At the moment, Japan is refocusing on Asia. The next Asian stops on Mr. Abe's tour are Indonesia and Vietnam, also fast-growing markets with strong consumer demand from a young and rapidly growing population.
This strategy should help Japan to reinforce its traditional export-driven economic growth at the time when sluggish economies and restrictive trade policies in Europe and in the United States are limiting the sales potential of Japanese industries. But a major effort will be needed to reverse Japan's shrinking shares of Asian business.
Japan's exports to Asia -- representing 52 percent of the total – are not doing well. In the first 11 months of last year, they fell at an annual rate of 10 percent, after a sluggish 2.1 percent increase in 2015 as a whole. That is depressing the rest of the economic activity, in spite of huge supplies of free money, because the Japanese growth model does not work with falling exports. Rising overseas sales are necessary to drive business investments, employment growth, labor compensations and consumer spending. Without that, the economy is stagnating, as was the case with a 0.6 percent growth in the first three quarters of this year.
Those in and outside Japan egging Tokyo to compete with China should be supporting Mr. Abe's apparent intent to latch on to China, and the rest of Asia, to pull that beautiful Rising Sun Archipelago out of its secular stagnation.
Efforts in that direction are under way. Last Wednesday (January 11), trade officials from China, Japan and South Korea met in Beijing for the 11th negotiating round on the way to a trilateral free-trade agreement. That process was launched in November 2012, and the three countries' leaders pledged in November 2015 to accelerate the conclusion of the world's largest trade deal representing 23 percent of the global economy.
It remains to be seen how much the political obstacles of hostile inter-Korean relations, contested territorial claims, the legacy of occupations, military confrontations and allegedly unrecognized and unsanctioned war crimes will slow this process.
The ten countries of the ASEAN (Association of Southeast Asian Nations – 630 million people, with an estimated GDP of $2.4 trillion and an average annual economic growth of 5 percent) also seem eager to broaden their integration with China, Japan and South Korea much beyond the present ASEAN + 3 trade arrangement.
EU must grow up – or die
All this is in sharp contrast with the unraveling European Union (EU). The UK is gone, and the main political platforms in Italy and France are based on ideas of either following the British exit or degrading the union by curtailing the "shared sovereignty" in the management of political, economic and social affairs. The Visegrad Group (Poland, Hungary, The Czech Republic and Slovakia) also wants to pick and choose from an "à la carte" EU political menu.
Hugely benefitting from nearly two-thirds of its EU exports, Germany would like a closer union (on its own terms), but it is facing a possibility of big political changes in next September's elections and increasingly reluctant partners to follow the German leadership.