HVK Archives: New it's_Japan's turn to decry invasion of foreign capital
New it's_Japan's turn to decry invasion of foreign capital - The Indian Express
Jathon Sapsford
()
May 20, 1998
Title: New it's Japan's turn to decry invasion of foreign capital
Author: Jathon Sapsford
Publication: The Indian Express
Date: May 20, 1998
There's a foreign invasion underway here, and it's getting really
scary to some. Just look at the headlines. "Foreign Companies Hit
the Beaches, Occupy the Country," declares Kinyu Business, a
Japanese financial journal. "American Capital Runs Roughshod Over
Japan," blares Gendai magazine. Proclaims the usually sober
Bungei Shunju monthly: "Japan Defeated Again."
Sound familiar? Think back about 10 years, when Japanese
investors bought Rockefeller Centre in the heart of New York
City, the prestigious Pebble Beach golf club in California and a
hunk of Hollywood - back when some in the U.S. decried a
"Japanese invasion." Now, the tables are turned: Americans are
suddenly buying more Japanese assets, and a vocal group of
Japanese journalists, politicians and right-wing commentators is
warning of an American assault.
This strident minority sees Yankee carpetbaggers exploiting Japan
at its moment of weakness. "The government has to intervene,"
says Susumu Nishibe, a former Tokyo University professor who is
now a widely read conservative essayist. "If we don't stop it,
American-style capitalism is going to stampede all over us."
Most Japanese take growing foreign investment in stride. Japanese
auto workers and lawmakers aren't yet publicly sledgehammering
U.S.-made Saturn cars or Compaq computers, a fate that befell the
Japanese products in the U.S. Many welcome the new capital,
particularly when it means jobs saved - as when Merrill Lynch &
Co. hired 2,000 employees of the defunct Yamaichi Securities Co.,
or when General Electric Co. spent $575 million to take on the
sales operations of a struggling Japanese insurer.
"Most Japanese would rather work for Americans than be
unemployed," says Hiroshi Kumagai, a former government trade
minister.
Alarmists are certainly right about one thing: U.S. investors
have taken a rather startling plunge into Japan. Investment in
Japanese property by American vulture funds, which specialise in
buying distressed properties, stands at about $20 billion, up
more than fivefold in a year, estimates a recent study by E&Y
Kenneth Leventhal, Ernst & Young LLP's real-estate-consulting
unit. (The Japanese had roughly $77 billion in cumulative U.S.
properties at the peak in 1993, Leventhal says.)
But the Americans aren't exactly buying Japan's Imperial Palace.
The office buildings and apartments they are buying aren't
particularly big-name properties; portfolios include half-
finished golf courses, game arcades and rent-by-the-hour "love
hotels" that the Japanese aren't jumping to purchase.
"It is a service to Japan, argues Minoru Mori, president of Mori
Building Co., a big Tokyo developer.
"It's a conspiracy," counters Soji Suzuki, president of Risk
Management Institute Inc., a financial-consulting firm. "They're
buying Japan on the cheap just to make a quick buck."
Without a doubt, U.S. property investors want to buy low and sell
high. Companies such as Goldman, Sachs & Co., Bankers Trust New
York Corp. and Morgan Stanley, Dean Witter & Co. are buying Tokyo
assets for as little as 10% of peak values, expecting prices to
jump at the slightest economic turnaround, according to people
familiar with the transactions.
"The best money to be made in this market is by those who get in
early," says Jack Rodman of Leventhal, who consults for U.S.
investors in Japan. Goldman Sachs, Morgan Stanley and Bankers
Trust won't comment on their acquisitions. One reason is that U.
S. investors aren't any happier to be objects of foreign-invasion
warnings than the Japanese were in the 1980s, says Mr. Rodman, so
"vulture funds don't like to talk about what they do; theye
worried about a backlash."
Not to mention ultranationalists. One recent afternoon, right-
wing extremists in black sound trucks, blaring martial music,
waving rising-sun flags, and screaming over loudspeakers for
Americans to "stop meddling in Japan," cruised past the U.S.
Embassy to a complex where Lehman Brothers Holdings Inc. and
Goldman Sachs have offices.
While American-invasion alarmists may be a minority, they are
getting vocal at a time when many otherwise-unalarmed Japanese
are growing pretty tired of hearing Washington urge Japan to
stimulate its economy, boost demand and deregulate, deregulate,
deregulate.
"If the Americans do too much, it could be worrisome," says
Shingo Nishimura, a Japanese legislator. "An excessively
emotional reaction to this sort of thing can be very dangerous."
Seiroku Kajiyama, a powerful former member 6f Prime Minister
Ryutaro Hashimoto's cabinet, recently asked reporters,
rhetorically: "Can we really go along with all this
Americanisation?"
Most of all, the Japanese press loves a foreign-peril scare as
much as the press does in, say, the U.S. The chimers-in include
even respected magazines like Aera, a publication similar to
Newsweek of the U.S. It was Newsweek that ran a 1989 cover story,
"Japan Invades Hollywood," that the Japanese charged was racist
and xenophobic. Aera, in 1998, runs this headline: "American
Money Buys Up Japan." The article features a two-page colour
photo of Tokyo at sunset, overshadowed by an ominous red, white
and blue funnel cloud; the text warns that "one day, we may
suddenly find that all our landlords are foreigners."
In these invasion scenarios, Mr. Hashimoto often plays the
appeaser who sold out to get some peace from American haranguing.
Declares the weekly Shukan Post: "Hashimoto's Government Puts
Country on the Block, Turns Japan into American Colony."
Mr. Hashimoto, the story explains, imported Western "Big Bang"
financial reforms. Those reforms are forcing Japan's banks to
unload properties at a national fire sale that has lured all
those Wall Street bankers and vulture funds, it says. "We wanted
to spark reaction," concedes Shinichiro Suga, one of the
journalists behind this exclusive on Japan's new colonial status,
"you know, for the sake of argument."
On the other hand, the press is merely reflecting sentiments that
already run deep among Japanese, says Takeshi Yoshimura, a staff
writer with the conservative newspaper, Sankei Shimbun. "You have
to understand: This is the third time we have lost to the U.S.,"
he says. First, it was to U.S. gunboats that forced Japan open
in 1858; second, to American soldiers in World War II.
"This time," he says, "we've lost the economic war."
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