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Fukui: India to surpass Japan around 2025; Will that district for foreigners help?

A news release from AFP yesterday announced a prediction that India’s economy should overtake the Japan’s around 2025 to rank third in the world after the United States and China in terms of purchasing power parity.

Who made this prediction? Bank of Japan Governor Toshihiko Fukui, who told a panel in Tokyo:

India continues to achieve high economic growth with price stability. Looking ahead, the Indian economy will likely grow to the same level as the euro zone around 2020.

Fukui didn’t have much to say about the Japanese economy, or what plans the Bank of Japan has for the future.

Speaking of the future, talk continues to swirl around Japan’s plans to build a “foreigner-friendly” district in Tokyo for businesspeople from overseas. This time, XFN-ASIA has picked up the story (about a month after we did, but that’s not too bad).

Some highlights from the article:

…Japan aims to reinvigorate Tokyo as a global financial hub with a lofty goal of developing a new foreigner-friendly high-rise banking district.

The idea has raised eyebrows among foreign fund managers in the region whose biggest complaint about Tokyo is often not the lack of a decent office or apartment but high taxes and strict regulations…

[Yuji] Yamamoto [minister for financial services] did not say whether Japan would tackle high taxes and red tape, the most common complaints about Tokyo from fund managers, many of whom opt to work in Singapore or Hong Kong instead even if they manage Japanese stocks.

“Building buildings doesn’t create a financial system,” said one fund manager based in Singapore…”Japan has an unfavorable tax regime both for financial products and the individual. The overall operating environment in Japan is unfavorable because there is a deep suspicion of capitalism.”

Then, Robert Feldman, a managing director and economist at Morgan Stanley, is reported as saying that foreign managers in Tokyo often bemoan the lack of sufficient staff who are fluent in English. I sort of feel your pain…though I frequently bemoan the lack of foreigners who are sufficiently fluent in Japanese, which is sometimes the only thing that makes them unable to be hired.

The distance from Tokyo to Narita airport was also mentioned in the article, and finally:

The head of the Tokyo Stock Exchange, Taizo Nishimuro, also warned that the plan for a new district for foreign banks, while welcome, will not be enough on its own to boost Japan’s financial competitiveness.

‘We cannot wait until the time when those high-rise buildings are to be built before the Tokyo financial market gets bigger and greater,’ he told reporters recently, noting such ‘hindrances’ as regulations and high taxation.

Well said, from a guy who oversees an operation that uses computer systems that are still a hindrance (though they are actually doing something about that rather than just building a new building).

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