Hello from Tokyo. As we enter the final stretch of 2023, many of us are preparing to celebrate at year-end or Christmas parties. However, Japanese politicians — especially those from the ruling Liberal Democratic Party (LDP) — will likely be having a far quieter time.
As far as I know, it has been a long time since Japan has been hit by such a major scandal involving political funds. Lawmakers raise money in various ways, and fundraising parties are one of the most common methods in Japan, where corporate donations are strictly regulated. Tickets for these events are usually sold for 10,000 to 20,000 yen ($70 to $140) each. The parties are typically held in hotel banquet rooms and feature a buffet and speeches by politicians and special guests.
For LDP lawmakers, there are two types of fundraising parties: those for individual politicians and those for factions within the ruling party. The latter are usually larger and always held in Tokyo. It is often said that the bigger the event, the higher the profit margin — some say it can be as high as 80% of ticket sales.
Factional fundraising parties are the problem in focus now. Politicians who belong to factions have a sales quota for tickets to these events. The higher the seniority or position, the higher the quota — a cabinet member or party executive might have to sell several hundred tickets. Because politicians can use the money generated from their personal fundraisers, they generally have a greater incentive to sell tickets for these events than for faction fundraisers.
Perhaps in response to this, some LDP factions began kicking back a portion of ticket sale proceeds to their members off the books as a way to incentivize sales, which in some cases amounted to tens of millions of yen and was, of course, considered to be illegal. This practice seems to have spread, with some lawmakers starting to find it easier to sell tickets to faction fundraisers thanks to the participation of big-name “headliners,” such as former Prime Minister Shinzo Abe. On the other hand, I often hear of junior politicians complaining that they can’t meet their quotas and end up buying the tickets themselves.
The full extent of this scandal is still unclear. Who knows — there may be unexpected developments after the Diet session ends next week. In politics — Japanese or otherwise — the creation and use of off-the-books money is an everyday reality. Whether this scandal will change that culture in Japan remains to be seen, but it will likely be a serious blow to the Fumio Kishida government, which is already plagued by an all-time-low approval rating and faces delays in some policy decisions.
While a decision by Prime Minister Kishida to call a snap election grows more distant by the day, Taiwan’s presidential vote is only a month away. This week’s Big Story is about what will be one of the most closely watched elections of 2024. The results will impact not only Taiwanese politics, but possibly also U.S.-China relations, which seem to have improved since the recent San Francisco summit. The story takes an in-depth look at how each candidate has a different approach to maintaining peace across the Taiwan Strait.
On the business side of things, Chinese e-commerce titan Alibaba is back in the spotlight. The sudden news that the company is shelving its plan to spin off its cloud business caught the market by surprise, but as our Business Spotlight explains, several factors drove the decision. Alibaba has been under considerable pressure from e-commerce rivals such as Shein and Temu, especially in the U.S. market, and its position looks increasingly vulnerable.
In Japan, the rapid expansion of e-commerce during the pandemic has created a significant labor shortage in the delivery sector. And that problem is only expected to worsen when the country’s overtime rules are significantly tightened from next April. Economic theory suggests that when demand outstrips supply, base salaries will rise. I am interested to see how this move will affect the Japanese economy, particularly the stagnant wage levels.
Finally, from the Life & Arts section, I’d like to recommend another story about Taiwan — though this one is from a different perspective. One of my favorite food writers in the region, Melinda Joe, reviews a recent hit cookbook called “Made in Taiwan” by Clarissa Wei. According to Joe, the book explains how Taiwan’s complex historical and cultural background make its cuisine so diverse and dynamic.
Wishing you a wonderful weekend!
Shin Nakayama
Editor-in-chief, Nikkei Asia
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