Cathay Pacific Airways is including 18 cities in China among the basic destination choices available through its 2010 All Asia Pass.
The 18 Chinese cities include China’s capital city Beijing, spectacular Shanghai, Chengdu – home to the Research Base of Giant Panda Breeding, Guangzhou – home to Cantonese cooking and Dalian and its inviting beaches. These new offerings complement the traditionally popular options of Bali, Bangkok, Cebu, Hanoi, Penang, Phnom Penh and Phuket plus 17 other Asian destinations.
Cathay Pacific’s All Asia Pass is a perennial favorite among everyone from globetrotters extraordinaire to novice adventurers. The All Asia Pass provides roundtrip economy class airfare from Los Angeles, New York JFK, or San Francisco to Hong Kong onboard Skytrax’s 2009 Airline of the Year, Cathay Pacific, plus 21 days of consecutive travel to up to four Asian cities. Prices start at just US$1,599. Taxes, fees, and international departure taxes of up to US$180 must be added to the base price.
Travel from other cities in the United States is available for an additional charge as is an extension of the consecutive travel period up to 90 days. Eight cities in India and the Middle East – including Cathay Pacific’s newest destination, Jeddah – are available as add-on cities at a cost of US$300 each.
The US$1,599 All Asia Pass price applies to the basic two-destination plus Hong Kong packages departing the United States on Mondays, Tuesdays or Wednesdays from Feb. 2 to May 17 or from Aug. 17 to Dec. 1. All travel must be completed by Dec. 7, 2010. Additional terms and conditions may apply.
ABOUT CATHAY PACIFIC AIRWAYS
Headquartered in Hong Kong, Cathay Pacific Airways was named "Airline of the Year 2009" by the Skytrax World Airline Awards. From North America, Cathay Pacific offers daily nonstop service to Hong Kong from LAX, JFK, SFO, Toronto and Vancouver. The airline is a member of the oneworld™ alliance.
Tuesday, December 22, 2009
CHINA: Best 10 Books On China
Commentary By Daniel P. Harris, 12.22.09, 6:00 AM ET
Because I write the China Law Blog and my legal practice focuses on China, I am always being asked to recommend books on China. So the other day, I thought I would pose the proverbial China book question to the members of the China Law Blog Group on LinkedIn. Thirty-eight responses later (and counting), my views on China books have crystallized a bit.
The following is my list of 10 must-read books for people planning their first business trip to China. I believe if you read them in the order below, they will provide the background needed to conquer China's business world there. The order of this list is intended to take the reader from the general to the more specific.
1. Lost on Planet China: The Strange and True Story of One Man's Attempt to Understand the World's Most Mystifying Nation or How He Became Comfortable Eating Live Squid, by J. Maarten Troost (2008, Broadway Books, $7.33).
This book is a fun read, and it quickly brings to light how China is nothing like Kansas. If you still want to go to China after reading this book, you are ready to move on to the next book on the list.
2. Chinese Lessons: Five Classmates and the Story of the New China, by John Pomfret (2006, Henry Holt & Company, $3.79).
This book profiles Chinese students who began their university studies immediately after the Cultural Revolution. Since these people run most of China today, it is important to understand their roots.
3. River Town: Two Years on the Yangtze (2001, HarperCollins, $14.40), or Oracle Bones: A Journey Between China's Past and Present (2006, HarperCollins, $17.79), both by Peter Hessler.
Very well-written, enjoyable books that increase understanding of both China's past and present.
4. Out of Mao's Shadow: The Struggle for the Soul of a New China, by Phillip P. Pan (2008, Simon & Schuster, $18.48).
This book is on the Cultural Revolution and its lingering impact on modern-day China. It is well articulated, and it provides a great feel for those running China today and for those who oppose how it is being run.
5. Postcards from Tomorrow Square: Reports from China, by James Fallows (2009, Vintage Books USA, $10.17).
Think Alexis de Tocqueville's Democracy in America.
6. China Shakes The World: A Titan's Rise and Troubled Future and the Challenge for America, by James Kynge (2006, Houghton Mifflin Harcourt, $20.00).
Explains China's economic miracle clearly and, dare I say it, enjoyably.
7. The China Price: The True Cost of Chinese Competitive Advantage, by Alexandra Harney (2008, The Penguin Press, $17.78).
Learn about China's factories and how they can get their prices shockingly low. But is it worth it?
8. Mr. China: A Memoir, by Tim Clissold (2005, HarperCollins, $15).
A true classic and a fascinating read on what it takes to do business in China. Everyone will assume you have read it, so read it.
9. One Billion Customers: Lessons from the Front Lines of Doing Business in China, by James McGregor (2005, Free Press, $2).
How big business gets it done in China.
10. China CEO: Voices of Experience from 20 International Business Leaders, by Juan Antonio Fernandez and Laurie Underwood (2006, John Wiley & Sons, $14.96); and/or Where East Eats West: The Street-Smarts Guide to Business in China, by Sam Goodman (2008, BookSurge Publishing, $18.99).
China CEO is a technical collection of interviews with CEOs on how to conduct business in China. Where East Eats West is a collection of China business snippets from a street fighting, "been there, done that," entrepreneur.
Because I write the China Law Blog and my legal practice focuses on China, I am always being asked to recommend books on China. So the other day, I thought I would pose the proverbial China book question to the members of the China Law Blog Group on LinkedIn. Thirty-eight responses later (and counting), my views on China books have crystallized a bit.
The following is my list of 10 must-read books for people planning their first business trip to China. I believe if you read them in the order below, they will provide the background needed to conquer China's business world there. The order of this list is intended to take the reader from the general to the more specific.
1. Lost on Planet China: The Strange and True Story of One Man's Attempt to Understand the World's Most Mystifying Nation or How He Became Comfortable Eating Live Squid, by J. Maarten Troost (2008, Broadway Books, $7.33).
This book is a fun read, and it quickly brings to light how China is nothing like Kansas. If you still want to go to China after reading this book, you are ready to move on to the next book on the list.
2. Chinese Lessons: Five Classmates and the Story of the New China, by John Pomfret (2006, Henry Holt & Company, $3.79).
This book profiles Chinese students who began their university studies immediately after the Cultural Revolution. Since these people run most of China today, it is important to understand their roots.
3. River Town: Two Years on the Yangtze (2001, HarperCollins, $14.40), or Oracle Bones: A Journey Between China's Past and Present (2006, HarperCollins, $17.79), both by Peter Hessler.
Very well-written, enjoyable books that increase understanding of both China's past and present.
4. Out of Mao's Shadow: The Struggle for the Soul of a New China, by Phillip P. Pan (2008, Simon & Schuster, $18.48).
This book is on the Cultural Revolution and its lingering impact on modern-day China. It is well articulated, and it provides a great feel for those running China today and for those who oppose how it is being run.
5. Postcards from Tomorrow Square: Reports from China, by James Fallows (2009, Vintage Books USA, $10.17).
Think Alexis de Tocqueville's Democracy in America.
6. China Shakes The World: A Titan's Rise and Troubled Future and the Challenge for America, by James Kynge (2006, Houghton Mifflin Harcourt, $20.00).
Explains China's economic miracle clearly and, dare I say it, enjoyably.
7. The China Price: The True Cost of Chinese Competitive Advantage, by Alexandra Harney (2008, The Penguin Press, $17.78).
Learn about China's factories and how they can get their prices shockingly low. But is it worth it?
8. Mr. China: A Memoir, by Tim Clissold (2005, HarperCollins, $15).
A true classic and a fascinating read on what it takes to do business in China. Everyone will assume you have read it, so read it.
9. One Billion Customers: Lessons from the Front Lines of Doing Business in China, by James McGregor (2005, Free Press, $2).
How big business gets it done in China.
10. China CEO: Voices of Experience from 20 International Business Leaders, by Juan Antonio Fernandez and Laurie Underwood (2006, John Wiley & Sons, $14.96); and/or Where East Eats West: The Street-Smarts Guide to Business in China, by Sam Goodman (2008, BookSurge Publishing, $18.99).
China CEO is a technical collection of interviews with CEOs on how to conduct business in China. Where East Eats West is a collection of China business snippets from a street fighting, "been there, done that," entrepreneur.
SOUTH KOREA: Ambitious South Korean Parents See Tall as All
December 23, 2009
By CHOE SANG-HUN
SEOUL, South Korea — With acupuncture needles trembling from the corners of her mouth like cat’s whiskers, Moon Bo-in, 5, whined with fear. But the doctor, wearing a yellow gown patterned with cartoon characters, poked more needles into her wrists and scalp.
“It’s O.K., dear,” said her mother, Seo Hye-kyong. “It will help make you pretty and tall. It will make you Cinderella.”
A growing conviction that tallness is crucial to success has prompted South Korean parents to try all manner of approaches to increase their children’s height, spawning hundreds of “growth clinics” that offer growth hormone shots, Eastern herbal medicine and special exercises to ensure that young clients will be the ones looking down, not the ones looked down upon.
“In our society, it’s all about looks,” said Ms. Seo, 35. “I’m afraid my daughter is shorter than her peers. I don’t want her to be ridiculed and lose self-confidence because of her height.”
Ms. Seo spends $770 a month on treatments for her daughter and her 4-year-old son at one such clinic, Hamsoa, which has 50 branches across the country, where the protocol includes acupuncture, aromatherapy and a twice-a-day tonic that contains deer antler, ginseng and other medicinal herbs.
“Parents would rather add 10 centimeters to their children’s stature than bequeath them one billion won,” said Dr. Shin Dong-gil, a Hamsoa doctor. “If you think of a child as a tree, what we try to do here is to provide it with the right soil, the right wind, the right sunshine to help it grow. We help kids regain their appetite, sleep well and stay fit so they can grow better.”
Koreans used to value what was perceived as a grittiness on the part of shorter people, reflected in the saying, “A smaller pepper is hotter, ” and in honors to the late South Korean strongman Park Chung-hee and, further afield, Napoleon. In North Korea, the feared and revered leader Kim Jong-il is just 5-foot-5 (or less — he adds inches with elevator shoes and bouffant hairstyle).
But shortness is most definitely out now, in part thanks to the media inundation of Western models of beauty and success. “Nowadays, children scoff if you mention Napoleon and Park Chung-hee,” said Park Ki-won, head of the Seojung growth clinic. “On TV, all young pop idols are tall. Given our society’s strong tendency to fit into the group and follow the trend, being short is a problem. Short kids are ostracized.”
Vitamins billed as growth enhancers have become big sellers, and newspapers and shops near schools advertise shoes with hidden lifts that give the wearer an extra inch or two.
Concerns about the trend are growing too, with some groups warning that growth clinics, while operating within the limits of the law, promise far more than the evidence supports.
Yoon Myoung, a top researcher at Consumers Korea, a civic group that, with the help of scientists, has been investigating the spread of the clinics and their marketing methods said parents should be more skeptical.
“There is no clinical proof or other evidence that these treatments really work,” Ms. Yoon. “They use exaggerated and deceptive ads to lure parents. But Korean families often have only one child and want to do whatever they can for that child. “
Even some of the clinics express concern over the level of expectation parents can have. Dr. Park Seung-man, the head of a growth clinic called Highki, said, “There is a gap between how tall children can grow and how tall their mothers want them to become.”
Last month, the simmering discomfort over the new trend exploded after a college student put the new feeling into words on a television talk show.
“Being tall means being competitive,” said a so-called “campus queen, ”Lee Do-kyong of Hongik University in Seoul . “I think short guys are losers.”
She added: “President Sarkozy of France is constantly mocked for being shorter than first lady Carla Bruni. It seems universal that short men are made fun of.”
Bloggers vilified her and lawmakers denounced the station, KBS-TV, for not editing out her comments. Some viewers filed lawsuits for defamation. Ms. Lee was forced to apologize, and the government’s Communications Standards Commission ordered the station to reprimand the show’s producers for “violating human rights” and “stoking the ‘looks-are-everything’ phenomenon.”
“She simply said what everyone thinks but doesn’t dare say in public,” said Dr. Kim Yang-soo, head of a growth clinic called Kiness. “Here, if you change your height, you can change your fate.”
At Kiness, Kim Se-hyun, a fifth-grader, walked on a treadmill with her torso encased in a harness suspended from an overhead steel bar. The contraption, the clinic maintains, will stretch her spine and let her exercise with less pressure on her legs.
Nearby, sweat rolling off Lee Dong-hyun, 13, as he pedaled a recumbent bicycle while reading a comic book. Behind him, his sister, Chae-won, the shortest girl in her first-grade class, stretched to touch her toes on a blue yoga mat, squealing as an instructor pushed down against her back.
Two years ago, their mother, Yoon Ji-young, had tried something more radical. She gave Dong-hyun growth hormone shots six days a week, at a cost of $850 a month.
She stopped after eight months, fearing side effects. Now she drives her children to Kiness three times a week and monitors their exercise for two hours. .“Both my husband and I are short,” said Ms. Yoon, 31, who is about 5 feet tall. “I don’t want my children to blame us for being short when they grow up.”
Chang Young-hee, 54 and 4-foot-10, was waiting for her son to finish a session at Kiness. She said her children had already experienced height discrimination. Both her daughters are college graduates and have good jobs, but when they reached marrying age, matchmakers regarded their short stature as a defect. (Both eventually did marry.)
“It felt like a blow to the head,” Ms. Chang said. “I learned a lesson. If you fall behind in your studies, you can catch up later. But if you miss the time to grow, you miss it forever.”
So for four years, she has been taking her youngest child, Seo Dong-joon, to Kiness. The boy, now 15, knows his goal.
“If I’m tall, I’ll have an advantage selecting my future wife,” he said, holding an English vocabulary book, which he studies while exercising. “Short guys are teased at school.”
South Koreans have been growing taller anyway, thanks to changes in diet. Over the past 30 years the average height of male high school seniors in South Korea has increased 3.5 inches, to 5-feet-8, according to government data. The average for their female counterparts grew 2 inches, to 5-feet-3.
Doctors at the growth clinics say that most children simply aspire to the new average height, but with more tall teenagers, those who are not as tall seem even shorter . “The gap between tall and short has become more pronounced,” said Dr. Park of Seojung, who recently opened 36 joint-venture growth clinics in China and says the quest to become taller is regionwide.
If so, one country that has been left behind is North Korea. Food shortages there have left children stunted, according to the United Nations and private relief agencies Dr. Park cited the case of a 16-year-old who fled North Korea last July to join his mother, who had arrived in the South three years earlier. The boy was 5 feet tall, almost 4 inches below the South Korean average.
“His height wasn’t unusual for the North,” Dr. Park said. “But when his mother saw him again, she cried because the boy hadn’t grown at all and because she knew the disadvantages he’d face here.”
“My dream is to open growth clinics in North Korea,” Dr. Park said, “so that, once we unify, children from both sides will be able to stand shoulder to shoulder, not with one side a head taller than the other.”
Copyright 2009 The New York Times Company
By CHOE SANG-HUN
SEOUL, South Korea — With acupuncture needles trembling from the corners of her mouth like cat’s whiskers, Moon Bo-in, 5, whined with fear. But the doctor, wearing a yellow gown patterned with cartoon characters, poked more needles into her wrists and scalp.
“It’s O.K., dear,” said her mother, Seo Hye-kyong. “It will help make you pretty and tall. It will make you Cinderella.”
A growing conviction that tallness is crucial to success has prompted South Korean parents to try all manner of approaches to increase their children’s height, spawning hundreds of “growth clinics” that offer growth hormone shots, Eastern herbal medicine and special exercises to ensure that young clients will be the ones looking down, not the ones looked down upon.
“In our society, it’s all about looks,” said Ms. Seo, 35. “I’m afraid my daughter is shorter than her peers. I don’t want her to be ridiculed and lose self-confidence because of her height.”
Ms. Seo spends $770 a month on treatments for her daughter and her 4-year-old son at one such clinic, Hamsoa, which has 50 branches across the country, where the protocol includes acupuncture, aromatherapy and a twice-a-day tonic that contains deer antler, ginseng and other medicinal herbs.
“Parents would rather add 10 centimeters to their children’s stature than bequeath them one billion won,” said Dr. Shin Dong-gil, a Hamsoa doctor. “If you think of a child as a tree, what we try to do here is to provide it with the right soil, the right wind, the right sunshine to help it grow. We help kids regain their appetite, sleep well and stay fit so they can grow better.”
Koreans used to value what was perceived as a grittiness on the part of shorter people, reflected in the saying, “A smaller pepper is hotter, ” and in honors to the late South Korean strongman Park Chung-hee and, further afield, Napoleon. In North Korea, the feared and revered leader Kim Jong-il is just 5-foot-5 (or less — he adds inches with elevator shoes and bouffant hairstyle).
But shortness is most definitely out now, in part thanks to the media inundation of Western models of beauty and success. “Nowadays, children scoff if you mention Napoleon and Park Chung-hee,” said Park Ki-won, head of the Seojung growth clinic. “On TV, all young pop idols are tall. Given our society’s strong tendency to fit into the group and follow the trend, being short is a problem. Short kids are ostracized.”
Vitamins billed as growth enhancers have become big sellers, and newspapers and shops near schools advertise shoes with hidden lifts that give the wearer an extra inch or two.
Concerns about the trend are growing too, with some groups warning that growth clinics, while operating within the limits of the law, promise far more than the evidence supports.
Yoon Myoung, a top researcher at Consumers Korea, a civic group that, with the help of scientists, has been investigating the spread of the clinics and their marketing methods said parents should be more skeptical.
“There is no clinical proof or other evidence that these treatments really work,” Ms. Yoon. “They use exaggerated and deceptive ads to lure parents. But Korean families often have only one child and want to do whatever they can for that child. “
Even some of the clinics express concern over the level of expectation parents can have. Dr. Park Seung-man, the head of a growth clinic called Highki, said, “There is a gap between how tall children can grow and how tall their mothers want them to become.”
Last month, the simmering discomfort over the new trend exploded after a college student put the new feeling into words on a television talk show.
“Being tall means being competitive,” said a so-called “campus queen, ”Lee Do-kyong of Hongik University in Seoul . “I think short guys are losers.”
She added: “President Sarkozy of France is constantly mocked for being shorter than first lady Carla Bruni. It seems universal that short men are made fun of.”
Bloggers vilified her and lawmakers denounced the station, KBS-TV, for not editing out her comments. Some viewers filed lawsuits for defamation. Ms. Lee was forced to apologize, and the government’s Communications Standards Commission ordered the station to reprimand the show’s producers for “violating human rights” and “stoking the ‘looks-are-everything’ phenomenon.”
“She simply said what everyone thinks but doesn’t dare say in public,” said Dr. Kim Yang-soo, head of a growth clinic called Kiness. “Here, if you change your height, you can change your fate.”
At Kiness, Kim Se-hyun, a fifth-grader, walked on a treadmill with her torso encased in a harness suspended from an overhead steel bar. The contraption, the clinic maintains, will stretch her spine and let her exercise with less pressure on her legs.
Nearby, sweat rolling off Lee Dong-hyun, 13, as he pedaled a recumbent bicycle while reading a comic book. Behind him, his sister, Chae-won, the shortest girl in her first-grade class, stretched to touch her toes on a blue yoga mat, squealing as an instructor pushed down against her back.
Two years ago, their mother, Yoon Ji-young, had tried something more radical. She gave Dong-hyun growth hormone shots six days a week, at a cost of $850 a month.
She stopped after eight months, fearing side effects. Now she drives her children to Kiness three times a week and monitors their exercise for two hours. .“Both my husband and I are short,” said Ms. Yoon, 31, who is about 5 feet tall. “I don’t want my children to blame us for being short when they grow up.”
Chang Young-hee, 54 and 4-foot-10, was waiting for her son to finish a session at Kiness. She said her children had already experienced height discrimination. Both her daughters are college graduates and have good jobs, but when they reached marrying age, matchmakers regarded their short stature as a defect. (Both eventually did marry.)
“It felt like a blow to the head,” Ms. Chang said. “I learned a lesson. If you fall behind in your studies, you can catch up later. But if you miss the time to grow, you miss it forever.”
So for four years, she has been taking her youngest child, Seo Dong-joon, to Kiness. The boy, now 15, knows his goal.
“If I’m tall, I’ll have an advantage selecting my future wife,” he said, holding an English vocabulary book, which he studies while exercising. “Short guys are teased at school.”
South Koreans have been growing taller anyway, thanks to changes in diet. Over the past 30 years the average height of male high school seniors in South Korea has increased 3.5 inches, to 5-feet-8, according to government data. The average for their female counterparts grew 2 inches, to 5-feet-3.
Doctors at the growth clinics say that most children simply aspire to the new average height, but with more tall teenagers, those who are not as tall seem even shorter . “The gap between tall and short has become more pronounced,” said Dr. Park of Seojung, who recently opened 36 joint-venture growth clinics in China and says the quest to become taller is regionwide.
If so, one country that has been left behind is North Korea. Food shortages there have left children stunted, according to the United Nations and private relief agencies Dr. Park cited the case of a 16-year-old who fled North Korea last July to join his mother, who had arrived in the South three years earlier. The boy was 5 feet tall, almost 4 inches below the South Korean average.
“His height wasn’t unusual for the North,” Dr. Park said. “But when his mother saw him again, she cried because the boy hadn’t grown at all and because she knew the disadvantages he’d face here.”
“My dream is to open growth clinics in North Korea,” Dr. Park said, “so that, once we unify, children from both sides will be able to stand shoulder to shoulder, not with one side a head taller than the other.”
Copyright 2009 The New York Times Company
Rough Ride for Hatoyama After Landslide Election
December 23, 2009
By HIROKO TABUCHI
TOKYO — A growing deficit, a spat with Washington, a campaign finance investigation and broken promises: Prime Minister Yukio Hatoyama’s first 100 days in office in Japan have been anything but smooth.
Four months after a landslide election swept aside a half-century of virtual one-party rule, Mr. Hatoyama’s agenda for a new Japan is under threat amid policy missteps and the harsh realities facing Japan, which has the world’s second-largest economy. Further complicating his work is a vocal fringe party in his coalition that is at odds with Mr. Hatoyama over government spending plans and debt levels.
“Mr. Hatoyama needs to regain control. He is letting the tail wag the dog,” said Noriko Hama, professor of economics at the Doshisha Graduate School of Business in Kyoto. “Japan’s economy could backslide.”
Mr. Hatoyama’s Democratic Party rode to power on a promise to end pork-barrel spending on public works projects championed by the long-ruling Liberal Democrats and divert the money to tax cuts and handouts that would bolster household incomes.
In recent weeks, a government task force has staged a public review of proposed government spending for the next fiscal year, cutting budgets and demanding that projects that are not urgent be postponed or abolished.
But those cuts came to less than a fourth of the government’s target of $32.8 billion — too little to make a dent in a burgeoning budget packed with stimulus measures to drive spending and bolster employment after the country’s worst recession since World War II.
The lack of progress on budget-cutting has fed jitters over the sustainability of Japan’s public debt, which is approaching twice its gross domestic product. Analysts say the government is likely to go well beyond a limit of $480 billion, it has set for next year.
Finance Minister Hirohisa Fujii reiterated Tuesday that the government would stick to that target. “The ¥44 trillion is a promise Prime Minister Hatoyama made to the public,” he said.
But tight finances forced Mr. Hatoyama to renege this week on a pledge to abolish a tax on gasoline. The government has also backtracked on a promise to eliminate highway tolls, though it vows to keep other parts of its campaign manifesto, like offering cash handouts to families raising children.
“The public understands that finances are tight,” Mr. Hatoyama told reporters Tuesday, after apologizing for going back on his word. “I am sure the public wishes for the money to be put to work to help stimulate the economy.”
Though the public has been largely patient with Mr. Hatoyama, his popularity has started to slide. Approval ratings for his government skidded to 48 percent from a post-election high of 71 percent in a weekend survey by the Asahi Shimbun newspaper.
Mr. Hatoyama’s approval ratings began to drop after he waffled on whether to renegotiate a 2006 deal to relocate a United States air base on the island of Okinawa.
The leader has also become embroiled in a campaign finance scandal involving $4 million in donations that prosecutors say were improperly reported. He told prosecutors this week in a written statement that he had no knowledge of the money, which Japanese newspapers said may have been contributions from his wealthy family disguised as donations.
At the heart of Mr. Hatoyama’s troubles, however, is Japan’s faltering economy. Although the country technically emerged from recession earlier this year, it remains mired in a deflationary cycle of falling prices, profits, wages and spending. A sustained rise in the value of the yen has also hurt the export-dependent economy. The government has pressed Japan’s central bank to flood financial markets with money to to spur the economy, but with limited results.
As the economy has floundered, tax revenue has dried up. Mr. Fujii has said he expected tax receipts for the year ending in March to come to a 25-year low of just over $400 billion, or $100 billion less than an initial estimate. That is also less than the government’s deficit for the current fiscal year — almost $590 billion.
The shortfall is sending the government scrambling to secure resources any way it can to keep from adding to its debt. Keeping the gasoline surcharge will bring in about $27 billion, economists say. The Hatoyama administration also decided Tuesday to raise Japan’s tobacco tax by a few cents per cigarette beginning Oct. 1, Bloomberg News reported.
In the meantime, an uneasy alliance with a fringe party is threatening to send budgets even higher. At the heart of the matter is Shizuka Kamei, banking minister and head of the tiny but strategically important People’s New Party.
Last month, Mr. Kamei fought successfully for a much-larger-than-planned $78 billion supplementary budget for the current fiscal year.
A former Liberal Democrat with strong ties to the construction industry, Mr. Kamei has been vocal in calling for a return to public works, raising fears in some circles that Japan could unleash projects on a country already chock-full of dams and roads.
“Coalition governments are prone to running up budget deficits,” Ryutaro Kono, a Tokyo-based economist at BNP Paribas, warned in a recent note. “There is an incentive for each coalition member to get their pet programs approved to highlight their profile.”
Moreover, Mr. Kamei has led the charge to freeze the privatization of the state-run postal savings bank, which has long been accused of squandering domestic savings. That would undo years of reforms introduced by the Liberal Democrats themselves to resuscitate Japan’s long-stagnant economy.
Mr. Hatoyama’s government is eager to show progress on Japan’s economy as his government faces its first test at the polls in mid-2010, when voters will choose members of the upper house of Parliament.
“Mr. Hatoyama is trying to bring about change, yet he faces resistance from within his own camp,” Professor Hama of Doshisha said. “If Mr. Hatoyama isn’t careful, Japan will find itself back in the dark old days.”
Copyright 2009 The New York Times Company
By HIROKO TABUCHI
TOKYO — A growing deficit, a spat with Washington, a campaign finance investigation and broken promises: Prime Minister Yukio Hatoyama’s first 100 days in office in Japan have been anything but smooth.
Four months after a landslide election swept aside a half-century of virtual one-party rule, Mr. Hatoyama’s agenda for a new Japan is under threat amid policy missteps and the harsh realities facing Japan, which has the world’s second-largest economy. Further complicating his work is a vocal fringe party in his coalition that is at odds with Mr. Hatoyama over government spending plans and debt levels.
“Mr. Hatoyama needs to regain control. He is letting the tail wag the dog,” said Noriko Hama, professor of economics at the Doshisha Graduate School of Business in Kyoto. “Japan’s economy could backslide.”
Mr. Hatoyama’s Democratic Party rode to power on a promise to end pork-barrel spending on public works projects championed by the long-ruling Liberal Democrats and divert the money to tax cuts and handouts that would bolster household incomes.
In recent weeks, a government task force has staged a public review of proposed government spending for the next fiscal year, cutting budgets and demanding that projects that are not urgent be postponed or abolished.
But those cuts came to less than a fourth of the government’s target of $32.8 billion — too little to make a dent in a burgeoning budget packed with stimulus measures to drive spending and bolster employment after the country’s worst recession since World War II.
The lack of progress on budget-cutting has fed jitters over the sustainability of Japan’s public debt, which is approaching twice its gross domestic product. Analysts say the government is likely to go well beyond a limit of $480 billion, it has set for next year.
Finance Minister Hirohisa Fujii reiterated Tuesday that the government would stick to that target. “The ¥44 trillion is a promise Prime Minister Hatoyama made to the public,” he said.
But tight finances forced Mr. Hatoyama to renege this week on a pledge to abolish a tax on gasoline. The government has also backtracked on a promise to eliminate highway tolls, though it vows to keep other parts of its campaign manifesto, like offering cash handouts to families raising children.
“The public understands that finances are tight,” Mr. Hatoyama told reporters Tuesday, after apologizing for going back on his word. “I am sure the public wishes for the money to be put to work to help stimulate the economy.”
Though the public has been largely patient with Mr. Hatoyama, his popularity has started to slide. Approval ratings for his government skidded to 48 percent from a post-election high of 71 percent in a weekend survey by the Asahi Shimbun newspaper.
Mr. Hatoyama’s approval ratings began to drop after he waffled on whether to renegotiate a 2006 deal to relocate a United States air base on the island of Okinawa.
The leader has also become embroiled in a campaign finance scandal involving $4 million in donations that prosecutors say were improperly reported. He told prosecutors this week in a written statement that he had no knowledge of the money, which Japanese newspapers said may have been contributions from his wealthy family disguised as donations.
At the heart of Mr. Hatoyama’s troubles, however, is Japan’s faltering economy. Although the country technically emerged from recession earlier this year, it remains mired in a deflationary cycle of falling prices, profits, wages and spending. A sustained rise in the value of the yen has also hurt the export-dependent economy. The government has pressed Japan’s central bank to flood financial markets with money to to spur the economy, but with limited results.
As the economy has floundered, tax revenue has dried up. Mr. Fujii has said he expected tax receipts for the year ending in March to come to a 25-year low of just over $400 billion, or $100 billion less than an initial estimate. That is also less than the government’s deficit for the current fiscal year — almost $590 billion.
The shortfall is sending the government scrambling to secure resources any way it can to keep from adding to its debt. Keeping the gasoline surcharge will bring in about $27 billion, economists say. The Hatoyama administration also decided Tuesday to raise Japan’s tobacco tax by a few cents per cigarette beginning Oct. 1, Bloomberg News reported.
In the meantime, an uneasy alliance with a fringe party is threatening to send budgets even higher. At the heart of the matter is Shizuka Kamei, banking minister and head of the tiny but strategically important People’s New Party.
Last month, Mr. Kamei fought successfully for a much-larger-than-planned $78 billion supplementary budget for the current fiscal year.
A former Liberal Democrat with strong ties to the construction industry, Mr. Kamei has been vocal in calling for a return to public works, raising fears in some circles that Japan could unleash projects on a country already chock-full of dams and roads.
“Coalition governments are prone to running up budget deficits,” Ryutaro Kono, a Tokyo-based economist at BNP Paribas, warned in a recent note. “There is an incentive for each coalition member to get their pet programs approved to highlight their profile.”
Moreover, Mr. Kamei has led the charge to freeze the privatization of the state-run postal savings bank, which has long been accused of squandering domestic savings. That would undo years of reforms introduced by the Liberal Democrats themselves to resuscitate Japan’s long-stagnant economy.
Mr. Hatoyama’s government is eager to show progress on Japan’s economy as his government faces its first test at the polls in mid-2010, when voters will choose members of the upper house of Parliament.
“Mr. Hatoyama is trying to bring about change, yet he faces resistance from within his own camp,” Professor Hama of Doshisha said. “If Mr. Hatoyama isn’t careful, Japan will find itself back in the dark old days.”
Copyright 2009 The New York Times Company
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