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China and Japan – a Student’s Perspective

Over the summer, I was given the opportunity to visit both China and Japan, as a first-time visitor in both cases – working in China on an internship at Lenovo, and in Japan as a journalist, tasked to write about ‘intriguing aspects’ of the country.

The relationship of the two countries will clearly be an important one for the future stability of both the region and the wider world, with Japan already a prosperous economy, and with China’s continued economic development catapulting it towards the status of an emerging superpower. Despite substantial trade and engagement, the two countries have once again begun to clash over China’s belief that Japan remains reluctant to acknowledge its crimes during the Second World War, and Japan’s fear that its economic assistance to China is merely being diverted and redeployed in the form of military development and expansionism.

The mistrust between the two countries on the international stage comes at a time when the internal economic conditions and trajectory of each country could not be more different. With China reassuming prominence in the region, its future relations with Japan look set to feature in some of the most important developments in the future of international relations. Although my time in Japan was significantly shorter than the time that I spent in China, it was enough to see some of the differences for myself.

The focus of the government of Japan since 2012 has been the ‘Abenomics’ programme being implemented by the government of Prime Minister Shinzo Abe, which is aimed at ending decades of stagnation after the post-war economic miracle that saw Japan grow to become the world’s second largest economy. Japan’s ‘lost decade’ during the 1990s and the period of continued stagnation that has followed have been characterised by low inflation, falling relative labour productivity and an ageing population.

The government has resolved to continue to implement many of the Abenomics policies until they effectively become the new norm for Japanese politics and society. The policies themselves mainly involve fiscal stimulus and structural reform. To a visitor such as myself, the ageing population and exodus of people from rural areas were readily apparent – the Tokyo metropolitan area has a population of around 38 million people – although there were little other visible signs of the ‘lost decades’ when walking through large cities such as Tokyo or Sapporo.

IMG_2207Harajuku district in Shibuya, Tokyo. 

China, on the other hand, has had to come to terms with its own growth slowdown, although this has involved growth rates falling from above 10% per annum to around 7% and a need to develop the service sector of the economy.

It is this immense level of restlessness and growth that characterised many of my experiences in China.

To live in Shanghai was to become used to this development and the products of China’s transformation. The city was teeming with shopping malls filled with a variety of domestic chains and foreign brands – having previously read of the international tastes of China’s growing consumer class, this should not have been surprising, yet its scale was still impressive. Travelling from Shanghai to Beijing on one of the country’s bright white high-speed trains takes just shy of five hours with the line passing through a number of historic cities – Nanjing, Suzhou, Tianjin and Jinan. The stops all feature a similar new station surrounded by fresh offices, blocks of flats and parkland. Vast spaces within the country are effectively being remade.

Much of this development has been delivered through extensive state activity in the economy. The consumerist culture that has developed among the wealthy and middle class provides a vast emerging market for both international and local brands to take advantage of, with foreign goods satisfying the appetite of many. The mall opposite my apartment offered plenty of this stuff, yet the large number of similar constructions around the city and elsewhere in the country (many of them well below capacity) pointed to the level of expected demand.

IMG_2016 The Bund and Pudong in Shanghai, often used as the symbol of China’s economic growth and development. 

China has begun to lose its comparative advantage in cheap manufacturing to neighbouring countries, as upward wage pressure has added to labour costs. A possible solution to this problem is to tap into China’s rising household wealth and drive growth via increased consumer spending and the development of a more prominent service sector – and indeed the state has sought to encourage this transition.

The level of online consumer presence, largely through smartphone apps, differentiated a lot of transactions that I witnessed in China from those in the UK and Japan; estimates put the amount spent online at around $600 billion in 2015. The number of online payment methods such as WeChat pay and Alipay, which are especially popular amongst younger people and in cities, seemed to dwarf the number of transactions that occurred through conventional cash or even card payment. During a visit to Hangzhou I had the chance to visit the campus of Alipay’s parent company, the Alibaba group. The group also owns Taobao, a service similar to Amazon or Ebay. Following a slick presentation of the group’s services, mainly focusing upon their services linking Chinese producers with consumers inside and outside of China and their cloud service, we were treated to a tour of the modern campus and its facilities. My visit left me with the clear perception that, contrary to the cliché of Chinese firms mimicking what western firms have already done; many Chinese companies were clearly innovating beyond such a position.

My experience in long-time liberal capitalist Japan, however, pointed to a quite different consumer culture, one that despite decades of economic openness had seen the survival of a number of domestic brands and a continued valu elements of traditional and artisan culture, even against the backdrop of international trends and brands. On a single street in Obuse, a town in Nagano Prefecture, as a group we visited a sake factory, a bakery, a teahouse and another sake factory – all adjacent to one another.

IMG_2102A sake factory in Obuse, Nagano prefecture. 

This is not to say that Japan did not itself possess its fair share of chains and large enterprises – I recognised many from my time in China – but comparatively, the number of surviving independent businesses in Japan was unique, especially when compared to my local high street back in the UK, where independent traders have slowly disappeared since the early 2000s. The company culture and the passing down of businesses through the generations has resulted in a large number of businesses existing that are hundreds of years old; two hotels still operating around hot springs in the country can trace their roots back to before 1000AD.

I had first encountered the phenomenon of the long-surviving Japanese business when attending a week of lectures at the University of Hong Kong at the beginning of the summer. It was there that the lecturer introduced the idea that the Japanese business did not simply serve as a means for moneymaking as it so often does in the West, but also for the purpose of delivering the finest service or the best product possible. Businesses are therefore not merely sold off for a quick profit, but rather remain in the hands of families for hundreds of years. This is aided by a certain flexibility: adults are often adopted into the family either legally or through marriage for the purpose of providing an heir to inherit the business.

IMG_2286 Workers producing shaped sweets in Tokyo. 

This notion of perfectionism also relates to the unique weighting that is applied to customer service in Japan. From bowing service staff in the train station to spotless taxis and toilet seats that rise to greet you, the contrast with any other place I had ever visited was marked. The phrase ‘the customer is God’ sums up a lot of the engagement that those working in service industries have with their customers or clients. For the level of service that you were provided with, no tip was required, nor would one be accepted; the level of courtesy shown was not dependent upon anything extra coming from you or a condition of the job – indeed, the level of care seemed entirely genuine.

The atmosphere I experienced in China was more relaxed. Working for a large Chinese company gave me some insights into the working culture that I was not able to obtain during my much shorter stay in Japan. Lunch in my workplace was an hour and a half in order to give plenty of time for rest; staff would regularly go for lunch or dinner with their department and the company organised group holidays once a year for its workers to visit somewhere in China. Such a relaxed and close-knit environment did contrast with the working culture that I had experienced in the UK, although, on more similar ground, long working hours were often the norm for many staff despite some flexibility.

Elsewhere, the continued heavy state involvement in the economy and giant public sector were also apparent. The underground transport systems in all of the cities I visited had a large security presence and bag scanning at every exit – more than enough to help you out, but the generous staffing did leave me wondering whether it was all quite necessary. China’s unemployment rate has remained more or less static at around four per cent for a number of years. This may seem an impressive achievement considering the size of the workforce, but this abundance of labour both allows and necessitates many tasks remaining manual and a bloated public sector. Such a state of affairs however could be at risk if growth rates continue to fall or the government decides to pursue marketisation.

Contrary to the perception that is generated by much of the media coverage of Chinese politic affairs, many people were rather cynical about their ruling figures. Everyone I spoke to at work nevertheless supported the current system and recognised its successes however. When I asked a Chinese colleague about whether they felt that China should democratise, they replied that it would lead to a lack of stability, given the sheer number of people in the country. Brexit was even used as an example of the pitfalls of democracy – in a democratic system, my colleagues observed, the resulting decisions may not be in the long term interests of the country. The argument had quite a conservative edge to it – emphasising the value of stability, in stark contrast to the vision put forward by the CCP during the early years of its rule.

IMG_1765Nanjing’s historic city wall meets an expanding skyline. 

Japan, on the other hand, has had a working democracy since the end of American occupation following World War II, yet the Liberal Democratic Party has since dominated, in what many would describe as a ‘one and a half party’ system. Opposition parties have never held power for extended periods – the most recent period of Democratic Party rule ended following a heavy election defeat and the mishandling of the response to the 2011 Tohoku earthquake and tsunami. Despite this party stability, Japan has had a high turnover of Prime Ministers; before Abe’s most recent term (2012-present), and not including his previous period in office, Japan has had seven Prime Ministers since 2000, largely due to pressures and political maneuverings within the LDP. Abe has enjoyed a decisive majority since 2012, in the face of the complete collapse of the opposition – his success points to a possible change in this high turnover of leaders. However, when myself and other journalists spoke to Japanese young people, they mostly seemed to dislike Abe, feeling frustrated at how he has provoked anger from China and South Korea. As in the UK, the age gap in political attitudes seems more striking than ever. Abe’s parliamentary majorities do not lie: there is solid support in the country for the move to amend the constitution so that Japan can drop its pacifist clause, and thus more strongly wield its influence in an increasingly unsteady region.

My different experiences in both countries on a personal level reflected two deeply distinct societies, political and economic systems. But at a higher level, the historical track of both powers and their opposing systems points to a rivalry which will only increase in prominence over the coming decades.

This piece was a result of an innovative, intellectual, and far-reaching journalistic experiment: 10 foreign student journalists, invited by the Prime Minister’s office and hosted by the HLAB summer school, sought to explore and illuminate Japan over a span of 19 days. Our projects eventually spanned topics ranging from Japanese views of success and failure to the robust Japanese artisan culture. See some of the other pieces here

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