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Political Eyes Shift to the East

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As the American public recovers from its post-election hangover, our attention turns to the recent political changes in the East. Much discussion has centered on China – and rightly so because of its growing political and economic influence. However, it is important not to lose sight of the political developments occurring with its nearby neighbors, Japan and South Korea.

We have seen significant press coverage of the growing tensions between Japan and China on a number of fronts. Both administrations in China and Japan are responding to their voters by promising significant economic reform, though with differing approaches. Japan’s Prime Minister elect, Shinzo Abe, has promised a return to public works projects to kick start the moribund economy – seen by many as a relapse to the pork barrel politics synonymous with the previous administration. In China, newly elected General Secretary Xi Jinping has hinted at the plans for driving reform, delivering economic growth and how the Party will address internal problems such as corruption and undue bureaucracy.

However, the biggest political story for the region could be the election of Park Geun-Hye as not only the first female president of South Korea, but of the entire Confucian civilization – of China, Japan, North and South Korea, Taiwan, Singapore and Vietnam – ­­ which incidentally accounts for a quarter of the world’s population. This is a seminal moment in a region historically dominated by men and places Ms. Park at the front of the line as a role model for hundreds of millions of women throughout East Asia.

While all three leaders ran on platforms that appealed to their respective cultures and constituents, all will be challenged with addressing similar issues – economic growth, growing gaps between classes, regional security and providing opportunities for the next generation. Oddly that sounds remarkably similar to the challenges that face President Obama, Prime Minister Cameron and French President Hollande to name a few leaders in the West.

As the leaders map their course for the future, it will be important to follow how their strategies play out, not only for their respective nations, but also for the region. Specifically, Abe’s hawkish call to militarize in the face of China and Japan’s ongoing island dispute, a move that threatens to further raise tensions between the two nations. And while Ms. Park’s primary focus will be on domestic issues, she will be unable to ignore her neighbor to the north as their young leader Kim Jung Un tries to exert his influence on the region.

Below offers a brief snapshot of the newly appointed administrations and the upcoming policy issues they will likely face.

Jere Sullivan is vice chairman, international Public Affairs. He is based in Washington, D.C.

 

Japan: A Return to the Old Guard By Deborah Hayden and Dan Lochmann

Prime Minister Shinzo Abe – image by openDemocracy

The widespread predictions of voter apathy in the General Election, held on December 16, rang true. Just under 60 percent of registered voters, a record low, turned out to reinstate the traditional governing party of Japan, the Liberal Democratic Party (LDP), after three years in the political wilderness.

Commentators see the wild swing back to the LDP as more a sign of voter frustration with the broken promises and internal bickering of the outgoing Democratic Party of Japan than a vote of strength in the LDP. For Japanese voters, victory for the LDP government represents a return to something they know.

  • Restoring the Economy to Growth. Prime Minister Abe must break the cycle of deflation. Already, the yen has weakened on the election results reflecting market expectations of pressure from the LDP on the Bank of Japan to loosen monetary policy further.
  • Earthquake, Tsunami and Nuclear Disaster Recovery. Post-Fukushima, most of the displaced still live in temporary housing as relief organizations debate the disbursement of monies and local authorities squabble over priorities.
  • Assessing Nuclear as a Viable Energy Source. Currently, the future of nuclear remains unclear: 80 percent of Japanese oppose nuclear energy, yet the LDP is the party known for supporting big business.
  • Balancing Militarization with Diplomacy. Considerable diplomacy will be needed to avoid foreign policy challenges with its neighbors if Abe proceeds with his plan to amend the Japanese post-war constitution, turn the Japanese Self Defense Forces into a modern army and raise defense spending.

Deborah Hayden, a 25-year Japan communications veteran, is Regional Director, Capital Markets and M+A, APAC and is also Acting Director of the Corporate Practice in Japan.

Dan Lochmann is Senior Account Supervisor in the Corporate Practice in Tokyo

 

South Korea: Beyond the Economy By Staff 

President Park Geun-hye – image by Πρωθυπουργός της Ελλάδας

President Park is in a position to leverage the successful economic principles first championed by her father, Park Cung-hee, who in the 1960s and ‘70s led South Korea out of economic despair. Park’s challenge will be to blend her father’s tactics with her own policy imperatives in order to effectively address the more salient and timely issues facing South Korea.

  • Expanding the Economy. An Op-Ed by Sung-Yoon Lee details Park’s planned efforts: rebuilding the middle class, lowering college tuition and expanding child care and other social welfare programs.
  • Putting Pressure on North Korea. Institutional change in the north might seem aspirational, but the first step towards achieving a liberated North Korea is in raising awareness to the current situation. Lee suggests Park increase funding for radio broadcasts and other information transmissions into North Korea, sponsor publications and international conventions on the subject and greatly expand programs that support resettlement of North Koreans in South Korea.
  • Making Human Rights a Priority. To achieve the goal of pressuring North Korea, Park must make human rights violations a priority for her administration. She would be the first South Korean leader to do so.

 

China: Leadership Direction and Reform By Cindy Tian

CPC General Secretary Xi Jinping – image by Erin A. Kirk-Cuomo

Since his inauguration speech, Xi Jinping and members of the Standing Committee have continued to provide insight into the direction the new leadership might take.

During Xi’s first official trip as general secretary, he traveled modestly to Shenzhen, Guangdong province, foregoing large envoys, large crowds, banners or red carpets. Well-received by the public, his actions as a “man of the people” suggest the possible “no-nonsense” style of leadership the Party could introduce.

Additionally, Standing Committee member Li Keqiang offered a further look into the government’s plans to change China’s current economic model from investment-driven to demand-driven. In an article published in People’s Daily, he points to urbanization, tax reform and environmental protection as three specific areas for driving this change.

  • Investment in Urbanization. The CPC hopes to drive new activity in service sectors related to industry, social security, employment and urban planning. With an urbanization rate of just 35 percent, this area offers promising and immediate economic growth.
  • Encouraging Environmentally-Sustainable Development. Increases in R&D for clean technologies, production and manufacturing would help promote other emerging industries (e.g. alternative energy) and support the country’s focus on improving domestic food security.
  • Tax Reform. By instituting “structural reductions” and decreasing “unreasonable burdens” on taxpayers, this would help drive competition making it easier for citizens to spend on domestic products.

Cindy Tian is vice chairman of Edelman APAC and lead of the Edelman Public Affairs practice in China.

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