Rebirth Tokyo 1986

Chapter 470 Suggestions and Rewards

On July 30th, Keizo Obuchi officially became prime minister and formed his cabinet.

However, this cabinet formation seems to be temporary.

Because he made deals with various powerful figures in order to become prime minister, the cabinet members he selected lacked his own loyalists.

But these are not the most important issues. The most important issue is the predicament of the Japanese economy, especially the financial sector.

Too many banks and insurance companies have gone bankrupt, and without bailouts, the Japanese economy will collapse further.

Faced with such a predicament, he naturally sought to consult with the most knowledgeable people in economics. Takeshita Masato, as his staunch supporter, immediately took the lead.

"I think the most important thing right now is to deal with the Japanese bank's debt problem."

"Due to the combined effects of government, corporate, and financial crisis factors, the debt risk of most Japanese banks is extremely high. Even giant banks are at risk of bankruptcy."

"The government must provide financial assistance to prevent a chain reaction."

Faced with his junior's serious warning, Keizo Obuchi felt very distressed.

He knew he needed to bail out the banks, but the government was truly powerless at the time.

There is deep resentment among the Japanese public, who feel that the economic downturn is the fault of the government and financial companies.

The government's failure to introduce effective policies to reverse the economic predicament is understandable; it is clearly a major mistake.

As for financial companies, these mainly refer to companies that engaged in rampant stock speculation during the bubble era, as well as financial institutions such as banks that provided loans to these companies.

The public now believes that Japan would not be in such a difficult situation if it weren't for the banks and bond companies stirring up trouble.

The public was extremely dissatisfied with the high salaries and low performance of financial companies, so Keizo Obuchi naturally dared not risk public outrage by injecting capital into the bank.

Because once he orders the injection of funds into banks and other financial institutions, it is uncertain whether the Japanese economy will improve, but he will certainly be forced to step down soon.

He might be blamed for the Liberal Democratic Party losing power again.

“Junior Takeshita, my approval rating is too low right now. If we go down the path of robbing the poor to enrich the rich by injecting bank capital, it will be unsustainable.”

"Besides, even if it is correct, even if I am willing to gamble my prime ministerial career, even if it can help Japan get out of its economic predicament, it is completely unworkable."

Although Keizo Obuchi is the prime minister, Japanese politics is not decided by him alone.

This strategy, which could lead to the Liberal Democratic Party losing power, is unlikely to gain the support of the majority within the party.

For most lawmakers, Japan's economic recovery is important, but their own parliamentary seats are even more important.

If one has to choose between the two, economic recovery can only be an additional option.

"Is that so? Indeed. Then why don't we just sit back and watch a large financial institution go bankrupt to deter the public, and then bail out the financial industry later?"

Only when people are in the most desperate situation will they be willing to accept economic recovery policies that involve robbing the poor to enrich the rich.

This was true for Japan and South Korea after the Asian financial crisis, and it was also true for the United States after the global subprime mortgage crisis.

Without the bankruptcy of Changxin Bank and Lehman Brothers, even if the Japanese and American governments wanted to save them, they would have been torn to shreds by public opinion.

"No, let's not do that."

The major Japanese banks have very powerful backers, and Keizo Obuchi was unwilling to offend them.

He looked at his junior and prepared to try a different approach that could achieve a similar effect.

"Junior Takeshita, what do you think about me doing nothing first, and then when a major bank is in trouble, constantly hyping up the consequences of a bank going bankrupt in the media? Is that feasible?"

"The results won't be very good unless it happens to you personally."

Takeshita Masato shook his head, then suggested a better solution.

"Actually, we can help those banks on the verge of bankruptcy to save themselves, for example, by tightening corporate lending."

"If enough banks do this, then businesses will get nervous. And if businesses get nervous, then workers who are afraid of losing their jobs will also get nervous."

"In this way, combined with the newspaper's publicity about the consequences of bank bankruptcy, we can achieve the effect that our senior wants."

Only when workers feel insecure will they realize the necessity for government-funded bailouts of the financial sector.

Without laying the groundwork, even if things succeed, few people will appreciate it.

This is the crux of the problem for democratically elected governments: they must consider the feelings of the people when doing things.

“Indeed, that’s better. Let’s start with Changyin Bank. It has the most serious problems among the large banks.”

Keizo Obuchi nodded subconsciously, and then immediately decided to use Nagagami as the experimental subject.

The bank is backed by some capital, but not very strong, and it is not the core enterprise of a conglomerate.

The government can do whatever it wants.

"Yes, Changyin is a very good option."

This is even better; the more difficulties Changyin encounters, the easier it will be for Xinghai Group to acquire it.

This was also Keizo Obuchi's idea: to help his junior brother strike at the remaining opposition within Chogin.

The financial system is complex and intricate; the two talked for a whole morning but still couldn't fully understand it.

In the end, the two decided to change the subject and clear their heads.

"Actually, if you want to increase your approval rating, you can start by cracking down on those messy churches in South Korea."

"It can gain the support of both domestic religious forces and the families of the victims."

Rivalry is common among competitors. Shintoists and Buddhists in Japan naturally do not want to see foreign forces taking away their business.

Therefore, Oburo's policy of cracking down on the influence of the South Korean church will gain the support of the domestic religious community.

Both funding and votes will be improved to some extent.

As for the victims' families, there's even less to say.

At least in the future, Japanese gunmen who knew Obuchi's strategy would choose to vote for the Liberal Democratic Party.

Furthermore, this is also a good way to boost national cohesion.

You foreign religious sect dare to cause trouble in Japan? You must be banned.

"That's true, but not right now."

Keizo Obuchi had a sudden thought, but quickly sighed and rejected it.

He desperately needs the support of the Mori faction, which will later become the Abe faction.

"I see. Then we'll proceed once our senior has gained public approval."

Masato Takeshita was unwilling to give up and desperately hoped that those things that were harming the country and its people would be eliminated as soon as possible.

"Yeah, no problem."

Obuchi Megumi and his two companions were rather conservative and disapproved of such shady dealings. Given the opportunity, he would certainly be willing to eradicate those petty and despicable individuals.

With the church matter unresolved, Takeshita Masato lost interest in continuing the conversation. He changed the subject, returning the topic to economics.

"Computers are the future of the world, and governments need to strongly support related industries."

"For example, subsidizing the telecommunications industry and promoting broadband fiber-to-the-home."

Japan's current situation presents an ideal opportunity to develop emerging industries. This would both increase employment and revive its struggling economy.

But thinking that the Nasdaq bubble would soon burst, the young man quickly added.

"However, while encouraging this, we must also conduct strict supervision to avoid redundant construction of lines."

"The current internet-related industries are so hot that it's almost frightening, somewhat like Japan in 1989."

When something becomes popular, people will act recklessly and without thinking in pursuit of rising stock prices.

For example, the telecommunications industry is currently benefiting from the explosive growth of internet company stock prices, and its stocks are also at a high level.

In order to maintain a high market value, or even further increase it, telecommunications companies need to acquire more users and market share.

Therefore, major telecommunications companies have invested heavily in the construction of fiber optic networks and various base stations.

This was originally a good thing. Telecom companies were installing internet cables for their customers, allowing more people to enter the internet age, and netizens paying money was accelerating the development of telecom companies.

However, at that time there were far too many telecommunications companies, and they all wanted to monopolize the market.

As a result, major telecommunications companies have fallen into a deadlock of redundant investment.

It's somewhat similar to the construction of the railway network in the United States in the 19th century, where multiple companies competed for investment in popular areas, resulting in a serious waste of resources.

In its previous life, Google became a hidden telecommunications giant by acquiring telecommunications companies at low prices and investing heavily in building, but ultimately abandoning, fiber optic lines.

The telecommunications industry in the US and Europe is chaotic, with a lot of redundant construction. Masato Takeshita doesn't want Japan's subsidy strategy to lead to a similar result.

If the situation is serious, then it's not helping Keizo Obuchi, but rather handing a knife to his rival.

"Indeed, redundant construction will only lead to serious waste of resources and needs to be carefully considered."

"Yeah, that's right."

Besides telecommunications companies, Masato Takeshita also thought of mobile phones and computers.

"The penetration rate of mobile phones in our country is growing rapidly, but computers are lagging far behind. And right now, computers are contributing far more to productivity than mobile phones."

“We can also provide subsidies to households that purchase computers, which will not only promote the development of computer companies, but also increase the adoption rate of computers among Japanese people.”

Mobile phone penetration in Japan is growing rapidly; almost everyone can own one without government promotion.

Computers are different; many people don't have the inclination to buy one.

Of course, this is also related to the hiring habits of Japanese companies at that time.

Many Japanese companies disrespect academic majors and arbitrarily assign positions to newly hired graduates.

For example, assigning sports students to development positions in companies and then having them learn programming and other technologies from scratch.

This situation not only resulted in a serious waste of resources and reduced the company's research capabilities, but also led to Japanese students generally not valuing computer skills as much.

Since the company will teach us after we join, why should we spend money to buy a computer to learn in advance?

Masato Takeshita cannot change this situation at the corporate level; he can only use his own abilities to persuade the government to increase investment in this area.

Of course, it's not just the government; the entire Seikai Group is also guiding Japanese students to learn computer technology.

For example, for the same position, someone with computer skills might earn an extra 5000 or 10000 yen in initial salary.

For different positions, those with technical skills can earn at least 30,000 to 50,000 yen more.

Combined with the large number of students recruited by the Xinghai Group from universities every year, it has begun to change the Japanese students' indifference towards computer technology.

At least there won't be a situation where a large number of graduates entering Xinghai Group don't know how to turn a computer on and off.

As for the very few exceptions, those are unavoidable. Even with the high salaries and extensive advertising in China's computer industry in later generations, there are still people who don't know how to turn a computer on and off.

"This is a good idea; Japan must improve its computer capabilities."

Influenced by Masato Takeshita, Keizo Obuchi and others learned to use computers to search for information at an early age and also recognized the convenience and importance of the Internet.

He even wondered if he could use the internet to promote and package himself, thereby increasing his approval rating.

In addition to finance and technology, Masato Takeshita then put forward a series of ideas in areas such as people's livelihood.

He hoped to help the Obuchi government operate better, thereby enhancing the Xinghai Group's political influence.

Keizo Obuchi was fully aware of this, and after thanking him a few times with a smile, he began to offer substantive feedback.

"Junior, tell me, when Changxin Bank was on the verge of bankruptcy, how did you plan to take over?"

Prime Minister Obuchi was greedy; he wanted to exert maximum pressure to awaken the Japanese people, but he also did not want Cho Bank to go bankrupt.

Therefore, he ultimately decided to have his junior, who had been eyeing Changxin Bank, help him clean up this mess, achieving a win-win situation for the government, businesses, and the public.

"The Xinghai Group is willing to exchange 2000 billion yen in financing for a 70% stake in Changyin. At the same time, the government needs to lend Changyin 5000 billion yen in low-interest loans."

According to calculations by Kamoto Takamasa and others, Changyin needed a large amount of capital to expand its new businesses. Therefore, Xinghai Group's acquisition terms were ultimately raised to 2000 billion yen.

However, for Xinghai Group, the acquisition would be very worthwhile regardless of the circumstances.

Changxin Bank is one of the top ten large banks in Japan. After the acquisition, Xinghai Group will achieve financial freedom in Japan and reach a new level of development.

"Yes, I'll remember that."

Keizo Obuchi was very pleased with his junior's sensibility.

The terms offered by Xinghai Group are at least somewhat acceptable to both the public and its behind-the-scenes shareholders.

This was also Takeshita Masato's purpose.

Xinghai Group is wealthy and doesn't need to skimp on small amounts of money. There's no need for them to take advantage of the government by asking for interest-free loans or for the government to take over Changyin's debts.

However, a single bank account is not enough to satisfy the young man's ambition.

He soon proposed another major acquisition target – the Industrial Bank of Japan.

Industrial Bank?

"That's right, Industrial Bank. This bank has suffered heavy losses and has fallen out of the top five banks in Japan."

"But if Xinghai Group can acquire it, we are confident that we can become number one in Japan."

At its peak, Changxin Bank was less than half the size of Industrial Bank, and it would have taken too long to develop.

Instead, they should directly acquire Industrial Bank, allowing Xinghai Group to achieve a level of strength in the Japanese financial industry comparable to that of zaibatsu (financial conglomerates).

"This……"

Keizo Obuchi hesitated, because Industrial Bank was not Changyin Bank.

If we compare it to China, Industrial Bank is similar to the four major state-owned banks. It not only enjoys a very high status, but also has extremely strong brand value.

Acquiring such a bank requires not only capital, but also extensive business dealings.

"No problem, leave it to me, I'll take care of it."

Keizo Obuchi has always been very kind to those who support him.

The most typical example is Mikio Aoki. He originally had very little experience, but thanks to the relationship between the two, he quickly became a bigwig in Japanese politics during Obuchi's administration.

When Obuchi Keizo unfortunately died of a stroke in his previous life, he was even one of the five key figures in the secret politics of Japan's prime ministerial election.

(End of this chapter)