Asia, including Sakhalin and Okinawa.

M. Tanigaki (B) Department of Area Studies, Graduate School of Arts and Sciences, University of Tokyo, 3-8-1 Komaba, Tokyo 153-8902 Meguro-ku, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6_8

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Economic Activities and Cultural Exchange Through Migration (September 2016–January 2017)

5.

Tonomura was again in charge of the course. The focus was on economic activities and cultural exchange through human mobility. This included the presence of Taiwanese people in Okinawa’s pineapple industry and the exchange between Japan and Korea through the song “Arirang”. One Belt, One Road and the Asian Community (September 2018–January 2019)

6.

Tanigaki took up the topic of One Belt, One Road in relation to the formation of an Asian community. In addition to Central Asia and North Korea, the change in Southeast Asia was taken up with reference to the development of transport networks. Conflict and Conciliation (September 2019–January 2020)

7.

The Asian Community was discussed from the angle of conflict and reconciliation, with the help of Tonomura’s reconciliation studies project, supported by Grants-in-aid for Scientific Research, Japan. In 2019, the mass protests in Hong Kong were at their height, so two speakers were invited from Hong Kong. Memory of History and Reconciliation (September 2020 – January 2021)

8.

Again, in collaboration with Tonomura’s reconciliation studies project, supported by Grants-in-aid for Scientific Research, Japan, the course discussed the formation of an Asian community on the theme of the memory of history and reconciliation. The Memory of History and Reconciliation (September 2021–January 2022) This year, during the period September 2021–January 2022, the focus will be on reconciliation and cooperation, which will be more contemporary in nature.

Thus, the series is mainly divided into two parts: (1) lectures on networks, migration, and economic activities, and (2) lectures on the recognition of history, reconciliation, and the memory of history. Many guest lecturers expressed doubts about the formation of an Asian Community. Some thought that reconciliation should first be sought regarding the history of Japan’s invasion of China and other parts of Asia in the 1930s and 1940s, the colonial experience of Korea and Taiwan, and the resulting issues of the postwar absence of reparations and national apologies. Others argue that an Asian Community would be difficult to establish since the membership is not fixed yet, so would it be limited to East Asia or also include Southeast Asia and South Asia. Considering Japan’s diplomatic relations, the question of how to deal with North Korea and Taiwan will also be challenging. In response to the question of whether the Asian community/East Asian Community has been established, Hirano (2007) offered a stimulating comment: he points out that the air route network has become so close that it is impossible to distinguish which city is the hub compared to the time when Mahathir proposed the East Asian Economic Group. Hirano also points out that this has led to the movement of people, which in turn has inspired the formation of a common social and cultural base, which

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is a necessary condition for a community to exist. Although the East Asian Community has not been institutionalized, ASEAN has been promoting the formation of a loose community, and China, Japan, and South Korea, as well as India, Australia, and New Zealand, have joined ASEAN+6. By borrowing ASEAN as a public sphere, a de facto Asian community could be observed as working effectively. The presence of Asians in Japan also reminds Japan that Japanese society is already part of the Asian community. According to the statistics on foreign residents for the end of December 2020 (Immigration Service Agency of Japan n.d.), 2,435,281 out of a total of 2,887,116 were from Asia, with China in first place, with 778,112; the Republic of Korea second, with 426,908; Vietnam third, with 448,053; the Philippines fourth, with 279,660; Brazil fifth, with 208,538; Nepal sixth, with 95,982; and Indonesia seventh, with 66,832. Although there are already a million Chinese living in Japan if naturalization is included, the number of Vietnamese nationals who have remained in Japan is surprisingly high. It is almost the same as the number from South Korea, which is one of Japan’s closest neighbors, and double the number of Brazilian nationals, many of whom are of Japanese origin. This reflects a high proportion of technical interns among the foreign residents of Japan. For the end of June 2020, 378,200 out of a total of 2,887,116 were classified as technical interns. 378,045 out of a total of technical interns were from Asia, surprisingly exceeding 99.95%, with Vietnam in first place, with 208,879; China second, with 63,741; Indonesia third, with 34,459; the Philippines fourth, with 31,648; Myanmar, fifth with 13,693; Thailand sixth, with 10,735; and Cambodia seventh, with 9970. In Myanmar, Cambodia, Vietnam and Indonesia, technical trainees account for a high proportion of the total number of their own nationals in Japan, ranging from 40 to 60%. The figures are, respectively, 39.8% in Myanmar, 48.7% in Vietnam, 51.6% in Indonesia and 59.8% in Cambodia. As Chap. Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program discusses, Japan is accepting technical interns and specified types of skilled workers to compensate for the shortage of labor in the real world, in the context of an aging population and declining birth rate. Chapter Increasing Japanese and Indonesian Mutual Cooperation Indonesian Human Resources’ Contribution to Japan’s Technical Intern Training Program testifies whether the program can create mutual benefits for both Indonesia and Japan.1 1

Mr. Andri Sumaryadi, a technical and administrative staff member of the Embassy of Indonesia in Tokyo, stated, on August 27th, 2021: Indonesia is the third largest exporter of technical trainees to Japan, after Vietnam and China, and the Philippines is the fourth largest exporter. Indonesia has a total population of 273 million and a working population of 135 million, both of which are the fourth largest in the world. In Indonesia, there are many requests from the provincial and municipal governments to send technical interns to Japan, which we experience in our daily work at the Embassy. We devote considerable efforts to ensure that the trainees spent a fruitful time in Japan. The sending organizations (SO) provide four months of training, including on Japanese language as well as Japanese culture and customs in Japan. The SOs select people suited to the Japanese situation

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At the end of the series of lectures, the editor was caught by a question about whether Japan could still have strengths which attract other countries, especially the Asian countries surrounding Japan. Japan’s GDP was surpassed by that of China in 2010. Amidst the COVID-19 developments, China’s R&D capabilities also surpassed those of Japan, as shown by its leading development of COVID-19 vaccines. One possible answer would be the attainment of governance that Japan has built up over the last 80 years since the end of World War II. Japan may help them as an advisor to improve their governance, as shown in the Assisting Program for Indonesian National Police by Japan’s National Police Agency (Chap. The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia), and the JapanChina Working Group for the Exchange of Economic Information (Chap. Fountain of Wisdom: Japan–China Working Group for the Exchange of Economic Information). This role could be pursued on the basis of a long-lasting relationship of exchange with these regions. Chapter The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia pointed out that, regarding the Japanese Police’s international cooperation, the initiatives can be traced back to 1962, when a training course was held in collaboration with JICA. Legal technical assistance was introduced in Vietnam for the first time in 1994. In fact, it was the Japan Defense Agency (renamed the Ministry of Defense in 2007) which initiated international exchanges, earlier than any other security sector. The National Defense Academy (NDA) has been accepting foreign cadets every year since 1958, when it accepted a cadet from Thailand (National Defense Academy of Japan Alumni Association 2014). NDA has about 100 foreign cadets from Cambodia, Indonesia, Lao People’s Democratic Republic, Mongolia, Myanmar, (the)Philippines, Republic of Korea, Singapore, Thailand, Timor-Leste and Vietnam. Most of these cadets spend their first year studying the Japanese language and then the following four years taking the same academic courses that the Japanese cadets do. They also graduate with bachelor’s degrees. (National Defense Academy n.d.1)

On April 5, 2021, 1965 students were enrolled on the undergraduate course. Of these 1965 students, 90 are from overseas. Regarding the graduate course, 148 are enrolled, of whom 16 are from overseas. (National Defense Academy n.d.2). Lastly, the editor would like to identify the possibility of a future research agenda by editing this book which covers the Philippines and Indonesia in a single volume. Chaps. The Adoption of Japan’s Experience in Asia: A Case Study of the Police System of Indonesia and Discourse, Empirics, and Perceptions on Investment and Aid: Reconsidering Chinese and Japanese Relations with the Philippines both deal with Japan’s ODA. The Philippines and Indonesia are countries of considerable contrast. The Philippines is the most globalized of the Southeast Asian countries because of its historical relationship with the United States, while it has close ties to the Chinese world through Fujian and Hong Kong because of its geographical proximity. On the other hand, Indonesia is the largest country in Southeast Asia and and send them to Japan. This system has led to fewer problems involving technical interns, such as abandonment of the workplace, compared with the program participants from other countries.

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is highly independent in terms of politics and economics as well as culture and society. However, through the filter of Japan’s ODA, the comparison of the Philippines and Indonesia may highlight the characteristics of both places in a different way from the previous studies. Chapter The Political Uses of Japanese Pop Culture in Hong Kong also suggests the possibility of using Japanese pop culture as a tool for comparative studies. The Guan family also raise a question about how globalized Chinese like the Guan family will deal with the future Asian community or One Belt One Road Initiatives. Historically, ethnic Chinese have been playing an important role in the economy in Southeast Asia. In post-World War II, the ethnic Chinese in Southeast Asia have been becoming increasingly localized. China’s recent rise has led them to be more interested in China and Chinese culture. All of these future agendas have a comparative perspective. It reminds us of the reciprocal nature of the relations between countries in the de facto Asian Community. Mutuality will be a keyword for analyzing the de facto Asian community. Amidst the COVID 19 situation, the rivalry between the United States and China is soaring. For the PRC, the anti-China environment tends to grow. However, many countries, like the ASEAN community, prefer to enjoy good relations with both the United States and China. Japan should be aware that Southeast Asia is not trying to make a zero-sum choice between Japan, China, or the USA. ASEAN may bring wisdom to Japan’s policy-making process regarding how to collaborate with their neighboring countries.

References Hirano, K. (2007). Higashi Ajia ni okeru Hito no Kokusai Id¯o (International Human Migration in East Asia). In M¯ori, K., et al. (Ed.), Higashi Ajia Ky¯od¯otai no K¯ochiku 3: Kokusai Id¯o to Syakai Hend¯o (Formation of the East Asian Community: International Migration and Social Acculturation) (Tokyo, pp. 136–148). Iwanami Shoten. National Defense Academy of Japan. (n.d.1). Ry¯ugakusei no ukeire (Acceptance of Goreign cadets), https://www.mod.go.jp/nda/exchange/accept.html. Accessed 20 September 2021. National Defense Academy of Japan. (n.d.2). Gakusei Kyokan s¯u (Number of students and academic staffs). https://www.mod.go.jp/nda/about/number.html. Accessed 21 May 2021. National Defense Academy of Japan Alumni Association. (2014, Feburuary 12). B¯oei Daigakuk¯o ryugausei no Hosuto Famirii boshu an’nai (Host Family wanted for the overseas students of National Defense Academy). https://www.bodaidsk.com/news_topics/000156.html. Accessed 26 May 2021.

Index

A Accept Organization (AO), 99, 101 Aging population, 79, 83, 95, 105, 120, 137, 286 Agnes Chow, 259 Alice Memorial Hospital, 230 Ampil, 37, 38 Approved foreign investments, 49 Association of Southeast Asian Nations (ASEAN), 46, 53, 55, 61, 64, 69, 70, 83, 200, 201, 220, 246, 285, 287 Attack on Titan, The, 251, 258

B Bekasi model, 22, 25, 29 Belt and Road Initiative (BRI), 44–48, 55, 56, 61, 62, 66, 67 Black Profile Photo, 253 Bowron, Mike, 21 Branch, 31, 151, 208, 222, 228, 230–238, 240–245

C Carrie Lam Cheng Yuet-ngor, 254 Civilian police, 15–17, 21, 25–27, 29–32, 34–39 Communication command, 19, 26, 30 Covid-19, 68, 255, 257, 286 Cultural acculturation, 116, 117, 120, 121, 134, 139, 140 Cultural exchanges, 3, 84, 120, 249, 250, 284 Customs law, 139

D D’ai Bachtiar, 28, 38 Debt, 48, 50, 63, 64, 187, 194, 195, 213, 217 Debt service ratio, 187, 195, 219 Demographic bonus, 3, 81, 83, 105, 139 Demosist¯o, 254, 259 Digital technology, 183–185, 218 Diplomacy, 46, 49, 52, 64, 221, 250 Directive plan, 146, 172, 216, 219 Doraemon, 251, 258 Duterte, 43–45, 53, 59, 60, 65, 67, 68, 72

E East Timor, 15, 21 Entrepreneurship, 101, 106

F Facebook, 252–254, 257–259, 261–263, 274–278 Family record book, 4, 229 Field criminal identification, 25 Foreign Direct Investment (FDI), 44–53, 55, 66, 196 Foreign intern, 98 Formal law, 123–125, 127, 128, 131, 133–137, 139, 140

G GDP quadrupling plan, 173 Gino Jisshusei (technical trainees), 98, 100, 103, 106, 140, 285, 286 Glory to Hong Kong, 255

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Tanigaki (ed.), Japan and Asia, Advances in Japanese Business and Economics 29, https://doi.org/10.1007/978-981-16-7989-6

289

290 Golden Week, 257 Governance, 7, 10, 20, 37, 286 Government, 1–3, 7, 8, 10, 14–17, 20, 30, 32, 38, 47–49, 52, 61–63, 66–70, 72, 80, 81, 84–86, 94, 97, 99–104, 106, 107, 118, 120, 122, 123, 125, 136, 138–140, 146–150, 152–154, 156, 161, 163–166, 171–173, 178, 179, 181, 190–195, 197, 198, 201, 203, 205, 208, 209, 212–214, 216, 217, 222, 230, 232–234, 236, 249, 250, 252, 254, 258, 261, 263, 264, 271, 272, 274, 277, 286 Grant, 2, 3, 7–9, 16, 30, 47, 56, 57, 59, 63, 64, 67–73, 161–163, 284 Gu, Mu, 3, 145–147, 150, 153–155, 160–162, 167, 168, 173, 180, 182, 194, 197, 198, 203, 215, 216, 221, 222 H Hands and Feet, 253, 255, 276 Hankou, 234 Hokokai Batik, 121, 140 Hong Kong College of Medicine for Chinese, 232, 233 Hongkonger, 251–253, 255, 256, 258–263, 272–274, 276–278, 280 Hong Kong Police, 8, 256, 258, 259, 273, 275, 277, 278 2019 Hong Kong Protests / the 2019 Protests, The, 251, 253, 256, 259, 272, 274–277 Hop Yat Church, 243 Human rights, 21, 65, 93, 96, 102, 137 100most, 259, 262, 263 I Imperial Medical College, 230, 232, 233 Implementation issues/ challenges/capacities, 10, 15, 29, 30, 32, 35–37, 39, 46, 49, 51, 52, 55, 62–64, 66, 82, 85, 96, 97, 100–106, 136, 137, 139, 140, 146, 152, 163, 164, 176, 178, 179, 192, 195, 200, 204, 206, 209–210, 213, 214, 219, 220, 243, 276 Indonesia-Japan Economics Partnership Agreement (IJEPA), 80, 95, 96, 98, 140 Indonesian National Police Reform, 2, 4, 8, 10, 13, 16, 19, 22, 29, 38

Index Industrial policy, 148, 188, 191, 202, 204, 209 Infrastructure, 46–48, 52, 55, 60–62, 64, 65, 67–70, 73, 177, 203, 210, 220 Integrated transportation system, 200, 217 Investment rate, 156, 162, 215 J Japan-China Investment Information Center, 184 Japan International Cooperation Agency (JICA), 2, 4, 7–11, 14–19, 21–37, 39, 63, 286 Japan-Philippines Economic Partnership Agreement (JPEPA), 44, 52 Joshua Wong Chi-fung, 254, 259, 274, 275 K Kamado, Tanjiro, 258, 277 Koban, 8, 13–15, 19–21, 29, 30, 34 Kobayashi, Minoru, 146, 149, 151, 155, 160, 165–167, 169, 174, 179, 180, 182, 185, 186, 191, 192, 194, 195, 199, 200, 202–207, 210–212, 214, 216–219, 221 Kuala Lumpur, 234 Kunitoku, 30, 31, 36 L Leadership plan, 170, 172, 216, 219 Lembaga Pelatihan Kerja (LPK), 98–102 LIHKG, 256 Like Japan, 159, 177, 261, 263 Little Grape, The, 258, 259, 273, 277, 278 Loan, 2, 7–10, 44, 47, 48, 50, 57, 59, 60, 62–64, 67, 68, 70, 71, 73, 152, 154, 158, 160, 161, 163, 185, 188, 192, 196, 197, 203, 217 Logistics, 69, 202–204, 217 Loke, Yew, 234 London Missionary Society, 229, 230 M Ma, Hong, 147, 150, 155, 164, 165, 167, 174, 178, 182, 186, 194, 199, 203, 207, 212, 221, 222 Malaya, 234, 235, 239 Manchu Queue Cutting Association, 244 Maritime dispute/conflict/threat, 4, 38, 44, 45, 47, 53, 61, 62, 64, 65, 236, 251, 255, 258, 260, 276, 277, 279, 284

Index Market research, 159, 175, 177, 179, 218 Meiji Restoration, 137, 206 Mixed economy, 171, 173, 216 Mutual benefit, 80, 83–85, 95, 104, 105, 117, 140, 286

N Naruto, 251 Negative perceptions/views, 3, 18, 21, 28, 47, 48, 53, 61, 62, 81, 82, 86, 100, 101, 104, 117, 118, 120, 136–139, 146, 155, 157, 164, 174, 187, 192, 202, 245, 255 Neighborhood Police Post (NPP), 14 Nintendo, 252, 256 Non-price competition, 181, 184

O Official Development Assistance (ODA), 2, 5, 7–9, 16, 44, 45, 47, 56–68, 71, 72, 146, 152, 160, 161, 192, 217, 287 Okita, Saburo, 3, 146, 148, 149, 151, 164, 165, 167, 171, 174, 182, 186, 190, 194, 199, 203, 207, 212, 215, 217 Oversupply, 163, 195, 205, 218, 220

P Partnership for Quality Infrastructure (PQI), 45, 46, 61, 66 Peace Index, 136 Peking Union Medical College, 236 Police–Citizen Partnership Center (BKPM), 20, 23, 30, 31, 33–35 Police–Citizen Partnership Forum (FKPM), 32 Police Sakura Association (ISI), 29, 31, 35 POLMAS, 21–23, 25, 28, 29, 31–37 Positive perceptions/views, 61 Priority inclination policy, 167, 168, 217 Public Private Partnership (PPP), 60, 61

Q Queen’s College, 235

R Rare metals, 183–185, 218 Regional cooperation, 15 Regional disparities, 206, 210, 217 Reunion cruise, 227

291 S Sally Hemings, 243, 244 Saving rate, 156, 157, 187, 222 Security, 9, 14, 16, 17, 23, 26, 29, 32, 33, 35, 38, 44, 62, 65, 68–73, 99, 119, 147, 194, 199, 203, 207, 222, 261, 274, 286 Seiketsu (Stantardization), 118 Seiri (Tidiness), 118 Seiso (Cleanliness), 118, 137 Seiton (Orderliness), 118 Self-Strengthening Movement, 230, 231, 235 Sending Organization (SO), 4, 8, 29, 30, 37, 39, 43, 53, 63, 66, 80–83, 85, 93–95, 98–107, 117, 119–121, 134, 136–140, 154, 158–160, 167–173, 175–177, 179–181, 183–185, 187–189, 192, 196, 197, 201, 203, 208, 212, 213, 215, 217, 220, 223, 237, 242–245, 252, 256, 261, 271, 278, 284–286 Shimokobe, Atsushi, 148, 149, 165–167, 174, 176, 179, 182, 186, 194, 199, 203, 206, 207, 210, 212, 216–218 Shitsuke (Discipline), 30, 94, 101, 104, 118 Singapore, 12–14, 19, 46, 52, 55, 83, 136, 138, 214, 228, 232, 234, 236, 241–243, 245, 287 Social capital, 104, 105, 120, 161, 206, 208, 219, 245 Social remittances, 245 Social sanctions, 129, 130, 133, 134, 137, 139 Social security system, 213, 214 South China Sea, 43, 44, 62, 67 Special economic zone, 146, 147, 152, 162, 181, 182, 212, 215 Sun, Yat-sen, 228, 232, 233, 236, 243, 244 Susumoyo Culture, 121

T Takata, Haruyuki, 15, 37 Technical cooperation, 2, 7–9, 12, 14, 29, 161, 175–177, 183, 198, 201 Tianjin, 163, 181, 193, 215, 230, 232–235, 239, 240 Timor-Leste, 10, 36, 287 Tokustei Gino (Specified Skilled Workers), 98 To Tsai Chapel, 230, 232, 243 Trilateral meeting, 32

292 TVB, 250, 251, 260, 262, 273 U 2014 Umbrella Movement, The, 275 United States, 3, 16, 21, 44, 184, 189, 190, 195, 198, 200, 201, 211, 213, 214, 221, 232–234, 236, 237, 239, 243, 246, 287

Index X Xi, Jin-ping, 2, 43, 253, 254

Y Yamazaki, Harry Hiroto, 17 Yellow Economic Cycle, 256, 257, 280 Yung, Hoy, 232, 236, 241, 244 Yung, Wing, 232, 241

V ViuTV, 258 W Weekly Shonen Jump, 258

Z Zhejiang, 235 Zhu, Rongji, 3, 5, 145, 147, 180, 194, 197