2011年3月21日月曜日

How the World and Japan Should Handle Japan Disaster

Osaka - Monday, March 21, 2011




Following the author’s previous articles The Reality of Japan Disaster – Affecting Nationwide and What Aids Japan Needs and Why from the Natural Disaster, the author would like to share the essence of an online article in which Dr. David Neal of Oklahoma State University (leader of disaster study centre), an U.S. expert who have been studying this topic for over 30 years, was interviewed by a major Japanese journalist and posted as an online article of a leading Japanese business media on March 17, on how the Japan disaster should be handled.



1. How Dr. David Neal sees the Japan disaster as an expert?



Concept of “natech disaster” has been an area of study for the past 15 years. This is “tech(nology” disaster triggered by “na(tural)” disaster.



The Japan earthquake is such a typical example. Huge earthquake triggered massie tsunami that completely destroyed social infrastructure. This was followed by the Fukushima atomic plant issue, making the disaster extremely complicated.



There would more likely be other issues such as breakout of fires (like Kobe earthquake in 1995) and possible contamination of water; however, as of March 17, everyone had been in panic to forget possibility of such issues. In such a situation, it is extremely difficult to develop a (detailed) plan of rescue and reconstruction.



For the time being, there would be repeated “changes” and the most important thing is for everyone to be flexible to adapt to such repeated changes without being too sensational.



2. The most urgent issue (as of March 17) was how to avoid the worst scenario. What is the advice from Dr. Neal?



What needs to be discussed is “science” of handling this issue, and not pros and cons of nuclear plant.



Repeated changes of instructions given to residents to evacuate (first residents within radius of 10 km then 20km, then instructing residents within radius of 20-30 km to stay indoors) was what Dr. Neal was surprised at. He says that that it would have minimized the confusion if the instruction had been more with some allowance, taking into consideration that it would be rather difficult to transport residents by bus etc. to safe area (when transportation infrastructure such as roads is severely damaged with earthquake).



Moreover, the fact that information about the atomic plant became snarled amplified confusion. One reason for this is the difference in viewpoint/opinion among the Japanese government, electricity company (TEPCO) and experts, which was something similar with the Three Mile Island issue in 1979. The background for this is the difference in standpoint (for or against nuclear plant/energy), which is about “politics”. However, what is necessary is “science”, not “politics”.



3. How should the Japanese government handle this?



The government needs to disclose the facts as they became clear, and continue open communication with the Japanese citizen (and with the international community). If the situation should deteriorate, assess and communicate again. Repeat of such cycles.



One incorrect “myth” of disaster is the fact that (the government’s warnings) are considered to immediately cause panic. It is usually believed that when people are instructed to evacuate, they would immediately get into cars to do so, causing traffic jam; however, that is not necessarily quite true.



Usually the first reaction of the people to the government’s warnings is “do nothing”. Most people “wait” until more information is disclosed. Then when it comes to a point, there will be a panic.



4. How should the government communicate the information accurately?



Japanese people are well educated regarding what to do should an earthquake occur; however, it seems that they were not so well educated regarding what to do should emergencies of tsunami and atomic plant occur.



As to nuclear plant issue, the ideal thing was that the government and electricity companies have been sufficiently communicating with residents, and had given guidance on how to evacuate etc. should an issue occur, thus establishing good relationship of trust. Such relationship would be a great help should in crisis. This is a lesson for everyone in the future.



What can be done from now on is someone (background etc. of that person does not matter) whom people help/take initiative in open communication with the general public.



5. How are other issues?



The problem is the fact that it is extremely difficult to understand the big picture of the disaster. In most disasters, within the first 5 days, first phase of the rescue is mostly complete; i.e. people who survived are rescued, overview of the disaster is understood, and dead bodies are collected and identified. However, this disaster covers such a wide region and such process is rather slow (despite much efforts/assistance by various parties from around the globe). More human resources and assistance from Japan and the international community is vital.



After such a phase comes reconstruction phase. Infrastructure reconstruction would no be only of business/commerce. Focus in reconstruction phase include starting from what would be the most effective to reconstruct transportation of necessities/goods; how many people temporarily evacuated to look after where, how and for how long; how and with what pace to reconstruct housing and business/commerce facilities in order to support people’s lives and economic activities, to name a few. This is because people needs to be employed to make a living even if they have housing, and even if they are employed without housing business/commerce activities would not function appropriately.



Psychological support of people in devastated area is also important. People have been noble and helping one another, as reported by worldwide media. However, although it has not appeared on the surface, it is quite possible that after about half a year many such people would suffer from PTSD (posttraumatic stress disorder). Usually not so many people would suffer from PTSD in natural disaster but in this case so many people have seen people including their families and friends taken away by tsunami and dead bodies. Therefore, psychological care of such people is also very important.



6. What is the key message from Dr. Neal?



The key would be to make upmost effort with integrity and flexibility. Japan needs brave actions, exceptional mindset, and resources (from around the globe). Experts like Dr. Neal himself and his team outside Japan would like to give full support.



7. The author’s final thoughts and additional comments



The article presents the guidance for all of us to handle the disaster, together with lessons for the future. Appropriate, open, timely communication of facts and of correct information is vital. Everyone needs to be calm and be flexible.



Besides the issues of radiation/contamination, electricity shortage, reconstruction of total social infrastructure, effect on global and Japanese economy etc., what is becoming a serious issue includes urgency of medical aids (experts, medicines, all other goods/services related to healthcare). Reason unique to this disaster include the fact that body temperature of many people in evacuation centres are very low (some even below 30 Degrees C) from tsunami, the region is still cold this time of the year, in addition to shortages of medicines, all healthcare goods/services, and experts.





References:-

Urgent interview to Dr. Davit Neal, an expert representing the U.S. in handing disasters – “What we can do now and what we need to do in the future from the Japan disaster” (Posted on March 17, in Japanese, interviewed and written by a Japanese journalist, Ms. Noriko Takiguchi)

http://diamond.jp/articles/-/11522





Resources:-

The key in handling the Japan disaster would be to make upmost effort with integrity and flexibility. Japan needs brave actions, exceptional mindset, and resources from around the globe. Experts in this realm from the U.S. like Dr. Neal himself and his team would like to give full support. This presents the guidance for all of us to handle the disaster, together with lessons for the future. Appropriate, open, timely communication of facts and of correct information is vital. Everyone needs to be calm and be flexible.

2011年3月20日日曜日

What Aids Japan Needs and Why from the Natural Disaster

Osaka - Sunday, March 20, 2011




There have been much aids from many countries, regions and people around the globe, including human resources of experts in various realm and donations of goods/materials, to rescue and heal people, to clear rubbles from major roads and Sendai airport to secure transportation channels, and to help people without homes and deliver necessities and energy fuels and to such people and staff/places helping them, to name a few. With such supports, there has been a big progress in the first week since the earthquake and tsunami that struck northern east Japan on March 11.



The author specializes in marketing and is not an expert in this realm; however, following the previous article The Reality of Japan Disaster – Affecting Nationwide which is the overview of the affect of the natural disaster as of March 19, the author would like to share what aids are ongoing and what aids she believes is vital and why to minimize negative effect on global and Japanese economy, from the first hand information she acquired from her online friends throughout Japan and what she and her employer have been doing as well as Japanese and western media and other sources.



1. What aids are ongoing besides the aids that countries and regions kindly offered immediately after the natural disaster?






1) From media



Media have been making upmost efforts to communicate critical information in a timely manner. Japanese media immediately started campaigns to collect relief money.



2) From companies



Companies including those that were severely affected by the disaster immediately started their own aids leveraging their business and products.



Telecommunication companies such as SoftBank, NTT and Google immediately started providing services to help confirm safety of people in devastated area as well as quickly recovering from mobile phones not being connected in Kanto (Tokyo etc.) immediately after the earthquake.



Automobile and consumer electronics companies (especially Japan big 3 of automobile companies; and consumer electronics giants such as Panasonic and Toshiba) most of which are severely affected because many of them have core plants in hardly hit Tohoku area, were quick in their action. They decided to provide financial aids (e.g. donate 300 million yen) plus their products. Automobile companies decided to donate cars and trucks for transportation of necessities. As an example of consumer electronics, Panasonic decided to donate batteries, radios and TVs so that people in evacuation centres to help people in evacuation centres obtain information and lead daily lives. As in the case of Nissan, they also welcomed 100+ people in their global HQ in Yokoyama on March 11 who could not go home when train services became unavailable.



Healthcare/pharmaceutical companies, Japanese and foreign affiliates (e.g. Takeda, Daiichi-Sankyo, Pfizer, Novartis, GSK, MSD), have been providing aids with similar concept; i.e. financial aids (100-300 million yen) via Red Cross and for some companies donation of medicine in addition. Shortage of medicine in devastated area is becoming a serious issue so this has much meaning.



Many companies of other industries have been providing aids in the same manner, and many foreign affiliates have been supportive as well. A few examples of the companies that the author’s friends works for include P&G (Japan office located in Kobe) that decided to provide financial aids and already sent some of their products such as diapers as donation based on their lessons from the Kobe earthquake in 1995, and IBM that provided some IT services for free.



3) From NPO/NGO and other organizations, local communities



Many NPOs and NGOs, worldwide and Japan, also were quick to take actions to provide aids leveraging their strengths.



As in the case of Japan, NPOs, NGOs and local communities immediately started campaigns of collecting relief money and goods. They also started planning how to organize and dispatching volunteers when we get to that phase.



Campaign of collecting relief money was initiated by famous athletes in sport games.



Many local communities (groups of people) in the devastated area voluntarily established unofficial evacuation centres.



Groups of hotels in spa resort area in midlands (away from the devastated area) started to welcome people evacuated from Tohoku area in their rooms.



4) From small and mid sized business owners, individuals



Business owners of small and mid sized business and individuals have also been setting up their own campaign to collect relief money and/or promoting campaigns of collecting relief money, as well as proactively sharing valuable information.



There is also a case in which the concept/objective of their upcoming event due in middle of April is now changed from sharing information and matching business owners to start and drive businesses to charity.



Many Japanese celebrities (business owners, TV stars and singers, journalists, athletes) announced that they will give relief money and/or give revenue from events etc. as charity.



2. What aids are still necessary, from Japan and from around the globe?






1) Goods, medicines



Necessities (food, water, blankets etc.) have started to arrive in the devastated area; however, one-time delivery will not keep people there to survive.



Fuel to keep people warm is also necessary. The temperature in Tohoku in this time of the year is still low. In fact it was as cold as middle of winter within the first week after the disaster and it snowed.



Medicine will started to arrive in the area soon but one-time delivery for this also will not be sufficient. Shortage of medicine and medical experts is becoming a serious issue. A few elders already died in evacuation centre and flue has emerged. Without medical aid it is quite likely that people who were rescued to survive the disaster would die.



Goods (e.g. foods) disappeared from shelves of supermarkets in Kanto area (e.g. Tokyo, Kanagawa/Yokohama, Chiba) and there seems to have been only little improvement but there are sufficient goods for people throughout Japan so as for area other than Tohoku it is the matter of Japanese consumers calming down instead of buying up more than they need for speculative stocking.



2) Transportation to deliver goods and medicines



This includes transportation vehicles and fuels. The key would probably be supply of fuels (gasoline/petrol). Shortage of gasoline has been a serious issue. For this reason, there were many cases in which goods arrived to places near Tohoku but could not be delivered to evacuation centres. Shortage of gasoline also made people in the Tohoku area with cars unable to evacuate smoothly.



3) Rebuilt of life lines and social infrastructure



One reason why goods and fuels could not be delivered to Tohoku smoothly was the fact that social infrastructures including roads, which are inevitable for transportation of goods, were collapsed completely. It is why gasoline companies have been trying to supply gasoline from Japan Sea side.



Now primary route to deliver goods to main area is established but smaller routes to deliver to all the evacuation centres are not yet established.



And of course, the total area (many areas/cities are still flooded, covered with rubbles), needs to be rebuilt from scratch; from roads, buildings and houses, to supply of electricity, water and communication services. It simply reminds many people of rebuilding the country from World War II.



4) Resources, especially financial aid



Much resource would be necessary for ongoing rescuing, delivery of goods and medicines, helping people in evacuation centres survive and start getting back to “normal” lives, and rebuilding life lines and social infrastructure that is expected to take at least 5 years, according to the estimation of a Japanese expert based on the recovery from Kobe earthquake in 1995.



It is likely that extra resource aids become necessary in regions outside Tohoku, too. This is because prefectures and cities including those that have been affected by aftershocks and blackouts decided to welcome people evacuating from Tohoku area.



5) Information and environment to proceed with the total recovery



It is public and private sector, academia and individuals of Japan that are ultimately responsible for the recovery, with further help from other countries and regions, and such help includes “soft” aspects as well as “hard” aspects of goods, medicines, human resources and financial aids.



What the author means by “soft” aspects includes economic environment, appropriate information sharing, and mental assistance.



Key economic environment determinant include stock market price and foreign currency rate. As for the latter, the yen reached as high as 76 yen per USD, the highest in history, which was rather difficult to understand why, after the disaster. Such a high yen would be a huge negative factor for recovery of companies and the country when the recovery of Japan economy has been rather weak compared with the rest of the world. It was highly appreciated that the international community took measures to stop further high yen.



Information sharing includes sharing of correct information by Japanese and western media as well as accurate, trustworthy, timely information from the Japanese government. One reason why Japanese citizens were extremely confused about the Fukushima atomic plant issue at the beginning was the fact that information became snarled.



Moreover, the author simply could not understand nor believe when she was informed from one of her online friend in Canada (initiator to raise 5 million dollars to save Japan) who kindly provided with all the information he had with agility, that western sources have been communicating online that Japan no longer needs assistance from abroad, when the situation here is desperate. She believes there was a kind of misunderstanding and/or miscommunication; however, this kind of things should be avoided. This issue really made her depressed, when many kind messages she received from online friends around the globe made her feel better.



All media and individuals need to be responsible of sharing information in an appropriate manner. We should share only the facts, what we know and feel that is logical and rationale, whose source of information is trustworthy.





In the next article the author hope to briefly introduce what experts around the globe (Japan and overseas) estimate as possible effects of the natural disaster on the economy, global and Japan.

2011年3月19日土曜日

The Reality of Japan Disaster – Affecting Nationwide

Osaka - Saturday, March 19, 2011




It is over one week since Japan experienced twin tragedies, earthquake plus tsunami, followed by Fukushima atomic plant issue, as mentioned in the previous article Reality and Lessons from the Japan Earthquake / Tsunami Tragedy. There have been so many aftershocks in the region and other parts of Japan including Nagano (midland, between Tokyo and Osaka) and Shizuoka (West of Kanagawa/Yokohama, famous for Mt. Fuji) that are as big as magnitude 6 or more.



In this article the author would like to briefly explain the situation as of Saturday, March 19 (Japan time).



1. People dead and without homes in Tohoku (north eastern Japan, the region hit the hardest by the earthquake and tsunami)



This area is still in extremely critical situation.



1) Thousands of lives lost and/or in emergency



More people are reported dead and missing, and the lifeline and social infrastructure remains totally destroyed.



Now people dead topped 7,100 and people missing 18,000 according to Sankei, a major newspaper and convey through Yahoo! Japan news. This is greater than 6,400t of Kobe earthquake in 1995, and it is estimated that it would be in 10ks. 100ks of people are without homes, and although necessities (food, water, batteries, blankets etc.) are on the way to evacuation centres in the devastated area of Tohoku, they are not reaching people in need smoothly.



This is because the lifeline and social infrastructure was completely destroyed, meaning broken links (roads still need to be cleared, etc.), lack of gasoline. Also, the fuel to carry the necessities is insufficient although parties are making upmost effort to provide gasoline from Japan Sea route. Moreover, the fact that the area covers such a wide range of scope, unlike other earthquakes Japan experienced such as of Kobe, Niigata, and Tokyo, make it extremely tough to distribute necessities to all the evacuation centres.



Medicine is also insufficient and a few elders died in evacuation centre. Flu broke out and experts in this realm are extremely anxious that in this situation the flu may well spread quickly from which many people die, after survived from the earthquake and tsunami.



2) An example from Fukushima



The situation is probably the worst in Iwaki City in Fukushima prefecture. This is in addition to the reasons mentioned above, the drivers of trucks carrying the necessities refrain from delivery and return because they are afraid of the radiation, although this city is outside 20km and 30km radius from Fukushima atomic plant. In NHK news in the evening of March 18, messages from people in evacuation centres in Iwaki were introduced. They believe the necessities and aids are on the way but psychological situation of them and the staff as well as necessities are almost the limitation, and they feel they just will die there.



3) Evacuation to other parts of Japan



People in Tohoku and around Tohoku area also started to evacuate voluntarily to other prefectures and prefectures/cities to nearby prefectures including Niigata (located in Japan Sea coast, that suffered from earthquake in 2007, and prepared 43 evacuation centres and welcomed 7,650 people without homes from the earthquake and tsunami by evening on March 17, as reported on March 18 by Yomiuri, a Japanese leading newspaper) and Saitama. Such prefectures/cities as Yokoyama and Osaka (in the western Japan) said that they will prepare to welcome such people as well.



2. Kanto (e.g. Tokyo, Kanagawa/Yokohama, Saitama, Chiba, Shizuoka)



This area is not functioning as usual.



1) “Planned” blackout



Due to electricity shortage (attributing to halting of Fukushima atomic plant as well as the initial effect of power down), there have been “planned” blackout, which is expected to continue until at least the end of April. This caused chaos in commuting by train because many trains became out of service or decrease in number of train in service and therefore companies made their employees to go home after they finally arrived in the office just before noon, and/or work from home. Also, many business people were forced to leave their office all of a sudden before the “planned” blackout. Retailers have been forced to operate in limited hours (evading blackout hours).



During the blackout hours, polices have been replacing traffic lights giving signals but still there have been many accidents. The blackout is especially critical in hospitals because some patients live on equipment operating on electricity and therefore finally blackout in hospital areas was avoided. The blackout was also very difficult to cope with in nursing schools and they prepared for it by making infants where extra clothes etc.



Much preparation is necessary in households, too. As in a case reported in TV news, bags full of ice were made and put into refrigerator. Of course, recharging was done. Mother made her children wear extra clothes. She also prepared to show her children see movies on recharging PCs so that they would not be scared in the darkness.



2) Little food in supermarkets and convenience stores



Soon after the earthquake on March 11, the shelves in supermarkets and convenience stores became empty, probably because people became anxious and started speculative stocking. This is why the author and her colleagues at work in Kansa (western Japan) went around shops near her office on March 14 and 15 to buy necessities to send to employees of her company in the devastated area. Tokyo HQ would usually take such initiative but it was impossible for them to do so.



With extremely limited circulation of foods in addition to blackouts, some schools closed because they simply could not provide children with school lunch. Some others kept open but children had to bring their lunch with them.



3) Biggest aftershock in Shizuoka among hundreds of aftershocks – messed up inside buildings, Shinkansen Bullet Train stopped temporarily



There have been hundreds of aftershocks of magnitude 3 – 6+. Perhaps the biggest one was of magnitude 6+ in Shizuoka on March 16. The shop floor of a retailer reported by a TV crew just after the earthquake was a complete mess; all goods cannot be sold as products anymore. Also, immediately after the aftershock, Shinkansen Bullet Train service stopped around Shizuoka, which took a few hours before the service became available again.





In the next article the author would like to briefly explain what aids Japan needs in this critical situation to minimize negative effect on economy, global and Japan.

2011年3月13日日曜日

Reality and Lessons from the Japan Earthquake / Tsunami Tragedy

Osaka - Sunday, March 13, 2011




On Friday afternoon of March 11, magnitude 8.8 earthquake (being revised just now, 12:57, to 9.0, in the explanation broadcasted in the TV news, because of multiple collapse of fault) struck Northern East Japan, provoking huge tsunami, which is described as “Death Wave” and “Hell on Earth” by the U.S. media headlines. This is the largest in Japan with the energy is 180 times that of the Kobe earthquake in 1995 that made the beautiful Kobe city (in western Japan) into a hell all at once mostly with fire, in which as many as 6000 people or more died.



Investigation, rescue and support will be ongoing for a while. Smaller earthquakes of magnitude 3-5 has been continuing in places or wide a scope including in southern area such as Ibaragi, Chiba, Tokyo and Nagano, which is assumed to continue for a month.



1. How is the situation as of 12:55 of March 13 (Japan time)?






1) North Eastern Japan



According to the TV news the author had been watching wince this morning, more than 2,100 people are dead or missing (the number continuously increases even when the author is watching the news), 10,000 people cannot be contacted, 2.15 million households are still without electricity, hundreds of houses are destroyed and hundreds of people are still being evacuated. The devastated area remains submerged. Transportation is paralyzed.



2) Other parts of Japan (Kanto area such as Tokyo, Chiba, Saitama, Kanagawa and others)



Even Tokyo and prefectures around Tokyo, far away from the earthquake, were severely affected. Tokyo suffered from earthquake of magnitude 5. Some buildings were partially collapsed. Public transportation paralyzed on March 11 and therefore people had to walk from work/ school or stay overnight and Shinkansen bullet train also stopped (thus people could not return from Osaka, western Japan, to Tokyo), but recovered smoothly the next day.



According to the TV news, currently 310,000 households in Kanto area are without electricity, and 1.4 million houses from Hokkaido to Kanto are without water. Also, Tokyo Disneyland and Disney Sea in Chiba will be out of service for a while.



3) Factories of leading Japanese Companies



Many global companies located in Japan with factories in the devastated area or in places nearby are forced to stop domestic production for a while, as reported by media including those of the leading U.S. media on March 12. Such companies include automobiles such as Toyota, Nissan and Honda, and consumer electronics such as Panasonic, Sony and Toshiba.



2. How were the actions by various parties?



People evacuated as instructed by government, and investigation and rescue have been ongoing. Experts have been getting together to share information and discuss.



Over 60 countries and regions around the globe including New Zealand that recently suffered from their own earthquake tragedy offered for help and staff are now arriving one after the other this morning. Some countries such as Germany and the U.K. arrived. 150 people from the U.S to arrive soon (or arrived by now).



The Japanese government decided to increase SDF (Self Defense Force) of Japan from original plan of 50,000 to 100,000.



Telecommunication and IT companies have been quick in starting services to help people to connect, share information and find missing people.



Red Cross and many NPOs were also quick in their actions to help. Some individuals also started to act such as donations.



3. What are the lessons from the tragedy?






1) Importance of Risk Management, BCM/BCP and Crisis Communication



It may well be difficult to have simulation training like the one the author experienced at work in 2007 for pandemic flue BCM (Business Continuity Management) / BCP (Business Continuity Plan) and crisis communication but risk management is necessary so if an emergency similar to this earthquake should occur in the future all parties can take appropriate actions immediately and disaster is minimized.



At least manuals should be ready and actions should be taken based on the manuals.



Crisis communication is especially the meaningful lesson from the Fukushima atomic reactor issue. This issue is something unique and significant to this earthquake tragedy yet the information became snarled and many people were confused. This is because this issue was reported with possibility of the meltdown by worldwide media before the official announcement was made by the Japanese government (speech by the Prime Minister and then explanation by the Chief Cabinet Secretary from 20:30 on March 12, which was after the explosion of the first reactor around 15:30. It turned out to be that it was not of the meltdown, the worst scenario, but it seems to take time to “correct” the information once proliferated worldwide.



It is highly understandable that the government needed time to investigate and find out the truth before making an official announcement but they could have minimized misunderstanding if they acted differently much earlier. The government has been disclosing information in a timely manner since the announcement last night and frequent updates have been made this morning.



2) Importance of integrity in accurate information sharing



There have been chain mails which had spread incorrect, negative information about a gas station company whose source and how it started is completely unknown. The corporate communications of the company immediately made a comment saying so and that the company is very sorry to have made nearby residents worried.



With social media, everyone can be a publisher and share information online to make it “viral” so responsibility of the individuals is vital and the key words would be “integrity” and “calmness”.



The above is an exceptional case and there have been information sharing based on “integrity”, helping to overcome the tragedy. Some examples to name just a few include calling to all people in Japan to save energy and transfer the saved energy to areas that suffer from electricity shortage, sharing information about the services of telecommunication and IT companies mentioned above, sharing useful websites, and asking people for information about the friends who cannot get in contact with.



4. The author’s final thoughts



Whatever the situations might have been until now, we cannot go back to the past. We simply need to move forward. We cannot afford to insult or fight with internal and/or external stakeholders. Every individual, every organization and every country/region is expected to help one other, do what he/she can, and fulfill his/her responsibility.



Of course, we need to learn from the incident so that we can manage should something similar occur in the future.



We are all connected and inter-dependence in the today’s global world. That is how we can all survive, co-exist, co-prosper, and realize sustainability.





Resources:-

The earthquake and tsunami tragedy that struck Northern East Japan presents lessons such as risk management and crisis communication, and what kind of mindset and actions we (individuals, organizations, countries/regions) need to have to overcome tragedies. Such mindset and actions are also requirements for sustainability of all of us in the today’s global world.

2011年3月8日火曜日

Shinkansen Bullet Train Extension Throughout Japan – Meaning, Benefits, Actions

Osaka - Tuesday, March 8, 2011




With completion of the extensions, Shinkansen bullet train is to go through across from north to south Japan on March 12 (excluding Hokkaido and Okinawa islands). This allows us to travel more than 2000km from Aomori in the north end of the mainland to Kagoshima in the south end in of Kyushu in southern Japan by train only in about 8 hours. This project has been ongoing for many years and is expected to boost tourism and economy of regions and towns along the Shinkansen, while competition between railway and aviation industries would become fierce.



1. How has the Shinkansen bullet train been until today?



The Shinkansen service first started between Tokyo and Osaka of 552km in 1964. The service was then extended between Osaka and Hakata (capital of Kyushu in southern Japan) of 644km. More extension followed from Tokyo towards northern Japan and towards Japan Sea Regions of Johetsu and Hokuriku to name a few.



At first there were Kodama, which stops at every station and Hikari, which is express. It used to take 3 hours from Tokyo to Osaka by Hikari but with the availability of Nozomi, super express, since 1993 it now takes only 2-1/2 hours from Tokyo to Osaka.



2. What is the Shinkansen bullet train route extension project?



It is to extend to make the route truly extending across the nation from north to south. The recent northward extension to Aomori of 714km was complete and the service started on March 5, 2011. And the southward extension in Kyushu from Hakata (northern Kyushu) to Kagoshima (southern Kyushu) of 2167km is to complete to start its service on March 12, 2001.



The two extensions are one of the hottest news among the many past extensions. The ticket to ride on the first extended Shinkansen sold out in less than 5 minutes.



More extensions are ongoing and being planned across to cover major cities and regions nationwide, excluding Okinawa.



3. What are the benefits of the extension for travelers?



1) Quicker and easier travelling



It is the fact that people can travel from South to North Japan without changing transport, much quicker than it used to take. For example, the author travelled from Osaka to Kagoshima last year which took total of 4 hours, changing trains. She went from Osaka to Hakata by Shinkansen (Nozomi) which took 1-1/2 hours, changed to JR (Japan Railway) limited express and rode for over 1 hour to a station in Kumamoto, then changed again and rode Shinkansen (Hikari) to Kagoshima for 40 minutes, meaning total of 3-1/2 hours. This is far quicker than before Shinkansen services became available but changing trains multiple times is inconvenient. However, it would only take 3 hours without changing trains after March 12. The similar benefit applies for the northward extension.



2) More options



The fact that by Shinkansen people can travel nationwide on trains means more options for travelers. Due to burden of changing trains and long hours of travelling, most travelers would choose to travel by air if they are to travel from Osaka or Tokyo to Kyushu other than Hakata, or Tohoku other than Sendai. In reality people travelling from Osaka would always choose to travel by air if they need to go to Tohoku.



However, with the Shinkansen extension, it would be realistic for people to travel nationwide by Shinkansen as well as by airplane. Therefore, they would be able to choose the optimum option according to the available time and cost, and preferences.



4. What would the extension mean for related industries?




It means more competition between railway and aviation industries. The two industries have been competing between Tokyo and Osaka and between Osaka and Hakata and therefore there have been two types of travelers, especially in business; one preferring Shinkansen and the other preferring planes.



With the Shinkansen route extension the scope of competition would extend to nationwide, when the third player of cars became another option for holiday travelers and the competition has been increasing. This is because the Japanese government implemented a system in which one time fee of 1000 yen allowed car drivers to use motorway nationwide at weekends and holiday seasons since last year when the fee varied according to the distance and it could be as much as almost 10,000 yen.



5. What has the cities/regions been doing to benefit from the Shinkansen extension?






1) From Tourism



To benefit from the Shinkansen extension, Aomori has renewed the area around the new Shinkansen station, and has been proactively developing, announcing and executing campaigns to attract tourists. In addition, restaurants and shops in and around the station have been creating new products and services



Three prefectures in Kyushu, Fukuoka (in which Hakata belongs), Kumamoto and Kagoshima, have been planning and executing something more dynamic and strategic. Not only do they plan to attract tourists within Japan but also from neighbor Asian countries by collaborating to develop strategic campaign and joint-announcing to tourist agencies in Asian countries such as South Korea and China. This kind of campaign was not feasible before the Shinkansen extension when it was such a burden in terms of time and effort to visit all three prefectures.



2) From population increase and city development



With the Shinkansen extension in Kyushu, it would take just over 1-1/2 hours to travel from Hakata to Kagoshima. This time is quite commutable in Japan and therefore it is quite possible that the extension have a big influence on population shift and city development. In fact, multiple flats including modern, luxury ones are being built near the new Shinkansen stations.

2011年2月27日日曜日

Japan’s Rare Earth Metal Investment – Goodbye to Excessive China Dependence

Osaka - Sunday, February 27, 2011




Nikkei, Japan’s leading newspaper specialized in business and economy, reported on February 25 that Japan (public and private sectors) will invest total of 110 billion yen in rare earth metals in order to shed its excessive dependence on China.



The objective of the investment is to change the supply structure of rare earth metals that is highly dependent on China. This is urgent because China has been drastically limiting rare earth metal export, as mentioned in the previous article Risk Management and Interdependence in Today’s Global Economy.



The initiative will involve 160 businesses from 110 companies and the government will give financial assistance of equipment investment.



1. What is the background and objective of rare earth metal investment?






1) Shed its excessive dependence on China to reduce risk



The investment would decrease risk for Japan. In the latter half of 2010 import of rare earth metals from China once terminated. The Chinese authorities have also reduced allocation of rare earth metal export. Currently 90% of rare earth metals used in Japan are those imported from China and excessive dependence on China is a very high risk for Japan.



2) Decrease outflow of technology



The financial assistance from the government would help globally competitive manufacturing sites remain in Japan, which means decrease in outflow of technology. Chinese government has been promoting investment of Japanese component manufacturers in their country using stable supply of rare earth metals as its reason. It is because high tech components made from rare earth metals are extremely globally competitive. By providing financial assistance to Japanese component manufacturers that utilize rare earth metals, the Japanese government would like to retain such globally competitive manufacturing sites in Japan.



2. What is the overview of the initiative?



The initiative is led by METI (Ministry of Economy, Trade and Industry), which selected 160 businesses from 110 companies that align with the government’s financial assistance policy. It is decided to that total of 33.1 billion yen will be provided. 9 billion yen will be invested to seek additional businesses.



The companies are to start the investment from 2011, aiming to reduce import of rare earth metals from China by approximately 30%. Currently as much as 30,000 ton of rare earth metals from China are used in Japan, and 10,000 ton of them will be reduced in mid/long term.



3. How will rare earth metal import from China reduced?






1) Reduction in use of volume and recycling



An affiliate of Konica Minolta will implement new equipment that efficiently uses cerium oxide as glass abrasive.



Mitsubishi Trading and Dido Steel make alliance with a venture company specialized in this realm to start a new business with the objective of reducing use of dysprosium by 40% in neodymium magnets production that are used in motors of EV cars.



Hitachi Metals plans to recycle refuse of manufacturing process of neodymium magnet.



2) Diversification of supply



Rare earth metals imported from the U.S. and Australia will be used and initiatives to drive such diversification of rare earth metal supply are driven by companies.



Rare earth metals from China are usually processed as alloys before imported to Japan but the U.S. and Australia are still behind in alloy process equipment. For this reason, Mitsui Mining and Smelting and Japan Metals & Chemicals will import rare earth metals in the form of raw stone and then process as alloys in Japan. Leveraging the knowhow, the two companies also plans to implement a new equipment to extract rare earth metals Nickel-metal-hydride batteries collected from around the globe.



Rare metal import from other countries such as Vietnam and Brazil is being studied as well.



3) Examination of new components



Reduction of rare earth metals and use of rare earth metals that are different from previous ones (i.e. those imported from countries other than China) means change in constituent. This means it is quite possible that performance of motors and catalysts change.



For this reason, leading automobiles companies including Toyota, Honda and Nissan will implement equipment to examine use of such new components for EV cars as a part of their development of motors and catalysts of EV cars.



Kureha Corporate will implement testing and evaluation equipment as apart of their load material development of lithium-ion battery.

2011年2月13日日曜日

The First Chinese Accounting Firm Enters Japan

Osaka - Sunday, February 13, 2011




Nikkei, Japan’s leading newspaper specialized in business and economy reported in its evening newspaper on February 12 that a leading Chinese Accounting Firm is to establish its first office in Japan. This is the first Chinese Accounting Firm to start business in Japan.



The firm is to support from accounting perspective Chinese companies starting business in Japan such as establishing affiliates or joint ventures in Japan. It is quite possible that the entry triggers global accounting network originating in China to expand worldwide.



1. What is the background of the first Chinese accounting firm entering Japan?



It is the fact that Chinese companies are extremely proactive in investing in Japan, especially M&A, as mentioned in the previous article Japanese Companies Leverage China / Asia Capital for Survival.



In fact, the number of M&A in Japan (acquisition of Japanese companies) by Chinese and Hong Kong companies has been increasing since 2000 and the pace has speeded up in the last year.



The number of M&A was around 10 in 2000 and has remained below 15 until 2005 but increased to above 20 in 2007. And, in 2010 the number jumped from around 25 in 2009 to over 35 in 2010.



2. Which Chinese accounting firm enters Japan?



It is Shinewing Certified Public Accountants, based in Beijing, China, that enters Japan. They have already completed registration. Japanese accounting professionals operating in China are the certified accountants.



3. What is the plan?



The company plans to officially start their business in Japan this spring, and increase the staff to approximately 10 by the end of this year.



Their core business is to support accounting and audit of affiliates and joint ventures of Chinese companies and to support M&A in Japan of Chinese companies. The company also would like to support Japanese companies investing in China.



The country manager of the Japan office commented that Japanese products are of high quality and globally competitive even though the price might be high. He also commented that Chinese companies are extremely interested in market, technology and know-how of business administration of Japan.



4. Positioning of Shinewing Certified Public Accountants



Revenue of Shinewing Certified Public Accountants is third in China, excluding western accounting firms such as PricewaterhouseCoopers. It has been supporting approximately 300 Japanese companies operating in China. It already has offices in other countries such as Australia and Singapore.



Chinese government is currently strengthening education of accountants. For this reason, they would like to expand accounting network of Chinese accounting firms by initiatives such as encouraging M&A of accounting firms/offices. The first office of in Japan is part of their initiative.