By Peter Galuszka
(Last of a series)
TOKYO, Japan — “Technology is like water, it runs down hill.”
My old Japanese friend and I are chowing down on delicious fried oysters and sashimi in a downtown Tokyo restaurant. We had just had drinks at the Foreign Correspondents Club Of Japan which offers a spectacular, 20th floor view of the city, including parts of the Ginza shopping district.
My journalist friend’s comment is at once wistful and annoyed. He’s sick and tired of hearing about the Chinese “miracle” when much of the technology that the Chinese have used is from Japan, the U.S., Germany or other more advanced nations.
I agree with him. I have been skeptical hearing about the wonders of the Middle Kingdom since it became fashionable when I was a middle-ranking editor on the international desk of a business magazine in New York back in the late 1980s and early 1990s. Although I am not a China hand and know little about the country, I keep noting that for every high speed train, there’s a high speed train crash that the government wants to cover up. Many Chinese products have the taint of intellectual property or brand theft. The miracle of millions of skillful, hard-working laborers churning out products for export doesn’t shed light on one-sided currency exchange rates or the labor conditions in which those products were made.
Not that long ago, Japan seemed to be where it was happening. Back in the 1980s, the buzz was that the Nipponese onslaught was moving from cars and consumer electronics to snapping up choice Manhattan real estate and buying big movie houses, controlling our media.
Alas, the real estate bubble in Japan hit and a “lost decade” of deflation followed. Japan is still staggering from it. Economists faulted the country for not taking enough steps to reconfigure the old “keiretsu” structure of big banks, government organizations and trading agencies all working towards common industrial policy and trade goals. Too slow to change, Japan was trapped and paid the price.
China faces the same pressures. It is, after all, a communist dictatorship that has ultimate say on all political, economic or civil rights issues. The plus is that it can make decisions quickly at least big decisions. It has the finances to build quickly and invest heavily in the U.S. This is an irony for conservative Americans who tout China because they want to make money from it, but somehow forget that it stands for all of the things they loathe, such as big regulation, government oversight and spending.
My friend and I would like to see a return to the old days when Japan led Asia with close cooperation from Washington. Despite the horrors of World War II, it seemed a natural fit.
That idea, however, unravels the minute I step into a taxi. The drivers are invariably grandfatherly men in black suits and white shirts. They will take credit cards for the ridiculously expensive rides to the hotel. They must bow and hand you scrap after scrap of paper. Ditto trying to find an ATM that will issue a foreigner cash. Most ATMs work only with Japanese banks. And while the subway and train systems are fast and efficient with extremely courteous staff, they seem unnecessarily complex and old. At my mostly-Japanese hotel, when they serve a tasty breakfast buffet, they actually play elevator music from the 1960s, including (believe it or not), Mantovani. I sip my soup listening to “Born Free.”
Indeed, Japan’s biggest problem is not spirit or smarts. It is age. Demographics are against it. Japan has the largest percentage of elderly of any advanced country. About 21 percent of the population is older than 65 years old. It has always been hard for foreign firms to crack the Japanese market, but some now shun it because the population is getting too old. Meanwhile, national champions such as Sony or Toyota seem as ancient as a Madonna CD. In the latter case, a shameful breakdown in quality tarred the once-popular car maker.
Can Japan keep pitching? Can the U.S.? Both long-time allies face similar challenges. My guess is yes, but not until the current Asia set-up
changes once more.