Is Japan on the verge of a major change on a par with the Meiji Revolution, or is it heading for a third "lost decade"? That was the question underlying the visit to Japan this month of Simon Fraser, the FCO’s most senior official.
The British companies he met tended towards the former prediction: they were being consulted by the Japanese government on how tax regimes should be reformed and what was needed to boost foreign investment in Japan - unheard of in this culture of often opaque decision-making, and a welcome sign of the government's growing openness. Prime Minister Kan's readiness in his new year addresses to broach taboo issues such as agricultural reform and abolition of the death penalty also suggested a determination to move forward, they felt.
Japanese companies were less convinced, bemoaning the lack of political leadership to drive through the changes needed in government finances, tax reform and trade liberalisation. And yet those same companies are quietly getting on with the job of restructuring and innovating to ensure their continued survival - and doing it pretty well, if this week's news headlines are anything to go by: 10% of listed firms are logging record profits and new commercial building developments are adding more office space around Tokyo than at any time since 2003 (with vacancy rates falling). The picture outside the big cities, and for SMEs is less rosy of course.
The extent of the disdain of some businesspeople for politicians was illustrated very vividly for me at some of the industry association New Year's parties I attended. The assembled hundreds listened politely to leading executives' assessments of the prospects for the year ahead (generally of the "it's going to be tough but let's all do our best" variety), and added their voices to the rousing toasts. But then, as representatives of each of the major political parties took to the stage in turn to say a few words of support for the industry in question, the guests all headed off to fill up their plates and glasses and talked cheerfully over the politicians. In a country that is sometimes almost painfully polite I found this behaviour quite shocking. Even a bit of heckling would have been kinder - at least it would have shown that they were listening.
Maybe that open rebellion itself is a sign that Japan is indeed changing. Certainly history suggests that the Japanese people can really rise to the occasion in times of crisis - their opening to the world in 1868 after 200 years of isolation and their remarkable growth following the second world war are good examples. But if the government is going to grasp the nettle and take the country with them they're going to need all the friends they can get. Just as well that Simon Fraser went away recommending that the British Government step up its engagement with its Japanese counterparts.
Sue Kinoshita
Sue.kinoshita@fco.gov.uk
Director, Trade & Investment
UKTI Japan