The Patriot: Shinzo Abe Speaks to TIME

On an April morning at Yasukuni Shrine in Tokyo, cherry-blossom petals fall like confetti around the Shinto worshippers who have come to offer their prayers. Pilgrims approach the austere shrine, clap twice and bow their heads. They are honoring the memory of 2.5 million Japanese war dead, whose souls are enshrined at Yasukuni and are considered divine. Nearby, on the shrine’s grounds, a military-history museum presents a less peaceful scene. Amid the maps and swords and glass cases containing soldiers’ letters home are exhibits that glorify Japan’s imperial march across Asia, justify the bombing of Pearl Harbor as a necessary response to U.S. intransigence and airbrush atrocities committed by Japanese soldiers. The Nanjing Massacre, in which Japanese troops killed, raped and rampaged across the former Chinese capital, is described as an “incident.”

On Dec. 26, 2013, Japan’s Prime Minister Shinzo Abe, dressed in a somber morning suit, walked behind a Shinto priest and paid his respects at Yasukuni. Japan’s last six leaders pointedly stayed away, mindful that conferring official recognition on a shrine that honors top war criminals among the deceased would anger Asian nations where those crimes were committed. But Abe had said that not visiting Yasukuni was the great regret of his first term in office from 2006 to ’07. Predictably, his visit drew furious condemnation from China and South Korea, two nations that suffered most under Japan’s expansionism. Even the U.S., Japan’s staunch ally and security guarantor, expressed its disappointment.

But Abe was playing to a different audience, sending a message not about love of war but about love of country. If his critics see it as a crude bit of nationalist provocation, so be it. “I paid a visit to Yasukuni Shrine to pray for the souls of those who had fought for the country and made ultimate sacrifices,” he told Time in an interview. “I have made a pledge never to wage war again, that we must build a world that is free from the sufferings of the devastation of war.”

Japan’s transformation from an imperial aggressor to the world’s second largest economy and champion of peaceful ideals was one of the most redemptive tales of the 20th century. But nearly 70 years since the end of World War II, the pistons have stalled. In 2011 the Japanese economy lost its No. 2 status to China. Beijing is flexing its muscles, aggressively pursuing territorial disputes with Japan and other neighbors. Meanwhile, Japan’s population is both aging and shrinking. For all its high-tech wizardry, the country feels sapped of the motivating power that propelled its rise. The 2011 triple shock of earthquake, tsunami and nuclear crisis, which claimed nearly 16,000 lives, only underscored this sense of national drift.

As Japan searches for its soul, Abe–grandson of a wartime minister once arrested by the Allied powers, collector of revisionist friends and Japan’s first Prime Minister born in the postwar period–has positioned himself as a national savior. Powered with a rare electoral mandate, Abe, 59, has vowed to halt Japan’s slow march toward international irrelevance. Two decades of economic deflation and the lingering weight of wartime loss, in the view of Abe and his allies, have forced the country into a submissive crouch. It was time for some backbone. The 2012 campaign slogan of Abe’s Liberal Democratic Party (LDP) was “Restore Japan.” Even his controversial economic-reform package, dubbed Abenomics, is a projection of the PM’s vision to return Japan to greatness. “I am a patriot,” Abe says, explaining one of his personal motivators. “When I came to office, in terms of diplomacy and national security as well as the economy, Japan was in a very severe situation.”

Whether Abe is a galvanizing change agent or a nationalist legatee who is driving his country back to the future, there is no doubt that he is Japan’s–and possibly the continent’s–most consequential politician in some time, having halted the revolving door that has seen six Prime Ministers come and go in as many years. With the LDP having secured a pair of electoral victories over the past two years, Abe is likely to rule until at least 2016.

This gives him latitude to tackle a long to-do list: rejuvenate the economy by ramming through structural reform, encouraging innovation and bringing more women into the labor force; revise the postwar constitution, which was written by the occupying Americans, to allow for a more conventional military; and most of all, play cheerleader to a nation in need of a jolt of banzai self-esteem. “Abe is of the view that Japan needs to stop getting kicked around,” says Michael J. Green, Asia and Japan chair at the Center for Strategic and International Studies in Washington, who, from his days as senior director for Asia on President George W. Bush’s National Security Council, knows Abe well. “He thinks about history and world affairs, strategy–he loves that stuff. He wants to be a strategic realpolitik player.”

Abe’s success depends, first and foremost, on his ability to revitalize the economy. So far, the first two phases of Abenomics–fiscal stimulus and monetary easing–have coincided with an uptick in growth and stock-market sentiment. Last September, in a speech at the New York Stock Exchange, Abe even sold his namesake plan as a blueprint for global revival. But the third arrow of Abenomics will be the trickiest to fire: structural reform aimed at dismantling business inefficiencies that hamper Japan’s global competitiveness. Already, growth is tapering, and a sales-tax hike unveiled this month could dampen consumer spending.

Without an economic resurgence, Abe will have a hard time achieving his greater goal of refashioning Japan as a modern nation-state–a democratic force that can be a counterweight to an authoritarian China. Japan is now a society where even the young have downsized their dreams. “People have lost confidence,” says Nobuo Kishi, Japan’s Vice Foreign Minister and Abe’s younger brother, who believes the Prime Minister wants to encourage “amity, love for the homeland and patriotic spirit. I think these form the basis for Japan restoring its confidence.”

It is into this complicated landscape that President Barack Obama is due to arrive in late April–a long-delayed trip after plans last year were foiled by the U.S. government shutdown. Obama will spend two nights in Japan, then stop in South Korea, Malaysia and the Philippines. (Notably, he is skipping China.) “There’s general excitement in the U.S. about a Japanese leader who looks like he wants to step up to challenges and is able to do it with popularity behind him,” says Vikram Singh, vice president for national security and international policy at the Center for American Progress in Washington. But reservations quickly follow. “[Japan] should be proud of its postwar way of being but should be honest about its wartime history,” says Singh. “And failing to do that is one of the great shortcomings of modern Japanese politics.”

The Rising Son
Japan may pride itself on being Asia’s oldest democracy, but its networks of power are rooted in families. Few Prime Ministers have taken office without a famous forefather before him. Abe is the son of a Foreign Minister and grandson of a Prime Minister. He says the commitment of his father Shintaro Abe to securing a peace treaty with the then Soviet Union, even as he was dying of cancer, impressed upon him the importance–and the sacrifices–of public service: “I learned … that you may have to risk your own life to make such a historical accomplishment.” His paternal grandfather Kan Abe was a rare critic of the militarist impulses of wartime leader Hideki Tojo and opposed embarking on war with the U.S.

But it is Abe’s maternal grandfather who looms largest in Japanese history. Nobusuke Kishi served in the wartime Cabinet as the head of the Ministry of Munitions and directed industrialization efforts in Manchuria, the northeastern Chinese region that Tokyo turned into a puppet regime. Manchuria was ground zero for some of imperial Japan’s worst crimes, from armies of forced labor to biochemical experiments on civilians. After Japan’s defeat, the Allied powers locked Kishi up for three years, but he was never charged with war crimes. A decade later, he emerged as a pro-Western Prime Minister who cemented the Japan-U.S. Security Treaty. His rehabilitation, like that of many wartime political figures, was sanctioned by the Americans, who occupied Japan for seven years.

Despite his lineage, Abe is, in some ways, an unlikely figure to rebuild the nation. In 1982, after working briefly for a steel company, he joined his father, then Foreign Minister, as a secretary. He soon found his political voice–a hawkish tone born of a Thatcher-Reagan-style conviction in the clarity of conservative principles. The LDP was a big ideological tent, which has helped it rule Japan for all but a handful of the postwar years by shape-shifting to the electorate’s mood. But Abe made his name on the right of the party spectrum, signing on to causes that downplayed or denied Japanese wartime atrocities.

In his earlier term, Abe was Japan’s youngest Prime Minister. The voters were concerned about the economy, but Abe frittered away political capital on nationalist causes, like educational reform that would increase flag-waving in schools. A year into his tenure, he resigned, blaming his retreat on a rare intestinal ailment. In the intervening years, the LDP–and Japan as a whole–has edged closer to Abe’s political moorings. One trigger was domestic, the incompetence of the vaguely left-leaning Democratic Party of Japan (DPJ), whose three years in power were consumed by economic dithering and political infighting. In December 2012 elections, the LDP crushed the DPJ by riding the protest vote and later pushed Abenomics as a path forward. “We were frozen in a deflationary mind-set,” says Abe’s economic adviser Etsuro Honda, who thinks Japan’s economy had reached a make-or-break moment. “The Prime Minister proposed a totally unprecedented trial … that cannot be allowed to fail.”

The China Card
The other catalyst of Japan’s rightward shift was external: the rise of China, now ruled by its own nationalist leader, President Xi Jinping. In 2012, Japan, under the DPJ, nationalized some uninhabited islands in the East China Sea that Tokyo administers but to which Beijing lays claim. Since then, Chinese military maneuvers in contested waters have increased, and in 2013, Japanese jet sorties climbed to their highest numbers since the Cold War. Last year China declared the skies above the islands as part of an East China Sea Air Defense Identification Zone and demanded that flights crossing the airspace notify Chinese authorities. The U.S., among other nations, has ignored this request and has criticized China for changing the status quo in such a volatile part of the world.

In 2007, when Abe left office, 67% of Japanese expressed negative views toward China, according to the Pew Research Center’s Global Attitudes Project. By 2013, that number had risen to 93%. Against China’s double-digit military-budget hikes, Abe’s calls to strengthen Japan’s armed forces didn’t sound so silly. Last year Japan’s defense budget saw its first–albeit modest–increase in more than a decade; 2014 has brought more money.

Meanwhile, Sino-Japanese relations remain in a deep freeze, although that doesn’t prevent China from serving as Japan’s largest trading partner, with more than $330 billion in bilateral trade in 2012. Abe has never had a summit with Xi, meaning that the leaders of the world’s second and third largest economies aren’t talking to each other. Proposals by Japan to set up a hotline between the two nations over the contested islands have been rebuffed by China, which says Japan must first admit to the existence of a territorial dispute–something Tokyo refuses to do. Although the U.S. takes no position on who rightfully owns the islands, called the Senkaku by the Japanese and the Diaoyu by the Chinese, Washington has said its security treaty with Japan covers the bits of uninhabited rock. “We have told the Chinese that risk reduction is not a concession to Japan,” says a senior U.S. Administration official, who acknowledges that unintended clashes in the East China Sea could spark a larger conflict.

Given how quickly the Japanese electorate gets disenchanted with its leaders, Abe’s popularity has proved remarkably buoyant. But support for his most hawkish goals is not assured. One of his pet projects is revising the postwar peace constitution, which was forced on the Japanese by the Americans and precludes Japan from possessing a normal military. (It does have well-funded armed forces, limited to defensive actions.) “I say we should change our constitution now,” Abe says, noting that Japan is a rare democracy to never have amended its constitution. Yet, for all their worries about China, most Japanese do not support measures for a more active military, polls show. Even LDP elders have expressed reservations about Abe’s push for what’s called collective self-defense, in which Japan could defend allies like the U.S. from foes like North Korea. “[Abe is] implementing his rather right-wing policy in national security and diplomacy,” says former LDP secretary general Makoto Koga. “It makes people feel concerned.”

Such criticism helps explain why Abe has backtracked on a couple of nationalist issues that played well with the LDP’s base. While campaigning in 2012, he called for a revision of the 1993 Kono Statement, the admission by a former Japanese Chief Cabinet Secretary that Japan’s military forced Asian “comfort women” into sexual slavery. In late February the Abe government announced it was re-examining the way in which the Kono Statement was formulated. Abe says that during his first term, “a Cabinet decision was made stating that there was no information that shows people were forcibly recruited.” Public opinion, though, didn’t clearly support such a move. Last month the Abe administration announced it would be leaving the statement alone.

Divine Mandate
According to Japan’s foundational myth, the Emperor Jimmu, a direct descendant of the sun goddess Amaterasu, founded the Japanese imperial house more than 2,600 years ago. Since then, an unbroken line of male heirs has tied Japan’s royal family to the divine. Shinto, in its latter state-linked form, deifies this imperial cosmology. The faith’s role in providing spiritual justification for wartime Japan–kamikaze suicide pilots dying in the name of the Emperor–tainted the state religious doctrine. In 1946, after Japan’s defeat in the war, Emperor Hirohito issued an imperial rescript that renounced “the false conception” that he was an incarnation of a god. The Americans stripped Shinto of its status as the national religion.

When Abe talks of restoring Japan, he often means economic rejuvenation. But one little-covered development of the Abe era is the renaissance of Shinto in Japanese politics. Abe is the secretary general of a parliamentary Shinto alliance, which has increased its membership from 152 parliamentarians before the LDP took power in December 2012 to 268 today. Sixteen of 19 Cabinet ministers are members; in the DPJ’s government, there were none. “Prime Minister Abe advocates breaking from the postwar regime and restoring Japan, and we share the same thoughts,” says Yutaka Yuzawa, the administrative director of a Shinto political association, whose father was once the lead priest at the controversial Yasukuni Shrine. Last fall, Abe became the first sitting PM in more than eight decades to participate in one of Shinto’s holiest festivals, in which the Emperor’s ancestors, all the way up to sun deity Amaterasu, are honored. In a major speech this year, Abe used Shinto vocabulary to glorify his homeland.

There’s nothing wrong with celebrating a homegrown faith that worships nature alongside ancient ancestors. But some politicians pushing for a Shinto resurgence also equivocate on Japan’s responsibility for the war. It’s instructive that Hirohito stopped visiting Yasukuni in 1978, after the enshrinement of top war criminals, presumably as a protest against the shrine’s hijacking by conservative elements. Japan’s ambivalent attitude toward its wartime past is often contrasted with that of Germany, which has vocally apologized for the Holocaust and supported the construction of genocide memorials. China, for one, says Japan hasn’t adequately repented for World War II. Abe disagrees. “In the previous war, Japan has given tremendous damage and suffering to the people of many countries, particularly those of Asia,” he says. “Previous Prime Ministers have expressed their feelings of remorse and apology. In my first administration, I also did so.”

But critics point out that Abe has fraternized with deniers of history. Last year he co-wrote a book with Naoki Hyakuta, a best-selling author who believes both the Nanjing Massacre and the military’s enslavement of “comfort women” are fictitious. “Japanese feel embarrassed about our country, our national flag, our national anthem,” says Hyakuta, whose novel about a conflicted kamikaze pilot sold 4 million copies and spawned a popular film late last year. “Mr. Abe is trying to restore basic things, such as national pride.”

Just how far does Abe want to go? “I’m extremely worried,” says Koga. “I want to ask Mr. Abe, You say, ‘Break from the postwar regime.’ Do you want to say … that Japan’s peace diplomacy was a mistake and that you want to make Japan into a modern and masculine country as in the prewar era?” Political scientist Koichi Nakano, who teaches at Tokyo’s Sophia University, puts Abe’s politics in a regional context: “The hard-liners in East Asia, they need each other,” he says, speaking of Abe, Xi (son of a revolutionary leader), North Korea’s Kim Jong Un (scion of the Kim political dynasty) and South Korea’s Park Geun-hye (daughter of a former strongman). “Their dominance of domestic politics depends on foreign enemies. This is a dangerous game playing across the region.”

Indeed, Abe’s popularity at home may depend on proving that his spine is stiff enough to stand up to the likes of China. After so many years of rudderless leadership, Japan has a Prime Minister whose pronouncements are closely watched by the world. The question is whether Abe’s active sense of patriotism–not to mention his evasions of wartime history–limns Japanese sentiments. The bravest leaders, of course, can guide their people, not just submit to their wishes. “I get criticized from time to time,” says Abe, “as I try to exercise what I believe to be right.” Penitent bows just aren’t the style of Japan’s chief patriot.

The Patriot

























Zhang Ruimin’s Haier Power
Michael Schuman / Qingdao
April 3, 2014
The world's largest Appliance maker wants to transform the meaning of Made in China

Enshrined in the cavernous showroom of Haier Group’s headquarters is a simple sledgehammer. It might seem to have no reason to be there. The firm, based in the Chinese coastal city of Qingdao, makes and sells household appliances—more of them than any other company in the world—and the tool seems out of place among the nearby refrigerators and washing machines. But the blunt instrument was once wielded by Haier’s long-serving CEO, Zhang Ruimin, 65, to make a point.

Thirty years ago, the city government of Qingdao placed Zhang in charge of a dysfunctional, near bankrupt refrigerator manufacturer. The communist-era dinosaur was a manager’s nightmare. Workers were sluggish, careless and so undisciplined that Zhang had to stop them from urinating on the factory floor. When a disgruntled customer returned a faulty fridge to the plant one day in 1985, Zhang inspected the factory’s inventory and discovered that many of those were broken too. Frustrated, he lined up 76 flawed appliances on the shop floor and handed the workers sledgehammers. “Destroy them!” he commanded. Soon the factory floor was littered with fragments of plastic and metal. Zhang grabbed a sledgehammer—one of which is now displayed in the showroom—and smashed it into a fridge to make his message clear: workers must shatter their old ways.

Since then, Zhang has transformed Haier into one of China’s most successful companies. It now has 24 plants around the world, 70,000 employees and a commanding share of the global market for major household appliances, more than well-recognized brands Whirlpool and Electrolux. In 2013, the company sold some 55 million refrigerators, washing machines and other major appliances. Even in a sluggish global economy, Haier posted sales growth of 14%, to $29.5 billion. Zhang and his sledgehammers are part of modern Chinese folklore. One of them even became part of the permanent collection in China’s National Museum, housed alongside ancient bronzes and priceless jades.

In many ways, Haier’s (pronounced Higher) story is China’s story. China Inc. has spent the past three decades breaking with its Maoist past, ushering in “socialism with Chinese characteristics”—or what the rest of the world would call capitalism. Companies ranging from PC giant Lenovo to telecom-equipment maker Huawei have grown rich by serving China’s exploding middle class. And the country’s low labor costs made it possible for Haier and others to quickly capture market share around the world.

But many of those advantages are now eroding. Wages are rising, and Chinese companies generally lack the technology or brand power to contend head-to-head with foreign rivals. Many are trying to change, some with unenviable results: sportswear maker Li Ning, for instance, flopped abroad. Carmakers such as Geely and Chery have mostly attracted customers in developing countries where price matters more than quality.

Haier is better off than most—its name is one of the few widely recognized Chinese brands. But it is still struggling to woo consumers away from more established players in the U.S. and other major markets. If Haier can jump from peddling bargains to becoming a popular brand shoppers crave rather than settle for, it could help kick-start a second economic revolution.

Refrigerator Revolutionary
Nothing in Zhang’s background prepared him to be a management guru. Born in the town of Laizhou in Shandong province on China’s east coast, Zhang missed out on university because of the 1966–76 Cultural Revolution. He educated himself by seeking out libraries and devouring everything from Shakespeare to Chekhov. (He still reads dozens of books a year and liberally scatters academic references into his conversation, including the Taoist philosophy of Lao Tzu and the theories of Nobel-winning economist Edmund Phelps.) In the late 1960s, he got a job as an apprentice at a Qingdao metal-processing factory. After rising within the firm, the city government made him a manager of a local appliance company in 1982.

That’s how he ended up, two years later, with the unsavory task of fixing the refrigerator factory. Zhang took Haier in a different direction from most Chinese companies: he focused on improving quality and building a brand. Embracing free-market principles, he tied workers’ pay to the sales performance of the products they made and encouraged them to be quick to accommodate consumers—sometimes in unusual ways.

In 1996, for example, a farmer complained that his washing machine kept backing up. When the repairman reported the device was being used to scrub sweet potatoes as well as clothes, Zhang ordered engineers to design special machines with buffers in the drum to protect vegetables and wider drain pipes that wouldn’t clog with dirt. By 2013, nearly 1 out of every 3 major household appliances bought by a Chinese consumer was a Haier. The brand is omnipresent in China, its logo plastered on main streets in nearly every town.

Zhang has been working on doing the same abroad. In 1998, Haier jumped into the U.S. market. He started small, with compact refrigerators for dorm rooms and offices. The meager margins scared off most major brands, but Haier took advantage of its low production costs to make its minifridges as common on American college campuses as empty beer cans. In 2000, Zhang invested in a plant in South Carolina—the first factory opened by a Chinese firm in the U.S.—to manufacture larger refrigerators specifically for American consumers.

But Haier has had a hard go of it. Its share of the U.S. major-appliance market was only 4.9% in 2013, according to Euromonitor, compared with 25.6% for the No. 1 brand, Whirlpool. Haier’s products have generally gotten trapped at the low end, and its name became tainted as a mark of cheap products of questionable durability. According to a consumer survey commissioned by Haier last year, only 24% of the respondents believe Haier offers excellent quality, compared with 43% for Whirlpool and 39% for South Korea’s LG. “We ended up just by nature of the entry in America selling a lot of very low-end, cheap appliances,” admits Adrian Micu, the newly installed CEO of Haier’s New York City–based U.S. subsidiary.

Shaking the bad rap hasn’t been easy. Shermaine Carter, shopping at a large appliance store in New York City, says she once bought a small Haier fridge that promptly stopped working and has avoided the brand since. “I would not buy their products even if they changed,” she says. Rob Petrella, the store’s manager, says Haier products sometimes lack popular features common in its competitors’ offerings. Haier “is cheaper for a reason,” he says. Though Haier executives say they’ve been striving to improve, they concede that Haier has so far failed to market a product line appealing to U.S. shoppers. Says Micu, a former Whirlpool executive hired to reposition the brand: “We need to do a little soul-searching.”

Management Makeover
That’s where Zhang’s latest management experiments come in. Haier can close the gap with market leaders, he argues, by using digital technology to more directly link the products Haier designs to the desires of potential consumers. “The Internet eliminated the distance between companies and their customers,” Zhang explains. “There is more customer interaction and collaboration in making products. There is big potential here.”

Zhang has been busy gutting Haier’s insides. Like most companies, it was organized as a hierarchy, with clearly defined departments—sales, R&D, manufacturing—run by layers of managers. Information flowed up; edicts were handed down. “As a company gets bigger, there is usually stricter control on its employees and less room for them to take ownership of their work,” Zhang says. “This is a challenge for both Chinese companies and companies all across the world.”

So Zhang broke down Haier into what he calls “self-managed teams.” Here’s how it works: any employee can generate his own idea—for a new appliance model, for instance, or product feature—by examining customer comments and market information gathered from the Internet. If approved by management, that employee can create and manage his own team to implement the project, which involves persuading staff such as product designers, research engineers and marketing experts to join. Team members get a share in the resulting profits.

Zhang began introducing the tactic in 2009, and then, at the end of 2012, he eradicated most of the middle management so the teams could flourish. There are now 2,000 of them. “In the past, employees would listen to their supervisors, but today they are responsible directly to their customers,” Zhang explains. “We want our employees to take initiative and create value.” While a few other companies have tinkered with similar experiments, “no one has tried to do it on the scale Haier is trying to do it,” says Bill Fischer, a management professor at business school IMD.

Even Zhang admits he’s taking a chance. With teams constantly forming and disbanding, workers jumping from one to another and employees engaged in nonstop competition to best one another, the system keeps the staff in almost perpetual flux. “I have to find a balance between reform and risk,” Zhang says. The process has been painful. To streamline the company, Haier shed about 16,000 workers, or nearly 19% of its staff, in 2013. And while Zhang likes to say he has eliminated the strict hierarchy common to Chinese companies, he and his senior executives still lord over the firm and command great authority. When Zhang walks into a room, the staff fawns and quakes like he’s a visiting emperor.

Zhang’s new strategy, though, has borne some fruit. Take the case of Lei Yongfeng. In 2012, the veteran engineer discovered a common customer complaint: air conditioners blew too cold, which many found uncomfortable and unhealthy. Lei proposed a self-managed team to address the issue. The result was the Tianzun air conditioner, which mixes air from the unit and room together, so the output is a bit less frigid. Rather than the usual vents, the Tianzun blows from a round porthole that glows different colors depending on the air quality (a concern in heavily polluted China). The model set a one-day sales record for air conditioners on major e-commerce sites in China when it was introduced in December, according to Haier. “We have become more and more entrepreneurial,” since Zhang’s reforms, Lei says. “We grab every opportunity, just like it is our own business.”

Zhang will need a lot more Lei Yongfengs if his experiment is to work. The U.S. subsidiary has begun introducing Zhang’s reforms, and he eventually intends all of Haier’s global operations to adopt them. Zhang is betting that will allow the company to become synonymous with quality, rather than a low price. If Zhang succeeds, he could weave a new folk legend—one recognized outside of China. “We are no longer simply following the industry leaders,” Zhang says. “We’re doing something new.”

Belgium's Lechery Backfire




















inserted by FC2 system