The economic impact

It looks increasingly plausible, even likely, that coronavirus will tank the global economy. Let’s take a gander at some recent headlines:

From the Fortune article:

Now, as coronavirus continues to spread, the region of China most heavily affected by the outbreak is a hub of global supply chains. A new Dun & Bradstreet study estimates that 163 of the Fortune 1000 have tier 1 suppliers—those they do direct business with—in the area. And 938 have tier 2 suppliers, which feed the first tier.

“That’s where it becomes troubling,” Nelson said. “It’s going to be that [item] where only one plant is qualified to make that and it’s going to interrupt a whole production line.”

Allow me to reference a blog post I wrote on the long-ago date of Feb 4. How many other people were writing about this at the time?

[Your humble author:] Mark Kern’s thinking about the global economic shocks being set in motion by the coronavirus outbreak is likely to prove prophetic, even if the virus itself doesn’t morph into a devastating pandemic:

On a related note, Asia’s gigantic work-from-home experiment continues in Japan:

From Sony to Takeda Pharmaceutical, top Japanese companies across industry lines are telling employees to work from home as the country continues to see a rise in coronavirus cases.

The outbreak has spread to nations across Asia in the weeks since it started in the Chinese city of Wuhan. With 66 cases [Ed: 132 now], Japan is among the countries with the most cases outside China, and the growing number of infections with no traceable links to the original epicenter have alarmed experts and government officials alike.

To keep employees out of large crowds, Sony urged staffers Tuesday to telework and avoid commuting during rush hour. It is suspending its usual 10-day monthly cap for working from home.

John Robb asks a pertinent question:

This thing is going to hit the US like a freight train and we won’t be ready for it.

Preparations have begun but they will almost certainly be inadequate.

CNBC: FBI has ordered $40,000 in hand sanitizer and face masks ‘in case the coronavirus becomes a pandemic in the United States’

Virus ship

An infectious disease expert at Kobe University Hospital talks about what he saw aboard the cruise ship Diamond Princess, from which he was hastily removed by the bureaucrats in charge:

I dealt with a lot of infections, more than 20 years. I was in Africa dealing with the Ebola outbreak. I was in another countries dealing with the cholera outbreak. I was in China in 2003 to deal with SARS, and I saw many febrile patients there. I never had fear of getting infection myself. For Ebola, SARS, cholera, because I know how to protect myself and how to protect others and how the infection control should be. So I could do the adequate infection control, protect myself and protect others. But inside Princess Diamond, I was so scared. I was so scared of getting COVID-19, because there was no way to tell where the virus is. No green zone, no red zone, everywhere could have virus and everybody was not careful about it. There was no single professional infection control person inside the ship and there was nobody in charge of infection prevention as a professional. The bureaucrats were in charge of everything.

Back to work

How much would you pay to not have to be in that crowd?

Speaking of work, Chinese companies are discovering an unexpected benefit of telecommuting:

China’s biggest tech companies have ordered employees to work from home, looking to limit the spread of the new coronavirus as many staffers return from Lunar New Year holiday travel.

Chat giant Tencent Holdings told workers through an internal instant message that they should telecommute during the week of Feb. 3-7. Employees tentatively are scheduled to come back to their offices Feb. 10.

Chinese e-commerce leader Alibaba Group Holding took similar steps, as did search engine provider Baidu.

So are Japanese companies:

E-commerce giant Rakuten says its policy covers workers and their family members who were in the country on business or on holiday from January 16th. They have been told to telecommute for a two-week period.

Rakuten will also allow pregnant women to work from home, regardless if they have been in China, if their bosses give consent.

The company will postpone business trips to and from the country.

Japan’s largest securities firm, Nomura Holdings, is giving its group company employees the choice of telecommuting for two weeks.

And more:

Meanwhile, an internet business provider, GMO Internet Inc., was set to have about 4,000 of its employees in Japan work from home for around two weeks from Monday in the wake of the outbreak, the Nikkei business daily reported Sunday.

That would account for about 90 percent of its domestic workforce. The company will also have its workers in Shanghai, among others, return home, the report said. The company could not be immediately reached for comment.

Quarantine them!

I’m pretty surprised that the Japanese government can’t force individuals to undergo tests, let alone be quarantined, after evacuating them from Wuhan:

Two Japanese citizens evacuated from Wuhan who refused to undergo tests for the new coronavirus have set off a political quandary in Japan over the evacuation mission, with debate centred on how the human rights of a minority should not supersede a potential health menace to society.

The two, who were among 206 nationals on Japan’s first chartered flight out of the epicentre of the 2019-nCOV outbreak which landed at Tokyo’s Haneda Airport on Wednesday, had displayed no symptoms at the airport and were “escorted home” after refusing to undergo further tests. Their actions came as three new cases of the virus were identified from the evacuees.

Prime Minister Shinzo Abe had to step in to calm nerves on Thursday (Jan 30).

“While quarantine officers did their best to persuade them to go for further tests, they refused, and unfortunately there is no legal basis to force them to do so,” Mr Abe told the Diet, as Japan’s Parliament is known. “There are some areas that the government is reluctant to forcefully step in because it encroaches on human rights. But from the second flight we should see how we can properly confirm the health status of all evacuees.” (…)

While the new Wuhan virus has been named a “designated infectious disease” in Japan under a special law, it only allows the authorities to make compulsory the hospitalisation of confirmed patients.

I don’t believe that argument would fly in, say, China.

Our robot future

What you thought you were getting:

What you’re actually getting:

Staffing a Japanese hotel with hundreds of robots didn’t work out quite as well as expected:

It turns out that even robots are having a tough time holding down a job. Japan’s Henn-na “Strange” Hotel has laid off half its 243 robots after they created more problems than they could solve, as first reported by The Wall Street Journal.

One of the layoffs included a doll-shaped assistant in each hotel room called Churi. Siri, Google Assistant, and Alexa can answer questions about local businesses’ opening and closing times, but Churi couldn’t. When hotel guests asked Churi “What time does the theme park open?” it didn’t have a good answer. That was a problem because Churi was supposed to help ameliorate the Strange Hotel’s staff shortage by substituting in for human workers.

Others on the chopping block:

• Two velociraptor robots positioned at check-in were also decommissioned because human workers essentially had to do their jobs for them and photocopy guests’ passports manually.

• Two robot luggage carriers could only reach about 24 of the over 100 rooms in the hotel and failed in rain or snow. They would also often get stuck trying to pass by each other.

Remember this is Japan we’re talking about. If they haven’t figured this out yet, nobody can.

Still, there’s something gratifying about knowing that even robots can get laid off.

Luttwak attack

For your amusement and edification, a link dump of interviews with, and an essay by, the great strategist Edward Luttwak, aka the Machiavelli of Maryland.

First, an interview with Japanese newspaper Sankei Shimbun in four parts: part 1, part 2, part 3, and part 4.

The interview addresses the emerging US-China Cold War and the role Japan will/can play in it. Excerpt:

Maybe China is trying to make allies and friends through One Belt One Road Initiative?

Good luck to them. Good luck to them because that will not help them with Malaysia — Malaysia has caused them a bit of a problem — nor with Indonesia, nor with the Philippines, nor with Japan.

The only country which the Chinese can get is Korea — South Korea. The South Koreans do not like being independent. They were under Chinese rule, then they were under Japanese rule, then they were under American rule, and they don’t like to be independent. They just don’t.

Not everybody likes to be independent. They are too divided themselves. They are more comfortable having somebody else. So, the South Koreans are willing to go under the Chinese rule.

The only reason they don’t do it is because of North Korea. North Korea is the protector of Korean independence, not South Korea.

If the South Koreans were interested in being an independent power, they would not be quarreling with Japan, given the fact that their security depends on Japan 100%. The Americans could do nothing in Korea without Japanese cooperation. So, the fact that they are anti-Japanese means that they are not interested in real foreign policy, they are not interested in being independent, and so they can afford to shout about comfort women and this and that because they are not serious. They are not serious about it.

One of our problems in Korea is that we don’t like North Korean nuclear weapons, but North Korean nuclear weapons guarantee the independence of North Korea and therefore guarantee that Chinese influence cannot extend over the Korean Peninsula. Because if it were up to South Korea, it would [allow Chinese influence].

You know, the South Koreans are not interested in resisting Chinese domination because they are not interested in being independent. The Vietnamese are determined to be independent of China and they are quite confident that they can defeat any Chinese action against them. The South Koreans are not confident, but also they are not interested in defending. They are really not interested in being independent. Otherwise, they wouldn’t behave the way they do.

Right. That might not be not good news for the United States and Japan. The common perception is that, in order to deal with the North Korean nuclear issue, we need some kind of trilateral cooperation including South Korea.

Listen, South Korea faces immediate military dangers from North Korea. For example, their rockets — there are cheap rockets aimed at the Seoul area. Today, there are anti-rocket systems that are not expensive and work very well. South Korea doesn’t buy them. Today, you can buy anti-rocket interceptors.

Like Iron Dome?

Like Iron Dome. You can go and buy it, okay? You can go to Lawson’s and you buy it.

Why don’t they buy it? Because they are not really interested in self-defense.

When they have money, they do something like build a helicopter carrier and call it “Dokdo.” Do they need a helicopter carrier against North Korea? No.

So, in other words, their actions are not the actions of people who either want to defend themselves or to be independent. They don’t.

They just want to transition profitably from being protected by the United States to being protected by China. That is the only thing that they are interested in.

Not everybody wants to be independent. In that sense, the North Koreans are. Because of the politics of the Kim family, they want to be independent.

But South Korea does nothing.

Luttwak’s intriguing conclusion: a divided Korean peninsula with North Korea in possession of nukes may be the best possible scenario for the US.

Next, a review of the book Japan in the American Century in the London Review of Books:

With [Prime Minister Shinzo Abe] that means much more than phrase-making, as Pyle explains in detail: his Japan now accepts real responsibilities, e.g. to repel any attempt by China to act on its fanciful claim to the Senkaku Islands in the East China Sea instead of begging the Americans to do so, e.g. preserving a dialogue with Putin in order to give him a reason for limiting Russia’s support for China (at one point Obama called Abe to try to persuade him to cancel an upcoming meeting, but he didn’t budge). It was not just a question of asserting personal leadership. To change long-settled habits of passivity, Abe established a National Security Council that is not just a gathering place for representatives of the foreign, defence and intelligence bureaucracies, as in most other countries, but an actual policy-making body operated by its own staff, the National Security Secretariat. It has been remarkably effective from the start, formulating Japan’s first post-1945 national security strategy and leading successful negotiations with the Chinese.

Finally, a lengthy interview on China and the logic of strategy in War on the Rocks. Excerpt:

Brad: So you’re the National Security Advisor to the new president, we see what China has done over the time that Xi has been in power, what should the U.S. policy toward China be?

Edward: Well it has to be engagement, but of a new kind. It’s an engagement in which United States simply becomes extremely positive on everything positive, and extremely harsh on anything negative. The famous, or perhaps not-so-famous Micron case in Taiwan, where a Fujian regional authority invests money to build a copy of a Micron plant, a shadow plant. And then they go and hire, offer triple salaries to any Micron employee who comes over to them carrying a laptop or server, or memory stick or whatever it is with Micron information. They get caught by doing all …

That should have led to a drastic response while at the same time trying to be positive when anything can be positive. In other words, one has to have a duality.

Brad: What would a drastic response look like?

Edward: Well a drastic response is very simple. To this day, the People’s Republic of China, with its many accomplishments, cannot produce an integrated circuit that is even remotely competitive. No Chinese intellectual property, integrated circuit or chip … as you know super computers, laptops, phones, all of what we call electronics, anything you’re going to build artificial intelligence on, does rest on integrated circuits or microprocessors or chips or whatever you call them. Those things, in order to be competitive, not just commercially but functional, for things like don’t generate so much heat that they melt down your battery kind of thing, those things, the Chinese are not able to do without using foreign intellectual capital and they can’t manufacture them. They have to be manufactured by Taiwan Semiconductor Corporation or the other people who can work on what’s called 7 nm, which is seven nanometers, which is seven billionths of a meter, right? They can’t do it.

The other B&R

Proposed Long Thanh International Airport in Vietnam

Proposed Long Thanh International Airport in Vietnam

China’s Belt and Road infrastructure drive is still in high gear, but when the pedal hits the metal, Japan appears to be kicking China to the curb in Southeast Asia:

(Bloomberg) — Japan is still winning the Southeast Asia infrastructure race against China, with pending projects worth almost one and a half times its rival, according to the latest data from Fitch Solutions.

Japanese-backed projects in the region’s six biggest economies — Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam — are valued at $367 billion, the figures show. China’s tally is $255 billion. […]

The latest Fitch figures, provided in an emailed response to Bloomberg, count only pending projects — those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February 2018 put Japan’s investment at $230 billion and China’s at $155 billion.

Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth $209 billion — more than half of Japan’s total. That includes a $58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.

Those are pending projects, mind you – they may not actually happen. Like China’s nuclear ambitions along the B&R:

China could build as many as 30 overseas nuclear reactors through its involvement in the “Belt and Road” initiative over the next decade, a senior industry official told a meeting of China’s political advisory body this week.

Wang Shoujun, a standing committee member of the China People’s Political Consultative Conference (CPPCC), told delegates on Wednesday that China needed to take full advantage of the opportunities provided by “Belt and Road” and give more financial and policy support to its nuclear sector.

Stay tuned…

Japan’s Belt and Road

Abe and Modi in 2016

In light of a certain state visit ongoing in Tokyo, I nominate this as the fact of the day (emphasis mine):

While Japan’s “lost decades” and China’s rise have led most observers to overlook Japan’s role in Southeast and South Asia, the country has remained an important source of development assistance, public lending, and private investment across the region, particularly as Japanese companies have extended their supply chains deeper into Asia. At the end of 2016, Japan’s stock of foreign direct investment in major Asian economies (excluding China and Hong Kong) was nearly $260 billion, exceeding China’s $58.3 billion. It is undeniable that Japan has increasingly had to jockey with China for high-profile projects as China’s footprint across Southeast and South Asia has grown. But Japan’s longstanding relationships and its long record of private and public investment across the region make it a worthy competitor with China.

Japan’s Belt and Road, particularly with US backing, could give China’s massive trade and infrastructure strategy a serious run for its money. And Japan is still the world’s third-largest economy…

Paralyzed people in Japan controlling robot waiters with their eyes

A brilliant and inventive use of robots gives disabled people a new form of gainful employment in Japan:

On 26 November, a ribbon cutting ceremony was held in the Nippon Foundation Building in Akasaka, Tokyo for a very special kind of cafe.

Called Dawn ver.β, it’s staffed entirely with robot waiters. While these days that’s hardly something new, these aren’t mere robots.

Developed by Ory, a startup that specializes in robotics for disabled people, the OriHime-D is a 120 cm (4-foot) tall robot that can be operated remotely from a paralyzed person’s home. Even if the operator only has control of their eyes, they can command OriHime-D to move, look around, speak with people, and handle objects.

Very cool. All we need now are remote-controlled robots that stand around all day drinking coffee and reminding their employees that they’re gonna need those TPS reports, mmmkay?

We don’t need no Anglicisms

Takanawa Gateway station

Tokyo denizens push back against an attempt by the operator of the city’s most important railway line to saddle them with an unwanted English word:

A growing number of people say they dislike the name of a new station in Tokyo, set to be called Takanawa Gateway, and are calling for the station’s name to be changed after its recent announcement by railway operator East Japan Railway Co.

The name of the station, set to open on Tokyo’s Yamanote Line in 2020, was chosen from a list of suggested names submitted by and voted on by the public. That list was compiled from about 64,000 entries, more than 13,000 of which were unique.

After the votes were gathered, the entries were published according to the number of votes they had received. Takanawa Gateway, with 36 votes, was ranked 130th on the list. For comparison, Takanawa — the entry that came in first place — received 8,398 votes and Shibaura, in second place, got 4,265 votes, according to JR East. The final decision has led many to question why the company asked for recommendations at all.

A petition created Friday by columnist Mineko Nomachi, titled “Please change the name Takanawa Gateway,” had already garnered more than 12,000 signatures as of Monday afternoon.

“Gateway” is hard for many Japanese to pronounce. It requires five syllables: “ge-e-to-we-i.”

Proving that bureaucracy is stupid, the company is pushing back against the public:

JR East does not intend to rename the train station, according to Yusuke Yamawaki from the firm’s public relations department, adding that they did not decide on the name merely by the number of votes it received.

One detail from the story struck me:

“Not only is the name Takanawa Gateway so long it will lead to clerical mistakes, it doesn’t suit the region or the Yamanote Line, and therefore should be changed,” Nomachi wrote on the petition’s homepage. “People feel that it’s outdated to stick foreign words onto the end of names for no reason.”

If it’s true that the Japanese are losing their enthusiasm for “Engrish,” that would be another micro-indicator that globalization has shifted into reverse gear.

‘Member when a lot of people confidently believed that national identity was weakening due to the free flow of information, people, money and goods across borders? I ‘member that. Good times.

Then again:

With the government set to create a new immigration agency in April, some officials in Tokyo are already envisioning a day where it could be further upgraded into a ministry.

As the country looks to bring in more foreign workers to address a severe labor shortage, the Immigration Bureau will next year become an agency under the Justice Ministry, following the approval of a law by the Diet on Saturday. […]

For now, there is concern about potential understaffing at the new immigration agency. The government expects some 340,000 people will obtain a new visa for lower-skilled workers in the first five years.

Oh, and speaking of trains in Japan, this is cool:

The most isolated railway station in Western Japan, Tsubojiri station, 坪尻駅, on Shikoku Island. Located at the bottom of a deep mountain valley, there is no road to access this, only a steep mountain footpath. Very beautiful. #TrainTwitter

Tsubojiri station Japan