1H2017 Review: Japan

1H2017 Review: Japan

This article is part of a series of reviews of political and economic events that occurred in the first half of 2017 in the major Asia-Pacific economies.

For Japanese Prime Minister Shinzo Abe, 2017 has been the year that his political credibility came into doubt. A poll conducted by the Mainichi Shimbun newspaper on June 17 and 18 showed that Abe’s approval rating fell 10 points to 36%, and the rate of disapproval reached 44% – his first net negative rating since 2015.

Abe’s declining poll figures may reflect concerns about his integrity. In February, Abe was implicated when a nationalist group bought public land for a kindergarten at a lower-than-market price. Evidence showed that the prime minister’s wife, Akie Abe, donated ¥1 million to the kindergarten’s operator, Morimoto Gakuen.

Furthermore, Asahi Shimbun revealed on May 17 that Abe gave preference to the Kake Educational Institution as a site for a new veterinary medicine department, not due according to a fair and legal process but because the director of the institution was a close friend. Eight documents were found to serve as evidence of this allegation.

It is not certain yet whether these scandals will affect Abe’s pursuit of a third term as prime minister in 2018, during which he hopes to finish amending Japan’s constitution to give the military a more active role in collective self-defense (such as being able to act to help the United States or other allies under attack).

Abe’s ambition to reform the existing laws is also seen in his push for a conspiracy law in the penal code, which Abe says is necessary to combat organized crime, but critics fear the law will restrict freedom of speech. A United Nations expert, special rapporteur on protection of freedom of expression David Kaye, wrote a letter to the Japanese government to criticize the anti-human-rights feature of this law. Nevertheless, the Lower House passed the bill on May 13, and the Upper House followed suit on June 15 after using a parliamentary procedure to rush through the vote.

Despite the political tension, the first half of 2017 was economically steady. Although still stagnating, Japan’s GDP growth has stabilized at 0.3% quarter to quarter. At the same time, labour force shortages continue to cause concern. On June 30, the most recent report by the Ministry of Health, Labour and Welfare showed that the effective job-opening-to-application ratio reached the highest level, 1.49, since 1990.

However, instead of a signal of economic activity, this ratio reveals a demographic issue. According to Japan Macro Advisors, a data analysis company, the tight employment market is due to the aging of population and shrinking of the workforce. Japanese employers are also unwilling to increase the wage level: annual growth has been no more than 1% from 2011.

Japanese industry also received some bad news. On June 25, the leading airbag manufacturer, Takata Corporation, filed for bankruptcy and was sold to its U.S.-based competitor, Key Safety System, now owned by a Chinese automotive parts company, Ningbo Joyson Electronic Corp. Takata recalled 100 million cars with potentially defective airbags.

Kuki Zhu is a master’s degree candidate at the University of Hong Kong‘s Journalism and Media Studies Centre.

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