Latvia, Estonia leave China-backed East Europe forum

 ... a new setback for China's increasingly assertive diplomacy

Latvia and Estonia say they have left a Chinese-backed forum aimed at boosting relations ...

Via AP news wire

Sat, 13 August 2022 at 12:15 am

https://uk.yahoo.com/news/latvia-estonia-leave-china-backed-161510100.html

China Latvia Estonia Diplomacy (Sputnik)

Latvia and Estonia say they have left a Chinese-backed forum aimed at boosting relations with Eastern European countries, in what appears to be a new setback for China's increasingly assertive diplomacy.

The move follows China’s boosting of its relations with Russia, whose invasion of Ukraine is seen as a possible first step in a series of moves against countries that were once part of the Soviet Union. China has refused to criticize Russia and has condemned punishing economic sanctions imposed on Moscow by the West.

Weeks before the invasion, Chinese President and Communist Party leader Xi Jinping hosted Russian President Vladimir Putin in Beijing and declared their bilateral relations had “no limits" in a joint statement.

The move also comes after Beijing launched economic and diplomatic retaliation against another Baltic state, Lithuania, in retaliation for its expanded ties with the self-governing island democracy of Taiwan, which China claims as its own territory and threatens to annex by force. China’s increasing assertiveness and recent threatening military exercises near Taiwan have brought a sharp backlash from the U.S., the EU, Japan, Australia and others.

“In view of the current priorities of Latvian foreign and trade policy, Latvia has decided to cease its participation in the cooperation framework of Central and Eastern European Countries and China," Latvia's Foreign Ministry said in a statement Thursday.

The country “will continue to strive for constructive and pragmatic relations with China both bilaterally, as well as through EU-China cooperation based on mutual benefit, respect for international law, human rights and the international rules-based order," the statement said.

Estonia issued a similar statement, saying it would “continue to work towards constructive and pragmatic relations with China, which includes advancing EU-China relations in line with the rules-based international order and values such as human rights."

“Estonia participated in the cooperation format of Central and Eastern Europe and China from 2012. Estonia has not attended any of the meetings of the format after the summit last February," the statement said.

China set up the forum to strengthen relations with members of the EU as well as Serbia and others, partly to further Xi's signature Belt and Road campaign to build bridges, railways, power plants and other infrastructure across the Eurasian continent.

China originally styled the forum as a “17 plus one" arrangement, but the number of European partners has now fallen to 14. Critics say the forum was an attempt to exploit differences among those states as part of a larger campaign to join with Russia in undermining the current rules-based international order dominated by the U.S. and its allies.

Along with its stance on Ukraine, China has come under strong criticism for firing missiles and sending ships and warplanes off the coast of Taiwan in response to a visit there by U.S. House Speaker Nancy Pelosi. China strongly opposes all government-to-government contacts between Taiwan and countries which, like the U.S., maintain only informal ties with the island in deference to Beijing.

China issued no immediate comment on the move by Latvia and Estonia, but Foreign Ministry spokesperson Wang Wenbin on Friday again defended the threatening military exercises.

“To defend our sovereignty and territorial integrity ... China has every right to take resolute countermeasures in response to the U.S. provocations, and such measures are absolutely necessary under those circumstances," Wang said at a daily briefing.

Britain summoned China's ambassador to register its over the “increasingly aggressive behavior and rhetoric from Beijing in recent months, which threaten peace and stability in the region,” Foreign Secretary Liz Truss was quoted as saying. “The United Kingdom urges China to resolve any differences by peaceful means, without the threat or use of force or coercion.”

Beijing's threats against Taiwan are a major contributing factor in the deterioration of U.S.-China relations to their lowest level in decades. China has also engaged in a lengthy feud with Australia and its firing of missiles last week drew condemnation from Japan, whose exclusive economic zone includes waters where the projectiles landed.

In another rejection, South Korea on Wednesday said it will make its own decisions about strengthening its defenses against North Korean threats amid Chinese calls that it continue the polices of Seoul’s previous government that refrained from adding more U.S. anti-missile batteries, which are strongly opposed by Beijing.

Asked about the developments, U.S. State Department spokesperson Vedant Patel said “we respect and support Estonia and Latvia’s sovereign decision to no longer participate."

“Estonia and Latvia are important and valued NATO allies and key U.S. partners across a number of issues, including through our strong defense ties, our strong economic ties, as well as the promotion of democracy and human rights," Patel told reporters.

“Over the past year, we’ve seen countries around the world express deep concern about the PRC’s strategic alignment with Russia as well as Beijing’s support for Moscow’s war against Ukraine," Patel said. “There is a growing convergence about the need to approach relations with Beijing with more realism," he said, citing previous comments from Secretary of State Antony Blinken.

Concluding a five-day visit to Taipei on Thursday, Lithuanian Deputy Minister of Transport and Communications Agne Vaiciukeviciute emphasized the importance of economic ties with Taiwan and endorsed a statement issued by the Group of Seven industrialized nations criticizing the Chinese military exercises surrounding Taiwan. The European Union issued a similar statement, prompting China to summon the group's ambassadors to register a protest.

“Lithuania is a democracy. Taiwan is our very close friend, and Taiwan is a booming economy," Vaiciukeviciute said.

“Lithuania chooses to cooperate with countries that are willing to cooperate with us. So, Taiwan is one of those countries and they are reliable partners," she said.

In response to her visit, China’s Foreign Ministry on Friday announced it was suspending “all forms of interaction” with her ministry as well as “exchanges and cooperation with Lithuania in the area of international roadway transport.”

China has already banned trade with Lithuania, with little apparent effect on the country that is a member of both the EU and NATO. The EU has raised a complaint over the Chinese action with the World Trade Organization.

https://uk.yahoo.com/news/latvia-estonia-leave-china-backed-161510100.html

15 August 2022

Taiwan denounces China for sanctioning Lithuanian minister, calls it 'bullying actio

14 August 2022

China suspends transport cooperation with Lithuania, sanctions Minister over Taiwan visit

13 August 2022

After Lithuania, Latvia & Estonia withdraw from China Cooperation Group over Taiwan issue

13 August 2022

China condemns Lithuanian delegation's visit to Taiwan; threatens 'stern retaliation'

Japan shies away from sanctions on China over Xinjiang

In echo of Tiananmen Square, Tokyo takes different path than that of key allies

MASAYA KATO, Nikkei staff writer

March 24, 2021 07:03 JST

Japanese Chief Cabinet Secretary Katsunobu Kato expressed "grave concern" Tuesday about the situation in Xinjiang without mentioning independent sanctions by Tokyo. (Photo by Uichiro Kasai)

China is Japan's neighbor and largest trading partner, and tensions between the two have already been inflamed by Beijing's forays around the Senkaku Islands, which are administered by Tokyo and claimed by China as the Diaoyu. Japan wants to avoid steps that could invite even more military pressure, though it could face a push from Washington and Brussels to toe the line.

But even without these complicating factors, there is a more basic problem. Unlike Washington and Brussels, Tokyo lacks a legal framework that would easily allow for sanctions on human rights grounds, along the lines of the Global Magnitsky Act used by the U.S.

"There are no rules under which we can impose sanctions that are directly and explicitly connected to human rights issues," Kato said.

Japan can employ existing laws, such as the Foreign Exchange and Foreign Trade Act, for asset freezes and travel bans on foreign officials, but these have no provisions related to human rights.

Past steps by Tokyo, such as a 2011 freeze on personal assets of Libyan leader Muammar Gaddafi, have mostly been based on United Nations Security Council resolutions.

Japan has also hesitatedChina is Japan's neighbor and largest trading partner, and tensions between the two have already been inflamed by Beijing's forays around the Senkaku Islands, which are administered by Tokyo and claimed by China as the Diaoyu. Japan wants to avoid steps that could invite even more military pressure, though it could face a push from Washington and Brussels to toe the line.

But even without these complicating factors, there is a more basic problem. Unlike Washington and Brussels, Tokyo lacks a legal framework that would easily allow for sanctions on human rights grounds, along the lines of the Global Magnitsky Act used by the U.S.

"There are no rules under which we can impose sanctions that are directly and explicitly connected to human rights issues," Kato said.

Japan can employ existing laws, such as the Foreign Exchange and Foreign Trade Act, for asset freezes and travel bans on foreign officials, but these have no provisions related to human rights.

Past steps by Tokyo, such as a 2011 freeze on personal assets of Libyan leader Muammar Gaddafi, have mostly been based on United Nations Security Council resolutions.

Japan has also hesitatedTOKYO -- As Europe, the U.S. and other major Western economies hit China with a spate of sanctions over alleged human rights violations in Xinjiang, Japan has so far stood pat, because of both a lack of effective tools and concern about harming an already complicated relationship with Beijing.

When asked in a news conference Tuesday whether Japan would impose sanctions on its own, Chief Cabinet Secretary Katsunobu Kato made no mention of doing so. He did express "grave concern" about the human rights situation in Xinjiang, where the Uyghur Muslim minority population has reportedly been subject to large-scale detentions and other abuses.

https://asia.nikkei.com/Politics/International-relations/Japan-shies-away-from-sanctions-on-China-over-Xinjiang?

Economy shrinks an annualized 6.3 percent after sales tax hike

Japan’s economy shrank in the October-December period for the first time in five quarters, as the sales tax hike and natural disasters pummeled personal consumption, according to preliminary figures released on Feb. 17.

THE ASAHI SHIMBUN

February 17, 2020 at 17:00 JST

A monitor at the checkout of a store in Osaka displays the 10 percent consumption tax rate on Oct. 1, 2019. (Asahi Shimbun file photo)

Gross domestic product declined by a seasonally adjusted 1.6 percent in the quarter from the previous three months, or an annualized 6.3 percent, the Cabinet Office figures showed.

The contraction of 6.3 percent was far worse than expectations of many private-sector economists, who predicted a shrinkage of 4 percent or so.

More bad news could be in store for the economy, with the new coronavirus outbreak now hammering tourism numbers and disrupting business operations.

Personal consumption, which accounts for more than half of Japan’s GDP, grew by 0.5 percent in the July-September period.

But the figure plunged to minus 2.9 percent for the three months from October, when the government raised the consumption tax rate to 10 percent from 8 percent.

Consumers tightened their purse strings after the tax hike, offsetting a surge in sales of electric appliances and other products in last-minute buying ahead of higher levy, the Cabinet Office said.

Destructive typhoons that hit eastern Japan and the warmer winter also fueled the slowdown in personal spending, such as purchases of winter clothes.

Other economic indicators slumped in the quarter.

Investment in equipment by businesses, for example, shrank by 3.7 percent, a sharp decline from a rise of 0.5 percent in the preceding quarter, while housing investment tumbled 3.7 percent from an increase of 1.2 percent.

New housing starts have also been waning since the tax hike.

Many companies’ business performances are deteriorating, particularly in the manufacturing sector.

In contrast, external demand pushed up GDP by 0.5 percentage point.

While exports declined by 0.1 percent largely from poor auto sales in the U.S. and EU markets, imports were down further, to minus 2.6 percent, underlining weak domestic demand.

As a result, overall external demand was in positive territory.

The nominal GDP rate in the October-December period was minus 1.2 percent, or an annualized minus 4.9 percent.

The economic figures for the October-December period were the focus of attention of government officials and economists because it was the first quarter to take in the effects of the consumption tax rate hike.

The slowdown was not as sharp as the one in the quarter when the consumption tax rate was increased from 5 percent to 8 percent in April 2014. The annualized growth rate in the April-June period of 2014 was minus 7.4 percent.

But the figure for the last quarter of 2019 was worse than the annualized rate of minus 5.5 percent posted in the January-March period of 2011, when the Great East Japan Earthquake, tsunami and Fukushima nuclear disaster hit northeastern Japan.

The government has introduced an array of measures to mitigate the negative impact of the latest consumption tax hike, such as keeping the tax rate for essential food items at 8 percent and introducing a point return system for cashless payments through June.

Yasutoshi Nishimura, minister in charge of economic revitalization, gave a positive outlook for personal consumption in a statement released on Feb. 17.

“The margin of decline in personal consumption is likely to shrink,” he said.

But Japan could find itself in an uphill battle to avoid a recession.

The spread of pneumonia caused by the new coronavirus originating in China since last month has led to a sharp decline in the number of Chinese tourists visiting Japan.

The epidemic has also forced Japanese manufacturers to temporarily suspend operations in major Chinese cites affected by the spread of the virus. Supply chains of components made in China and needed by Japanese companies have been disrupted.

At this stage, it is difficult to gauge the ramifications of the outbreak on Japan’s economy, many experts say.

But some economists are already warning that GDP could shrink again in the January-March quarter of this year, citing an estimate that the impact of the epidemic will further push down GDP by 0.46 percentage point on an annualized basis.

http://www.asahi.com/ajw/articles/13135428

Wary eyes on Europe’s sclerotic growth

Eurozone bears similarities with Japan in the mid-1990s

FRANKFURT: Europe’s sclerotic growth and political dysfunction inspire frequent comparisons with Japan’s lost decade from the mid-1990s. It’s not there yet.

Monday, 8 Apr 2019

The region’s bout of misery this year – Germany’s industrial slump and the struggle to fix its banks, Italy’s inability to reform, the apparent defeat of central bankers seeking to wean the eurozone off stimulus – may seem to make perpetual malaise look inevitable.

The eurozone’s economy is similar in important ways to its Asian counterpart two decades ago: Interest rates at or below zero, the mountains of debt and non-performing loans, populations transitioning from an ageing society to an aged one.

Economists insist there are limits to the comparison, though, while acknowledging that a prolonged period of European stasis, deflation and central bank impotence remains a threat.“I’m very worried about it,” said Adam Posen, president of the Peterson Institute for International Economics, whose areas of expertise include both Japan and Germany. “Europe’s Japanification is a real risk.”

Japan’s so-called lost decade, triggered by the bursting of a bubble in stocks and real estate, pushed the economy into anaemic growth or none at all, with rising unemployment and falling interest rates.Here are some of the ways Europe is heading in that direction – and some of the ways it isn’t.

Dwindling workforce

The eurozone’s working-age population has decreased as people live longer and have fewer children. Overall population growth is set to peak in 2045, according to Eurostat, so the region is well on track to match Japan. There, the population has fallen for the last seven years; one in three people is now age 60 or older.

Ageing populations are often thought to weaken inflation pressures, as people save for retirement and spend less per capita.

Japan’s demographic squeeze has brought more women and old people into work and pushed the overall unemployment rate to 2.3%, near the lowest level in more than two decades. Yet wage growth is tepid, insufficient to spur inflation.

In the eurozone, on the other hand, unemployment is still above its pre-crisis low, yet workers’ pay has started to improve, a signal ECB officials frequently cite as evidence that price growth will pick up.

Monetary policy

The Bank of Japan (BoJ) has battled deflation for much of the last two decades. The European Central Bank (ECB) got a taste of that struggle in 2009 amid a recession and in the aftermath of the eurozone’s sovereign debt crisis. While Japan’s woes began abruptly at the start of the 1990s, the eurozone slid more gently into weak inflation and growth.

The BoJ was the first major central bank to embrace radical monetary policy, yet it’s still locked into negative interest rates and asset purchases, and weighing more easing. The ECB is a long way from raising rates. While it may be unable to adopt more BoJ-like measures if the slowdown worsens, the bank could be locked into its current stance for a while.

“By refusing to ease policy appropriately, the BoJ created a situation where the country had to stay with near-zero interest rates for 20 years,” said Athanasios Orphanides, a former ECB policy maker. “If you look at it like that, 2020 or 2021 might become completely impossible for the ECB to hike.”

Inflation expectations

While inflation in the eurozone has picked up, it’s still below the ECB’s goal of just under 2%, and the core rate is stuck around 1%.

The ECB says the risk that markets anticipate even slower inflation is “very low”. Investors are less sanguine: A gauge based on derivatives prices has plunged to 1.3%, the lowest level since 2016 – when the ECB was buying bonds at a rate of 80 billion euros (US$90bil) a month.

Debt and yields

Japan’s debt-to-GDP ratio is now above 230%, and rising as deficits pile up. European Union rules impose fiscal limits that will limit such a buildup. The eurozone’s ratio is 89% and is forecast to decline slowly, though a weaker economy and the need for fiscal stimulus could hamper progress.

Still, bond yields tell a worrying story: German borrowing costs are converging with those of Japan.

“Japan and the eurozone are not that dissimilar,” said Andrew Bosomworth, a money manager at Pacific Investment Management Co. “We’re just following in their footsteps.”

Migration

The eurozone’s more dynamic labour market, with both external and internal migration, is a key caveat to comparisons with Japan.

Net inflows of migrants peaked in 2015 as a recovering European economy coincided with instability in North Africa and the Middle East. That helped soften declines in the working-age population. More recently, however, Europeans have grown resistant to large-scale immigration. Annual net inflows into the euro area will decrease in the coming decades, according to Eurostat.

Japan, with 126 million people, has only about 1.3 million foreign workers and remains opposed to a formal immigration policy. The government is likely to issue five-year residency permits to as many as 345,000 low-skilled workers over the next five years. That would plug about one-quarter of the predicted labour shortfall. — Bloomberg

https://www.thestar.com.my/business/business-news/2019/04/08/wary-eyes-on-europes-sclerotic-growth/

Merkel says 'still time' to find Brexit solution

There is still time to find a solution to Britain's exit from the EU, German Chancellor Angela Merkel said Tuesday, voicing optimism on a political deal over the tricky "backstop" that has stymied progress.

AFP
news@thelocal.de @thelocalgermany
5 February 2019 09:25 CET+01:00

Merkel speaking to Japanese students at Keio University on Tuesday. Photo: DPA

Speaking to Japanese and German business leaders in Tokyo, Merkel stressed that "on the one hand, time is pressing" and businesses using "just-in-time" delivery processes could not afford lengthy customs procedures.

However, she added: "From a political point of view, there is still time. Two months is not a long time but there is still time, and this should be used by all sides."

SEE ALSO: 'We must do everything to avoid a no-deal Brexit': Merkel

SEE ALSO: Merkel spokesman says reopening Brexit deal 'not on agenda'

Britain is poised to leave the EU at the end of March following a 2016 referendum.

Merkel acknowledged the issue of the unpopular Northern Ireland backstop
provision was "complicating" Brexit talks.

The backstop is intended to ensure there is no return to a hard border with
Ireland, but Brexit supporters fear it will keep Britain tied to EU customs rules.

She said the issue with the backstop was a "problem that is precisely defined and therefore one should be able to find a precisely defined solution".

SEE ALSO: How to swap your German driving license for a British one

"But this solution depends on the question of what the future relationship
between Britain and the EU will be like and what type of trade deal we sign
with each other," added the chancellor.

Throwing the ball into London's court, she stressed: "It will be very important for us to know what exactly the British side sees as its future relationship with the EU."

After meeting Japanese counterpart Shinzo Abe Monday, she urged "creativity" and "goodwill" to find a solution. 

However, she was clear that any solution could only come via the political
declaration attached to the withdrawal agreement -- rather than re-opening
talks on the actual exit deal.

There are concerns in London that any tweaks to the political declaration  will not be legally binding.

Her Monday comments were seen as conciliatory and boosted the pound as British Prime Minister Theresa May prepares to engage in further talks with EU officials to break the Brexit deadlock as the exit date approaches.

A top EU official, however, sounded the alarm bell after talks with British MPs.

Martin Selmayr, the right-hand man of European Commission President Jean-Claude Juncker, said the meeting had confirmed the view that the EU was right to start in December 2017 preparations for a "no-deal" Brexit.

Merkel said relations between Britain and the EU bloc were currently strong and would remain that way. 

"Over the last two years during which we have been dealing with Britain's exit, we have worked more closely together than during several years when Britain was a member of the European Union," she quipped to laughter.

https://www.thelocal.de/20190205/germanys-merkel-says-still-time-to-find-brexit-solution

Also:

Merkel urges EU and UK to find Brexit compromise (21 January 2019)

Germany to UK: We will miss you, please stay  (24 January 2019)

With creativity, we can find Northern Ireland solution, Merkel says (4 February 2019)

Merkel says 'still time' to find Brexit solution (05 February 2019)

Trade deal offers show post-Brexit world is our oyster

t least 35 countries have expressed an interest in a free trade deal with Brexit Britain, including the United States, Japan, and Australia. Brexit is going to be a bonanza. So drop the pessimism, and get behind it

Dover getting busy for Brexit

Joseph Hackett

On 20 July 2017 05:08

Who would want free trade with Brexit Britain? Plenty of countries, as it turns out. Three important countries -- the United States, Australia, and Japan -- reiterated their commitment to a post-Brexit deal with Britain in the space of a few days recently.

Firstly, at the G20 summit in Hamburg earlier this month, US President Donald Trump said he wanted to see a “very powerful deal, great for both countries,” and predicted it could be concluded “very, very quickly”.

Trump had previously proposed a US-UK free trade deal in January, and by reaffirming his support now, he has shown this was not just a passing comment.

Needless to say, a US-UK trade deal would have great promise. The United States is the world’s largest economy, and is already our second-biggest trading partner (after the EU). Dismantling tariffs and other barriers to transatlantic trade would be a significant boost to both the British and American economies.

The prospect of such a major trade deal also strengthens our hand in negotiating a trade deal with the EU, since a deal with America would at least mitigate the effects of a ‘no deal’ Brexit.

Days later, Prime Minister Theresa May hosted her old acquaintance Malcolm Turnbull, the Prime Minister of Australia, at 10 Downing Street. There, Turnbull said he wanted a deal with Brexit Britain “as soon as possible,” saying Australians “move quickly” and “don’t muck around.”

Of course, Australia is not as big an economy as the United States, but it is a resource-rich country and a significant trading partner nonetheless.

Meanwhile, as Remainers hailed the EU agreeing to a trade deal with Japan, Koji Tsuruoka, the Japanese Ambassador to Britain, offered good news for Brexiteers. Tsuruoka said the terms of the deal could also be applied to a UK-Japan deal, since after all, the UK was a driving force in the EU-Japan negotiations.

Tsuruoka said Japan would welcome a free trade agreement with Britain after Brexit, echoing the Japanese Government, which last month announced plans to start informal trade talks with Britain. A free trade deal with Japan, the world’s third-largest economy, would of course be yet another major boost for the British economy.

Remarkably, in over 40 years of managing our trade policy, the EU still has not struck a free trade deal with either the United States or Australia, while the Japan deal could take several years to fully conclude.

The TTIP agreement between the EU and the United States still appears to be years away -- it has already been repeatedly kicked down the road, and complaints from various special interests across the EU make it possible it will never be agreed.

Meanwhile, Turnbull is hoping a trade deal between Australia and the EU will be agreed before Brexit – although given how slow the EU can be to negotiate, this might be a touch optimistic.

When we leave the EU and take back control of our trade policy, it is crucial we, like the Australians, “don’t muck around”. We will already have lost time by complying with the EU’s demand not to enter into any formal negotiations until Brexit talks have concluded. We must seize the day and quickly strike mutually-beneficial free trade deals with the United States, Australia, and Japan.

However, we must not limit our scope to just these three nations. At least 35 countries have expressed an interest in a free trade deal with Brexit Britain. Some of these should be easily achieved, since we already have deals with them as part of the EU -- South Africa, for instance. But many more would be entirely new territory -- markets which we have been unable to properly tap into because of the EU’s lack of ambition.

As we Get Britain Out of the EU and its sclerotic Customs Union, there is every reason to be confident. The United States, Australia, Japan, and many more countries are waiting for us to get around the negotiating table and start making deals with them.

It falls to us to recognise the world is our oyster, act with ambition, and make the most of this Brexit opportunity.

Joseph Hackett is a Research Executive at Get Britain Out

http://www.thecommentator.com/article/6626/trade_deal_offers_show_post_brexit_world_is_our_oyster

Trump's pivot to Asia?

On Thursday, President-elect Trump met Japanese Prime Minister Shinzo Abe in an unexpectedly lengthy meeting. Will campaign rhetoric over Asia (and much else) translate into the reality of government?

Trump and Abe met for 90 minutes on Thursday

Michael Auslin

On 18 November 2016 11:30

Within 48 hours of being elected president of the United States, Donald Trump was in touch with America’s two main allies in Asia.

A phone call from South Korean President Park Geun-hye and an agreement to meet Japanese Prime Minister Shinzo Abe in New York this week began the transition from campaigning to governing, laying the groundwork for policies that will come into effect in January.

Still, this cooperative start to Mr. Trump’s Asia policy doesn’t erase the many problems he will face once inaugurated.

While not unexpected, the president-elect’s willingness to talk with both Ms. Park and Mr. Abe marks a change from his campaign trail rhetoric.

He shocked friends and adversaries alike by openly questioning the value of key regional alliances, threatening to walk away from them if Tokyo and Seoul failed to pay more for the privilege of hosting U.S. forces for their own defense.

Mr. Trump even indicated he might encourage both countries to pursue an independent nuclear capability, thereby ending the decades-long American guarantee of extended deterrence.

Mr. Trump also mused about a potential trade war in Asia, punishing both China and Japan for their supposed currency manipulation and unfair trading practices.

His adamant rejection of the Trans-Pacific Partnership (TPP) showed disregard for years of negotiations and the promise of a new liberal trade architecture in the Asia-Pacific.

As with so much about the President-elect, it remains to be seen how campaign rhetoric translates into the practice of government.

A full-text version of this article may be found in The Wall Street Journal. Michael Auslin is a resident scholar and the director of Japan Studies at the American Enterprise Institute (AEI), where he specializes in Asian regional security and political issues. Before joining AEI, Auslin was an associate professor of history at Yale University. His articles can be read here

http://www.thecommentator.com/article/6443/trump_s_pivot_to_asia

Italy and Europe's demographic death spiral

Germany has just overtaken Japan as having the lowest long-term fertility among the world's biggest powers. But it is Italy which has shown the biggest decline in recent years. There used to be children everywhere. Europe is in a demographic death spiral

Too few babies

Tim Hedges

On 17 September 2016 13:04

There is a little joke I have every year on 1st May. I ask an Italian what he is doing and he says ‘nothing, it is the festa del lavoro, the festival of work’.

The Festival of Work is the one day you can’t get anyone to do any work at all (though for the rest of the year Italians are harder working than their reputation suggests).

So I was a little confused when the government announced a festival of fertility and then the Minister of Health, Beatrice Lorenzin, said it was really a festival of infertility. What was an Italian supposed to do on this day (it is on 22nd September)?

Get to it, is the answer: Italy has a serious fertility problem and the government is hoping it can do something about it.

Italy is not the worst: Germany has just overtaken Japan as having the lowest long-term fertility rate among the major powers.

Levels in Portugal and Greece are even lower, but it is Italy which has shown the biggest absolute decline in recent years. There used to be children everywhere. The simplest explanation is that all animals produce fewer young when there is a lower prospect of food and shelter. Whilst this might not fully explain the problem in Germany, it is certainly the case in Italy. Everyone is worried about the economic future (not without good reason).

Italian women are, on average, having their first baby at nearly 31, the oldest in Europe.

The problem is not confined to Italy, of course. The Europe-wide figure used for fertility, known as total fertility, is 1.6 births per thousand women of childbearing age. The required level for replacement of population in an industrialised country (ie with a relatively low death rate) is 2.1.

In France the Total Fertlity rate is 2.01, Britain 1.81, Germany 1.47, Italy 1.37.

But why should we worry? Isn’t it just part of modern civilisation that women work, and that there is no pressure on them to have children if they don’t want to? Yes, but there are two problems.

The first is that with an ageing population, expensive healthcare and particularly pensions, without a continuing supply of young people there are fewer taxpayers supporting too many welfare recipients. in 1950s Italy there were ten people of working age for each pensioner. Now, there are only three to pay for them.

The second is the solution which dare not speak its name. Immigrants tend to be young, and you won’t have another crisis in 40 years’ time because they tend to produce lots of children. It will not have been far from the front of Angela Merkel’s mind, when she welcomed a million immigrants to Germany, that her country is scarcely economically viable without them. It is just that she couldn’t say that.

Concern about immigration is a leitmotif through European politics, in France, Britain, the Netherlands, Scandinavia. It was the principal feature of the recent regional elections in Germany which Merkel lost so badly, and it is a constant worry in Italy.

Giulio Meotti, Cultural Editor of Il Foglio writes that in one generation Europe will be unrecognisable.

The solution, in part, is for western countries to meet the replacement rate of their populations, and this is where Beatrice Lorenzin’s Fertility Day comes in. Unfortunately the way she has gone about it has been at best clumsy.

Adverts in the press have shown a woman clutching an hourglass and the caption ‘Beauty has no age. Fertility does.’ The website shows water dripping with the words ‘fertility is a common good’.

Some have likened the publicity to Mussolini’s attempt at growing the population. Feminists object, and there are mutterings of ‘what about the men, though?’ which doesn’t go well with the Italian man’s ‘latin lover’ image. The figures, doubtless wrongly, suggest the cold British man has a little more lead in the pencil.

But what else to do, other than this fecundity encomium? The immigrants arrive, and poor, infertile Europe has insufficient reason to turn them away. And we know where they are coming from.

As Giulio Meotti writes ‘the fatal meeting between Europe’s falling birthrate and the rise of Islam has already had significant consequences: Europe has turned into an incubator of terrorism; formed a new poisonous anti-Semitism…. Europeans are now importing young people in large numbers from the Middle East to compensate for their lifestyle choices.’

So perhaps two cheers for Beatrice Lorenzin’s Fertility Festival. At least she is doing something.

Tim Hedges, The Commentator's Italy Correspondent, had a career in corporate finance before moving to Rome where he works as a freelancewriter, novelist, and farmer. You can read more of his articles about Italy here

http://www.thecommentator.com/article/6406/italy_and_europe_s_demographic_death_spiral

Japan's threat to cut investment in the UK would hurt - but is unlikely to come true

Japan’s companies could flee the UK post-Brexit, the country’s government has warned, if Britain is cut off from Europe and the world.

Tim Wallace

6 SEPTEMBER 2016 • 9:56AM

Prime Minister Shinzo Abe said Brexit could lead to Japanese firms 
moving their European headquarters out of the UK 
CREDIT: ETIENNE OLIVEAU/REUTERS

The bold statement does not reflect the public aims of Britain’s leaders nor those of the EU, but Japan’s warning reflects worries over the potential shock to global trade if ties with other nations are severed altogether.

“Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to continental Europe if EU laws cease to be applicable in the UK after its withdrawal,” the government said in a statement at the G20.

The document handed a list of demands to the UK and EU, warning that tariffs on international trade “could suppress the revenues of businesses” while burdensome red tape on trade between the UK and EU would “increase the costs of logistics operations, which would have a significant impact on business operations”, and that retaining and banking passport is vital.

In plain English, it is a threat of less investment and fewer jobs.

Highcharts

Japan is certainly a major investor in the UK. Almost 1,000 UK firms are owned by Japanese investors, with a combined turnover of £72bn last year and gross value added to the economy of £14.5bn, according to the Office for National Statistics.

Foreign direct investment into the UK from Japan totalled a net £2.2bn in 2014, with the UK receiving half of the country’s investment into the EU, seeing Britain as a gateway to Europe.

The Japanese ambassador estimates 10,000 Japanese firms operate in the UK, employing 140,000 people.

The impact of a wholesale shift away from the UK by any large firm could be significant, particularly when companies focus in one particular region.

Nissan and Hitachi are both big Japanese manufacturers with major operations in the North East of England – Nissan’s car plant in Sunderland employs 6,100 staff, and claims that more than 24,000 jobs are created in the wider supply chain supporting the factory.

Nissan's electric car, the Leaf, has been built in Sunderland since 2013

Hitachi’s UK head office is in London and it has depots around the country, as well as manufacturing trains in Newton Aycliffe, County Durham. It has a total of 5,000 UK staff with 600 building trains in the North East for use in the UK and Europe.

The North East has benefitted from the investment and is now the only British region which consistently exports more goods than it imports, but remains sensitive to changes in the economic environment. Despite the Japanese investments the region still has the highest unemployment rate in the country at 7.6pc, making it vulnerable if large firms do pull out or cut back investment.

Nissan established its site in the 1980s and expanded in part because of an attractive tax arrangement designed to promote investment in a relatively deprived area. It has invested the best part of £4bn in the site and is still investing – last year Nissan announced it was spending another £100m on production of its Juke car.

It produces around 500,000 cars per year, the majority of which are exported. As a result it would suffer if a post-Brexit deal failed to secure a free trade arrangement with Europe and led to the imposition of tariffs on cars exported to the EU.

The company has yet to decide on the location of future investments.

“Nissan is working closely with the new UK government to ensure our success and investment in the UK continues. However, this depends on a number of important factors, including the UK’s trade and tariff negotiations with the European Union,” Nissan said.

“We will continue our discussions with the Government, however, future business decisions will be made on a case by case basis, as is our policy. It is in the interest of the businesses and people of the UK that a resolution is reached as soon as possible.”

Hitachi has plants in sites including Ashford and Newton Aycliffe CREDIT: GWR

Economists believe that Nissan in particular led to a wave of manufacturing growth in the area.

“The North East has a very long, proud history of being home to Japanese companies, and it is a significant part of the reason our region is a strong performer in exports,” said Jonathan Walker from the North East Chamber of Commerce.

“[Nissan’s investment] led to other Japanese firms investing in the automotive supply chain. It put the region on the world map and has brought in a huge amount of investment right through to this day.

“Ultimately we want to see businesses here and those who might want to come here continue to enjoy access to global markets and EU markets.”

Meanwhile Japanese bank Nomura has around 2,600 staff in the EU, with 2,000 of those in London.

EU access is important but not vital – it has staff in other parts of the EU who can continue to do business there, and its London office carries out business across the globe. Retaining good access to EU markets would help keep more of those workers in the UK, however, which is particularly important when the bank is already cutting back.

In April the bank said it would cut around 500 jobs, predominantly in London, as the latest bank to chop back in the face of tight regulation and volatile markets.

In other instances, however, Britain’s relationship with the EU will matter very little or even not at all.

Take Fujitsu as an example. It employs around 14,000 people in the UK – one-tenth of total Japanese corporate employment in Britain – yet has next to no direct exposure to Brexit.

http://www.telegraph.co.uk/business/2016/09/05/japans-threat-to-cut-investment-in-the-uk-would-hurt---but-is-un/