Japan has a plan for chips

Insight: Subsidizing semiconductor plants, launching 100 autonomous vehicle projects on public roads and encouraging citizens to contribute more to their pensions – Japan's annual economic and fiscal policy plan is a grab bag of measures meant to stimulate key sectors of the economy. The 2024 version, according to a Nikkei newspaper scoop this week, will focus on microchips and attempts to set a legal basis for ongoing fiscal support for this most strategic industry. 

Impact: Back in the 1980s, Japan dominated the world chip market. These days its share is in single digits. Reviving large-scale manufacturing of leading-edge semiconductors is therefore a government priority, designed to boost economic growth, provide high-value jobs and ensure economic security for key industries. Hence the idea of actually legislating a program of ongoing subsidies. The biggest beneficiary is Rapidus, the domestic champion, which is getting state loans to build a cutting-edge 2-nanometer chip fab in northern Hokkaido. But global players like TSMC, which is investing in southern Kyushu, will gain too. 

50 billion

The expected value in pounds sterling of Shein’s potential listing on the London Stock Exchange. The China-born, Singapore-based, fast-fashion retailer is looking to London after facing pushback to its previous attempt to list in New York. Winning Shein, which captures almost one fifth of the global fast-fashion market, would be a coup for the LSE, which has trailed the NYSE and Nasdaq when it comes to snaring IPOs in recent years.  

Insight: After China’s disappointing post-COVID recovery in 2023, data from this year’s 618 festival shows that things are finally looking up. The second-largest annual e-commerce event in China, the 618 festival saw significantly increased spending and a recovery in consumer appetite: Within hours, 28 brands surpassed RMB100 million (USD13.8 million) in sales. Sales were up across many sectors, including luxury, tech and home goods, as well as for both domestic and international brands.

Impact: Though China remains an important growth market, navigating it has never been easy for foreign brands. Not only do brands need to cater to an often-particular set of demands by Chinese consumers, they also need to choose the right channels to do so. Case in point – Japanese fashion giant Uniqlo has slowed brick-and-mortar expansion in favour of e-commerce and livestreaming. Starbucks seems to be offering more digital coupons to remain competitive with cheaper rivals like Luckin Coffee.  Foreign brands will need to continue testing out the proper omnichannel approach to maximize reach. Chinese consumers are ready to spend again – but the question is: are brands ready to adapt? 

Insight: As Las Vegas has demonstrated over many decades, the glitz and glam of casinos, not to mention the promise of winning big (however elusive in reality...), is an enormous draw of both tourists and their hard-earned cash. Singapore found this out in 2010 when it opened the country to two casinos which, by 2019, had doubled tourist numbers and contributed up to 2% to Singapore’s GDP. Now these two “integrated resorts” (IR) are expanding, with a combined investment value of USD 7.4 billion earmarked for hotel and new facility development. 

Impact: Singapore approved the expansion plans in 2019, showing the city-state recognized the ongoing potential of integrated resorts to add to its coffers. Compare this to famously bureaucratic Japan, which had danced around the idea of legalizing casinos for decades, to the frustration of gaming companies worldwide. Japan finally approved plans for an integrated resort in Osaka just last year, raising gaming’s hopes, only to dash them again by denying Nagasaki Prefecture’s application to open an IR mere months later. Japan’s slower approach to casinos has made PR tricky to navigate for numerous gaming companies as they announce plans only to reverse course later. 

FGS Global’s sustainability experts on navigating the climate diplomacy calendar.

Insight: Last summer was the hottest globally in 2,000 years, according to sobering research published recently by the journal Nature. The impact of ‘extreme heat’ is being felt across Asia. Last month, a record-breaking +40°C heatwave in many countries, including Thailand, Vietnam, and the Philippines, caused widespread disruption to educational, economic, and agricultural activities, as well as heat-related illnesses and deaths. Many climate experts warn that climate change is exacerbating the frequency and severity of extreme weather events. Governments are under increasing pressure to find solutions that will limit global warming to under 1.5 °C, with the UN's lead climate official now claiming that humanity has 'two years to save the world'. 

Impact: With such dire predictions, the future looks a little bleak. Global conflicts and economic uncertainties also cloud the way forward. However, according to our FGS team, climate diplomacy is quietly making progress, with last year's COP28 in Dubai setting a positive precedent for future action at COP29 and 30. The private sector has a crucial role to play in the climate policy arena, for example on global climate finance, and can use these major events to engage effectively. But it's no longer a question of just showing up. How you show up – and demonstrate the real-world impact around key issues – is increasingly important to stakeholders in Asia. A comprehensive and integrated strategic communications approach is now crucial. 

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