Cool for cats? A new dawn in the land of the rising sun

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Are there really jazz festivals for pets in northern Japan? And how are demographics and changing gender roles affecting Japan’s economy and society? The Airport Economist explores modern Japan for himself in this excerpt from his new book, Trading Places.

"There’s a view Abenomics is good for Tokyo, but what about the regions?"
Tim Harcourt, Fellow in Economics, UNSW Business School

In Sapporo, the capital of the prefecture of Hokkaido in the far north of Japan, they have a jazz festival with a difference. This one caters for pets.

That is, the music has been chosen to help soothe people’s pet cats (and also some dogs, too). The idea for a jazz festival for animals was the brainchild of Hokkaido entrepreneur, Tatsuya Kato, who runs the award-winning store Pet Land.

Believe it or not, but Pet Land has an Australian connection. According to Sally Phillips, Australia’s Trade Commissioner in Sapporo, when Pet Land came on the scene they "worked closely with the Pet Land family as many of the products and ideas they have sourced are Australian.

“In fact, they undertook a photo shoot on the Gold Coast, as Australia’s open lifestyle appeals to the aspirations of Japanese families – particularly here in Sapporo.” So who knew pet modelling was so big on the Gold Coast?

In fact, there is quite a lot of Australian influence in Hokkaido but it’s mainly due to snow rather than sunny beaches which are few and far between in these parts.

Australians only really know the city of Sapporo for it famous beer (a major industry in Hokkaido, like Kirin or Asahi in their home prefectures) but in the region as a whole, Australians have been attracted to the ski fields in the hundreds.

They take advantage of the amount of high-quality snow on offer, the short flight from Australia with little time difference (compared to flying to Europe or North America) and the pre-existing Australian ski community in the region.

One great ski resort town is Niseko, which is only a two-hour drive from Sapporo. Niseko is booming as a result of all this Aussie activity and is attracting jazz festivals, top-rate restaurants and other forms of entertainment to cater to the influx of tourists from down under.

They need other things to do when not skiing, so Niseko is following the lead from Aspen, Banff, Queenstown and other snow resorts in providing world-class food, art and entertainment. Hokkaido itself is 5.6 million people and Sapporo a comfortable (by Japanese standards) 1.8 million, but Niseko is only a resort town, so it needs its international visitors, including the Aussies.

But many Aussies have become more than just seasonal visitors. In fact, some have actually moved into the area and become major investors in local real estate. One such couple, Simon and Joasia Robinson, run Hokkaido Tracks, a major property development business in nearby Kuchan. The couple, who are mad skiers, built their new business in Japan after losing everything in the 2003 Canberra bush fires.

“We lost everything except the shirt off our backs – and of course, our skis” says Simon Robinson. “We had nothing to lose and given our passion for skiing, we decided to start afresh somewhere new and the relatively undeveloped northern Japan ski fields were just full of opportunities for expansion.”

As a result, the Robinsons have become major investors in the area and, according to Simon, they have found it relatively easy to buy good properties as, after the great deflation, “the Japanese have become ‘wowsers’ when it comes to investment in real estate, although this might change as the Japanese economy continue to recover”..

Of course, the Aussie numbers are small and not likely to make much of a dent in the stock of local investment. But according to Ian Brazier, Australia’s new Consul General in Sapporo, there were “around 67 property sales in Niseko last year and the Aussie tourist numbers continue to grow year by year, along with overall international tourism”.  

In addition, Brazier says there’s even an Australian-owned taxi fleet operator to ferry Australians to the ski fields.

“Foreign visitor numbers to Niseko are still healthy with 287,668 total foreign visitor nights in 2013/14, a 143 per cent increase on the previous ski season,” he says.

The tourism sector is important to Hokkaido as it doesn’t have the manufacturing base of other prefectures in Japan. At the time of The Airport Economist’s visit to Hokkaido, the region had been hit hard by the decade long recession of the 1990s and as a result the Hokkaido unemployment ratewas still above the national average.

The Hokkaido situation is symbolic of how Japan views Abe-nomics - named after Japanese Prime Minister Shinzo Abe. There’s a view Abenomics is good for Tokyo, but what about the regions – especially places like Hokkaido? 

There are fewer job vacancies than there are skilled workers to fill them. The ‘opening ratio’ in Hokkaido (that is the ratio of job vacancies to workers) is typically at two thirds of the national average in Japan.

However, Japanese policy makers are trying ways to reduce that disparity in incomes by region. According to the Ministry of Economy, Trade and Industry (METI)’s Hokkaido bureau chief Fukano Hiroyuki, “the fall in construction activity has particularly affected Hokkaido, and therefore we are keen to attract investment in manufacturing, services and ‘knowledge-based industries”.

Australians have been successful more broadly in Hokkaido. Hobart-based Incat Fast Ferries regularly wins big contracts in Japan, but there are also potential joint ventures in agribusiness, IT and biotechnology with Hokkaido University and the neighbouring Otaru University.

Regions in Japan, not just Hokkaido, need investment and Australia’s capacity in food and beverage, infrastructure, agribusiness and education makes it a good fit. 

Whilst Hokkaido is a unique region in Japan’s economy, some of the regional influences symbolise the marked changes in Japanese economy and society in the post-war era.

Economically, we’ve witnessed Japan’s capacity to deal with fallout from the global financial crisis (GFC) and we’ve started to notice more evolutionary changes in Japanese society too, shaped by economic trends and political events. These too have implications for Australia.

Veteran observer Professor Peter Drysdale from the Australian National University (ANU) first visited Japan in 1964. The first thing Drysdale noticed was how poor Japan was. 

“It was before economic development had really taken off and Japan was still recovering from the horrors of the war,” he says.

"Nutrition was poor and the average number of calories was half of what the average Japanese household consumes today. As a result, I lost a third of my body weight and I was pretty slim to start with! “

The young (and slim) Drysdale, whilst immersing in the nooks and crannies of the Japanese economy, witnessed one event that proved to be monumental in Australian-Japanese trade relations.

“I saw the first shipment of iron ore arrive in Kyushu,” he said. “The Australia-Japan love affair in the commercial world had begun!”

Of course, life has moved on since 1964, when Japan became Australia’s number-one trading partner and our beach head into Asia. When thinking of Australia’s future in the Asian Century, most minds turn to China, perhaps India, ASEAN and the rest of emerging Asia. But it is really Japan that Australia should thank for enabling us to get a foothold into the East-Asian region in the first place. 

In fact, we were talking about ‘Abenomics’ over 50 years ago in 1957, when Trade Minister Abe (the current Prime Minister’s grandfather) signed the Commerce Agreement with John ‘Black-Jack” McEwen, Australia’s Country Party Deputy Prime Minister and Trade Minister.

Now we have a new partnership agreement with Japan, the second leg of Australia Trade Minister Andrew Robb’s free trade ‘trifecta’, after South Korea. There’s plenty on offer with the Japan Australia Free Trade Agreement (JAFTA), particularly in agriculture and services.

Australia has been seeking cuts in tariffs and non-tariff barriers and more openness in Japan’s previously closed rural and services markets for some time, whilst Japan needs energy security from Australia – particularly in terms of liquefied natural gas (LNG), given stiff competition from both South Korea and China. Both nations are seeking to expand investment in each other’s countries.

But if you think of Peter Drysdale talking about malnourishment in the early 1960s and compare the problems of an affluent society in the 2000s, with ageing, low birth rates and low marriage rates (and a serious shortage of husbands I’m told!) then you can really say Japan  has changed.

After all, imagine telling Japanese households dealing with malnourishment in the 1960s that in 50 years time they’d have enough food for the family and their pets too! 

And speaking of pets, next time you head to the snow in northern Japan go check out the Sapporo Jazz Festival, where you’re sure to see plenty of cool cats and who knows, maybe the odd hot dog.

This story is an excerpt from The Airport Economist’s new book, Trading Places – The Airport Economist’s guide to International Business, published by NewSouth Books.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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