Japan's Asia package

As most export reliant countries are doing, Japan is speaking out against protectionism. In a bid to support its neighbors, Japan is also providing aid to nearby countries aid- US $17 billion (1.5 trillion yen) - to be spread out over the next three years on infrastructure projects and trade promotion.


http://news.bbc.co.uk/2/hi/business/davos/7862424.stm
http://edition.cnn.com/2009/BUSINESS/01/31/davos.wef.japan/index.html

China's African relationship

As Hillary prepares to tour China, this is what the Chinese President was doing last week:

"China's President Hu Jintao has granted $22m (£15m) in aid to Tanzania as he continues his tour of Africa"

http://news.bbc.co.uk/2/hi/asia-pacific/7891418.stm

Dodgy Chinese economics

Getting economic data out of China has always been difficult. The government keeps tight control over their numbers so the message fits with their goals. Their current objective is to prove, by next year, that their $586 billion stimulus package is working.

The Chinese target for economic annual growth rate is 8%. Basically, any other number will make the government squirrely. Global economists do their best to measure China's data, but quarterly expenditure breakdowns are not provided to compare to output figures. And with exports and property values down, it is unlikely that China will meet its goal.

The Chinese premier has already publically blamed the US for causing the economic crisis, which postures the situation for the Chinese public.

Nissan relocating plant; central bank buys shares

It's been a busy month so far.

Nissan is not merely laying off workers, it is moving a plant out of Japan (to Thailand). Building plants outside of Japan is not new, but closing and relocating plants out of Japan is.

Also not new, but infrequent, Japan's central bank announced it would buy $11.12 billion (1 trillion yen) of BBB minus or lower company shares from the nations banks. This last occurred in September 2004 and in November 2002. The move is to add stability to the banking system.

How to spend the Japanese stimulus

As Japan suffers from an export bubble, their challenge is to create domestic demand. That's no small feat considering that exports accounted for 74% of Japan's growth, while domestic spending during the same period was only 6.6%.

As with China, Japan is realized that a heavy reliance on exports makes them vulnerable.

So the focus has shifted to domestic jobs, which should create domestic demand. When Japan invested heavily in infrastructure spending in their last downturn, they already had well maintained roads and bridges, so they ended up with aimless or useless projects.

Politicians are recognizing that those projects only create jobs during construction. Now they are looking for jobs that will have a lasting impact.



http://www.nytimes.com/2009/02/06/world/asia/06japan.html?pagewanted=1&_r=1

Tracking Japanese Stimulus

I'm still gathering numbers on various stimulus packages. According to 1/29/09 WSJ, Japan's series of stimulus measures amount to 75 trillion yen ($842.5 billion). And the Liberal Democratic Party just pushed through an extra fiscal year end (March 31) of 4.8 trillion yen - (nearly $54 billion).

Bernanke's Bank of Japan speech

Interesting speech by Ben Bernanke, Chairman, U.S. Federal Reserve. He sizes up the Bank of Japan's past responses and critiques their quantitative easing bait and switch:

http://www.yomiuri.co.jp/dy/business/20090129TDY19104.htm