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MAY 17, 1999 VOL. 153 NO. 19

Perfect Pitch
On a six-day U.S. visit, Japanese Prime Minister Keizo Obuchi pleasantly surprises his hosts by calling for more American investment, but he may have a tougher time convincing people back home that restructuring is the way to go

Keizo Obuchi and Sammy Sosa. AP

Before Prime Minister Keizo Obuchi left for the United States, he admitted he was nervous about getting things across to the Americans. Would he be able to articulate Japan's policies on financial reform, trade issues, defense? And of only slightly less importance, would he be able to throw a baseball across home plate when he tossed out the ceremonial first pitch at a Chicago Cubs game at Wrigley Field? On his third day in America, Obuchi put on a blue Cubs jacket and lobbed a ball toward home-run hero Sammy Sosa, who scrambled to grab it before it hit the grass.

Not exactly a strike. But it did the trick, and Obuchi's pitch was near-perfect for the rest of his six-day visit. In terms unusually frank for a Japanese leader, the Prime Minister conceded that his country's economic crisis was causing considerable pain at home and that additional reform measures were sure to upset "the socio-economic structure of Japan." Flexible labor markets would begin to replace guaranteed lifetime employment, for example, and a ban on stock crossholdings would end cozy ties among companies. But unless things change dramatically, Obuchi noted, "Japan is doomed to economic and technical decline."

In other words, this is not your typical Japanese leader. Charlene Barshefsky, the U.S. Trade Representative and hardly a pussycat when it comes to assessing Tokyo's economic policies, said she was pleasantly surprised that Obuchi opened his talks with U.S. President Bill Clinton by saying Japan was eager for an infusion of American investment. "Starting out with this," she said, "was indicative that, at a minimum, Japan does appreciate that something fundamental has changed in its economy which traditional measures cannot fully resolve."

Obuchi's push to improve Japan's investment climate has already attracted several American firms. In March, GE Capital, the industrial giant's financial arm, purchased Japan Leasing for $7 billion. Such moves are the mirror image of trends in the 1970s and '80s, when Japanese auto companies set up production facilities in the U.S. The Japanese then were creating manufacturing jobs at a time when the U.S. was in an economic slump. In effect, they revitalized the American car industry by forcing producers to become more competitive. "Now the reverse is taking place," says Michael H. Armacost, former U.S. ambassador to Tokyo. "Japan is struggling, particularly in the financial sector, and now American firms can come in and provide the best practices and jobs." After Yamaichi Securities--then Japan's fourth-largest broker--went bankrupt, Merrill Lynch hired 2,000 former Yamaichi employees, a development many Japanese applauded. "Creating jobs has taken the edge off the usual nationalist reaction to any foreign involvement in their marketplace," says Armacost.

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This edition's table of contents | TIME Asia home



U.S. secretary of state says China should be 'tolerant'

Philippine government denies Estrada's claim to presidency

Faith, madness, magic mix at sacred Hindu festival

Land mine explosion kills 11 Sri Lankan soldiers

Japan claims StarLink found in U.S. corn sample

Thai party announces first coalition partner


COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state


COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness

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