The British Embassy in Tokyo is located on a vast track of land facing the Chidorigafuchi moat of the Imperial Palace. The complex, on land leased in perpetuity during the Meiji era, has several structures from the ambassador’s residence, the main Embassy buildings and housing for Embassy staff. The wooded site includes cherry trees whose blossoms in spring are stunning.
The seminar featured Simon Wood, head of public relations at the Embassy, along with Naoya Sano, marketing and business relations manager for media and communications, Hiroshi Nagatani, public affairs, media and press manager, and Satomi Shinjo, media and communications press officer. Together they explained Embassy PR activities in Japan. The seminar took place in the Grand Hall at Ambassador’s residence.
Simon Wood explained that the role of the Embassy through its PR was “to show its commitment to diplomacy in a global view, not only through a bilateral but through a multi-lateral relationship”. He stressed the main themes of worldwide cooperation, development aid, climate change, prevention of conflicts, nuclear proliferation, anti-terrorism, and reform of international organizations. As a result of this promotion of trade and investment in the UK, to date export values have reached approximately 8 billion pounds and 5,400 companies from Japan have entered or invested in the UK. Advancements in scientific technologies is also an area that the UK is proud of, and the Embassy is committed to PR activities that introduces UK technology to Japan and encourages cooperation. Nation to nation diplomacy is not the only function of PR activities that often focus on reaching out to the average Japanese. These activities are performed in a wide range of areas.
Naoya Sano emphasized a shift to direct PR communication methods between the Embassy and Japanese, and use of blogs for that purpose. “UK-Japan 2008”, held to celebrate the 150th anniversary of British-Japan relations, consisted of three concepts;contemporary UK, the UK’s creativity, and the collaboration between the UK and Japan, focusing on art, scientific technology and the creative industry. Up to then, the Embassy had always sent information in one direction; out, but this time it switched to interactive PR methods. For example, people had the opportunity to make comments regarding events and, as a result, 330 recognized events were commented on by 960 viewers. One result of this PR method saw a new British rock band promote itself and be able to give performance at clubs in Tokyo and live on FM broadcast.
Satomi Shinjo produced the Seville Row (the street famous for its tailors in London) exhibition “The London Cut” displayed British suits as a part of a business promotion of the UK. She introduced tailors from the past to the present at Isetan and the British Embassy, and showed video images broadcasted on Japanese TV.
UK public relations ranges from politics, to the economy, and science to culture. Staffers who produce this PR can be found in several departments. The recent policy is directed toward internet based communications and is aimed at individuals rather than on mass distribution.
Hiroshi Nagatani has a lot of experience working as a PR media manager, and believes that it is essential to explain the Embassy’s PR strategies directly with media companies. In the economic area, UK TRADE & INVESTMENT publishes the quarterly Japanese magazine SPARK, to introduce new businesses and policies in Japan and the UK. Subscribers to the magazine can also read an expanded version on-line.
November 12th, the day we arrived at Beijing, we visited China International Public Relations Association(SIPRA). We met Mr. Zheng Yannong, Executive President & Secretary-General of CIPRA and local PR companies’ members.
We exchanged the opinions and we received an advice that what should be known by Japanese companies intending to start business in Chine.
Both sides agreed to mutually enhance the relation more deeply in future.
November 13th, we visited Mitsubishi Motors Corporation Beijing Liaison Office and Shiseido China. We studied the recent economic trend in China, also collected the opinions and comments of Chinese consumers about PR activity.
Then, we visited Economic Daily (Newspaper) and were given fresh information on business environment for mass media in China. In the night of 13th, we attended the reception of 18th World IPRA Congress.
On 15th, the last day, we visited Olympic Stadium at Beijing.
PR market in China looked growing more rapidly than we thought now and will be in near future, it will affect greatly Japanese PR market. We learned a lot about the current situation of media industry in China, such as the concurrent of newspapers and internet, generalization of CGM and overwhelming volume of local media.
On November 7, 2008, PRSJ international subcommittee invited Kazuo Mizuno, the chief economist at Mitsubishi UFJ securities, to let him give a special lecture on financial crisis starting from the US.
Mizuno explained a flow of big change of global economy with his “3 globalization stages” theory and historical facts.
In the beginning, he introduced a phrase “the most serious financial crisis in 100 years” of Mr. Greenspan, the former FRB chairman, and said that financial crisis now going on was the biggest problem since the beginning of capitalism. He pointed out that in 2007 we entered into the second stage of globalization.
Mr. Mizuno defined 3 stage of globalization as follows; the first stage is 1974 to 2007, the second stage is 2007 to 2012, the third stage is after 2013. At the first stage, monetary economy became dominant over real economy; at the second stage, adjustment starts after collapse of balance between two economies; at the third stage, real economy expands and recovers its balance with monetary economy.
At the first stage, monetary economy became dominant over real economy.
Especially after 1995, when Treasury Secretary Robert Rubin stated that strong dollar was the national interest of the US, this dominance reached its peak. Financial assets in the world grew up by 102 trillion dollar from 1995 to 2007, and the main booster was the US. Mr. Mizuno called this model “American ‘investment banking’ empire”.
In this “American ‘investment banking’ empire” model, the US procured a huge amount of capital from abroad at low cost, and get return with highly-leveraged foreign investments. Actually 100 billion dollar per month went into the US till June 2008, 60 billion of those were spent within the US and 40 billion of those were used for foreign investments.
As the yield of 40-billion-dollar foreign investments per month exceeded the debt service cost of huge procured amount, the US was able to maintain its economy in spite of 60-billion-dollar trade deficit per month, and then kept its high standard of living.
Japan was one of countries of which economic growth was supported by the US trade deficit. He called Japan‘s model “Japan ‘export’ company”; Japan maintained its high standard of living with large amount of trade surplus gained through export of high-tech goods and import of low-cost material and foods. After 1955, two graphs showing the moving average of the ratio of personal consumption expenditure per GDP of the US and the ratio of Japan’s export per GDP made same the identical movement. He explained that Japan’s export became more and more dependant on personal consumption in the US after 1955 by pointing out the straight line of regression appeared in these graphs.
Additionally, he commented the only index that gained weight in Japan’s GDP was export, which means Japan’s economy was supported not by the domestic consumption but by the export depending on individual personal consumption in the US.
Mr. Mizuno said that the present current globalization means Americanization, and the export market diversification does not directly mean less dependence on the US economy due to the fact that almost all the goods were gathered in the US and consumed there. The story can be explained by a close correlation in graphs between Japan’s export and the US individual consumption, and we will plunge into the second stage of globalization triggered by sub prime loan, he said.
The second stage of globalization is an adjustment started after collapse of balance in two economies. He clarified some meanings of sub prime loan, the trigger for the second stage.
He said that one meaning is capital’s farewell to sovereignty (of developed countries), which can be described as “Interest rates revolution” in the 21st century.
Mr. Mizuno used the word “from capitalism 1.0 to 2.0”. Until 2007, which was capitalism 1.0, capital, sovereignty and national interest represented the same value like the Trinity. While, after 2008 which is capitalism 2.0, capital exceeded its weight beyond sovereignty and national interest, and these three started failing to match.
Mr Mizuno stated that, after September, 1997, the long-term interest rates in Japan have stayed under 2.0%, and profitability has remained too low to maintain current economic and social systems. Due to this too low profitability, capital, sovereignty and citizens are not able to keep good relationship each other. Now there came the same sort of great phenomenon as the interest rates revolution witnessed at the end of the 16th century. The interest rates revolution in the 16th century created capitalism where capital and sovereignty married, but that in the 20th century produced capitalism where capital and countries divorced.
Another meaning of sub prime loan issue, Mr.Mizuno explained, is the rise of newly emerging countries. Sub prime loan debacle caused not only the fall of 1 billion middle class people in the developed countries, especially the US and Japan, but also the rise of 3 billion middle class people in the newly emerging countries.
According to him, though financial assets in the world grew up by 102 trillion dollar during1995 and 2007, those funds did not flow into developed countries but into newly emerging countries where higher return was expected. As nominal GDP of these countries in 2008 was 19.4 trillion dollar, while 102 trillion dollars to be invested to these countries in 20 years means 5 trillion in a year. The ratio of investments per GDP there will reach as high as 26 % (5 trillion /19.4 trillion)
As the modernization process of a country needs capital investment in plant and equipment, the ratio 26% shows how the emerging countries’ rise can strongly be promoted, judging from the fact that the ratio of investments vs. GDP was 16% for Japan which attained the modernization most rapidly
Next, Mr. Mizuno pointed that we are in the middle of markets integration process between developed countries with one billion people and BRICs with 2,8 billion people, explaining about it by comparing it with price revolution in the 16thcentury.
Comparing trend of consumer price in UK at that time with that of recent oil price, the present situation is similar to that of 1557(it was in the midway of skyrocketing price). That was the year when Spanish empire, the main sponsor of Rome Catholic, went bankrupt and the middle of 1450 and 1650(the long 16th century). The bankruptcy in 2008 of American ‘investment bank’ empire which had led world economy since world revolution in 1968 can be seen identical to the Spanish empire’s fiscal failure.
He pointed out that in 2007, the ratio of households with total assets worth less than 12 million yen reached 50 %, and their debts ratio was 82.1 %. That means that half of households in the US hold debts worth 10 million yen and assets worth 2 million yen. Most of them in the US could not live without debts, and if loan conditions become tighter, one household out of two may go bankrupt in 30 years and 250 billion dollar worth of debt of lower 90 % households will not be used for consumption. That means that export to developed countries will not increase in the future. This has been already reflected to auto sales in the US. The main cause of poor sales performance will shift from high oil price to severe loan terms and conditions.
Next, Mr. Mizuno talked about trade terms as a challenge to Japan ‘export’ company. Trade terms mean the ratio of export price per import price. At present, they are deteriorating very much since the import price went up due to higher materials cost caused by “price revolution”, and the fall of middle class in developed countries, which has been the largest export market for Japan ‘export’ company, due to sub prime loan debacle causing sluggish sales of luxury goods.
He also referred to increase of production volume. So far, Japan targeted to markets in developed countries, but it has to shift the target from now to those in other countries. In the past, Japan exported luxury goods to developed countries where GDP per capita records 30 thousand dollars, but Japan will have to change its export products aiming at the markets where GDP per capita is ranging from 1000 to 3000 dollars to increase production volume.
He showed graphs of Nikkei Stock Average and NY Dow-Jones Average to point out how these two graphs correlate and follow the same movement. Then, he stressed how Japan economy has a strong reliance on the US economy. At the end of his lecture, Mr. Mizuno emphasized that it is Japan’s task to be free from the current dependence on the US economy and shift its strategic target to newly emerging countries.
From now on, Japan should expand its business to emerging countries such as China, India, Russia and Brazil. People engaged in PR activities should study new issues including corporate branding and corporate communication in each country.
