Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (2358)	2/24/1998 9:23:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Stitch, I thinkJapan's stand result from an ingrained xenophobia. They are realy afraid that if they stimulate local demand and liberalize imports, foreign cultures with some of their less beneficial sides (at least as viewed from the traditional strict "class structure" in Japan) will take hold more and more. They are already seeing a decline in some of their music and arts that are being influenced, and I would be the first to admit, negatively by western music styles. They fear a situation where a college drop out (like Gates) can wield more power that their established kurizu (I am not sure if I have this term right, but it is more or less the corporate equivalent of the Chaebols in Korea). Thus they keep their doors closed for as long as they can. What they are missing in the process, is that long term, their main markets are their neighbors, and their neighbors will not be able to buy much if they are weakened economically or go into a depression. If they get Japan to be the leading locomotive of economical rejuvenation by increasing demand from the rim, 5 years down the road, they will once more be able to have normal trade relations with strong and growing economic partners. I think that there is also a great fear of fiscal stimulation since it does lead to deficits, yet monetary stimulation is out of the question with interest rates as low as they are. Finally, there is the freeze before overwhelming forces described by Worsick before, that lead to inaction. Sukibara (and I am sure I missed and misplaced few letters in his name) some two three weeks ago stated unequivocally that the MOF will not let any of the 19 big banks fail. This pronouncement (and similar ones by him and other spokepeople from the LDP) almost tie their hands. Some questions you may ask them could be around what is the status of venture capital in Japan and how is new enterprise formation encouraged. Other questions could surround the problems of liquidity in their banking systems and steps which will encourage money flowing through their economy (I am guessing that a good chunk of money is frozen in those unproductive assets on the banks' books). Anther question would address the steps corporations can take to honor their life commitments to employees yet provide for the necessary mobility of labor to higher productivity jobs (since it is inevitable that the low productivity jobs will migrate with capital to low labor cost countries). Well, I could go on for longer, but that is a starter. Zeev

To: Stitch who wrote (2358)	2/24/1998 9:51:00 PM
From: j g cordes	Read Replies (1) \| Respond to of 9980

Stitch, was reading your posts with Zeev.. the same question has occured to me as to why the Japanese don't open the throttle. I believe there are two significant but related reasons. One is a fiscal methodology which relies on the private sector funneling funds into large institutions which in turn are provided the capital base to expand their production and marketing capacity. This method of money routing differs from ours. We attempt to stimulate the general population through tax incentives and monetary policy to spend more or less to strike employment balance without inflation of goods or services. While we attempt to regulate the purchase of goods and services, they attempt to regulate the engine of export with much the same aim. This brings me to point two.. which is that Japan is still an export driven economy and mindset which is easily understood as a survival then wealth building policy of superpower proportions. From the above you can see that the solution we see of encouraging the consumer in their minds goes counter to the habit of policy that encourages export. Indeed, by encouraging the consumer to spend more it may even be seen as counter productive, undermining the engine of export by encouraging imports. Hope this helps. Jim When you are there, ask your hosts if by encouraging public spending they feel that Japan's financial security, which relies on positive export revenue, would be threatened. Also if imports were allowed freer entry, would it undermine the vertically integrated manufacturing structures... and are they politically motivated to lobby on behalf of little or no change to the status quo? It may be a key worth turning.

To: Stitch who wrote (2358)	2/24/1998 10:07:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 9980

Stitch: For one thing you can ask the Japanese why they are so hell- bent on making 'her' people suffer so. Why do they have to pay more for such simple necessities of life as food stuff and the like,while the Japanese 'conglomerates' dump their products on the cheap in foreign lands and charge exorbitant prices for the same in the domestic market. For how long they think they can 'export' their way into 'nirvana' and how long they intend to close their economy to the outside world to the detriment of the Japanese people? You may also make a statement to the effect that the Japanese have proven to the world that one can be rich yet be poor at the same time by resorting to such inward-looking policies.