Author: Toshio Aritake

TOKYO, July 4, 2022—The China State Administration for Market Regulations, Beijing’s antitrust regulatory body, is set to introduce new regulations that require foreign manufacturers conduct on the Chinese shores all production procedures for copiers and other office equipment sold in China. Makers that fail to comply the regulations to locally design and manufacture integrated copiers, projectors and other equipment that pack proprietary, sensitive technologies can be denied access to Chinese public sector procurement tenders.
The impending regulations are being drafted by the Chinese state agency as a ‘Information Security Technology Office Equipment Safety Rule,’ according to the Yomiuri daily newspaper July 2 that claimed to have obtained a draft copy. It said all office equipment ‘shall be completed domestically, from designing, research and development, and production,’ and that proposed safety regulations under the rule said the Chinese authority ‘shall inspect whether designing, R&D and production are completed locally in China,’ according to Yomiuri.
The office equipment that would be subject to the rule include integrated copiers with printing, scanning, fax, copying and other functions, the newspaper said. The rule would apply to telecom, transport, finance and other vital social infrastructure entities. The draft also singled out as ‘vital components,’ core regulation microchips, laser scanning devices, condensers, registers, micro-motors, as subject to local China design and production.
The impending rule is similar in nature to Japan’s ‘Japan Industrial Standard (JIS),’ administered by the Ministry of Economy Trade and Industry as a voluntary – yet compulsory as a self-imposed – regulation for most hi-tech products. In its 2021 white paper, the Japan chamber of commerce and industry in China warned that the rule can eventually legislated as a law.
Foreign manufacturers currently are conducting basic designing and R&D in their home countries and assembling sensitive parts as components as final products in China to be sold locally and exported to the United States, Japan and elsewhere. Apple for one is doing that exactly. Japan Rail, which developed the world’s first high-speed rail systems, had failed to take precautions about China’s aggressive technology theft. It invited Chinese engineers to its Japanese labs and also sent Japanese engineers to China for helping build China’s high-speed rail system that China boasts as its proprietary technology.

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TOKYO, July 3, 2022—The two-day-long mobile telecommunications outage of au/KDDI, Japan’s second largest mobile carrier, has not only inconvenienced millions of Japanese phone users but also leveled sharp blows to the future of Japan’s digital society initiatives: autonomous driving, smart houses, remote medical surgery, robotics, and metaverse, among many, on top of e-commerce, movies, gaming and others that are at play now.
The massive glitch hit the telecom carrier’s Tama server storage facility at 1:35 a.m., July 2 and the company said it cannot be fixed until 5:30 p.m., July 3. KDDI’s au and UQ Mobile services for individual customers, as well as its ‘povo’ data service, also for individuals, are being affected, it said. Corporate customers, government offices, also are affected, totaling a many as 62.1 million contracted users. In addition, Rakuten Mobile, the fourth largest carrier, was partially affected, it said.
The Asahi national daily reported following entities were being affected:
–The Japan Meteorological Agency for weather data collection;
–Yamato Holding Co. for package deliveries;
–The Fire and Disaster Management Agency for emergency calls;
–Ogaki Kyoritsu Bank for ATM machines:
–Japan Post Co. for mail and package deliveries; and
–Japan Freight Railway Co. for cargo collection.
In addition, Toyota Motor Corp. said its T-Connect service using au/KDDI telecom signals, Suzuki Motor Co., Subaru Corp., were being affected. Toyota holds 13.74 percent shares of au/KDDI, second largest after Kyocera’s 14.54 percent. Toyota is experimenting autonomous driving, smart housing and other next-gen technologies at its Woven City town near Mt.Fuji.
What the telecom disruption taught Japan is that prolonged telecom outage levels unfathomable risks to next-gen technologies, particularly in the transport and medical areas. It most likely forces a rethinking of the entire future digitalization initiatives that the Japanese government Digital Agency and the private-sector are pursuing.
NTT DoCoMo, the largest carrier, suffered a similar, albeit smaller-scale, telecom down time earlier.

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TOKYO, June 27, 2022—The G7 countries are to announce a ban on imports of Russian gold Tuesday, June 28, 2022, according to news reports June 25-26. It illustrates significantly more than that the economic and financial sanctions that the United States, European Union and their allies have leveled against Russia’s unprovoked invasion of Ukraine has run its course: The G7’s utter ineptitude for halting Vladimir Putin’s resurgence in its quest for full control of Ukraine as common sense tells a gold embargo is totally unrealistic and threatens western industry that had been desperate for securing yellow metal supply even before the war began in late February, 2022.
Gold is a universal store of value, ultimate safe haven assets exchanged equitably for goods and services by all countries regardless of different societal, political, and religious persuasion, the assets that have unrivaled liquidity recognized as a supreme cosmopolitan legal tender in every corner of the world.
Gold stores enormous value in bars, ingots and coins, jewelry that are bought and sold by anybody and cross-border. The west is struggling to halt oceangoing tankers carrying Russia oil, in vain, as the old is on Russian tankers are reloaded in international waters to third country tankers, e.g., of China and India. Moving gold bars that store the same value as a 100,000 tanker is almost like delivering a suitcase of metal from one ship to another, so Russia won’t feel any pain of the embargo at all.
And the west’s industry, which has been impacted by the gold price’s jump to $2,000 from $300 a couple of decades ago, now has to do without Russian supply, on top of spiraling prices and tightening supply of other precious and rare metals that are increasingly coming under China’s whims.
At 330.9 metric tons, Russia was the world’s second largest gold producer in 2021 after China’s 332.0 tons, according to World Gold Council statistics. Australia was third at 315.1 tons; Canada, fourth, at 192.8 tons, and the United States, fifth, at 186.8 tons. Other big producers, including Ghana, Peru, Mexico, and Indonesia are steadily swallowed into China’s geopolitical sphere.
The west’s gold import ban is anything but a folly.

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TOKYO, June 24, 2022—The city of Amagasaki, a western Japanese municipality of 460,000 citizens, June 23 announced that the entire population’s personal data, including the national ID number called the My Number, can be compromised in the loss of a data-stored USB memory card carried in violation of regulations by a data company sub-sub-contractor employee who had been intoxicated and had his bag that stored the USB stolen.
The sub-sub-contractor was commissioned data management work from the sub-contractor that was subcontracted by BIPROGY, formerly Nippon Unisys, a publicly traded Tokyo-based company. In a statement, BOPROGY said the data was not compromised because the USB memory was protected with a password and that the data was encrypted. The city said in a press release that the employee on June 21 found that he had realized after returning home that his bag that stored the USB memory was missing and having been unable to locate the bag and USB memory, he reported the loss to police on June 22 as well as to the city office the same day afternoon.
The city said the USB memory stored the city residential codes assigned to all 460,517 citizens, names, postal numbers, physical addresses, dates of birth, gender, dates when domicile was registered. It also stored municipal tax data of 360,573 tax-paying citizens, as well as special financial aid for 74,767 tax-exempt households in fiscal 2021 and 7,949 households in fiscal 2022, plus bank account information of 16,765 citizens that receive national welfare benefits and 69,261 citizens that receive child care subsidies.
At a June 23 news conference, a city official fanned citizens’ anger at the data loss by disclosing the number of digits of the password as it raises the possibility of password breach.
In a nutshell, vital personal information, particularly the My Number that links citizens’ bank, security and other financial accounts, as well as healthcare, criminal and other data is endangered for possible compromising and misuse. While unprecedented that all citizens’ data were lost, Amagasaki is not alone that commissions personal data management and storage to security businesses. Most other Japanese public entities, both of national and local, commission data processing and IT security work to private-sector parties.
In May, two officials of Kamaishi City in northern Japan moved personal data of all 30,000 citizens by email and physically out of the city office presumably for personal use allegedly between the two, the city announced May 26, probably eventually for selling to third parties. The two officials were indicted for violation of the Residence Registry Act and discharged from the city.

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TOKYO, June 23, 2022—U.S. President Joe Biden June 22 announced he’s asking Congress a federal gasoline tax holiday to ease consumers suffering soaring prices, but Japan’s Fumio Kishida may demur in emulating Biden’s footsteps as the Japanese prime minister is confronted by the stubborn hushed opposition of the Ministry of Finance bureaucracy as unprecedented.
On June 22, a House of Councilors (upper house) election was called for voting on Sunday, July 10. Voter attention has swung sharply from the Ukraine-Russia war, COVID-19 and Kishida’s macroeconomic policy, to spiraling goods prices as gasoline prices threaten to breach 200 yen per liter even with government subsidies to refiners that started this spring.
In a political debate session hosted by the Japan National Press Club this week and ensuing occasions, Kishida concentrated his discussions on doubling Japan’s defense spending to 2 percent of GDP in relation to the Ukraine war, COVID-19 vaccination promotions and relaxing foreign tourists to Japan with limited quarantine regulations, and his ‘New Economic Policy.’ He spared little time in policies to restrain rising goods prices that are gripping consumers and producers alike, as well as tightening energy and electricity supply except to say that the government would introduce a credit point system for families that conserve electricity. Opposition party leaders demanded that the government suspend the 10-percent sales tax and the gasoline tax of 53.8 yen per liter.
The gasoline tax was introduced as a 5-year sunset tax in 1974 and though it was debated in parliament, the tax has remained a permanent general revenue tax to this day. Also, the motor vehicle tonnage tax, which is collected on the basis of vehicle weight, was introduced in 1971 as a means of financing local highway construction and is collected on top of the motor vehicle tax, resulting in double taxation in probably violation of Japanese tax law. There has been no parliamentary debate to review those taxes. After the 2011 earthquake tsunami natural disaster, the government enforced a provisional 2.1 percent ‘Reconstruction Financing Tax’ on on top of the income tax in 2013. The tax is scheduled for repeal in 3037 but whether it actually happens is unknown.
Numerous other taxes in Japan that had been introduced as sunset taxes have become permanent and their original target expenditures have disappeared. It is because of the Ministry of Finance’s historical policy of never repeal a tax, whether it is permanent or provision, once introduced. ‘A state means tax revenue,’ Makoto Utsumi, a former MoF vice minister for international finance, had told me by drumming his chest. ‘It’s the power of the state.’
Uncompromising tax collection authority is the MoF bureaucracy’s policy and source of authority over taxpayers, including lawmakers. Court cases in which the tax authority had lost are few and most of them concerned areas that the inward-thinking bureaucrats are unfamiliar, such as transfer-pricing taxation on profit allocations between Japan and other countries.

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TOKYO, June 14, 2022—In January 2022, a group of some 30 top Japanese businesses, including a governmental bank, launched a lobby in hopes for legalizing sports betting of all conceivable professional athletic events, from basketball to baseball, by using digital monies such as NFT and sports tokens. What looks like a private-sector initiative came few years after the government of former prime minister Shinzo Abe’s failed attempt to open several government-sponsored casinos across Japan. (http://toshioaritake.com/2020/05/14/adelson-dumps-japan-casino-project-a-big-blow-to-japanese-prime-minister/)
Though claiming as autonomous and independent, the bureaucracy working with and on behalf of politicians seems to be imbedded in the group’s organization, led by the membership of the Development Bank of Japan, Inc., a former governmental bank which was privatized several years ago. The bank had been a virtual Ministry of Finance entity. The group’s members are made up of telecom, internet, and financial services including Boston Consulting Group, KDDI telecom, Mizuho Bank. Its composition is very diverse and suggests that without a powerful leadership entity, it could not have been assembled, the reason why the Prospect speculates strong government influence.
It’s named the Council of Sports Ecosystem Promotion. (https://www.c-sep.jp) Nishimura Asahi Law Office’s Hironori Itagaki serves as head of the organization, and Fleishman Hillard Japan, which worked for making Yuriko Koike as Tokyo governor, is named an active working member,
In 2020, former PM Abe was forced to give up opening state-sponsored casinos in Japan for a bout of bribery scandals sweeping his Liberal Democratic Party. The casino project had been incubated by the Ministry of Economy Trade and Industry, which is Abe’s pivotal administration base.
This time, sources said, METI once again arranged to legalize gambling in Japan as sports betting is estimated to generate $40-50 billion in tax revenue.
In early June, the trade minister, Hagiuda, categorically ruled out that legalizing sports betting will materialize but he did not deny that METI had drafted the scheme. Bureaucrats are concerned that as Japan’s economy contracts further, their jobs will diminish, so they feel the heat of creating new business.

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Namie, Fukushima, Japan, June 12—In the long and wide areas struck by the March 2011 earthquake, tsunami and Fukushima nuclear meltdown triple whammy stretching hundreds of kilos of northern Japan, many spectacular jaw-dropping scenes are unfolding making visitors wander how to pay for them and their upkeeps. An earthquake and reconstruction museum, a business center, and a hydrogen energy production pilot program, not to count dozens of smaller facilities that purportedly are to accommodate local folks affected by the triple disaster 11 years ago, many of them aging and living in far remote areas and exhausted about returning to their homes.
From the rooftop of the Futaba Business Incubation and Community Center (https://www.f-bicc.jp）, a $30 million glass-walled 5-story structure, the visitor can watch the bright Pacific Ocean across the now-ubiquitous tsunami break walls having been built over the past 11 years along the coastline stretching more than 600 kilos from Chiba, adjacent to Tokyo to the northern province of Aomori, as a key protection against future tsnami. Namie is only several kilometers north of Fukushima Dai-Ichi nuclear power station that partially melted down in March 2011.
The spiffy facility was completed in 2021, It is a business complex housing a food court, a gift shop, a restaurant, offices, rental working booths, and conference rooms. I visited the building after 11:00 a.m. on a weekday, walking through most of the facilities before walking up to the roof and observation deck. There were ver few visitors, even few on that overcast day. The food court, restaurant, the shop and the roof top were totally empty. At lunch time, some people cascaded out of the offices of the companies that I identified that all were related to disaster reconstruction and little else, such as Fukushima Create that gauges Fukushima nuclear power reactor radiation levels and Maeda Construction that built the building and other reconstruction facilities.The workers went into the food court and restaurant but the places were were looking still empty.
Right next to the Center, another glass-walled large building stood proudly like a movie star in a shiny clothing on the moon surface, the Great East Japan Earthquake and Nuclear Disaster Memorial Museum (https://www.fipo.or.jp/lore/).　It opened in September 2020 at a cost of $48 million. The museum exhibits earthquake and nuclear meltdown relics, photos and panels. Four uses carrying students from local schools were visiting the museum that day. The number of visitors to the museum topped 100,000 in late March 2022 since its opening, half a year ahead of its projection, according to the museum’s website.
On the high ground of Namie about 15 kilos from the two buildings, the Ministry of Economy Trade and Industry’s arm, the New Energy and Industrial Technology Development Organization (NEDO), Toyota Motor, Toshiba Energy Systems, Tohoku Electric Power and Iwatani are producing hydrogen with solar power at the Fukushima Hydrogen Energy Research Field (FH2R) (https://www.nedo.go.jp/english/news/AA5en_100422.html) since 2020. The stakeholders claim the $200 million FH2R as the world’s largest hydrogen producer. Current output was not available.
On June 11, 2022, Toyota and Aeon, a major supermarket chain, began selling groceries carried on a Toyota experimental EV truck that uses hydrogen produced at FH2R, according to local media reports. Fukushima’s government is promoting several other hydrogen production projects in the Name area. Surrounding fields of the three facilities, which used to be farmlands, are now covered with solar panels and some wind power mills.
NEDO also is conducting R&D on robotics at Minami Soma, north of Namie (https://www.fipo.or.jp/robot/en).
Namie’s population before the 2011 disaster was 21,500. The most recent count of residents was 1,600, while a total of 15,800 were registered as residents but living outside the town, according to the town’s statistics. There are few grocery and other shops for daily necessities, the reason why Toyota EV truck retailing services are appreciated in a municipality where more than 75 percent are 60 years and older and only 7 percent are younger than 50.
Looking at those facilities makes observers speculate that the Japanese government might be trying to pacify the nuclear meltdown-struck Fukushima people with the carrots of the community center and museum, at the same time experimenting hydrogen power with massive solar panel farms that should have drawn strong opposition from farmers had it not been for the disaster, as well as robotics that critics say are partially developed for military purposes.

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TOKYO, June 3, 2022—Over several past months, many Japanese government officials were arrested, reprimanded and/or punished for committing crimes. There’s nothing new about that. But when a crime involves tax administrators who are solely responsible for collecting tax in supposedly equitable regime, it should be handled differently for, as Japanese treasury bureaucrats would declare, ‘tax is the foundation of a sovereign country.’
In early June, Japanese newspapers reported that Tokyo police had arrested seven men and women, including a 24-year-old National Tax Administration officer and a former NTA officer, for swindling government COVID-19 financial aid totaling approximately $1.7 million by filing false applications on behalf of some 200 applicants for the program and instead yf distributing the money, they pocketed it for themselves. The suspects were charged for fraud.
Finance minister Shunichi Suzuki June 3 apologized at a parliamentary session and emphasized that the ministry would ensure that such irregularities won’t recur. In 2021, two junior ‘career’ trade ministry officers committed comparable serious fraud by swindling government money.
What’s disturbing to The Prospect is that the latest crime was reported as a local news story by most major Japanese media. It may not be a front-page splasher as there have been a plethora of crimes committed by government officers, ranging from sexual harassment, government handouts-related scams, and murders of kind. (Until several years ago, when bureaucrats were implicated in crimes and scandals, they were top headline news.)
BUT the fact that a country’s tax authority officer was engaged as a leader of a government payment scam speaks for its significance and ramifications to its tax administration policy. Can taxpayers trust the tax office? How do folks of malicious minds see this crime if penalties are generous?
Such serious implications were set aside by the Japanese media, which volunteeried to treat it as a local crime story with a relatively small headline. It was the case with the Yomiuri and other national newspapers on June 1, though perhaps with a sense of guilt and embarrassment about journalism, it carried a followup article on June 2.

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TOKYO, May 14, 2022—Pumping iron in the dark, spit-shined dirty floored gym used to be a manic activity for those that aspired to win in the boxing rings or Olympic gold medals. Many guys (boys only!) lifting weights wearing sweat-smelling tattered clothes, not designer sports outfits, came from poor families with the resolve to hit the stardom one day with their iron-clad muscles. Former powerlifters, boxers, wrestlers now in their twilight ages did just that.
Young people going to the gym these days have almost totally different objectives: Some exercise for healthcare reasons but those are mostly female. Most men lift weights to build up muscles to show off their bodies to other people. When I asked why he lifts heavy weights the other day, a 30-year-old Mr. Yamada replied with a grin: ‘I want to show my body to the girls on the beach.’ It’s the reason why body builder contests are popular these days.
Whatever the purposes, it’s good that people move their bodies. But as they build their muscles to formidable size and their psychological confidence cross certain thresholds, something seems to click in their heads, with their psyche swinging to physique-driven radicalism – like most NFL players are trained to think.
If not all, many such people are befriending with each other and forming Japan’s right-wing alliances and connecting with politicians such as former prime minister Shinzo Abe and others on the right side of the lawmaker camp. And allying with pro-military defense forces personnel, they are supporting amending the pacifist Japanese constitution, big defense build-up including owning nuclear weapons.

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TOKYO, May 13, 2022—In the trains and on crowded sidewalks of Tokyo, where COVID-19 infections have been relatively stable at a four-digit, face mask-less people are hardly seen even when the city’s governor says she is considering relaxing the mask mandate and even though there’s hardly any penalty for not wearing one.
Face masks seem to have become the Japanese people’s integral body part or compulsory gear for human activity in places and situations other than where one can be alone like a bathroom. No joke, in fact, many people wear masks even in family living rooms and in bed.
A recent random survey result taken from young generations one radio station aired said that even if the mask mandate is lifted, more than half of them will continue wearing it. Respondents said that the face mask has become part and parcel of their bodies and they wanted to be identified by third parties by wearing it. Others said they were afraid about showing their full face to other people. A small percentage of respondents said they wanted to continue wearing it to avoid disease infections.
Clearly, many do not want others to read their expressions and lips in this increasingly complicated society.
From the sociological perspective, a different explanation emerges: Yes, the face mask was vital during the initial stage of the pandemic three years ago and it remained important to to prevent the virus spread in the ensuing period, the reason why the government and municipalities asked and pleaded people to wear the mask. But now, most other countries nave lifted the mandate and people are mask-free. But in Japan, where the public sector is suggesting lifting the mandate, people continue in favor of wearing.
Because the Japanese are subservient to authorities and love regulations – politicians and bureaucrats must have rejoiced at this national character.

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