The CEO Game

Japanese prime minister Naoto Kan, warned yesterday that his country might be facing debt crisis just like Greece, if Japan won’t urgently manage it’s ever growing debt. Kan, in his first address since entering the prime minister role this last Tuesday, said that Japan can’t afford letting its national debt grow.

Japan - Next To Fall?

Kan, the sixth prime minister in the last 4 years, had promised that the government together with the Japan’s national bank, will work together to prevent such crisis. Kan said that the government is aiming to focus on developing an extensive but stable financial policy . He also added that the government will consider tax raising, a step which according to him, previous governments were afraid of performing.

Ailon.

The CEO Game.

The world standstills, dazed and confused as news break out about a new possible Chinese-Japanese alliance. China and Japan, long time sworn rivals began to seriously discuss their unification, one so strong according to experts, that it could make them the strongest financial force ever seen in the entire world. This comes as a shock, since Tokyo and Beijing’s main concerns over a century were fighting and humiliating each other over more than a couple of wars. Now they talk business and propose creating and joining both a wide “East Asian Community” instead of poking each other with sticks just for the kick of it.

A New East Asian Community?

Although the plans to build this East Asian Community are in their primordial stages, the result of this oriental holy matrimony may pose a threat to major economic powerhouses worldwide including the parallel European Union. Current talks revolve steps to reduce the suspicions and the contention between the two countries. Among this initial steps you can find measures such as canceling the long time obligatory entrance permit (thus, making traveling visa free) and cooperation on environmental issues and energy, as well as public health. If all goes well, the dual countries will be tackling more complex issues from regional agricultural understandings to politics and defense and military cooperation. Another hot issue, and what might be an attempt to strike at the European Union’s foundation stone the euro, is a possible East Asian common currency.

This change in decades long tensions, is possible due to the newly elected Japanese democratic party just a couple of months ago. It is believed that the Japanese PM was the one who started the talks, on his first meeting with Chinese President Hu Jintao in New York. The new Japanese prime minister, Yukio Hatoyama, who won by leading and recruiting brilliant campaign strategists, has brought the winds of change with him, and he focuses his energies at rebuilding the relationships with neighboring China and other countries too. These efforts were previously chopped down by rightist governments, and now they represent a backlash against Washington, some may even say a slap in the face of Japan’s most persistent ally since the Second World War, one that could threaten Obama’s foreign and economic policies.

The effects of an orient economic alliance would be humongous, with Japan and China being the world’s second and third largest economies appropriately. Media observations pointed out it was Japan’s will behind the wheel that revived the talks. However, why does Japan want the alliance so much? Like the old saying says “if you can’t beat them, join them”, the global economic crisis has shown Japan that it needs to aspire to garrison its economic strength, which China might soon surpass, by actually aligning with China and some newly emerging economies in the area. They also want to establish a powerful, influential Japanese leadership in East Asia, don’t forget this once was an Empire, and a shot at solving territorial issues such as who will hold significant areas of the East China Sea, which contain oil and natural gas.

It seems like if they do actually form this union that the West will suffer a blow. But, will the western world gain any profit from the alliance at all? The West could actually enjoy from a closer relationship between Japan and other surrounding Asian countries, which may help US interests in the region. The US administration also believes that more involvement from China’s side in the global stage would help world economics. However, many obstacles still lay ahead: to ease the tension that dates back to the first Sino-Japanese war in 1894, when Japan led an offensive campaign against China and destroyed it’s military under less than a year. There were more wars to follow, with the protruding World War II when 300 thousand Chinese innocent civilians were killed by the Japanese occupying troops. Over the years, the Japanese colonial rule became like a thorn in China’s side, pervading from relations to improve.

Furthermore, some polls show that two thirds of the Chinese are in favor of a wider Asian cooperation like the one being discussed for quite some time now, which will include more countries such as Indonesia, South Korea, Singapore, New Zealand and mighty India. Nevertheless, experts agree on communist China’s unwillingness to jump into a swift arrangement. Especially a wide agreement, that might include another one of China’s traditional rivals- India as mentioned above, with China already fearing the India-Japan space alliance; suspecting that the US is masterminding this regional space alliance, behind the curtains. But, according to the Chinese, they are still advocating and engaged at setting up an East Asian Community and its integration process. We suggest continuing following this hot topic, when talks resume on October 10 in Beijing.

Omer Shachnai

The CEO Game.