NEWS LETTER

2024
June

Exchange of opinions around the future ofcapitalism ― conference with Professor Markus
Gabriel is held
The 21st Century Public Policy Institute conducts
research and analysis on important economic andsocial issues that exist both domestically and overseas,taking a medium- to long-term outlook and uniqueperspective with the business world and academia
transcending existing frameworks and fusing their
wisdom.
As part of this, the Institute launched a “capitalism anddemocracy” research project (Principal Research
Director: Takahiro Nakajima, Professor, Director of

Chairman Tokura

the East Asian Academy for New Liberal Arts,
University of Tokyo) in 2022 and holds discussions

Professor Gabriel views capitalism not only as anwith domestic and overseas experts from various fields

economic system comprised of a market economy andin order to overcome the environmental issues,

private ownership of means of production, but also as

inequality issues and liberal democracy crisis rooted ina system for the resolution of social issues and moral

traditional capitalism. Cooperation with University ofadvancement. In this sense, he points out, there is aBonn Professor Markus Gabriel, who also serves asneed to assess whether a company’s orientation andAcademic Director of The New Institute (TNI), has

activities amount to a morally correct business in the

been especially important to the project.

first place and how much they contribute to theresolution of ethical issues, and argues that it isimportant for current capitalism to become an ethicalcapitalism. Such a way of thinking aligns with thethinking “from a social point of view” that Chairman
Masakazu Tokura has endorsed since taking office, andthe shared perspectives and directionality of the twohave been confirmed even in their special dialogue
held in May 2023 (note). In this context, the 21stCentury Public Policy Institute decided to takeConference members

advantage of Professor Gabriel’s return visit to Japan1

and hold a conference on 26 March 2024.
The latest event took a two-part structure. In the first
half, an exchange of opinions was held in the presenceof Principal Research Director Nakajima with theattendance of Chairman Tokura as well as Vice Chairs
Jun Sawada and Yumiko Noda, Vice Chairs of theBoard of Councilors Masumi Kakinoki and Seiji
Inagaki, and Chair of the Committee on Political
Affairs Shinya Katanozaka. The current internationalsituation, how to deal with cutting-edge science andtechnology such as AI and the outlook for capitalism
were discussed in a cordial atmosphere from start tofinish. There was an in-depth Q&A and full exchangeof opinions on the vision presented by Professor
Gabriel.
In the second half, an exchange of opinions was heldwith members of the “future of capitalism” researchworking group established under the “capitalism anddemocracy” research project. The working group
comprises around 30 volunteers from the industries towhich the Keidanren chairman and vice chairs and theBoard of Councilors chairman and vice chairs belong
and takes up the research theme of “universalizing
concepts originating from Japan.” At this gathering,
Professor Gabriel opened with a keynote speech on
ethical capitalism, then Principal Research Director
Nakajima gave a report on the working group’s
activities. At the free discussions that followed,
examples of efforts around social and ethical issues byPrincipal Research Director Nakajima

the companies of the working group members wereintroduced. Various opinions were offered from theviewpoint of companies that are actually conducting
business under current capitalist logic with respect tothe challenges that are being confronted or could be
confronted toward the realization of ethical capitalism,
and the methodology for Japan’s business community
to create new value for the world. There were also
active and constructive discussions on these withProfessor Gabriel.
The 21st Century Public Policy Institute will further
consider the “future of capitalism” based on theknowledge gained from the latest conference withProfessor Gabriel. Details on the recent exchange of
opinions and the project’s research results will be
posted periodically on the institute’s website anddisseminated through pocketbooks and newsletters.
（Arisa Nishimura, Fellow）

The project’s research results (Japanese
language only)
The 21st Century Public Policy Institute/researchareas/philosophy and liberal arts
Note: Booklet providing overview of special
dialogue titled “Toward the Creation of a
Desirable Future Society – University of Bonn
Professor Markus Gabriel and Keidanren
Chairman Masakazu Tokura”
Video(YouTube)
Professor Gabriel

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Seminar series on the “business portfolio
restructuring aimed at the sustainable growth ofJapanese companies” – second seminar is held
On 15 February 2024, the 21st Century Public Policy
Institute cooperated with the Research Institute of
Economy, Trade and Industry (RIETI) to hold an
online “brown bag lunch” (BBL) seminar as part of aseries on the theme of “business portfolio
restructuring.”

Tomoyasu Marutani, Chairman,
Secoma Co., Ltd.

What is the “business portfolio restructuring”
seminar series
Amid calls about the need for carbon neutrality anddigital transformation and arguments that the very
structure of the economic community will undergo
major change, there is also a demand to transformbusiness strategy. The traditional business model ofholding multiple businesses and pursuing profits ineach segment is not enough. Going forward, it will beessential to revise existing businesses from the groundup under the clear vision and strong leadership ofmanagement and to be strategic and bold intransforming business portfolios in order to achievesustainable growth and earning power.
At this seminar, the management of companies thathave actively and resolutely taken on the challenge ofsuch business portfolio restructuring and achieved
results will be invited on stage to speak about their
specific efforts at restructuring and the mindset
necessary to succeed.

The second seminar conducted this time aroundwelcomed Chairman Tomoyasu Marutani of SecomaCo., Ltd. Chairman Marutani spoke about the ideas of
his company, which develops businesses rooted in thelocal community and demonstrates overwhelming
brand power in Hokkaido, and ended the seminar on ahigh note.
Appearances:
Speaker
Tomoyasu Marutani, ＊Chairman, Secoma Co., Ltd.
Moderator/commentator
Katsuhiro Sato, ＊Consulting Fellow, RIETI/Professor,
Graduate School of Business and Finance, Waseda University
Commentator
Takashi Yoshimura, Director, The 21st Century Public Policy
Institute, Keidanren (Secretariat)(＊ Titles as of February 2024）

This series is broadcast exclusively on YouTube Livewith archives posted at a later date (see URL below)
Archives (Japanese language only)
https://www.rieti.go.jp/jp/
events/24021501/handout.html(limited release until August 2024)

What are BBL seminars?
BBL seminars are seminars held during lunch hours
where participants bring their own lunches – a format
that has long been utilized at US universities andresearch institutes. The name comes from the practiceof putting a purchased lunch into a brown bag. In
Japan, RIETI actively works to hold seminars in thisformat. The seminar held jointly with RIETI this time
Seminar photos (from left, Takashi Yoshimura, Tomoyasu Marutani,
Katsuhiro Sato（※titles omitted）

around also took such a format.
(Kota Aono, Senior Fellow)

3Symposium on “challenges and outlook for the
Chinese economy” is held
On 28 March 2024, the 21st Century Public Policy
Institute’s China research project (Principal Research
Director: Shin Kawashima, Professor, Graduate
School, University of Tokyo) held an online
symposium on the “challenges and outlook for the
Chinese economy” with the participation of member
companies. Principal Research Director Kawashima
and three fellows specializing in the economy gave an
overview of China’s sluggish economic situation andanalyzed the labor market and troubled local
government finances that have become a social issue.
Below is a summary.
■Analysis of China’s current economic situationand future challenges (Jiro Naito, Professor, Daito
Bunka University)
The Chinese economy is expected to remain in a longterm slump. The decline in consumption andinvestment sentiment due to the deflationary trend is
especially serious. At the same time, economic policies
show a striking “incongruity.” One example is how
China revised its so-called counterespionage law while
saying it will actively attract foreign capital. Suchseemingly incoherent policies are a feature of the Xi
Jinping administration. Although it restructured its
organizations and personnel to emphasize national
security and strengthen party leadership, policy
decisions and operations may be confused as a result.
Also, impoverished local economies face thechallenges of investment companies under local
governments holding hidden debts and the

Research Fellow Naito

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Research Fellow Kajitani

restructuring of finances dependent on the transfer ofland use rights for income.
■Labor markets and irregular labor in China（KaiKajitani Professor, Graduate School of Economics,
Kobe University）
In China, the youth unemployment problem has comeinto focus. To understand this problem, it is necessary
to accurately grasp labor statistics. For example, thejobless population does not include “lying down” and“mooching” youth and the actual situation around“flexible workers,” which have increased sharply, isunclear. In China, people dubbed “migrant workers”
had moved from rural to urban areas as temporary
workers and day laborers. Since 2010, they haveremained in those urban areas even after losing theirjobs and have become flexible workers. It is essential
to view China’s labor market problems, including how
the increasing number of flexible workers will impact
on that market in the future, as a medium- to long-term
structural change.
■Sustainability of China’s finances and balance
between central and local governments (Kumiko
Okazaki, Research Director, the Canon Institutefor Global Studies (CIGS))
The Communist Party of China has long managed
policy with a strong focus on fiscal balance. Withsociety getting old before it gets rich, maintaining
fiscal sustainability is an important issue. However,
local government finances have depended on income

Research Fellow Okazaki

Principal Research Director Kawashima

from fees for the transfer of land use rights, so they
have taken a major hit with the slumping real estatemarket. To help with local finances, transfer
expenditures from the central government to local
governments have actively been implemented to date.
The challenge is making these expenditures in a timely
manner and the extent to which it is possible torespond flexibly to local needs. Regional disparities
have become another serious issue. These cannot be
resolved by increasing the local government’s share oftax revenues alone. It is probably best to first collect
all tax revenues at the central government, thenredistribute.

■Panel discussion
A panel discussion with the three speakers was held
next with Principal Research Director Kawashima
serving as moderator.
Principal Research Director Kawashima deepened
discussions with the speakers, taking up four points
based on their speeches: 1) the positioning of
economic policy for Xi Jinping; 2) the possibility of
relying on foreign capital for economic reconstruction;3) the Japanization of the Chinese economy; and 4)
the migrant workers that remain in urban areas andurban policy. Finally, he concluded by touching on
points that warrant the attention of Japanese companies
that have expanded or will expand into China（Yuko Chiba, Senior Fellow）

Seminar on the “outlook for international politics in
2024 and beyond” is held
On 20 February 2024, the 21st Century Public Policy
Institute held a seminar at the Keidanren Kaikan in
Otemachi, Tokyo. Visiting Research Fellow Ryo
Sahashi, Associate Professor, Institute for Advanced
Studies on Asia, University of Tokyo, delivered aspeech on the “outlook for international politics in
2024 and beyond.”
Research Fellow Sahashi opened by saying that 2024
is an extremely important year to the medium-term
outlook for international politics in 2025 and beyond,and indicated what the Japanese business communityand companies should prepare for and the measuresthey should take before the arrival of an“uncomfortable world” stemming from the retreat ofglobalization and loosening of the international
economic order. Below is a summary.
■Indo-Pacific system as a new structure
A major factor characterizing the current international
order is the US-China conflict. Looking squarely at
China, the US Biden administration over the past three
years has deepened ties with allies and partnercountries in the area of economic as well as military
security, demonstrating initiatives through the
Quadrilateral Security Dialogue (QUAD) among
Australia, India, Japan and the US, the Trilateral

Visiting Research Fellow Sahashi

Security Partnership among Australia, the UK and US(AUKUS), and US-Japan-Korea trilateral summits.
Japan’s role as the US forms this new order isconsidered especially important and will likely
increase going forward. These efforts will increase
predictability and lead to stability in the East Asian
region.
■Increasingly severe international situation and US
domestic politics
Turning to other regions and US domestic politics, thedifficult situation becomes visible. In relation to
Ukraine, the international community’s low morale
due to aid fatigue is a concern, while the situation in5the Middle East is in turmoil and the future is unclear.
US Congress is also in turmoil and a rematch between
President Biden and former President Donald Trumpin the November 2024 US presidential election appears
increasingly realistic. We need to start thinking
seriously about the return of a Trump administration
and anticipate and prepare for a worst-case scenario.
■To prevent an undesirable division into two large
blocs
There is growing concern that if things continue like
this, competition between superpowers will turnincreasingly intense and an undesirable world with two
major blocs will arrive. Because standards and rules
would be completely different, there would be no flowof goods, no exchanges of people and no place fordiscussion. In confronting the future international
order, it will be essential for Japan to maintain adialogue with China, while emphasizing cooperation
with major Western nations and countries of the Global
South. Preventing a division of the world due tocompetition between superpowers and building a
multilayered order will be the path forward forJapanese diplomacy.
◇
As a message to Japanese companies, Research Fellow
Sahashi touched on the need to boost “predictive
capability” without the assumption of pastglobalization and international cooperation. He spokeon the importance of keeping a closer eye on theinternational situation than before and gaining a goodunderstanding of trends around developed countries
and regions such as the US federal government and
EU headquarters as part of a company’s management
strategy and in-house training.
During the Q&A after his speech, there was a question
on how companies should prepare for economic
closure and disruption. On this, Research Fellow
Sahashi took up the example of a Taiwan emergency
and answered that it is necessary not to discuss
whether it will occur but rather to assume various
stages and scenarios, then think about how much sucha case could impact on one’s company and how tocollaborate with those around us and help one another.
（Yasuhiro Iwasaki, Senior Fellow）

Seminar on “international situation surrounding
global warming, including COP28, and Japan’schallenges” is held
On 22 December 2023, the 21st Century Public Policy
Institute held an online seminar on the “internationalsituation surrounding global warning, including
COP28, and Japan’s challenges.”
Jun Arima, Project Professor, Graduate School of
Public Policy, University of Tokyo reported on his
field research at the 28th session of the Conference of
the Parties to the United Nations Framework
Convention on Climate Change (COP28) held in
Dubai, United Arab Emirates. Below is a summary.
■Assertions of developed and developing countries
On the handling of greenhouse gas reduction targets
and fossil fuels, a point of contention at the latest
COP28, there has been a conflict between the positionsof developed and developing countries since the issue
came into focus at COP26 two years ago, with the6former seeking to incorporate ambitious targets into
the agreement document and the latter wanting to
respond in accordance to the differing circumstancesof each country■Greenhouse gas reduction
On targets for greenhouse gas reduction, the latest
agreement listed the numbers and deadlines sought bydeveloped countries and stated that it “recognizes theneed to achieve” them. However, it states that the word
“recognize” “does not mean that every country willreach” the targets, suggesting developing countries
may not produce plans for reduction consistent with
them.
■Handling of fossil fuels
On fossil fuels, the COP26 of two years ago only took

up coal-fired power generation, where no measures
had been taken to reduce emissions, and only called
for a “gradual reduction.” Developed countries
subsequently sought to widen the target to all fossil
fuels, not only coal, and to strengthen related language.
Developing countries made similar assertions to thosein COP26 with respect to coal without mentioning
fossil fuels.
The COP28 agreement used similar language to
COP26 with respect to coal-fired power generation,
while mentioning fossil fuels as a whole for the firsttime and expressing a “shift away from” those fuels.
Although indicating a directionality of reducing
dependence on fossil fuels, it was vague with respect
to the end point.
■Specific means of transition
The means of transitioning away from fossil fuels
covered the acceleration of low-emission and zeroemission technology including renewable energy,
nuclear power and carbon dioxide capture, usage andstorage (CCUS). This marked the first mention of
nuclear power in the history of COP.
For emissions reduction in road transport, theagreement mentioned not only the zero-emission
vehicles and electric vehicles emphasized by the US
and others, but also, partly upon Japan’s insistence, theswift introduction of low-emission vehicles such ashydrogen cars and hybrids.
◇
Professor Arima concluded by noting that the latest
COP28 did not focus solely on fossil fuels but rather
outlined a variety of paths when viewed overall andthat he hoped an accurate picture of COP would begrasped.
After the speech, Professor Arima responded toquestions from participants. As for the actions thatshould be taken by Keidanren’s member companies,
he urged participation in the GX League Basic
Concept announced by METI and forward progress on
the reduction targets/long-term targets that have been
set. In relation to the green transformation businesschance, he remarked that how to create superior
technology and deploy it to the world is important,noting that many people indicated an interest inJapan’s many excellent technologies on display in the（Kota Aono, Senior Fellow）
pavilion.

Seminar record (Japanese language only)
Pocketbook on “international situation
surrounding global warning, including COP28,
and Japan’s challenges”
Note: this article is a compilation of theJapanese content of Professor Arima’s lecturethat has been translated into English by the 21stCentury Public Policy Institute.

Report on “circular economy – for new growth” ispublished
In 2019, the “circular economy (CE)” research project

report, and once again explained the need for Japanese(Principal Research Director: Yasushi Umeda,

companies to transition to the circular economy. The

Professor, Research into Artifacts, Center for

five research fellows for this research project discuss

Engineering (RACE), University of Tokyo) publishedthe direction for future growth based on thea report on “‘the circular economy changes business’ –characteristics of Japanese companies.

the aim of the EU’s CE policy.” Now subsequent（Yuko Chiba, Senior Fellow）

research results have been compiled and published in areport on “circular economy – for new growth.”
This report introduced the latest domestic and overseas
policies as well as strategies and examples from

Report (Japanese language only)“Circular Economy – For New Growthadvanced companies since the publication of the last7

Authors (chapter order)
Yasushi Umeda, Professor, Research into Artifacts, Center for Engineering (RACE), University of Tokyo
Keiko Akaho, economic journalist
Kazuo Iwano, former Chief Digital Officer, Mitsubishi Chemical Holdings Corporation
Kazunori Kitagawa, Director, Eco Management Center, Japan Productivity Center
Yayoi Hirose, Professor, Faculty of Information Networking for Innovation and Design, Toyo University(Titles as of March 2024)

Report on “issues surrounding geopolitical risk andthe legal response of Japanese companies: Focus
on legal issues surrounding Russia’s invasion of
Ukraine and economic security” is publishedThe “international law” research project (Principal

government and corporate response to Russia’s

Research Director: Kazuhiro Nakatani, Professor,

invasion of Ukraine, business with nations and regions

Graduate School for Law and Politics, University ofthat have geopolitical risk and the legal issues

Tokyo) compiled its FY2022 and FY2023 researchsurrounding such business as well as the legal issues

results in a report on “issues surrounding geopoliticalsurrounding economic security.
（Arisa Nishimura, Fellow）

risk and the legal response of Japanese companies:
Focus on legal issues surrounding Russia’s invasion of
Ukraine and economic security.”
The eight experts that participated in this research
project dis cuss legal is s ues s ur r ounding th eReport (Japanese language only)“Issues surrounding geopolitical risk and thelegal response of Japanese companies: Focus
on legal issues surrounding Russia’s invasion of
Ukraine and economic security”

Authors (chapter order)
Kazuhiro Nakatani, Professor, Graduate School for Law and Politics, University of Tokyo
Yoshinori Abe, Professor, Department of Law, Gakushuin University
Kazuyori Ito, Professor, Graduate School of Law and Politics, University of Tokyo
Kei Nakajima, Associate Professor, Institute of Social Science, University of Tokyo
Rikako Watai, Professor, Graduate School of Law, Keio University
Yurika Ishii, Associate Professor, Department of International Relations, National Defense Academy of Japan
Kie Matsushima, Special Counsel, Anderson Mori & Tomotsune
Jun Kazeki Senior Fellow, GRIPS ALLIANCE, National Graduate Institute for Policy Studies (GRIPS)(Titles as of March 2024)
Publishing/editing

The 21st Century Public Policy Institute, Keidanren (Japan Business Federation)
1-3-2, Otemachi, Chiyoda-ku, Tokyo 100 - 8188 Japan
TEL +81 (0) 3- 6741- 0901

http://www.21ppi.org/english/

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