On security policy, on trade and on North Korea, Japan will increasingly have to develop its own independent regional vision.
Since US Secretary of State Rex Tillerson’s speech at CSIS, a Washington-based think tank, in October 2017, the ‘free and open Indo-Pacific’ (a concept taken from the Abe government) has become the headline for the Trump administration’s Asia strategy. There has accordingly been a revival of the security-based quadrilateral dialogue between the United States, Japan, India and Australia.
There is not yet any meat on the bones of the ‘free and open Indo-Pacific’ strategy — particularly in terms of concrete economic mechanisms.
Without the multilateral framework of the Trans-Pacific Partnership (TPP) and given the Trump administration’s bilateral zero-sum view of trade, Japan and smaller Asian nations are struggling to envision a United States that offers a tenable alternative to China’s ‘predatory economics’.
In light of the confused US regional vision, Japan has made progress on a free trade agreement with the European Union and has managed to salvage the TPP under the TPP-11 framework. It achieved the suspension of only 20 clauses from the original TPP — even without the lure of US market access for Malaysia and Vietnam.
This leaves space for the United States to return to the agreement and maintains its high-standard rules and norms.
It is uncertain whether Canada — the second-biggest economy in the agreement — will ratify the deal after Canadian Prime Minister Justin Trudeau’s no show at the signing of the TPP-11 agreement. Wrapping up these efforts will be vital to counteract the narrative developing countries draw from China’s success — one suggesting that authoritarianism is the governance model best-equipped for growth.
The real game changers in 2018 for Washington’s (and thus Tokyo’s) Asia strategy will be how the United States tackles its China trade gripes and the North Korea dilemma.
The United States’ combative stance towards China was confirmed in the 2017 National Security Strategy, and this stance will only strengthen if the Trump administration perceives Chinese non-compliance on North Korea.
Decisions to implement solar panel tariffs or CFIUS reform would provoke tit-for-tat retaliation from China. Investigations into forced technology transfers and dumping of base metals by China will further demand action from the Trump administration — an administration that is firmly cognisant of the threat posed by China’s state capitalism and monopolistic industrial strategy. The US breaking from Europe and Japan by acting unilaterally outside of the World Trade Organization (WTO) to challenge China risks trade war.
Tokyo therefore faces a tough decision about how long it wants to appear supportive of Washington’s tougher economic measures against China. Japanese government officials privately express that a US government with a more confrontational approach towards China than the Obama administration is in their strategic interest.
However, Japanese Prime Minister Shinzo Abe is determined to realise mutual state visits with Xi Jinping, and the uncertainty over Washington’s Asia policy and over cooperation on North Korea is pushing Tokyo to improve relations with its big neighbour.
Tensions between the United States and North Korea are putting Japan in a tight situation. The rhetoric and frustration from the Trump administration unfailingly results in escalatory North Korean reactions, which together increase the likelihood of war. Mixed messages from Washington have also confused allies about the official US position on North Korea. China and Russia have called for de-escalation and are encouraging the United States to engage in dialogue with North Korea after the Kim regime allegedly expressed its willingness to Russia.
Japan is holding out for ‘pressure maximisation’, specifically an oil embargo. Tokyo hopes this strategy will force North Korea to call for negotiations in which the United States and its allies have a strong position. Ultimately Japan needs to decide with the United States and South Korea the conditions and end goal for entering dialogue with the North, but such a dialogue is complicated by the mutual distrust between the Moon and Trump administrations and by the intense geo-economic pressure Seoul has been under from Beijing.
Japan must help find a middle road to enter negotiations between the United States’ demand for North Korea to denuclearise and the Chinese and Russian ‘freeze-for-freeze’ proposal. This could…
Author: Harry Dempsey, AP Initiative
How Asia could be the winner in the US and China’s Belt and Road race
The world’s three largest economies – the US, China and Japan – are actively manoeuvring for economic and geopolitical influence through infrastructure funding
Hino To establish a development and production base in Thailand
Once the factory begins operation in 2021, Hino will first start off by producing vehicles for the domestic Thai market
Japanese motor Company to push forward with locally led manufacturing of best-fit products to quickly respond to customer needs in close proximity
Under this new setup, Hino will be constructing a new center in Bang Bo, Samutprakarn Province to consolidate and strengthen our product planning, development, and production functions for best-fit products in ASEAN.
The site has an area of roughly 400,000 sqm. Construction is scheduled to begin in July 2019 with operations to begin in 2021.
The new center will consist of the new plant’s production area, and a development area centered around a test track. The total investment amount is expected to be roughly 11.5 billion yen.
Operations to begin in 2021
Once the factory begins operation in 2021, we will first start off by producing vehicles for the domestic Thai market, and expect to begin supplying ASEAN best-fit vehicles to other emerging markets by roughly 2024.
Hino Motors, Ltd. (HQ: Hino City, Tokyo, President & CEO: Yoshio Shimo; hereafter “Hino,”) and Hino Motors Manufacturing Thailand, Ltd. (HQ: Samrong, Samutprakarn Province, President: Somchai Pleankaew; hereafter “HMMT”), our manufacturing company in Thailand, in order to achieve our vision of “Corporate strategy 2025” and enable us to respond to customer needs in close proximity, will be taking steps in Thailand, one of our key centers of operation, to accelerate our efforts to strengthen our business foundation in ASEAN.
By newly appointed Mr. Somchai Pleankaew, who has an exceptional career background with Hino, to president of HMMT, we will be creating an organizational setup that will enable us to drive our business in a locally led manner.
Mr. Somchai Pleankaew, who assumed the office of president of HMMT as of Feb 1 has this to say:
HMMT will put all of our effort to make this project successful in order to enable the growth of our company. Our aim is to serve all customers to their greatest satisfaction by providing the best-fit products and total support customized for each vehicle.
In addition, as a center of Monozukuri, including product planning, development, and production, as well as Total Support in ASEAN, Hino Thailand will collaborate and go forward with Hino in ASEAN in order to grow and strengthen together to support the growth of our customers’ businesses in the ASEAN region.
The Hino Group will be reforming its business structure to achieve sustainable growth leading up to 2025. We position Thailand as one of our key markets for sales in the ASEAN region, our second pillar after the Japanese market. The country is also one of our key business centers and a driver of Monozukuri and Total Support within the region.
The new center to be constructed will consolidate and strengthen our product planning, development, and production functions in Thailand.
New center overview
|Name||Suvarnabhumi Monozukuri Center|
|Location||Bang Bo, Samutprakarn Province|
|Site area||400,000 sqm|
|Functions||Product planning, development, and production of Hino vehicles|
|Products produced||Light- and medium-duty trucks and buses|
|Operation startup date||Scheduled for 2021|
|Employees||Approx. 1,300 (at the time of operation startup)|
As a “Monozukuri Center” it will be designed with the capability to commercialize and supply ASEAN best-fit products locally and consistently. In addition to increased coordination between different functions, we will be taking steps in product development to push forward with localization of product development by upgrading organizational setups and constructing a new test track so that we will be able to respond to customer needs quickly and accurately at close customer proximity. In the area of production, the production functions that are currently distributed across existing plants in Thailand will be consolidated at the new center to improve production efficiency.
Furthermore, know-how from the Koga Plant―our global mother plant―will be actively incorporated into the plant to create a system that will enable us to deliver competitive products to our customers in a timely fashion.
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