My latest story for Asia Times. Chinese signal V for victory

Here is my latest story for Asia Times. Although I am a strong proponent of the East Asian Community, I am a little bit concerned about China's recent aggressive diplomacy. Cheers, Kosuke

Chinese signal V for victory

The Chinese media have raved about a diplomatic victory in the dispute with Japan over the arrest and eventual release of a Chinese fishing-boat captain near disputed islands in the East China Sea. But the story is far from over. Beijing's frightening of Tokyo into submission with economic threats has led other Asian nations to regard China as a hegemon reverting to old ways. - Kosuke Takahashi (Oct 4, '10)
 
China signals V for victory
By Kosuke Takahashi

TOKYO - The flare-up between China and Japan over the arrest and dramatic release of a Chinese fishing-boat captain detained near disputed islands in the East China Sea symbolizes the rise and fall of Asia's two most powerful countries.

Chinese fishing boat captain Zhan Qixiong, 41, arrived at an airport in Fuzhou City of Fujian province, his birthplace, on September 25, and descended the stairs of a Chinese government-chartered airplane with both hands raised in the air making V signs. He became a national hero in the Chinese media, and his release was lauded as a significant victory for Chinese diplomacy as Japan bowed to Beijing's relentless demands to end his detention.

Beijing frightened Tokyo into submission via a de facto ban imposed by China, according to Japan - and denied by Beijing - on the export of rare-earths, metals essential to numerous industrial processes and whose supply is at present largely in Chinese control. China's tourism authorities discouraged Chinese citizens from traveling to Japan. China was, in a sense, successful in appealing to the international community the fact that there is a territorial dispute between the two nations, while Japan claimed there is no territorial dispute over the islands, known as the Senkaku in Japan and the Diaoyu in China.

The incident and its conclusion touched off a fierce political firestorm in Tokyo, with the media and opposition hammering and accusing Prime Minister Naoto Kan and his administration's handling of the incident as ''weak-kneed'' and a display of ''cowardice''. The politically damaged Kan is highly likely to struggle to clear through the legislature its 4.8 trillion yen (US$57 billion) supplementary budget, which to spur the deflation-driven, sluggish economy. The government is expected to compile its proposals for the budget this week.

Reflecting increased tensions between the two nations, more than 10 vehicles of Japanese right-wing campaigners surrounded a line of motorcoachs carrying about 1,300 Chinese tourists in Fukuoka City on September 29. No one was injured, the Japanese media reported.

Japan's mistakes
Japan seems to have made a couple of mistakes in dealing with the Chinese fishing boat, which Tokyo claims had illegally entered Japanese territorial waters and crashed with Japan Coast Guard patrol vessels near the Senkaku Islands on September 7.

It's first mistake was in how it dealt with the fishing boat captain. Japan could have deported him to China immediately without judiciary proceedings. Tokyo has a precedent in the recent past. Junichiro Koizumi, a former prime minister, deported seven Chinese activists, who landed on Uotsuri Jima in the Senkaku Islands.

The Kan administration did eventually release the captain, but in a half-hearted manner. It should have released him much earlier before having to succumb to pressure from Beijing. Contrast this with when Koizumi was in power. As prime minister, Koizumi was hawkish enough to provoke fierce protests from Japan's neighbors, particularly China, by regularly visiting the controversial Yasukuni Shrine memorializing the war dead (including Class A war criminals such as Hideki Tojo), but he also was well aware of how severely Sino-Japanese relations would deteriorate further without the forced repatriation of seven men.

Japan's second mistake was in not immediately releasing the video of when the Japan Coast Guard patrol arrested the captain. Although little known among domestic and foreign observers, in June 2008 Japan Coast Guard patrol vessels and a Taiwanese leisure fishing boat collided with each other near the Senkaku Islands. At first, the coast guard claimed the Taiwanese boat bumped into the Japanese patrol ship. Later, because one Taiwanese fisherman aboard happened to shoot the scene in which the coast guard could be seen bumping the other vessel, the Japanese government was forced to pay about NT$10 million (US$311,000) as compensation.

From the start of the more recent incident, Japan should have released the video in order to justify its own claim as soon as possible, not least before four employees of a Japanese construction company, Fujita Corp, were held in China on September 20 for allegedly entering a military zone without permission and videotaping facilities there. The Japanese government is now reluctant to release the Japan Coast Guard's video as this could whip up anti-Japanese feeling in China at a time that one Fujita employee is still being held in Chinese custody.

The story is far from over
Although Chinese media has raved about the Chinese diplomatic victory, the story is far from over. Other nations such as the Association of Southeast Asian Nations (ASEAN) and South Korea as well as the United States and European nations are beginning to voice concerns about the perceived Chinese "threat" - vehemently denied by Beijing. By looking at Beijing's strong-handed diplomacy against Tokyo, they have become very cautious about China's recent aggressive diplomacy and military activities to expand its ocean interests at a time when the economic powerhouse already exceeds Japan as the world's second-largest economy.

China, the Philippines, Vietnam, Taiwan, Malaysia and Brunei all claim sovereignty over the Spratly Islands in the South China Sea, yet another potential tinder box in the region. South Korea is also conscious of Beijing's intentional display of its diplomatic and economic power. JoongAng Ilbo, one of South Korea's major newspaper wrote on September 25:

China has been eyeing the territorial right over Leo Island in the Yellow Sea, which South Korea claims is its territory, and the Exclusive Economic Zone could become the next hot potato. The Leo Island dispute and the economic zone are the reasons why Korea cannot sit back and watch the discord between China and Japan comfortably.

We need to have firm determination to proudly defend Korea's national interests, using all possible and available means and measures.

The South China Morning Post has also pointed out that China is taking a harder stance than before. ''First there was Taiwan, Tibet and Xinjiang, and then the South China Sea. Now the Diaoyu Islands have become the latest addition to China's 'core interests' when it comes to territorial integrity,'' the Hong Kong newspaper reported on October 2.

Western companies are beginning to dislike the ''China Risk'', as Beijing can easily block the export of rare earth minerals that industries throughout the world need, leading companies to suffer since China accounts for more than 90% of the global production of such minerals.

Middle Kingdom
Chinese characters also show the potential for stability and instability that has persisted in Asia historically. In Chinese characters commonly used in East Asia, China means "central nation" or "middle kingdom". The characters imply that the Chinese empire is the center of the world and that other nations are tributary states. That situation for neighboring states was long true until the middle of the 19th century, when the Qing Dynasty, the last imperial dynasty of China, suffered under foreign aggression and occupation.

From the standpoint of China, the late 19th and 20th centuries were exceptional times, with what Chinese call "small Japan” beating and invading the middle kingdom and reigning as the No 1 nation in the region. The 21st century may well be high time for China to recover ''lost territories''.

Japan, meanwhile, experienced great changes during and after the Meiji Restoration in 1868, when the emperor proclaimed a cultural awakening to "catch up" with Western nations. Two victories against China in the Japanese-Sino War, 1894-1895, and against Russia in the Russo-Japanese War, 1905, made Japan a world power. The main character on the Asian stage thus changed rapidly in the early 21th century.

In a sense, Asia is in the process of normalization, with China coming back as the Asian hegemon after a century and a half. But at the same time, the world is in a process of "abnormalization", with the global economy's center of gravity shifting from the West to the East, led by China's rising economic and corresponding political power.

The world needs to urge China to become a responsible stakeholder among the international community, not to become a big nation that bullies neighboring countries.

Kosuke Takahashi is a Tokyo-based journalist.

(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

My latest story for Asia Times: Ten-yen stores capture deflation dilemma

Here is my latest story for Asia Times published today. If you have time, please go over this.

Ten-yen stores capture deflation dilemma

As the United States flirts with deflation, economists point to Japan for examples of the damage falling prices can inflict on society. Yet Japanese chain store Recycle Garden shows how profits can be made in such dire circumstances - at least for a short while. - Kosuke Takahashi

My latest story for Jane's Defence Weekly

Here is my latest story for Jane's Defence Weekly published on September 10.

Japanese White Paper highlights concerns over China's maritime activities
Kosuke Takahashi JDW Correspondent
Tokyo

China's intensifying maritime activities in the sea around Japan and the lack of transparency of its national defence policies are a matter of concern for the region and the international community, Japan's new defence White Paper has cautioned.

The 2010 White Paper, released by the Ministry of Defence (MoD) on 10 September, said that China does not disclose a clear, specific future vision of its military modernisation and that it has been intensifying its maritime activities, including those in waters near Japan. The paper also noted Japan required prudent analysis on current developments in the Chinese People's Liberation Army (PLA).

The White Paper - which Japan releases annually to take account of any changes in the defence and security environment - included the PLA Navy's activities in the sea off Japan, particularly those of the past two years. It cited a series of incidents that have occurred since 2004, involving Chinese flotillas that have sailed through the Miyako Strait near Okinawa and voyaged to waters near Okinotorishima in the Pacific Ocean, thus intruding into Japan's exclusive economic zone.

The paper said those flotillas were each comprised of between two and 10 vessels, centred on a Luzhou-class guidedmissile destroyer - a vessel armed with an advanced air-defence system - or a Russian-built Sovremenny-class guidedmissile destroyer and/or a 'Kilo'-class diesel-electric-powered submarine. It also cited the incident of a Chinese Hanclass nuclear submarine that intruded into Japanese territorial waters in November 2004.

In a move to counter China's growing naval presence, the paper highlighted Japan's ongoing security efforts in the Nansei Islands - an island chain stretching southwestward from the Japanese island of Kyushu to Taiwan - noting that, on the basis of the security environment surrounding Japan, the MoD is reviewing how to defend the islands by taking into account the deployment of new corps.

North Korea's nuclear weapons and ballistic missiles were another area of focus. The paper said that North Korea's nuclear tests, along with the build-up of ballistic missile capabilities that could become a delivery system for weapons of mass destruction, would never be acceptable. The tests posed a grave threat to the security of Japan and seriously damaged the peace and stability of Northeast Asia as well as the international community, it stated.

MoD press secretary Satoshi Maeda told reporters ahead of the formal release of the paper on 9 September that countries such as the US and India are also concerned about the lack of transparency of China's national defence
policies and increasing naval activities, including those in waters near Japan.

Asked about Japan's original efforts to demand transparency in China's strengthening of military power, Maeda said: "We have been promoting mutual understanding between Japan and China through security dialogues and defence exchanges in recent years. The promotion of mutual understanding is very important."

Copyright © IHS Global Limited, 2010

(Foreign Affairs) The Pyongyang Playbook

This is a very nice analytical article on North Korea's diplomacy.
The author said, “Based on this trajectory, North Korea will likely conduct another nuclear test in the coming months, tempting the Obama administration -- which has yet to yield to Pyongyang’s playbook -- to start afresh with negotiations early next year. Possible dates for the test include September 8, the eve of North Korea's National Foundation Day, and October 10, Party Founding Day. ” Let's watch out for the DPRK with “strategic patience”!


The Pyongyang Playbook

Sung-Yoon Lee

SUNG-YOON LEE is Adjunct Assistant Professor of International Politics at the Fletcher School of Law and Diplomacy at Tufts University.

One persistent misperception about North Korea is that its provocative international behavior is unpredictable. In the last two years alone, North Korea has held four U.S. citizens hostage; fired a long-range missile over Japan; conducted further nuclear testing; and, most recently, torpedoed the South Korean warship Cheonan, killing 46 sailors on board.

In fact, Pyongyang's methods have been remarkably consistent since the early 1960s, when Kim Il Sung, the nation’s founding dictator and its current leader’s father, purged all potential rivals and consolidated power. Its strategy has been to lash out at its enemies when it perceives them to be weak or distracted, up the ante in the face of international condemnation (while blaming external scapegoats), and then negotiate for concessions in return for an illusory promise of peace. Incapable of competing with economically flourishing South Korea, the North can rely only on military and political brinkmanship to make up ground. This has been a stunningly successful game plan for the isolated, impoverished nation that sits amidst the world’s most powerful status quo states, including China, Japan, Russia, South Korea, and the United States.

North Korea's policy toward the Obama administration has closely followed this time-tested strategy. The United States has a long and undistinguished history of playing into the North’s game plan. However, the Obama administration has deviated from this pattern and adopted a policy that U.S. officials have dubbed “strategic patience.” The White House has attempted to remain calm in the face of North Korean provocations and has resisted making deals with Pyongyang merely for the sake of defusing tension. In view of the North Korean regime’s strategic outlook, it is the right approach.

The North has long chosen to confront its adversaries when they are weak. In 1968, as the political tide was turning against the United States in Vietnam, North Korea dispatched a 31-man commando team to kill South Korean President Park Chung Hee. Although South Korea thwarted the raid, Pyongyang continued its offensive two days later, when its forces captured the U.S. intelligence ship Pueblo in international waters off the coast of the Korean peninsula. One U.S. sailor was killed in the seizure; the remaining 82 crewmembers were held captive under torturous conditions for 11 months until they were released following an apology by the Lyndon Johnson administration.

After enduring international condemnation, North Korea often decides to stay the course and even increase political tensions. During the Pueblo standoff, North Korea carried out commando raids against South Korea, sending more than 120 soldiers that October and additional troops the following year. The South Korean military quelled the raids, but Pyongyang, emboldened by continued U.S. difficulties in Vietnam, soon greeted the new Nixon administration with further violence. On April 15, 1969, on the occasion of Kim Il Sung's birthday, a North Korean jet shot down a U.S. reconnaissance plane, killing all 31 U.S. servicemen aboard.

The United States attempted to manage these crises in the 1960s by responding with conciliatory gestures aimed at alleviating tensions. North Korea learned that it could provoke, and even attack, the world’s greatest military power with impunity.

The North has redeployed this tactic in recent years. In 2006, for example, it attempted to capitalize on U.S. difficulties in Iraq. As Americans were celebrating July 4, North Korea carried out a barrage of missile tests, even firing a long-range missile in the direction of Japan.

This was the prelude to a far more confrontational act: North Korea’s first-ever nuclear test, which occurred on October 9, the eve of the Korean Workers’ Party Founding Day. By demonstrating its nuclear capabilities, North Korea painted the Bush administration into a corner. It also blatantly defied UN Security Council Resolution 1695 -- passed earlier that year in response to the North’s missile tests -- which called on Pyongyang to “abandon all nuclear weapons and existing nuclear programs.”

The October 2006 nuclear test yielded a more strongly worded Security Council resolution (1718), which demanded that North Korea “not conduct any further nuclear test or launch of a ballistic missile” and called upon UN member states to “ensure” that funds supporting North Korea’s nuclear program be cut off. More important, it triggered a change of heart in the George W. Bush administration, which chose to abandon its effective policy of financially squeezing North Korean elites' cash flow and instead negotiate a nuclear agreement with North Korea the following February. In return for Pyongyang’s promise to dismantle its nuclear arsenal, Washington sequentially unfroze North Korea’s illicit funds, resumed food and fuel aid, and delisted North Korea from the U.S. State Department’s list of state sponsors of terrorism.

Leaders in North Korea believe that their aggressive behavior can coax such concessions yet again. Thinking that the Obama administration -- coping with two ongoing wars and a serious economic crisis -- would be quick to opt for diplomacy, Pyongyang launched a long-range missile in April 2009, dominating global headlines and diminishing Obama's then high-profile visit to Europe. Pyongyang assumed that Obama could be bullied into seeking conciliatory diplomacy. Such assumptions, however, have yet to be borne out.

After raising the stakes with its opponents, the North often retreats and demands negotiations. It did this in 1972, when, stunned by U.S.-Chinese rapprochement the previous year, it agreed to hold the first-ever high-level talks with the South since the Korean War. Since then, Pyongyang has intermittently launched “peace offensives” at the United States, hoping to sign a treaty that would lead to the withdrawal of U.S. troops from the South.

Yet Pyongyang often sues for peace while forging ahead with forbidden activity. Even after it entered negotiations with South Korea in 1972, it continued hostilities against its southern neighbor. North Korean agents kidnapped South Korean fishermen and made another attempt on the life of South Korean President Park Chung Hee in 1974, leading to the death of his wife.

In the Kim Jong Il era, North Korea has consistently applied this approach of illusory concessions to the nuclear issue. In the wake of signing the 1994 Agreed Framework -- a deal in which Pyongyang agreed to freeze its plutonium-based nuclear weapons program in exchange for energy aid -- the North sealed its main nuclear reactor and opened doors to International Atomic Energy Agency inspectors. But North Korean leaders quickly flouted the plan. In 2008, Pyongyang drafted an 18,000-page laundry list of nuclear activities while refusing to provide samples from its nuclear complex to outside inspectors on request. Despite its duplicity, North Korea still managed to be removed from the State Department’s terrorism blacklist in October of that year.

In recent weeks, Pyongyang has dangled an olive branch before the Obama administration. Apparently pleased with the weakly worded July 9 UN Security Council presidential statement on the sinking of the Cheonan -- which, despite overwhelming evidence of North Korean culpability, failed to blame the country for the act -- Pyongyang has suggested that it would return to the six-party denuclearization talks. By intimating a willingness to rejoin the multilateral forum, the North is seeking to deflect the negative attention it has received from the Cheonan incident. Once again, the North is presenting an image of reconciliation in the hopes of more political and economic rewards.

While angling for compromise, the North often offers meaningless theatrical gestures. In 2008, it allowed the New York Philharmonic to play in Pyongyang. Later that year, it blew up an old nuclear cooling tower, one that had exhausted its lifespan and could easily be rebuilt. Such dramatic displays are designed to bolster proponents of concessionary diplomacy in the United States and South Korea. They target those who unwittingly take the patronizing view that North Korea, lacking a strategic mindset of its own, merely reacts to positive stimuli -- be they musical overtures or diplomatic civility.

Yet U.S. policymakers should not be deceived. Amidst ongoing talks with Washington this past decade, North Korea has sent nuclear technology to Syria, as revealed in the wake of the Israeli air strike on a North Korean–built nuclear plant, Al Kibar, in eastern Syria in September 2007. In July 2008, North Korean guards killed a South Korean tourist taking a walk along a resort in the North’s eastern coast, a site funded by the South.

Meanwhile, Pyongyang has pressed ahead with drug trafficking, money laundering, and U.S. currency counterfeiting. It has also attempted to export arms in violation of UN resolutions. Last December, for example, a North Korean shipment of rockets and rocket-propelled grenades was seized in Bangkok that, according to Thai officials, was destined for Iran. In a failed plot earlier this year, Pyongyang sent agents posing as defectors into South Korea to assassinate a high-level North Korean defector.

The incitement from Pyongyang is likely to continue. North Korea's artillery barrage on and near the western maritime border with South Korea on August 9 and its seizure, the day before, of a South Korean fishing boat allegedly in North Korea’s eastern exclusive economic zone are just the latest examples of Pyongyang’s predictable game plan.

Based on this trajectory, North Korea will likely conduct another nuclear test in the coming months, tempting the Obama administration -- which has yet to yield to Pyongyang’s playbook -- to start afresh with negotiations early next year. Possible dates for the test include September 8, the eve of North Korea's National Foundation Day, and October 10, Party Founding Day.

Moreover, the political bureau of North Korea’s ruling Communist Party is scheduled to convene a rare meeting in early September where Kim’s heir apparent may be formally introduced. North Korea's intention to implement another father-to-son power transition makes the odds of a nuclear test even more compelling -- if only to bolster the inexperienced inheritor's military credentials. For a nation that professes to pursue “military first” politics, the implementation of another hereditary succession is certain to carry greater legitimacy if it comes on the heels of a dramatic demonstration of military prowess.

The U.S. should maintain its strategic patience with North Korea. It must put sustained pressure on Pyongyang's points of vulnerability -- principally, the cash flow needed to sustain its palace economy. In recent weeks, the Obama administration has repeatedly stated that it would strengthen financial sanctions against the North Korean leadership, targeting its counterfeiting, money laundering, and other illicit activities.

Furthermore, North Korea has shown itself to be sensitive to criticisms of its human rights abuses in the past, categorically denying that it perpetrates human rights violations in its “workers’ paradise.” Thanks to public pressure, the North has reduced its execution rate in recent years while sporadically relaxing prison sentences for border-crossers. Although such changes may be more a function of logistic difficulty than determined policy, the fact that foreign criticisms impel North Korea to cover up its manifold human rights abuses is beyond doubt. The White House should take a firm stand on North Korea's human rights violations, which would not only give hope to the long-suffering North Korean people but also impel, if only incrementally, Pyongyang to relax its crackdown on political prisoners. At the very least, such a principled stance would galvanize international cooperation on reunifying the two Koreas under a democratic government should the North’s regime collapse.

These policies will help the Obama administration avoid getting drawn into a dangerous military conflict with North Korea. Today, the North Korean regime faces the greatest existential threat since the disintegration of the Soviet Union. Beset by a perennial economic crisis, increasing information flow into the country, and the uncertainty of another dynastic succession -- while struggling to rein in an ever-increasing number of North Koreans who wish to escape to the South -- Kim Jong Il must confront serious questions of long-term self-preservation. Amidst all this, Kim, who suffered a stroke two years ago, is himself racing against the clock. A dictator for life, he used to enjoy the advantage of outlasting democratically elected leaders. Strategic patience will best exploit his new limitation.

Time is no longer on Pyongyang’s side. The U.S. should avoid chasing North Korea through a revolving door of provocation and deception, unwittingly subscribing to the tactics presented all too plainly in the decades-old Pyongyang playbook.

My latest story for Asia Times. Japan's new round of musical chairs

I wrote about Ozawa's bid for the DPJ presidency. In my view, Ozawa is Japan's dirty hero, who could cause major political and economic change in the country.

Japan's new round of musical chairs
By Kosuke Takahashi

TOKYO - Around the globe, poor economies are weakening already vulnerable governments and causing political changes. This was so in the United Kingdom in May and is likely to be reflected in the November mid-term elections in the United States.

Japan is no exception. With the country facing a rising yen, sluggish domestic demand and unstoppable deflation - all significant contributing factors to the sinking of the world's long-time second-largest economy, musical chairs with the top job may possibly burden the nation with its third premier in a year.

Political kingpin Ichiro Ozawa, 68, a member of the governing Democratic Party of Japan (DPJ), on August 26 took on Prime Minister Naoto Kan, 63, declaring his candidacy for the party leadership. The outcome of that race will essentially decide Japan's next leader.

The government on Friday offered a pessimistic view of the economy. Japan's consumer prices continued to decline in July for the 17th straight month, another sign that the economy remains mired in a deflationary spiral that is pushing down prices, wages and demand. The yen hovered near a 15-year-high against the US dollar, trading at 84.64 yen a dollar at 4:50 pm in Tokyo.

The fate of the DPJ presidential race has far-reaching implications beyond the domestic arena of politics. Ozawa has said that the US 7th Fleet, based in Yokosuka, Kanagawa prefecture, would be enough to secure the US presence in the Far East from a strategic viewpoint - suggesting that he supports withdrawal of all other US forces from Japan, including the controversial US Marines Corps base in Okinawa.

In December, Ozawa, then secretary general of the DPJ, accompanied more than 600 people, including 143 DPJ lawmakers from the upper and lower houses of the Diet (parliament), to Beijing - showing his pro-China stance as a direct successor of former prime minister the late Kakuei Tanaka, who broke the ice to normalize Japan-China relations in the early 1970s.

The Destroyer
Ozawa, a shrewd veteran lawmaker and former Liberal Democratic Party secretary general, has earned himself the nickname "The Destroyer", a Japanese version of the Hindu god Shiva the Destroyer, for his record of creating and breaking up parties and for crushing personal ties and letting go of many talented aides.

He stepped down as DPJ secretary general in June, wounded by a political donation scandal that has already led to the arrest of his three secretaries, along with the party's then-leader and prime minister, Yukio Hatoyama.

Ozawa still has past accounting violations at his political fundraising organization, or Rikuzankai, hanging over his head. He could be brought to trial, depending on a ruling by a citizens' panel expected as early as October. But should he become the next prime minister, the law could protect him from indictment for the duration of his tenure for a questionable land transaction by his implicated fundraising body.

Strong-arm tactics and risk-taking
Although he conjures up tainted images as a politician among ordinary people, more than a few lawmakers and some business leaders expect Ozawa to boldly address national problems through his strong-arm tactics and risk-taking - by confronting and reining in the bloated bureaucracy, including the Ministry of Finance and the Bank of Japan, and then taking more pump-priming measures.

Ozawa decided to throw his hat into the ring for the presidency of the DPJ as he felt a restless urge about the future of his fading political influence, Minoru Morita, a noted political analyst based in Tokyo, said.

"Heading into the party election, Kan refused to accept Ozawa’s demands, such as the dismissal of chief cabinet secretary Yoshito Sengoku and current secretary general Yukio Edano, both Ozawa foes," Morita told Asia Times Online on Friday. "This made Ozawa decide to run for the election. For sure, he is damned if he does so because he resigned as the DPJ's secretary general less than three months ago. But he would also be damned if he doesn't, because he surely faces the end to his career by losing his political power."

"If the presidential election were held today, Kan would beat Ozawa because of the strength of the incumbent premier holding power and position," Morita said. "But in the DPJ presidential election scheduled for September 14, there would have been a major reversal in this situation. Ozawa may win."

Japanese economists and market participants are divided over the prospects of the economy should Ozawa take over as prime minister.

Critics view Ozawa as a fiscal expansionist by sticking to the party's 2009 platform that was criticized as rampant spending. They predict extra spending could trigger selling in Japanese bonds and the yen, just like with Greek bonds and the euro.

Proponents, meanwhile, say Ozawa would be better to tackle the rising yen and falling Japanese stocks by taking aggressive measures, much more so than Kan, who seems to have fallen behind the curve since taking over in June this year, even though Kan was a finance minister.

A Japanese proverb says, "One poison drives out another." Ozawa may be a tainted hero who could cause major political and economic change. People are increasingly focusing on the DPJ presidential race - it could be a good measures of how much ordinary people want a leader to revive the fading country, once called an "Economic Animal" and now facing a "lost three decades".

Kosuke Takahashi is a Tokyo-based journalist.

(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

"ANPO" Trailer

Praying for World Peace

Today is the 65th anniversary of the end of the World War 2.

Japan is also in the Obon season, which is from August 13th to the 16th. Obon is a Buddhist festival to recognize ancestral spirits. It is believed these spirits return to our families during the period. We visit our ancestral graves and make offerings of flowers and incense.

The photo above is my great-grandfather, Yonosuke Goto, who died in 1925 at the age of 33. That was before the war. I personally offered a one-minute silent prayer to mourn the victims and wish for world peace.