South KoreaĦÇs Dilemma


ĦĦSince South Korea decided to deploy THAAD in February, China has been economically punishing South Korea. The South Korean economy has been devastated. ĦĦĦĦ


ĦĦDuring March, the sales of Hundai cars in China decreased by 44.3%, and those of Kia decreased by 66.8% compared to the same month in the previous year. ĦĦĦĦ


ĦĦIn contrast, Japanese cars sold well. The sales of Toyotas in China more than doubled (an increase of 116%), Honda sales increased by 31.6%, and Nissan sales increased by 12.4%. ĦĦĦĦ


ĦĦOn March 15th, the Chinese government prohibited its travel agencies ĦĦfrom selling package tours for South Korea. Chinese tourists accounted for over 70% of the sales of foreign tourists in South Korea. If this situation continues, the South Korean tourism industry will be destroyed. ĦĦĦĦ


ĦĦChina became the second largest economy, and has been effectively exercising its economic power. Different from Japan, South Korea has no ability to respond to aggressive Chinese tactics. ĦĦĦĦ


ĦĦIn 2010, after a Chinese fishing boat was detained by the Japan’s Coast Guard vessel in the vicinity of the Senkaku islands, China imposed restrictions on the export of rare earth metals. At the time, Japan imported 99% of rare earth metals from China. The prices of the metals soared, and those companies in China temporarily prospered. However, Japanese companies diversified their suppliers, and developed alternative technologies to use smaller quantities of rare earth or even eliminate the need for rare earth metals in key sections completely. The prices of rare earth plummeted, and the majority of the Chinese rare earth companies went bankrupt or halted operations. The market is unlikely to recover any more. ĦĦĦĦ


ĦĦIn 2012, after the Noda Cabinet nationalized the Senkaku islands, radical anti-Japanese riots occurred in China. Many Japanese companies were vandalized, and Japanese department stores such as Heiwado were looted. The Chinese government declared that it wouldn’t compensate Japanese companies for the damages. However, not only Japanese companies but also American and European corporations become aware of the risks of doing business in China, and started to consider withdrawing from China. In order to prevent Japanese companies from withdrawing, local governments offered corporate-tax exemptions instead of compensation. Obviously, acquiring new investment became difficult. ĦĦĦĦ


ĦĦUntil South Korea prevents the deployment of THAAD, China will continue to economically punish South Korea. And, if South Korea nullifies the THAAD program, the U.S. might abandon South Korea. Its presidential election will take place on May 9th. The ball is in South Korea. ĦĦĦĦ


A Road to HellĦ§South Korea


ĦĦOn March 9th, South Korea’s Constitutional Court unanimously ruled to strip impeached President Park Geun-hye of power. The nation slipped into a political whirlwind. The political apparatus is in haste arranging the coming presidential election which must occur within 60 days. In recent years, South Koreans have given their nation the moniker of “Hell Choson” (Hell Korea). In fact, South Korea is on the way to hell. ĦĦĦĦ


ĦĦDisgraced President Park had taken a hostile position against Japan. Consequently, South Korea couldn’t ask Japan to continue the Japan-South Korea currency swap agreement. The agreement was discontinued in 2015. In addition, in protest of the comfort woman statute in front of the Japanese Embassy in Seoul, Japan recalled its ambassador. Currently, there is no hope for South Korea to resume a currency swap with Japan. ĦĦĦĦ


ĦĦOn March 6th, North Korea launched 4 ballistic missiles into the Sea of Japan, allegedly in preparation for an attack to U.S. bases in Japan. The following day, the U.S. began to deploy its state-of the art antimissile system, the Terminal High Altitude Area Defense (THAAD) in South Korea. ĦĦĦĦ


ĦĦAfter South Korea decided to deploy THAAD, to which China has strongly been opposed over concerns related to its own missile capability, China started to impose various sanctions against South Korea. Especially, LOTTE, a conglomerate, was completely excluded from the Chinese market because it gave up its golf course in a land swap to facilitate the deployment of THAAD. The Chinese government ordered its travel agencies to pull tours to South Korea. Chinese tourists account for nearly half of all tourists traveling to South Korea (8.0 million out of 17.2 million). The South Korean tourist industry will be devastated. And, a currency swap agreement with China will expire this October unless China agrees to extend it. ĦĦĦĦ


ĦĦThe largest peril is the coming presidential election. According to a survey conducted by Gallup Korea, the most popular candidate is Moon Jae-in (32%), who is friendly to North Korea, followed by Ahn Hee-jung (17%), Hwang Kyo-ahn (9%), Ahn Cheol-seo (9%), and Lee Jae-myung (8%). The only conservative is Hwang Kyo-ahn. ĦĦĦĦ


ĦĦSpecifically, Moon Jae-in insists on nullifying the agreement on comfort women issue with Japan and the deployment of THAAD missiles with the U.S. If he becomes the next South Korean president, not only will relations with Japan and the U.S. worsen but also he wants the U.S. to remove the THAAD missile system from South Korea. In that case, the U.S. might be justified in deserting South Korea and withdrawing its forces. Without support from the U.S., North Korea can invade South Korea as it did in 1950. History might repeat itself. ĦĦĦĦ


ĦĦMost South Korans are now pleased with the ousting of Park Geun-hye. She said before, “There is no future for a people who don’t come to terms with their history.”ĦĦĦĦ


Doomed President


ĦĦOn November 4th, the South Korean Gallup announced that President Park’s approval rating plummeted to 5%, a decrease of 12% form October 28th, whereas her disapproval rating soared to 89%, an increase of 15%. The 5% of approval rating is the historically worst in South Korea. Now, South Korean politics is completely dead. ĦĦĦĦĦĦĦĦĦĦ


ĦĦIn 1997, when the Asian currency crisis occurred and South Korea fell under the control of the IMF, then-President Kim Yong Sam had the previously worst rating of 6%. In the same year, his second son was arrested for bribery before Kim Yong Sam finished his term in 1998. ĦĦĦĦĦĦĦĦĦĦ


ĦĦDuring the late term of the next President Kim Dae Jung, his 3 sons were arrested for various cases of bribery. ĦĦĦĦ


ĦĦAnd, the elder brother of the following President Roh Moo Hyun was arrested for bribery. He himself was also prosecuted for illegal campaign contributions, and committed suicide in 2009. ĦĦĦĦĦĦĦĦĦĦ


ĦĦIn another case, the elder brother of the former President Lee Myung Bak was taken into custody for bribery, but, fortunately for him, the current president belongs to the same party. So, he was released. However, if President Park resigns or after her term ends, we don’t know what will become of the brother or even Lee Myung Bak himself. ĦĦĦĦĦĦĦĦ


ĦĦKorean society is historically nepotistic. And, Korean politicians are dishonest and selfish, without commitment to their nation. Nonetheless, South Korean president are endowed with a great deal of personal power to appropriate relatives to important positions. It’s quite natural that bribery and similar crimes occur. ĦĦĦĦĦĦĦĦĦĦ


ĦĦOn the other hand, they are severe to others while easy to themselves. They unfairly and even falsely condemn others. False accusations are rampant in South Korea. Historically, they work their way up at the expense of their rivals.


ĦĦPrior to the inauguration, President Park’s approval rating amounted to 80% in 2013. So far, she or her relatives have not committed bribery. However, former South Korean presidents have been arrested or gone into exile or committed suicide. I’m curious about the current president’ future after she resigns or finishes her term.ĦĦĦĦĦĦĦĦĦĦ



South Korea into the Sand


ĦĦDue to Samsung’s global failure of the Galaxy Note 7 and Hyundai’s repeated labor strikes, the South Korean economy is suffering a great downturn. In addition, President Park Geunhye has been neutered by a political scandal. I believe that it’s only a matter of time before South Korean will go into default again. ĦĦĦĦĦĦĦĦĦĦ


ĦĦFrom July to September, the growth rate of South Korea’s manufacturing industry dropped to minus 1%, the worst in 7 and a half years. Experts predict that, from October to December, the situation will become even more severe. ĦĦĦĦĦĦ


ĦĦAccording to a survey conducted by a research center “Research & Research”, the majority (51.4%) of South Koreans believe that the South Korean economy is in a serious crisis, and 39.8% feel that they are in somewhat of crisis. In total, 90.4% of citizens recognize that South Korea is now facing an economic downturn. ĦĦĦĦĦĦĦĦ


ĦĦNevertheless, the South Korean government cannot take any measure against the worsening economic situation because its president has completely lost her credibility due to a political scandal that she had repeatedly divulged official documents to her close friend. ĦĦĦĦĦĦĦĦĦĦ


ĦĦA Gallup survey conducted in South Korea on October 26th and 27th shows that her approval rating was only 14%, the lowest since her inauguration, whereas disapproval rating was 78%. She has now become totally dead politically and is likely to remain so for the remaining 1 year and 4 months of her term. ĦĦĦĦĦĦĦĦĦĦ


ĦĦFormer South Korean presidents have historically taken a future-oriented view toward Japan rather than dwelling on the past, at least at first. But, once their approval ratings dropped, they tended to take a nationalist stance toward Japan to garner support form citizens. On the other hand, she has taken a clear anti-Japanese position from the beginning. Therefore, she has nowhere to go to raise her approval ratings. Many South Koreans are currently demanding she resign as president. ĦĦĦĦĦĦĦĦĦĦ


ĦĦIf she resigns, during the resulting political vacuum, there will be no measures to fix the South Korean economy, which will deteriorate further. ĦĦĦĦĦĦĦĦĦĦ


ĦĦIf she doesn’t resign beforehand, the next presidential election will be held in December 2017. And, in February 2018, the Winter Olympics is scheduled to take place in Pyeongchang, South Korea. ĦĦĦĦĦĦĦĦĦĦ


ĦĦThe 2017 Asian Winter Games will take place in Sapporo, Japan. I believe that Japan should prepare for the possibility of the 2018 Winter Olympics being moved to Japan, prior to the Tokyo Olympics in 2020. ĦĦĦĦĦĦĦĦĦĦ



Gun Control

ĦĦĦĦOn June 12th, 49 people were gunned down and 53 were injured at an Orlando gay nightclub. While guns kill over 30,000 people in the U.S. every year, many Americans, powerful gun lobbies and Republicans oppose any attempt to regulate guns. I feel fortunate to have been born in Japan. ĦĦĦĦ ĦĦĦĦJapan strictly bans civilians from owing a gun. In 2014, there were 32 gun incidents, and only 10 people were killed or injured. Shooting rampages do not occur in Japan. Only yakuza members have guns, and they attack each other. Ordinary citizens are rarely involved. ĦĦĦĦ ĦĦ ĦĦĦĦOn the other hand, the American constitution prohibits the federal government from passing laws prohibiting the right to bear arms. And, 31% of households own guns according to research by Chicago University. ĦĦĦĦ ĦĦĦĦGun rights activists in the U.S. insist that gun control is an infringement on their right to own guns. As long as the American constitution stipulates the right to bear arms, their insistence seems plausible. Some even claim, ĦÈGuns donĦÇt kill people. People kill people kill people.ĦÉ I believe they are using sophistry. But, I donĦÇt care because itĦÇs an American domestic matter. IĦÇm perfectly happy to live in Japan.

Procrastination to Catastrophe

ĦĦJapanese cars are selling very well in China. However, I don't believe it's a good long-term growth strategy for Japanese car makers. The more Japanese car makers benefit from sales in China now, the more they will be adversary affected when the Chinese economy inevitably crashes.

ĦĦDuring November, Nissan sold 122,700 cars in China, an increase of 21.9% compared to the same period last year. Similarly, Honda increased sales by 32.7%Ħ¨Toyota, 13.5%Ħ¨and Mazda, 10.3%.

ĦĦAs the Shanghai Stock Market has been gradually recovering from its plummet in June, Chinese consumer spending has revived. In addition, China reduced taxes paid on the purchase of new cars with engines smaller then 1,600 ccs.

ĦĦNissan's sedan 'SYLPHY' sold 38,491 units, an increase of 59.3%. Even Nissan's 'EXTRAIL' SUV, which is not eligible for the tax break, sold 16,431 units, an increase of 65.8%.

ĦĦChinese Premier Li Keqiang admitted that China's GDP is often inflated. Instead, he makes policy decisions based on rough GDP shorthand indicator composed of electricity consumption (40%), outstanding bank loan balances (35%), and railway freight transport (35%). China officially states its economic growth as 7%. However, electricity consumption is flat, and the railway freight transport is negative 10%. According to his metric, China's economic growth is, in fact, around 2%.

ĦĦCapital investment for public and private use is calculated into GDP. Already in 2013, investment for fixed capital accounted for 46% of ChinaŽĠs GDP. Private consumption was only 36%. In Japan, private consumption accounts for around 60% of its GDP, and the U.S., it amounts to 70%.

ĦĦUseless capital investment leads to excessive supply capacity. This year, China's domestic auto production capacity increased to 50 million cars, whereas expected demand only amounts to some 25 million units.

ĦĦFirst, the real estate bubble burst, and then the stock bubble burst in June. Now, the capital investment bubble entered a period of adjustment. Until excess capacity lessens, the Chinese economy won't recover properly. And, in order to reduce the excessive production capacity, capital investment will nosedive. Consequently, China's GDP will drop into negative territory.

ĦĦThe longer China prolongs the problems of its chain of economic bubbles, the more difficult a soft landing becomes.

Judge Not

ĦĦRioting, fires and looting broke out in Ferguson, Missouri, after a grand jury decided not to indict a white police officer over the fatal shooting of an unarmed black boy in August. The U.S. is a very hypocritical country. Americans should reflect themselves sincerely before criticizing other countries.

ĦĦOn August 9th, police officer Darren Wilson fatally shot Michael Brown Jr. despite the black teenager being unarmed. In Japan, use of arms cannot be permitted under such a situation. Rioting occurred, followed by looting. The U.S. often criticizes other countries in terms of human rights. Russia and China have claimed hypocrisy on the side of the U.S.

ĦĦRioting broke out against the alleged cruel treatment. But, why did looting occur? Looting had nothing to do with the incident. In the aftermath of the Great Tohoku Earthquake in 2011, there was no looting in Japan even though the victims had nothing to eat. On the other hand, when Hurricane Katrina hit New Orleans in 2005 and a cold wave hit New York in 2012, massive looting occurred in the U.S. I believe that the American moral compass is incomparably lower than Japanese's.

ĦĦOn November 24th, a St. Louis County grand jury was unable to bring charges against the white police officer over the shooting death of Michael Brown Jr. At night, many protest rallies ensued, but, in time, the mob set fires to 12 buildings. Patrol cars were destroyed, and stores were looted.

ĦĦOn the following day, demonstrations expanded into more than 170 cities, where decades of participants were arrested for failure to disperse. In Ferguson, over 100 demonstrators were arrested. The state authorities deployed 2,200 National Guard. The measures they took were similar to the Chinese Communist Party. At least, peaceful rallies should be permitted. I believe that the U.S. is, in reality, far from democratic.

ĦĦThe U.S. often condemns other countries from the viewpoint of democracy. However, the U.S. government never criticizes Saudi Arabia, an autocratic nation whose death penalty is said to be the harshest in the world. Even speaking ill of the king deserves capital punishment. The U.S. purchases petroleum from Saudi Arabia, and, in turn, Saudi Arabia purchases weapons from the U.S. Also, the U.S. supported the former Filipino president Marcos, who was a pro-American dictator. The U.S. is very hypocritical.

ĦĦEvery U.S. president is inaugurated, putting his hand on the Bible. The Bible says, "Judge not, lest ye be judged" (Matthew 7-1). I think that American president and citizens are not qualified to criticize other countries.

Emerging Energy Economies

ĦĦThe global economy is uncertain about the prospects of the U.S. economy. On the other hand, several emerging economies such as Qatar, Turkmenistan, and Azerbaijan are flourishing. I predict that their prosperity will promote Japan's economic recovery. At the same time, the rise of new energy-suppliers might put Russia into a second default.

ĦĦNow, Qatar is the richest economy in the world. Its per capita GDP exceeds 100,000 USD, even including non-citizens. Its population is about 2 million, of which its citizens comprise only about 300,000. Upon marrying, its citizens are provided land, and they can afford to build large houses.

ĦĦQatar used to be a poor county. However, liquefied natural gas (LNG) transformed the poor nation into a superbly wealthy country. Chioda Corporation, a Japanese construction and engineering company, launched a LNG project in 1992, and the plant was completed in 1996. I believe that Qatar is very thankful for Japan's cooperation. After the Great Tohoku Earthquake, Qatar founded the Qatar Friend Fund which contributed 100 million USD for Japan's recovery.

ĦĦThe 2022 FIFA World Cup is scheduled to take place in Qatar. 8 out of 12 stadiums are to be newly constructed. In addition, many hotels will be constructed to accommodate visitors. I believe it is a good opportunity for Japanese construction companies.

ĦĦTurkmenistan, which had been called "North Korea of the Central Asia," has been attracting attention recently. Turkmenistan became independent in 1991 in the wake of the collapse of the USSR. The first president, Niyazov, who had tightly controlled the flow of information, died in 2006. Berdimuhamezov was inaugurated as the second president in 2007. He adopted a liberal policy, and removed restriction on the flow of information. Then, the world learned that the mysterious nation was, in reality, an amazing wealthy nation on account of its natural gas. Utility bills and tuition up to collage are free in the country. In addition, an allowance for children is provided. A family with 8 or more children is gifted a large condominium.

ĦĦThe second president appears positively predisposed to Japan. He has already visited Japan to meet former prime minister Hatoayama and present Prime Minister Abe. At foreign collages, Japanese is the most popular language. In their language, "toyo" means wedding, and "ota" means grassland. With a catchphrase "From a wedding to grassland," Toyota has a 60% share in the country. Kawasaki Heavy Industries and Sojitu Worldwide, both Japanese companies, have constructed a 600 million USD LNG processing faculty, which will start operation this month.

ĦĦAzerbaijan also became independent from the USSR in 1991. The Kazar (artificial) Island Project (11 billion USD) has been ongoing and is scheduled to be completed in 2030. The Azerbaijan Tower will reach 1,050 meter tall, the highest in the world. The bank interest rate is so high (over 20%) that the citizens can increase their money without doing anything. Karate is the most popular martial art even though it was banned in the era of the USSR. Akio Kanai, a Japanese man, is highly respected for having donated 4,000 pairs of glasses to visually impaired refugees in the country.

ĦĦIn the early 20th century, its Baku oil field produced over half of the global oil supply at the time. With European technology, Azerbaijan was able to develop its offshore oil field in the Caspian Sea.

ĦĦNot only petroleum but also natural gas are abundant in Azerbaijan. A natural gas pipeline to Italy is planned. When realized, Russia won't be able to exercise its dominance of the natural gas supply in Europe.

ĦĦAlong with shale gas and shale oil, the emergence of new energy economies will deprive Russia of international clout. Russia might be put into default again.

The Pro-Democracy Protests in Hong Kong

ĦĦPro-democracy demonstrations have broken out in Hong Kong. Hong Kong was repatriated from the U.K. to China in 1997. At the time, the Chinese government guaranteed relative autonomy outside of diplomatic and defense issues for 50 years after the handover. Anti-Chinese sentiment is on the rise among Hong Kongese.

ĦĦChina had been exploited by the British Empire since the late 18th century. The empire exported opium from India to China, which led to the Opium War of 1840. China was completely defeated by the modern British Army, and ceded Hong Kong to the British in the Nanking Treaty of 1842. Hong Kong since flourished under the guidance of the U.K.

ĦĦLast Year, 40.7 million Chinese visited Hong Kong. However, many of them were actually opportunists who carried Japanese or Western products from Hong Kong to China without tariffs. Chinese products are so unreliable that the products brought from Hong Kong sell at high prices in China. The most popular commodity is Yakult, which is a Japanese microbiotic, followed by powder milk and paper diapers (mainly Japanese makers'). Per 1 package of 50 Yakult, they can earn about 3 dollars. Many of them go back and forth several times a day, and earn far more money than the average Chinese income.

ĦĦEvery day, around 20,000 carriers visit Hong Kong, and consumer prices are surging there. On the other hand, Chinese travelers tend to irritate citizens of Hong Kong. For example, Chinese parents let their children urine on the street. Chinese have no manners. Hong Kongese identify themselves as different from Chinese.

ĦĦThousands of demonstrators occupied the streets of Hong Kong's financial center in order to promote democracy. Banks have to close down their branches, and the stock market plunged.

ĦĦI don't believe that the protest in Hong Kong will lead to a new Tienanmen Square Massacre because China cannot afford to devastate the "Pearl of the Orient." I bet that China will have to concede to some degree.

ĦĦChina has taken a hard-line stance owing to its emerging economic power, but cannot any more. For instance, Chicago University and Pennsylvania State University announced that they would discontinue their respective Confucius Institutes, where Tibet and the Tienanmen Square Massacre are prohibited from being discussed. China has founded the institutes at over 90 universities in the U.S. in order to push pro-Chinese propaganda. However, if China bans discussion about the protest in Hong Kong, more universities would close down the Chinese-financed institutions.

ĦĦAs the Chinese economy trembles, China will have to concede that. The protests in Hong Kong are the beginning of a larger push for freedom in China.

Chinese, Rest Assured : Japan won't aggress against China

ĦĦThe relationship between Japan and China has been deteriorated. To our surprise, many Chinese are concerned that Japan might invade China again. Needless to say, their anxiety is unfounded.

ĦĦIn a survey conducted by the U.S, Chamber of Commerce, 48% of American businesses operating in China cited that Chinese air pollution has made it difficult to attract senior employees to China Ħĵ a sharp increase from 19% in 2008. Not only U.S. but also European and Japanese companies have difficulty finding employees willing to live in China due to the serious air pollution and contaminated water. They have attempted to use financial incentives to attract workers willing to work in China. Nevertheless, few are willing to relocate to China. On the contrary, the number of multinational employees who desiring to leave China is surging.

ĦĦParticulate matter with a diameter of 2.5 micrometers or less, which associated with lung cancer and other respiratory diseases, is mainly due to emissions from factories and cars. The factories also discharge contaminated water into rivers. In China, tap water is hazardous to drink. To make matters worse, a Chinese mineral water producer was found to be less safe than tap water.

ĦĦChina dominates the production of rare earth metals. As a matter of a fact, rare earth metals exist broadly in Eurasia, North and South America, and Australia. China's reserves are only about 30% of total world reserves. However, its mining contaminates surrounding groundwater and soil. Therefore, hardly any country other than China eagerly produce rare earth metals.

ĦĦIn addition, Chinese food is too dangerous to eat. This July, a food scandal received global attention that Shanghai Husi Food had reproduced rotten meat and supplied them to transnational fast-food chains such as McDonald's KFC, and Pizza Hut. Last year, cadmium-contaminated rice was detected. In 2011, 3 infants died of milk containing of high level of nitrites. Also, illegal medicine was found to be injected into pork, and prohibited coloring agents were found in steamed buns. In addition, recycled oil from ditches was resold. Especially egregious was a 2008 case where melamine-contaminated milk killed 6 babies in Chin and Hong Kong, and poisonous dumplings imported from China hospitalized 9 Japanese.

ĦĦJapanese are afraid of eating Chinese food, much less living in China. Many Japanese expatriates are staying in China alone, leaving their families in Japan. They are dying to return to Japan.

ĦĦThere is no possibility that Japan will invade China because Article 9 of the Japanese Constitution expressly prohibits wars of aggression. In addition, Japanese soldiers would hesitate to be deployed in such a cursed land.

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