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On this day ten years ago, Japan was jolted by a magnitude 9.0 earthquake that struck about 70 miles off its northeastern shore. The temblor, the most powerful to hit the archipelago in recorded history, unleashed a tsunami with waves as high as 130 feet that smashed into 300 miles of coastline, wiping out entire villages in the provinces of Fukushima, Miyagi, and Iwate. The tsunami triggered a third disaster: the meltdown of three reactors at Tokyo Electric Power Company’s Fukushima Daiichi nuclear power plant, an incident now widely regarded to be the world’s worst nuclear catastrophe since Chernobyl.
Japan’s “triple tragedies,” as the events of March 11, 2011 have become known, killed nearly 20,000 people, forced another 160,000 to evacuate areas contaminated by radiation, and destroyed property worth hundreds of billions of dollars.
They also were a shock to Japan’s national psyche. “The compound crisis of earthquakes, tsunami, and nuclear emergency has shattered Japan’s image as a land of safety and security,” declared Japanese journalist Yoichi Funabashi in Reimagining Japan, a collection of essays I helped edit for McKinsey & Co. in the months following the catastrophes.
Funabashi, who is one of the smartest Japanese journalists I know, argued eloquently in that essay that March 11 was a seismic wake-up call—one that, like the arrival of Commodore Matthew Perry’s “black ships” in 1854 or Japan’s defeat in the Pacific War, had the potential to rouse Japan to abandon old traditions and fundamentally reinvent itself. “The momentous question now is what sort of change the Great Eastern Japan Earthquake will delineate,” he wrote. “Japan can no longer afford the delusions of ‘graceful decline’ or ‘small is beautiful’—notions that appealed to many prior to March 11. Our choice is rebirth or ruin.”
Funabashi bet on the former: “In the past 20 years, never have I been more sanguine about prospects for Japan’s rebirth.”
Alas, it’s hard to argue that, over the past decade, Japan has lived up to those hopes.
Many things have changed since 2011. As Peter Tasker points out in this recent Eastworld Spotlight conversation, Japan’s big companies are leaner and more profitable now than they were ten years ago—one reason that the nation’s benchmark Nikkei 225 stock average is returning to record highs.
And, for better or worse, the Fukushima meltdown transformed public perceptions about the safety of nuclear power. Before March 11, Japan operated 54 nuclear plants and relied on them for nearly 30% of total energy consumption. In the aftermath of March 11, all 54 plants were closed and a third were permanently scrapped. Of Japan’s 33 remaining commercial reactors only nine have been approved for restarts under post-Fukushima safety standards and only four of those are operating. Nuclear accounts for only 6% of Japan’s energy mix. Leaders of Japan’s ruling Liberal Democratic Party still back reviving Japan’s nuclear power industry. But that’s a position without support among Japanese voters. A recent poll for national broadcaster NHK found that only 3% of the public wants to use more nuclear power, while two-thirds want a gradual phaseout of nuclear power or its immediate abolition.
Tokyo has spent billions to rebuild infrastructure and contain contamination in the three provinces hardest hit by the tsunami. Nikkei Asia reported recently that, between 2010 and 2017, the GDPs of Iwate, Miyagi, and Fukushima all grew faster than that of the broader Japanese economy—even as their populations continued to shrink.
But Japan has mostly shrugged off the big challenges that have weighed on its economy since the collapse of its speculative “Bubble Economy” in the early 1990s. The triple tragedies did not force sweeping reform of Japan’s political system. Arguably, the crisis diminished public enthusiasm for new leaders because it occurred during a brief three-year period when the LDP was not in power. The public grew disillusioned with the response of Naoto Kan and his Democratic Party of Japan, voting them out of power in 2012.
Meanwhile, Japan’s population has continued to shrink steadily because of falling birth rates. It peaked at 128 million in 2011, now stands at 126 million, and is expected to fall below 100 million by 2053, according to government projections. In 2020, Japan’s population contracted by 512,000 people.
Despite an acute need for more and younger workers, Japan remains reluctant to open its borders to immigrant labor and has been slow to expand employment opportunities for women. Last year, the number of foreigners in Japan increased by about 200,000, but non-Japanese residents account for only about 2% of Japan’s population.
Japan’s female employment rate has increased steadily since Shinzo Abe returned to Japan’s prime ministership calling for more opportunities for women. But Abe and his successor, Yoshihide Suga, have fallen far short of Abe’s stated goal for women to hold 30% of the nation’s leadership positions, and the pandemic has had a disproportionally negative impact on Japan’s female workers.
This week’s Economist has a detailed look at why Fukushima didn’t prove the “turning point” many had hoped. It includes this lament from Funabashi: “I expected that Japan would finally start to change and I pinned hope on that prospect—but I’m afraid I was proven to be wrong.”
Separately, Alicia Garcia-Herrero, chief Asia-Pacific economist at investment bank Natixis, joined me for an Eastworld Spotlight conversation this week to discuss China’s five-year plan and the prospect of U.S. GDP growth surpassing China’s this year, thanks to the newly-passed stimulus package. Check it out here.
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
Two Sessions
Nearly one year after Beijing imposed a new National Security Law that effectively quashed the Hong Kong’s pro-democracy protest movement, Beijing on Thursday passed a sweeping overhaul of the city’s electoral system that is aimed at rooting out opposition voices from the city’s legislature. The law was passed on the last day of Two Sessions, a week-long annual political meeting of China’s top government officials. South China Morning Post
Who will Blink-in first?
U.S. Secretary of State Antony Blinkin pledged on Wednesday to take action against what he called “egregious violations of democracy and human rights” in regards to Beijing’s actions in Hong Kong. Blinkin’s promise will be quickly put to the test, as the state department announced Wednesday that he is set to meet with top Chinese foreign ministry officials in Alaska later this month. New York Times
Made in China
On Amazon, Chinese distributors make up over half of the platform's top sellers, marketing Chinese-made goods like shoes, suitcases, and flags to customers largely in the U.S. In 2020, the sellers got a unique glimpse into American life. When the U.S. government sent out stimulus checks amid the pandemic, Chinese Amazon traders enjoyed an immediate spike in sales as Americans spent their newfound funds. During U.S. protests over the summer, shoe sellers noticed that customers were reviewing shoes based on how well they performed when customers had to run from the police. New Yorker
To the moon
China and Russia have agreed to jointly build a new space station on or near the moon, potentially scrambling the politics of space exploration. China has made major advances in recent years as it has challenged the U.S.'s lunar supremacy, and now its enlistment of Russia—the U.S.'s original competitor in space—as a partner may help give China the upper hand in lunar research. New York Times
Coronavirus by country
Indonesia
This week, Indonesia said that it will allow large corporations and other private businesses in the country to purchase bulk orders of the state’s vaccines and distribute them to their employees. The idea is aimed at helping businesses in the country get back to work faster, but critics are worried that the policy may steer vaccine stocks to wealthier citizens. So far, Indonesia’s Chamber of Commerce says that 8,000 businesses have signed up for the program and the businesses plan to inoculate 30 million employees this year. The campaign may provide a boost to Indonesia’s fledgling vaccine drive—Indonesia plans to inoculate 181 million people by March 2022 but only 1.3 million people have been fully vaccinated thus far. Wall Street Journal
Markets and movers
China Telecom – The state-owned network operator said on Tuesday that it applied to debut in a secondary listing on the Shanghai stock exchange, two months after its stock was suspended in New York after the U.S. government alleged it had ties to China’s military. China Telecom’s primary listing is in Hong Kong. Nikkei Asian Review
Foxconn – The Taiwanese Apple supplier is shifting up to 10% of its production capacity to India from China, which will include shifting some iPhone 12 assembly lines to India. The move marks the first time that Apple’s flagship device will be made outside of China. Nikkei Asian Review
Coupang – The South Korean e-commerce giant will price its initial public offering at $35 per share when it debuts on the New York stock exchange on Thursday, according to Bloomberg. Coupang is set to raise $4.2 billion at a valuation of over $60 billion in the debut. Bloomberg
Cathay Pacific – On Wednesday, the Hong Kong-based airliner reported that it lost $2.8 billion in 2020 amid the pandemic, the company’s worst-ever annual performance in its 70-year history. Cathay is cautiously optimistic about its prospects for recovery in 2021, saying it will remain in cash-preservation mode given uncertainties surrounding vaccine rollouts. Caixin Global
Pfizer – The American pharmaceutical giant has told the Indian government that it will produce its vaccine in India if the government guarantees it speedy regulatory clearance and the ability to set its own prices and export to other countries, sources tell Reuters.
Baidu – The Chinese tech giant plans to launch its Hong Kong secondary listing on Friday and sell 4% of its shares worth an estimated $3 billion. Baidu is now set to become the latest in a string of Chinese tech giants like Alibaba and JD.com to seek secondary listings in Hong Kong after first debuting in New York. Reuters
Final figure
6%
Chinese Premier Li Keqiang said Thursday that China's targeted 6% GDP growth in 2021 is not too low in an apparent response to critics saying the estimate was overly conservative. Experts have projected that China's economy is set to grow by 8% this year as the country bounces back from the pandemic, but Li says the lowered projection will help the country avoid large economic swings. Reuters
