Hong Shihong
In the past two years, many Chinese people have come to Japan to buy houses. To understand Japan's real estate market, in addition to considering the return on investment, you also need to understand the direction of the macroeconomic. Since the bursting of the Japanese real estate bubble in the 1990s, Chinese media have often emphasized the 20 or 30 years lost by the Japanese economy, and it seems that the Japanese economy has become increasingly weak. What is the truth? I have been studying in Japan in 1986 and have started studying the Japanese economy. It has been more than 30 years since I was studying in Japan. I am willing to share with you some of my views on the Japanese economy. Why is the support rate of
Abe high?
It should be said that the overall situation of Japan's economy is not very good at the moment. According to the International Monetary Fund, there are currently three major problems in the Japanese economy: consumption and investment have not improved, and people's willingness to consume is not high; the labor market has a binary structure, and more and more companies have abandoned traditional lifelong employment and switched to temporary employment; the gap between the rich and the poor is serious, and 35% of people with jobs are in poverty.
The hourly wages in the northeastern region of Japan may be only $5 or $6, which is much lower than the $10 in Europe and the United States. In Japan, it is very difficult to live with such a salary, so many young people do not spend or get married. My school (Shannan University) is a private university with relatively expensive tuition fees. In the past two years, I clearly feel that more and more students are applying for loans, which shows that the situation of the middle class in Japan is not good. But even so, Abe's approval rating has remained above 50%, and when it was high, it was even more than 70%. The main reason for this is the economy. (Shannan University is located in Matsuhara City, Osaka Prefecture, with a population of 120,000 in 2010. - Editor's note)
Abe served as prime minister for the second time at the end of 2012, " Abe Economics " began to become popular. It includes three aspects: active financial policies, active fiscal policies and economic structural reform. Although these measures are named "Abenomics", they are actually the consensus accumulated by the Structural Reform Commission in the Ministry of Economy, Trade and Industry of Japan over the past twenty years. We all know that Abe is relatively right. The Democratic regime, which ruled before Abe, adopted a completely opposite liberal economic policy, that is, to curb inflation and currencies; to control fiscal spending, reduce fiscal deficits; and to carry out thorough reforms. All these three points have touched the interests of some vested interests and ordinary people. Among them, the most significant impact was the suspension of new public works, and many builders were hit. The construction labor force was about 5 million. In addition to the families they supported and related industries, it was conservatively estimated that 30 million votes were involved, so the Democratic Party was elected not long after it was in power.
Abe took office and did the opposite. Not only did he put forward all the original projects that the Democratic Party had stopped, but he also allocated a lot of budgets to build bridges and pave roads. The construction industry suddenly had very, very many orders, and the construction industry is an industry with great multiplier effect. When the Democratic Party was in power, the number of people employed by the construction industry dropped from more than 5 million to 4.8 million. After Abe came to power, he not only rebounded to 5 million, but also short of manpower, because the construction of the venues for the Tokyo Olympics at alone was 3 trillion yen at once, which was about 180 billion RMB of engineering volume.
In addition, Japan has a special situation, which is the local protection of the construction industry. In the 1970s, when Kakuei Tanaka was prime minister, he passed a law called the Local Autonomy Law, which stipulates that the construction industry is absolutely not allowed to enter, and the other is regional autonomy. For example, all public works construction in Tokyo can only be done by construction companies in Tokyo. Even if the construction companies in Osaka do better and cheaper, they cannot be used. The first article determines that Chinese construction companies can go to Africa and the Middle East to do engineering, but cannot enter the Japanese market. The second is local protection.The new mayor of Tokyo, Koike Yuriko , inspected the construction of Tokyo Olympic venues a while ago, and at first said that it was too expensive. The city next door had such good facilities, why not use it and had to build a new one? The mayor of a city next door was very happy when he heard it, but he changed his words in just two days and said no, because the politician supported by the surrounding construction companies lobbied the mayor and said that if you are like this, you should stop attending the next election. This is very realistic.
Another move by Abe is to desperately issue more currencies and suppress the exchange rate of the yen. This is a very good thing for the export industry.
So big companies support Abe's policies very much. Of course, these large companies generally have investments in China, so I hope Abe has a good relationship with China, but they have to support Abe because the Democrats came to power and cut off their budgets, and Abe's policies are beneficial to them. Japan's special industrial organizational structure also determines that Abe only needs to seize large enterprises. There is a series of company systems in Japan. The company that Toyota provides supporting facilities for it is called the Toyota series. There are more than 27,000 direct supporting manufacturers, and there should be more than 100,000 companies indirectly supporting facilities for Toyota. As long as you provide supporting facilities for Toyota, Toyota will do whatever Toyota requires you to do.
The Chinese Embassy holds activities in Japan every year with the purpose of letting the Japanese understand Chinese customs. This event is easy to get started in , Nagoya, , because Toyota's headquarters is in Nagoya, and Toyota says it supports it, all companies that provide supporting facilities for Toyota will contribute money and efforts, so the Chinese Embassy will do the job as long as it handles Toyota. The same is true for Abe. As long as he handles a few large companies, the people below will naturally not have any objections.
The moral basis of the market economy
Another reason for the high support rate of Abe is that Japan is already a mature society, and more than half of the private real estate is owned by the elderly. With the influence of less birth, the younger generation can enjoy the economic achievements accumulated by their predecessors, and the economic situation has not had that great impact on them.
A few years ago, there was a Japanese student in my class who didn’t look for a job before graduation. I said, “You kid doesn’t look for a job, what will you do in the future? He said I just did odd jobs and didn't have to go to work. I said, then you won’t make much money like this. What if you want to buy a car and a house in the future? Do you still have to get married? He said I don’t have to buy a house. I already have two houses. My grandparents have passed away. I’ll leave one for me. My parents will have to leave sooner or later, and I still have one. It’s enough for me to take care of these two houses. Do I still have to work hard on myself? I heard it right, you can't explain this kind of person to him. Because our ideas are wrong, the goals of our generation are different from their goals.
There was a friend from the Chinese Embassy. He said, help me study Japan's stability maintenance. Young people in Japan are not well-income and are hard to find jobs. Why don't they cause trouble? I told him the above situation. I believe that as the generation of only children grows up, this situation will also occur in China. If a person has no permanent property, he will not have perseverance, and it is the same everywhere.
Japan is a relatively egalitarian society called "100 million midstream". From the perspective of economic history, this economic and social structure in Japan began with the Meiji Restoration . Before the Meiji Restoration, Japan was also a society with severe polarization. The mentality of hatred of the rich was very common. The merchants had a low status. When they saw the shogunate bureaucrats and samurai, they nodded and bowed their heads and bowed. Eiichi Shibusawa, an important figure in the Meiji Restoration, came to Europe to investigate and realized that Japan was backward. At the age of 33, he resigned from the province of Datura to start an industry, introduced the joint-stock company system to Japan, and personally founded more than 500 companies. He was the designer and founder of Japan's capitalist system and business ideas. He has a famous book called "The Analects of Confucius and the Abacus", which praised the "natural" of Cheng Yi, a great scholar of the Song Dynasty, and believed that abacus should be motivated by the Analects of Confucius, and at the same time, the Analects of Confucius also had to rely on abacus to truly serve the society.If you do not pursue material progress and interests, the people, the country and society will not be prosperous; and the purpose of getting rich is not only to have a lot of money, but to repay society and prove the social value of merchants.
Moreover, not only Shibusawa Eiichi, but a group of people in the Japanese economic circle had a strong idea of designing the vision system and had their own value goals. This had a profound impact on the establishment of the Japanese lifelong employment system, the relationship between enterprises and the government, and the business ideas of enterprises. Therefore, Japan's Meiji Restoration was successful under the planning and promotion of a group of knowledgeable and visionary elites, and has its ideological and theoretical basis. The same is true for the European Industrial Revolution. Religion is used to regulate people's economic activities and give people a sense of peace of mind, that is, you have goals and noble purposes to make money.
. China's reform and opening up lacks this part, without thinking and value establishment process, so people lack legitimacy and sense of mission when making money, and are not happy.
Can't just look at GDP
The important reason why Japan's lifetime employment system began to loosen is technological progress. It turns out that when making color TVs, a production line can last at least twenty years, a company can earn at least twenty years, and workers can also work for twenty years, so there is no need to worry about unemployment. This is the product's technical cycle. Now this cycle is getting shorter and shorter. The replacement of Suspension to CD to MP3 was completed in a short time. It turned out that it was impossible for you to support workers for thirty or fifty years in a Suspension enterprise. So temporary employment has become a trend now, which is similar not only in Japan, but all over the world.
In recent years, young people in Hong Kong and young people in Taiwan have been dissatisfied with society and the government. In fact, the fundamental reason lies not in the government’s policies, nor in the intervention of mainland Chinese capital, or in the cheaper labor in China, but in the technological progress.
. In terms of technological progress, Japan is still very strong and competitive. Thomson Reuters recently selected the 100 most innovative companies in the world, Japan accounts for 40 this year, followed by 35 in the United States, 7 in France, 55 in in Switzerland, 4 in Germany and South Korea each, and not in China. In the past two years, a lot of bad news about Japanese companies has been circulating in China, such as , Sony, , and a large company is about to go bankrupt. Many of these are misleadings. Sony often closes a factory in Japan or stops a project. In the past two years, many Japanese companies have sold their businesses in a certain aspect, such as Toshiba , which sold their personal computer department to Lenovo, Sanyo sold them to Haier as a whole, and Sharp to Foxconn .
However, the real money-making part of these companies is no longer the finished products of computers or color TVs, but the core electronic components. Two years ago, I went to attend the Shenzhen High-tech Fair and found that there was no home appliance at Panasonic's booth, showing the semiconductor chips it now sells, and it is mainly concentrated in the automotive field. More than 60% of a car, especially a high-end car, is worth more than 60% of the value of electronic parts, especially the central control (ECU, Electronic Control Unit), and the mechanical part accounts for less than 40%. 80% of the electronic components in the world are made by Japanese companies. If you don’t buy them, your car will not move.
On March 1, 2011, a magnitude 9.0 earthquake occurred in the northeastern waters of Japan and triggered a tsunami, causing major casualties and property losses. Fukushima A factory that produces ECUs was suspended for a month. As a result, almost all automobile manufacturers in the world stopped production for a month. Not only Japanese manufacturers, but also German, American, and Chinese.
For example, for Apple phones, 45% of the parts value in them are Japanese parts, the United States only 6%, the remaining 7% are Germany, South Korea accounts for 14%, and China's labor force is only 3.6%.
In addition, Japanese companies have made a lot of investments and mergers and acquisitions around the world over the years. As a result, under the active fiscal policy, many of the over-issued currencies have gone overseas, and domestic prices and real estate prices in Japan have not risen. This is very different from China.A while ago, SoftBank's president Masayoshi Son ran to Trump and said he would invest $50 billion in the United States. The Japanese government actually wants to block the money that has been leaked, but it cannot do so, because Japan is a member of the G7 and has signed free capital flow agreements with six other developed countries, so foreign exchange control cannot be implemented.
I have a friend who works in the financing department of the CCB Tokyo Branch. He is a Chinese. His main job is to find investment opportunities in China for local banks in Japan. This is not necessarily a good thing for Japan's domestic economy, but because there are channels for outflow of funds, it avoids the emergence of asset bubbles. China does not have this channel. This is because, firstly, the RMB is not a freely convertible currency, and secondly, China has foreign exchange controls and funds cannot be used casually, so it can only be hoarded in the domestic stock market or real estate market.
So now we need to look at Japan's real economic situation. We cannot only look at GDP (gross domestic product), but also GNP (gross national product). The former only calculates Japan's domestic economic income, while the latter includes the income of Japanese individuals and enterprises overseas. In recent years, Japan's GDP has not grown much, sometimes even negatively, but GNP has grown a lot, and Japan currently makes the highest money among all countries in the world. Therefore, the Japanese economy includes two parts: a conservative and inefficient local economy and an advanced, fully competitive overseas Japanese economy.
Investing in Japanese real estate should be cautious
Finally, let’s talk about the Japanese real estate market. To invest in Japanese real estate, you must first realize that Japan is a mature market. It is impossible to buy a house and sell it in a few months to make a lot of money, but you can only pursue a stable and predictable return.
Overall, Japan's real estate is surplus, but it is unevenly distributed. The downtown houses in Tokyo are not enough, but most second- and third-tier cities are surplus, with an overall 8 million units surplus. So like other places, buying a house in Japan depends on the location. Except for Tokyo and Osaka, houses in other places are not very valuable, as is the same with the Hokkaido , which is popular among Chinese people.
If you want to rent a house after buying it, you must first see if you can rent it out. The latest occupancy rate in December is 60%, which is the average number, which means that 40% of the house you buy may not be able to rent it out. Of course, it is easier to rent out a house with good locations, but the investment in buying a house is more; most of the land you buy is not good at cheap locations and it is difficult to rent out. Friends often come to ask me that there is an apartment next to the subway station, which is only 300,000 yuan. It is too cheap. Do you want to buy one for rent? I showed it to him and found that it was a subway station in Tokyo, but it was difficult to find a tenant at the most offensive station, so I advised him not to buy it. Therefore, when buying, you should check the occupancy rate data one by one, and you cannot take it for granted.
In addition, foreigners cannot borrow from Japanese banks when buying a house in Japan, so they naturally cannot enjoy the low interest rates in Japan. When buying, you have to pay a miscellaneous fee equivalent to 8% to 10% of the house purchase fee. After buying it, you have to pay real estate tax every year. If your house appreciates, the amount of real estate tax will also rise. If you are not in Japan, you have to entrust the relevant company to help you complete the procedures, and you have to pay the agency fee to it. There are also house property management, water supply and heating, maintenance and other expenses. The higher the apartment, the higher the cost. You also have to pay income tax on renting a house. These expenses together account for about 15-20% of the overall income.
The biggest benefit of buying a house in Japan is that the return rate is very stable, and the national average is about 6%, which means if you invest 1 million yuan, you will get about 60,000 yuan a year, and you will only make a profit of about 20 years.
If you want to sell a house, you must be prepared to discount the house price by half, because in the Japanese concept, the old and new are much different, even if you buy it in the morning and sell it in the afternoon. In fact, in Japan, not only houses are like this, but many other things such as cars, but also the prices of new and old are very different.
(This article was compiled based on the author's speech at the Guangzhou Book Purchasing Center on December 17, 2016, and was exclusively authorized by the international media "World Sensitivity" to publish it.)
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