The Business of Restoration in Japan

https://www.youtube.com/watch?v=dLZ0vSE8m34

Architecture in Japan has for hundreds of years represented Japan’s innovation and cultural uniqueness. Today renovation of historic Japanese homes is attracting new foreign investors to Japan. Restoration of old homes has been yielding up to 80 percent investment returns. As one American architect, Jacob Reiner who has a firm based in Japan mentioned, “There is a huge innate value in the homes that are just being overlooked by the locals.” Can foreign investors help drive cultural preservation of Japanese homes? Or are the more modern houses that are emerging just a new wave of innovation?

The restoration business is a large business that both the private sector and the government are deeply involved in and which also benefits the tourist industry. Approximately 200 homes are restored in Japan every year that were built during the Edo era of 1603-1868. The cost of renovation can cost up to $20 million yen ($238,000 US dollars) but can double the value of the home. One home in Shojiko which is 150 years old was recently renovated and purchased for 5 million yen. The cost to restore the property was $5 million yen and it sold for $15 million yen.

There is a large variety of styles of historic homes representative of different architectural periods in Japan. Japanese elite for example in the eleventh century built homes in a style called shinden-zukuri. This style house has a traditional garden in the center with rooms connected by long hallways. Another style house emerged in the Meiji era between 1868 to 1912. There were many elements to these homes that represented traditions and rituals of these periods inside the home such as screen doors and hibachi fireboxes.

However, in Tokyo historic houses that are even older than 40 years old have become difficult to find. In other cities in Japan traditional houses are still common such as in Kyoto and Kamakura. Two Japanese architects in Tokyo recently purchased three homes to create an exhibit around the architectural work of postwar Japanese architects and to raise awareness about importance of appreciating and preserving these older homes.

As for temples the government takes great strides to ensure that these historical sites are maintained. In Kyoto alone in Japan there are over 2,000 temples which are in need of restoration. The cost of just one restoration project carried out in 2011 of the Kanginn Shodenzan Temple cost $1.3 billion yen and was subsidized by the Cultural Affairs Agency and Decorative Arts and Crafts company based in Toyko. Restoration can be even more complex than the original construction. This particular project involved some of Japan’s master craftspeople in carpentry, engraving, painting, as well as traditional artisans.

Surprisingly it is primarily foreigners buying historic properties and having Japanese homes restored as local residents tend to prefer more modern homes. Foreign appreciation and investment in the restoration of historic homes could create a shift to more Japanese buyers wanting to purchase these beautiful old homes. However, the more modern homes in Japan being built today just may be more representative of the culture of the country today. There may be new innovations in architecture emerging in Japan for the world to learn from and appreciate for years to come.

 

https://www.youtube.com/watch?v=g_9j87QIrYc

1] http://www.japantimes.co.jp/text/fl20120805x4.html
2]http://www.businessweek.com/news/2012-11-19/japan-s-forsaken-homes-restored-to-traditional-styles-yield-80-percent
3]http://www.realestate.co.jp/2012/11/22/renovated-japanese-homes-deliver-investment-returns-as-high-as-80/
4]http://www.realestate.co.jp/2012/10/30/historic-homes-in-tokyo-attract-more-international-buyers/
5] http://japandailypress.com/buy-a-house-save-old-japan-2917408
6] http://traveltips.usatoday.com/japanese-historical-homes-33254.html

 

Kim Jong-Un Wins Time’s ‘Person Of The Year’ Reader Poll

This gallery contains 4 photos.

By: Dana Sher TIME’s Person of the Year will be announced Dec. 19, however the reader poll’s results were announced on the 13th, and I have to say I was very surprised. Among the 40 candidates are Marissa Mayer, Hilary … Continue reading →

A business built on guilt: the dark side of doing good

Ever thought about going abroad and spending some time as a volunteer doing good for the local community? If so, you are not alone – especially when you had Cambodia on your list. The number of volunteers coming into the country has skyrocketed during the past decade. While most of them might come with the best intentions, a closer look suggests that more harm than good is done by this trend of ‘Voluntourism’.

Cambodia is one of the poorest countries in the world. During the devastating Khmer Rouge regime’s rule (1975-79), up to a third of the population died from executions, overwork, starvation and disease. Despite ongoing border conflicts with Thailand, Cambodia is now looking back on a decade of relative political stability and tremendous GDP growth, albeit from a low base. Tourism makes up more than a third of the country’s economy and remains the fastest growing industry. Today, more and more people come to Cambodia not only for its mind-blowing temples, but to pay a visit to one of the many orphanages that have mushroomed across the country.

Where there is a need there is a market. In 2008, there were 258 orphanages, 237 of which were privately owned (up from 140 in 2005). While the country was full of orphans after the war in the early 80’s, this is no longer the case. Government figures suggest that only a quarter of the children living in orphanages have lost both parents. Evil to him who evil thinks. In fact, “renting out” children to orphanages has become a source of income for poor families and a very lucrative business for those who operate the establishments. Beyond these perverse incentives, operation of orphanages by profit-seeking businessmen has a multitude of negative repercussions on children’s wellbeing.

China’s challenges

Huai-Chun Yu

After the secrecy of the procedure by China’s top leaders is selected. Xi Jinping announced human touched speech compare to other Chinese officials. “ Our people have great enthusiasm, hope for better education, stable jobs, satisfactory income, higher standards of medical services.” It brought up the experts to detail the 5 challenges for China.  The 5 challenges would be Factional divisions, more spending less saving, Pouring water on disputes, too many men, and also learning the three Rs.

China’s commentator Willy Lam presented that noting, “Even before the birth of the People’s Republic in 1949, the party had fought over the future direction of the China.” The party’s struggle was between two lines since Mao’s rule, which has become morphology into divisions according to family ties to revolutionary leaders and from powerful mentors. Since the 1990, three majority groups emerged within the party, which also control the country are The Shanghai faction leads by the president Jiang Zemin, the Communist Youth League also named CYL faction leads by former President Hu Jintao, and the Gang of Princelings faction leads by current president Xi Jinping. Despite the three parties apparent differences, but the factions are having a solid consensus on the major goals for China. The challenge would be monopoly on power over key factors from gas to banking and telecommunications, but the China’s economy are being more integrated with the global market.

China has issue on more spending and less saving on their income morphology. In 2011, the experts found out that the top ten percent of income earners are sitting on most of the wealth. On the other hand, the low savings rate of most Chinese households surveyed showed that the most households do not have the money to spend. The key to improve a consumer-based economy is to raising the income and spending levels for the poor.

The China’s foreign policy is keen to prevent other countries from concluding that China has discarded the peaceful rise. For instance, in recent days, Chinese media have been reported Chinese ships to expel Japanese Coast Guard boats. China attempted to remind the world that the troubles were all started by Tokyo. But the new leader would prefer not want to look weak, thus blunting the edge of the note of the peaceful rise for the foreign policy.

Economic Cost of Indian Democracy: Look at China!

While democracy is a preferred system of government for people’s freedom and human rights, its appropriateness needs to be reviewed, and economic costs of democracy has to be assessed and accounted for,  for some countries.

Indians fame themselves of having the largest democracy in the world with a population of over 1.2 billion. In this democracy, the possibility and decision to go for protest on a day has never been difficult for ordinary and Poor Indians at the call of some interest groups whether the cause made sense to them or not. These ordinary people are the ones who end up getting injured, killed, arrested, or their properties destroyed in the process, in addition to massive destructions they cause on infrastructures, vehicles, buildings, and businesses. The assessments of the actual economic value they lose in protests are the least that they have in their head. The freshest of the recent events worth noting is the September 20^th nationwide protest against the FDI in multi-brand retail and the hike in diesel prices. This single-day protest named ‘Bharat Bandh’, organized by opposition Bharatiya Janata party (BJP) cost US$ 2.3 billion to an Indian economy according to the Confederation of Indian Industry. This is only one of several such protests that take place every day across different states of India. The gross economic costs of all protests in a year in the democracy of India can be valued only if Indians themselves realize it and properly account it. (As of date, I did not come across a record of number of protests, assessed costs of such protests, nor the research work in this field).

The above mentioned protest is only one example of how tough it is for the government and the policy reform drivers to bring about economic reforms in democratic India. Almost every economic policy reforms initiatives are effectively opposed by the opposition party and interests groups. For most part of the past decade, India remained at large protectionist who has effectively helped its domestic firms remain inefficient, uncompetitive in international trade, and unproductive. Most of the leading economies in and around Asia seem fed up of trying to negotiate trades agreement with India which almost all have failed due to protectionist’s attitude shown by India. For instance, the South Korea’s Trade Minister Taehoo Bark said that negotiating trade agreement with India is extremely difficult, and it is not pursuing much interest on India at present, during his presentation to the students of IBS few months back. Such regards from the prospective trading partners, and its own conservatism has manifested in its poor economic performances.

“Hallyu” – an Unstoppable Influence in Asia?

By Yu-Shan Wu

Hallyu, or Korean Wave, 한류, is the growing aspiration to know more about Korean culture. The term was originated in mid 1999 by Beijing journalists surprised at the fast growing popularity of Korean entertainment and culture in China. The wave has started in East Asia and swept over Southeast Asia. Recently, it has even landed in the Middle East and part of Europe. The Korean Wave has extended the cultural understanding and interaction between South Korea and the rest of Northeast Asia and further created more business opportunity between countries. Based on Harvard professor Joseph Nye, he describes this wave as a soft power, and this soft power could create faith in culture, polices and institutions to win the battle of hearts instead of using traditional forms such as military power to gain awareness from countries.

The soap opera and k-pop (Korean pop music) have been the two main sources

of the Korean Wave in China. In 2003, the Korean television drama “Winter Sonata” was first shown on Japanese television in twenty episodes.  It captured 22% of the prime time viewing audience. In 2004 Winter Sonata had its second showing and this time it captured 24% of viewing audience.  This drama not only created the honor for the main character Bae Yong Joon but for the Korean drama business. Demand by fans for Winter Sonata merchandise has created an industry with an annual turnover in Japan and Korea worth 2.3 billion US dollars. Even the wife of the Japanese president was into this trend and drama.

Below is the chart of economic effect of Hallyu. Hallyu generated approximately extra KRW 1 trillion in 2010 than in 2009. In terms of value-added figures, Hallyu raised the figures by KRW 453.2 billion to KRW 1.9192 trillion. Hallyu also created more employment opportunity from 15,888 to 51,545 people. Based on the report, it also indicates this hallyu effect is large to China, Japan, and South Asia due to its high export. The tourism is the biggest winner in the sector because of the increase in the number of tourists visiting Korea. Southeast Asia also played a significant role in raising tourism in Korea.

Economic effects of Hallyu (Unit : KRW 1 million, %)

Hallyu effects	Year			Rate of increase from 2009 (%)	Ave. rate of increase
	2008	2009	2010
Production inducement	4,933,688	3,960,623	4,982,470	25.8	0.5
Value-added inducement	1,713,952	1,466,022	1,919,254	30.9	5.8
Employment inducement	12,503	35,657	51,545	44.6	103.0

The Survival Odyssey of a Chinese FMCG Brand

By Miaomiao HUANG

As the heat of Black Friday and Cyber Monday revive retailing from the lackluster sales in the US consuming market, American Asians are consistently contributing their every effort to save the plummet of the American Brands by accounting for almost half of the queue outside malls and outlets.

Evidently not much surprising remains in how the Chinese Consumer change the world since the French Luxury Brand Hermès endorsed a Chinese designer to create a Chinese version of “Hermès” – “SHANG XIA” which philosophically means inheriting the family legacy and tradition. The marketer mavens like Patrick Thomas – CEO of Hermès are equipping themselves for the branding battle in the coming Chinese market. This European case which combines the French branding expertise of “savoir-faire” and “savoir-être” in luxury industry and Chinese element brand inspiration does not reside solo as the World’s second cosmetics giant – the American Lauder Group known as the maker of popular brands like Estée Lauder, Clinique and Bobbi Brown launched their hybrid East-Meets-West beauty line “Osiao”, quoting New York Times “In short, the hybrid brand is a modern mash-up of traditional Chinese medicine and the American science of marketing.”

Another curious case has to be how the Kentucky Fried Chicken and Pizza Hut’s mother company YUM! successfully introduced a Chinese cuisine fast-food chain restaurants “East Dawning” since 2004, now feeding Chinese people in its 30 restaurants under the KFC business model in China. All these cases above are signs for Chinese local Market players to wake up and fight back reluctantly or otherwise for this is doomed to be a brutal branding journey for China’s local brands.

Let’s track back the branding history in FMCG in the Chinese Market for a while. Since the open-up, all the national brands are passively defending from the fierce attacks from the foreign international ones. Over time, those are either forced out the market lacking of the necessary survival competitiveness, or bought out by the international groups like L’OREAL acquired Xiao Hu Shi to expand its mass-distribution in local market and YU SAI, the first threshold known Chinese high-end beauty brand, and Johnson & Johnson took over another national brand DABAO Skincare. However, back to the time when the majority of the national brands were failing, the foreign-brands-savvy Chinese were just so unemotionally careless about it.

A bird view on the Asian economical development, China’s pathway is just another déjà-vu, Japan, Korea, Taiwan and Singapore have all been there and done that or still struggle to build its own national international brand. After over a decade’s prosperity of the “World Factory”, China is having its “growing pain” extremely severe, in the recently news from Hong Kong based Phoenix Media Group, a Chinese economist reveals that the manufacturing factories are stuck in this dilemma of either losing money by halting production indefinitely or continuing producing with a definite loss. When the stake is at the worth of 4%-of-the-GDP, China’s policy makers are getting increasing anxiety from the industry transformation as they were worrying about creating Chinese Brands decades ago. For better or for worse, there is a no-alternative stage for China to go through in the later period of WTO contract.