Dr. Jeffrey Funk

Shareholders sent Toyota a message by dealing Chairman Akio Toyoda his lowest approval rate since 2010. TOKYO — Shareholder approval of Akio Toyoda tumbled to a record low of 72 percent, amid investor discontent about a safety and vehicle certification scandal at Toyota Motor Corp. and questions about corporate governance under his longtime leadership. The Japanese carmaker said it considers the falling support "candid feedback" that reflects concern, especially among institutional investors, about the misconduct and governance issues. The world's largest automaker said it will work to address the shareholder response. The vote, held June 18 at the company's annual general shareholders meeting in Toyota City, can be seen as an embarrassing wake-up call about management and strategy. It comes even as Toyota finished a fiscal year of record profits, sales and production that pushed the company's share price to new highs this year before the scandal broke. Despite the investor blowback, shareholders seated the full board nominated by Toyota management. That roster includes the reappointment of Toyoda, despite his apparent sinking popularity, to a second year as chairman of the company founded by his grandfather. He stepped down as president last year after 14 years at the helm. Record low Toyoda's approval rate dropped to 71.9 percent, the company said June 19 while releasing detailed results of the vote. It was Toyoda's lowest support rate since 2010, when the company began disclosing such details. It also marked a steady decline from the 97.7 percent approval Toyoda enjoyed in 2021, the 96.5 percent in 2022 and the 84.6 percent last year. In a response to the 2024 shareholder vote, Toyota suggested the results reflected discontent with the company as a whole, not its chairman as an individual. "We perceive the approval rates at this year's shareholders' meeting as candid feedback from institutional investors in accordance with the voting standards of each investment manager regarding various background such as recent certification problems, the independence of the board of directors, and cross-shareholding, all in relation to Toyota Motor Corporation, as an entity," Toyota said in its statement. "Moving forward, we will continue to value dialogue with our shareholders, sincerely taking their feedback to heart and addressing it." In its statement, Toyota said it has been working to improve corporate governance and the independence of the board of directors. In recent years, it added more independent members. The company also said it is trimming the thicket of cross-shareholdings it has with other group companies. Institutional investors have long seen these relationships as tying up valuable capital. Toyota began a selldown last year, raising some $2 billion from a sale of shares in Toyota Group megasupplier Denso Corp.

12

3 Comments

Turing CEO chases Level 5 autonomous driving tech — powered by artificial intelligence — by 2030. TOKYO — Artificial intelligence whiz kid Issei Yamamoto became famous in software circles for programming a computer that was the first to beat a grand master in the board game shogi. The ancient strategy game is often referred to as Japanese chess. But experts consider shogi one level deeper than its Western counterpart in complexity. Now, Yamamoto eyes another kind of grand master: Elon Musk, the self-proclaimed Technoking of the electric vehicle world. In 2021, Yamamoto founded one of Japan's newest mobility startups — the self-driving EV hopeful Turing — under a bold promise: "We overtake Telsa." The slogan, stenciled on the reception wall, is the first thing visitors see at its office. In his white T-shirt, black jeans and dark hoodie, the 38-year-old CEO looks more skate punk than neural network guru. His ambition is also something to behold. Yamamoto wants to deliver Level 5 fully autonomous driving technology — powered by artificial intelligence — by 2030. Along the way, he wants Turing to make its own superfast semiconductor chips — think Japanese version of Nvidia. Moreover, Turing eyes possibly manufacturing its own brand of EVs, with designs inspired by the torpedo-shaped bodies of killer whales. Three T's Then there are Toyota and Tesla, and, in Yamamoto's mind, one more T. "We internally say we would like to be one of three Ts: Turing, Toyota and Tesla. I am very conscious of that," Yamamoto said in a June 5 interview at Turing's headquarters on the fourth floor of an office block in central Tokyo. Such goals are mostly aspirational right now. "I think it will take 20 years," Yamamoto said. "But declaring that we will make such a journey is significant because there are very few Japanese start-ups that do so." Turing is a rare startup darling in a country better known for conservative conglomerates than nimble risk-takers. Be ambitious Turing has only 40 full-time employees and has raised just ¥4.5 billion ($28.2 million) in funding. Yamamoto reckons Turing will need at least $626.4 million to achieve Level 5 driving. Turing has yet to sell a product and has only two self-driving prototype systems. So far, it has collected only 100 hours of driving data, for about 3,000 kilometers (1,800 miles) of roads. But Yamamoto wants to expand Turing's payroll to 100 employees this year and demonstrate 30 minutes of door-to-door "full-self driving" in Tokyo by the end of 2025. In 2026, Turing wants to begin test production of its own high-powered semiconductors, which will be called Hummingbird, and run an AI system called Heron. There will also be another superfast language modeling chip called Swan. And tying it all together will be a cloud-based data server called the Gaggle Cluster. Turing wants to start mass producing its chips in 2028 and install them in its own self-driving vehicles in 2030.

12

1 Comment

Myth: Japanese Are Only Good At Incremental Innovation   In dealing with the causes of Japan’s declining trend in commercial innovation, it’s necessary to first dispel a widely-repeated cultural myth: that “the Japanese” are only good at incremental innovation, not big breakthroughs. Not only is it not accurate about Japan. It’s not even accurate regarding the relationship between creating new products and improving them, incremental versus radical innovation.              Time after time, particularly in the 1960s-80s, Japanese companies have been the first, or among the first, to develop a new product.              Someone may invent a product or technology that eventually—perhaps decades later—proves to be transformative in its economic impact. Steel, electricity, and the internal combustion engine come to mind. But they become that important because of decades of one incremental improvement after another.              Consider the lithium-ion (L-I) battery, which was invented in 1985 by Japanese chemist Akira Yoshino. For this invention, Yoshino was awarded the 2019 Nobel Prize. In 1991, SONY developed a commercial L-I battery. Back then, the 75 kilowatt-hour (KwH) battery pack powering today’s Tesla Model S would have cost a half-million dollars and weighed 4,000 pounds. Today, it costs about $10,000 and the price is still plunging. The weight is down to 1,200 pounds. Without these incremental improvements, the EV would not be commercially viable.              To lift the economy, technological innovation must be married to commercial skill. Why was it Tesla, not Nissan, that changed the world? After all, the Nissan Leaf, invented in 2010, was the first commercially successful EV and was the world’s top seller until 2020. But Nissan failed to make the necessary incremental improvements, including fixing its poor battery life. The culprit is not a lack of technological prowess, but a failure of corporate strategy and execution.              See https://lnkd.in/eDMcCx_k #Japan #technology #incremental #innovation #breakthrough #R&D #lithiumionbattery #electricvehicle

17

2 Comments

“The world benefits from Chinese capacity and its investment in manufacturing across the globe. The issue isn't Chinese "overcapacity," it's the incumbent powers wanting to keep control of who can develop and when they can develop.” Some thoughts on questions of Chinese manufacturing capacity and the international political economy of energy transition and development 👇🏽 #china #evs

53

15 Comments

Han Feizi makes a contribution to the ongoing demolition of the “over capacity” trope in this latest piece. It tackles the question through reflection on the so-called “Lucas Paradox” and historical experiences. The LP wonders why rich countries continue to accumulate capital from poor ones, denying the latter development opportunities. It’s a paradox because mainstream economic theory would say that capital would keep leaving rich countries where returns are low. I won’t spoil the argument. It’s well worth the 3-4 minutes. #imperialism #hanfeizi #lucasparadox #china #globalmajority

22

2 Comments

The Chinese-Filipino community has recently found itself at the intersection of rising Sinophobia and geopolitical tensions, creating a wave of fear and uncertainty. As global dynamics shift, Chinese-Filipinos, who have long been integral to the Philippines' social and economic fabric, now face growing scrutiny and discrimination. This climate of distrust can lead to significant fallout, affecting not only personal safety and community cohesion but also economic stability. Businesses owned by Chinese-Filipinos might experience boycotts, and social relations could become strained as stereotypes and misinformation spread. Addressing this issue requires a concerted effort to promote understanding and solidarity, highlighting the diverse contributions of Chinese-Filipinos to the country. It’s crucial for leaders and the public to foster an environment where cultural diversity is celebrated, and prejudice is actively countered. Education and dialogue are key to mitigating the adverse effects of Sinophobia and ensuring that the Chinese-Filipino community continues to thrive in an inclusive society. #Sinophobia #ChineseFilipino #CommunityCohesion #CulturalDiversity #StopHate #UnityInDiversity #Philippines #SocialHarmony #EndDiscrimination #Geopolitics #EconomicImpact #Inclusion

1

US government and US tech companies are not on the same page when it comes to tech dissemination controls. #exportcontrols on critical and emerging tech will be less effective and more expensive than anticipated #geopolitics #geotech #techcoldwar #china #semiconductors

9

1 Comment

In NZZ I explained how Japan aims to secure skilled workers, engineers and scientists despite declining population: Japan, a pioneer in addressing labor shortages, is taking proactive steps to ensure a steady supply of skilled workers despite its shrinking population. The share of STEM students might be lower than in many countries. But in Asia, Japan sticks out with a well-structured vocational training system, thanks to its long history of industrialization. In addition, Japan is enhancing the attractiveness of its education programs, particularly for women, through the establishment of Super Science Highschools and new support programs. Key points: Japan's long-standing tradition in manufacturing and well-established structures for vocational education at all qualification levels give it an advantage over other Asian countries. The government is promoting STEM education through funding programs and making vocational education - and employment after graduation - more accessible to foreign students. Japan's education system places a strong emphasis on mathematics and hands-on skills from elementary school onwards, resulting in high performance in global student assessment studies. Challenges remain, including the need to foster innovation and creativity, as well as attracting more women to STEM fields, where Japan lags behind other OECD countries. Foreign companies, such as BMW and Mitsubishi Fuso, are introducing German-style dual vocational training to secure talent and provide more practice-oriented education. Their hope: By offering a special system in which young Japanese are being paid to study and work they hope to win the war for talent. I link the article in the comments. #Japan #education #laborshortage #STEM

12

1 Comment

Non-issue. A Chinese-Filipino is distinctive - they just open their mouths and no one can mistake them as a native of Wuxi. Heck, even when they speak Mandarin - it is just different. A Singaporean-Chinese (born here, studied here) is also different. Our Mandarin most of the time CMI, and we are the only ethnic Chinese national group that speaks English (Singlish) when we gather, not dialect or Mandarin. Ditto a Malaysian Chinese - usually their Mandarin sounds funny to us (and I am sure our Mandarin sounds weird to them). But here is the thing - our command of Singlish, Tagalog and Bahasa is rock solid while our grasp of Mandarin is passable to CMI. If you want to be suss about people who may be 'plants' (PSA: Singapore govt frowns on making anyone in Singapore feels threatened) their command of the local vernacular will be weak. (Fellow Sinkies know this. We cringe when people use 'lah' in the wrong place, and do not what is the right length to drag or shorten the lah, and the right tone. I think Malaysians have roughly the same rules regarding 'lah' as well.)

9

3 Comments

Reading UNEP's report titled "A Review of 20 Years of Air Pollution Control in Beijing". For years, Beijing had the unfortunate distinction of being a polluted city. However, things can change quickly. In just five years, from 2013 to 2017, fine particle levels in Beijing and the surrounding region fell by around 35% and 25% respectively. No other city or region on the planet has achieved such a feat. The Beijing Clean Air Action Plan from 2013 to 2017 significantly improved air quality by reducing PM2.5 levels. Key measures included renovating coal-fired boilers, promoting clean residential fuels, and restructuring industries, which effectively tackled major emission sources like coal combustion and industrial outputs. The spatial impact extended beyond Beijing, benefiting surrounding areas. With determined intention and concrete actions, Beijing has proven that significant improvements in air quality are achievable. #CleanAir #EnvironmentalHealth #UrbanSustainability #AirQualityImprovement #almatyair

3

I think China would have a concern - not that they fear S Korea doing anything untoward to China. But what is the N Korea reaction when S Korea gets nukes - as they also just obtain nuclear power status - or worse, just fail to get nukes before US bases some with S Korea. The problem I think exists between the idea that N Korea is a Chinese puppet state. It is a hermit kingdom that is useful to China as a buffer for a long time - but now with China being one of the most modern nation alongside S Korea and Japan in the region - it makes N Korea seem out of place in China's strategy. But China's hold over N Korea has never been as strong as US or the West thinks it is - even if it is stronger than they claim it is. Of course, if N Korea has no nukes before the S Korea gets them - Kim might have to have his own nuclear pact with Putin or Xi, and he is not going to be choosy (ie, Putin). If N Korea has nukes as well as S Korea, then the idea of 2 nuke armed nations in the peninsula will increase the concerns of everyone except Russia and N Korea. I think Koreans do not want nukes in their country, and US will not put NBC weapons in Korea, in the era of ICBMs that can reach anywhere in minutes, shaving 60 seconds off here and there is not going to make a difference. And US will also want to be the one to launch the US nukes - on Korean soil as well.

1

https://lnkd.in/gV3QE_NJ Firstly, let's discuss the most talked-about topic today—the US presidential election debate. The first televised debate between Democratic President Joe Biden and former Republican President Donald Trump took place on the morning of the 28th Taipei time. Hosted by CNN in Atlanta, Georgia, on the evening of the 27th local time, the debate lasted approximately 90 minutes. The candidates clashed fiercely on issues such as the economy and foreign policy, with each accusing the other of being "the worst president in history." Biden emphasized economic growth, while Trump criticized his policies for high inflation. The debate also covered Russia's aggression towards Ukraine and the Middle East situation, with both candidates expressing clear stances. A CNN poll after the debate showed 67% believed Trump won, while 33% supported Biden. Did you watch the debate? If not, try to find a recording to catch up. Next, let's look at the latest developments in the Liberal Democratic Party (LDP) leadership election in Japan. Digital Minister Taro Kono from the Aso faction recently met with Vice President Taro Aso to express his intention to run for the party presidency. Former Prime Minister Yoshihide Suga emphasized the responsibility of the Prime Minister and suggested a leadership change. The dissolution of factions has made forming a majority within the party complex. Kono, Fumio Kishida, and Toshimitsu Motegi are actively seeking Aso's support, leading to fierce competition in the leadership race. Suga, representing the non-mainstream faction, criticized Kishida, highlighting the responsibility for political funding issues and the legitimacy of factions. With three months of intense campaigning ahead, the election results will directly influence the formation of party consensus. Personally, I think it would be less troublesome if Kishida announced his non-participation early. Lastly, I’d like to share a personal story. Last night, I had dinner with a senior who retired from Japan's Ministry of Economy, Trade, and Industry. This senior played a key role in facilitating TSMC's successful entry into Kumamoto. I shared my thoughts on developing Kumamoto, particularly the concept of creating a new "Tai-Kuma Culture" that integrates Taiwanese and Kumamoto cultures. It was gratifying to hear the senior praise my ideas, which might indicate that we are on the right track. I will keep you updated with specific details as they develop.

2

How many millionaires does it take to make a city vibrant? The Business Times reports: "SINGAPORE is now home to 244,800 resident millionaires, 336 centi-millionaires, and 30 billionaires. Based on the 2024 World’s Wealthiest Cities Report by Henley & Partners, the city-state has moved up two places to fourth on the global ranking following an “impressive” 64 per cent increase in the number of millionaires over the last decade. This also comes after 3,400 high-net-worth individuals (HNWIs) moved here in 2023 alone. “Widely regarded as the most business-friendly city on earth, Singapore is also one of the world’s top destinations for migrating millionaires,” noted the British investment migration consultancy on Tuesday (May 7)." The key words are "business-friendly". Media reports citing Singapore's extremely impressive GDP per capita figures often fail to note that very little of said GDP (comparatively speaking) accrues to Singaporean workers. It is also noteworthy how Henley & Partners - The Firm of Global Citizens® counts millionaires. Per their website (https://lnkd.in/gXZJjQer): "For the purposes of this report, ‘wealth’ refers to an individual’s liquid investable wealth, which only includes listed company holdings, cash holdings, and debt-free residential property holdings." I'm not sure about you but I don't consider my home to be "liquid investable wealth", even if I've paid off my mortgage. Unless it is a secondary home, I will have to buy a replacement even if I sold it. Any high valuation is largely irrelevant if I have to buy high after selling high. There is also the societal consequences of such high valuation if wages have not risen as much. My wealth is built on feeding off the next generation. As Chua Beng Huat points out in his new book (excerpted https://lnkd.in/gNvDnnj5): "[G]iven that the buyers of resale flats tend to be the younger generation who are fresh entrants into the housing market, the gains of the older generation sellers are effectively passed on as financial burdens of the young; as in my uncle makes money from your nephew and your uncle makes money from mine." Comparatively speaking, Singapore appears to be doing better than many rich cities: "By contrast, Henley & Partners noted that Tokyo saw a 5 per cent decline in its resident HNWI population despite having “led the pack a decade ago”. London’s millionaire population, too, has shrunk by 10 per cent over the past decade – placing the city one rank below Singapore at fifth place." Yet, these cities are culturally by far more vibrant than Singapore. We may host concerts by top international artistes but what of our own? One Taylor Swift concert does not a vibrant arts scene make. Attracting wealth is not easy but ensuring such wealth contributes more than rising cost of living is even harder. https://lnkd.in/gTa7uiuC

42

32 Comments

https://lnkd.in/gBzV8779 Firstly, let's discuss the concurrent rise of TSMC and the Nikkei Index. TSMC's stock price surpassed the NT$1,000 mark today, sparking significant market interest. Meanwhile, the Japanese stock market also showed robust upward momentum. The Nikkei 225 Index in Tokyo has risen for five consecutive days, reaching a record high of 40,913.65 points. The TOPIX index also hit a 34.5-year high. Major stocks like Toyota and SoftBank Group attracted substantial buying, pushing the indices higher. This overall rise in the Japanese stock market reflects market expectations for improved corporate profitability and governance structures. The anticipated depreciation of the yen has boosted the profit outlook for global companies, drawing more overseas investors. This increased market confidence signals Japan's economic stability and recovery trajectory. Next, let's look at the delay in the International Thermonuclear Experimental Reactor (ITER) project. The ITER project, involving Japan, the United States, and several other countries, has been postponed to 2033, a delay of at least eight years from the original 2025 target. The delays and component repairs have increased costs by approximately 5 billion euros. The ITER organization emphasized that the delay was the right decision to achieve the project's goals, with a greater focus on risk management to minimize further delays. Nuclear fusion power, considered relatively safe with low resource risks, does not produce CO2 and has low-level radioactive waste. Fusion reactions can be achieved using tokamak and laser methods. If successful, this "sun on earth" could offer a new solution to humanity's energy needs. Now, let's talk about mosquito-swatting techniques. Summer is mosquito season, and we often want to kill mosquitoes before they bite us. Professor Satoshi Nakata from Chiba University found that mosquitoes have the highest wingbeat frequency among insects, with males beating their wings 600 times per second and females 400 times per second. Mosquitoes can sense air flow changes from 30-40 millimeters away, equivalent to humans sensing air movement from four or five floors up. The research indicates that mosquitoes constantly change their wingbeat frequency while flying, causing their bodies to rise when the frequency changes. Therefore, swatting mosquitoes from above and below increases the chances of success, while side swats may allow them to escape upward.

2