Latest / Trumponomics / When Japanese People Die, Their Land Goes Into Purgatory

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When Japanese People Die, Their Land Goes Into Purgatory · Trumponomics

• 0:00
  Speaker 1: You may have heard that Japan has a population problem.
• 0:03
  Speaker 1: Too many people are getting older and not enough people
• 0:06
  Speaker 1: are being born or moving there. But it's not just
• 0:09
  Speaker 1: a demographic problem. Many of these people who are dying
• 0:12
  Speaker 1: happen to own land, but when they depart this earth,
• 0:15
  Speaker 1: no one seems to know what happens to their property.
• 0:18
  Speaker 1: In fact, no one knows who owns more than ten
• 0:21
  Speaker 1: percent of the nation's landmasks. That's about sixteen thousand square miles,
• 0:26
  Speaker 1: the equivalent of the size of Denmark. That creates a
• 0:29
  Speaker 1: big economic headwind. You may not have heard about. Welcome
• 0:41
  Speaker 1: to Benchmark. I'm Scott landman and economics editor with Bloomberg
• 0:45
  Speaker 1: News in Washington, And I'm Daniel Most, economics writer and
• 0:49
  Speaker 1: editor at Bloomberg View in New York. So, Dan, you
• 0:53
  Speaker 1: lived in Japan for several years and you visit there
• 0:56
  Speaker 1: every so often. What can you tell us about the
• 0:58
  Speaker 1: demographics there. I would draw a big distinction between the
• 1:03
  Speaker 1: Tokyo metropolitan area and the rest of Japan. The Tokyo
• 1:08
  Speaker 1: metropolitan area is as vibrant as ever. When you get
• 1:13
  Speaker 1: into the provinces, you can start to see the demographic crunch,
• 1:17
  Speaker 1: and you start to see it in little ways. For example,
• 1:21
  Speaker 1: in elevators there are a second set of numbers much
• 1:25
  Speaker 1: much lower to the ground, which I assume are for
• 1:28
  Speaker 1: old people hunched over. You also see in public bathrooms,
• 1:33
  Speaker 1: which by the way, are impeccable, you see a little
• 1:36
  Speaker 1: seat wedged into the corner of the wall where you
• 1:39
  Speaker 1: can put your baby if you need to use the restroom.
• 1:44
  Speaker 1: And sometimes there's a little helpful sign above the exit
• 1:48
  Speaker 1: to the restroom saying, don't forget your baby if you
• 1:51
  Speaker 1: put it in the thing on the wall. In other words,
• 1:53
  Speaker 1: these young people are really crucial, or in other words,
• 1:56
  Speaker 1: don't forget your person belongings. If you're old and you
• 1:59
  Speaker 1: have and to go in there, and maybe don't forget
• 2:02
  Speaker 1: your baby reminds you that you have something in there too.
• 2:06
  Speaker 1: Did that ever come up to in no, Well, anyway,
• 2:12
  Speaker 1: let's bring in our guest, Yoshi Nohara, as a reporter
• 2:15
  Speaker 1: covering the Japanese economy in Bloomberg's Tokyo bureau. He recently
• 2:19
  Speaker 1: wrote about the issue I mentioned in the introduction for
• 2:22
  Speaker 1: the Benchmark website. So we're just rolling in the synergy today.
• 2:26
  Speaker 1: He's joining us from Tokyo. Yoshi, thanks so much for
• 2:30
  Speaker 1: talking with us on the Benchmark podcast from Tokyo. Glad
• 2:34
  Speaker 1: to join this conversation. Thank you so much for inviting
• 2:38
  Speaker 1: me for this. Now, Yoshi, before a government panel put
• 2:42
  Speaker 1: out a report on this topic, how familiar were you
• 2:46
  Speaker 1: with it? You know, we're talking about landowners dying off
• 2:49
  Speaker 1: and no one knowing who their property passed to. Well,
• 2:52
  Speaker 1: to be honest to Scott, not magic or a more
• 2:55
  Speaker 1: precisely put, I hadn't thought about it at all, and
• 3:00
  Speaker 1: that says a lot about this problem. People not paying attention,
• 3:04
  Speaker 1: and the problem has gotten this big before most of
• 3:07
  Speaker 1: us knew. And can you tell us a little bit
• 3:10
  Speaker 1: more about the size and scope and how this happened. Well,
• 3:13
  Speaker 1: the size it's an estimate, but it's considered that now
• 3:18
  Speaker 1: the there's been a tremendous difficulty trackdown ownership the many
• 3:23
  Speaker 1: properties in Japan, which total to equivalent of the size
• 3:28
  Speaker 1: of Tushue, which is a pretty big island in Japan.
• 3:33
  Speaker 1: And for global audience, it's as big as the nation demark,
• 3:38
  Speaker 1: which shows how big this problem is. And there's also
• 3:43
  Speaker 1: an estimate how big it's expected to be. It's going
• 3:46
  Speaker 1: to be as big as Hokaido, which is the second
• 3:50
  Speaker 1: biggest island in Japan and Yo. She does this reflect
• 3:54
  Speaker 1: idiosyncrasies in Japanese property law or is this a broader
• 4:00
  Speaker 1: narrative about what happens when parts of a country hollow
• 4:05
  Speaker 1: out and people just die without an influx to support
• 4:10
  Speaker 1: the population. Well, I think both. The short answer is
• 4:15
  Speaker 1: but for this there's definitely a legal some legal issues.
• 4:20
  Speaker 1: But at the same time, when you think about the
• 4:24
  Speaker 1: root problem for this is that it comes down to
• 4:28
  Speaker 1: this what happens when the property becomes a burden better
• 4:33
  Speaker 1: than asset. In other words, you do everything you need
• 4:38
  Speaker 1: to do to maintain property when you know that piece
• 4:42
  Speaker 1: of property you're inheriting inheriting from your family is worth
• 4:49
  Speaker 1: an investment, but you don't want to do anything about
• 4:52
  Speaker 1: it if you know that that's just not going to
• 4:55
  Speaker 1: be developed or nobody is willing to invest money in it.
• 5:00
  Speaker 1: So it's an economic issue. There's a less and less
• 5:04
  Speaker 1: incentive to invest in London, especially in regional areas. So
• 5:10
  Speaker 1: that's a justis of the issue. So that's why it's
• 5:13
  Speaker 1: so hard to grasp the scope of this issue. But
• 5:19
  Speaker 1: we do know that it's happening, especially in the rural area.
• 5:23
  Speaker 1: So are you saying that they can't even sell this
• 5:27
  Speaker 1: land even if it went to its rightful owner or
• 5:31
  Speaker 1: was you know, passed down properly, that even the airs
• 5:35
  Speaker 1: would not be able to sell it or develop it.
• 5:38
  Speaker 1: In a lot of places, well, the question is that
• 5:41
  Speaker 1: is what when you think about this, and they think
• 5:44
  Speaker 1: about this. So the issue is that it's not that
• 5:49
  Speaker 1: the people don't want to sell properties. It's an issue
• 5:53
  Speaker 1: that the government or any of that student is having
• 5:57
  Speaker 1: a difficulty to track down who owns these properties. So
• 6:02
  Speaker 1: even if the government wants to buy a piece of
• 6:05
  Speaker 1: lander because they want to create a park or something,
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  Speaker 1: they can't do so because well they don't know who
• 6:13
  Speaker 1: owns the property. And the Japan has the eminent domain, um,
• 6:18
  Speaker 1: so the government can use it. But it's just it
• 6:22
  Speaker 1: takes more manpower to do that, and it's hard when
• 6:26
  Speaker 1: you don't know who owns the property and it takes
• 6:31
  Speaker 1: mamper to track down the ownership. And it's an increasing
• 6:35
  Speaker 1: button for a lot of municipalities because it's not just
• 6:39
  Speaker 1: the residents who are getting old and you know there's
• 6:44
  Speaker 1: a man a population decline in regional Japan, it's also
• 6:47
  Speaker 1: government stuff. But they're being stretched a lot more so,
• 6:51
  Speaker 1: that's why they find it difficult to generate enough manpower
• 6:56
  Speaker 1: to track down the ownership and do something about it. Yeah,
• 7:01
  Speaker 1: she A powerful political theme in the United States is
• 7:05
  Speaker 1: a sense, justified or not, that in rural areas they've
• 7:10
  Speaker 1: just been abandoned, and all the intellectual energy and all
• 7:14
  Speaker 1: the capital and all the lawmaking expertise is focused on
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  Speaker 1: the big metropolitan areas and rural areas have just been abandoned.
• 7:24
  Speaker 1: Does the phenomenon we're talking about here today underscore a
• 7:29
  Speaker 1: similar growing sentiment in politics outside Japan's big cities, Well,
• 7:35
  Speaker 1: I would say them speaking of political sentiment, it's a
• 7:40
  Speaker 1: fact that Tokyo is getting everything, including people, young people
• 7:46
  Speaker 1: in the intellectual knowledge and the businesses, and most of
• 7:50
  Speaker 1: the business headquarters are located in Tokyo. But here's an
• 7:54
  Speaker 1: issue that in Tokyo, the you know, it's so hard
• 8:00
  Speaker 1: to be able to afford kids, which is surprising because
• 8:04
  Speaker 1: this is a bustling place. In many cases, including myself,
• 8:09
  Speaker 1: young people move from the regions where the bathrade is
• 8:14
  Speaker 1: much higher. So there's a podcast pusson that they want
• 8:19
  Speaker 1: to stop infra two big cities like Tokyo, and then
• 8:25
  Speaker 1: generally some kind of incentive for young people to stay
• 8:29
  Speaker 1: in their hometowns so that they can ease this depopulation
• 8:34
  Speaker 1: problem we're facing. So I think that's kind of an
• 8:37
  Speaker 1: interesting contrast to what you just described about the US.
• 8:42
  Speaker 1: But that said, I'm not such that making a much
• 8:46
  Speaker 1: progress in Japan because despite many initiatives, all the things
• 8:51
  Speaker 1: that post to make us say about, yes, let's do
• 8:55
  Speaker 1: something about reasonal hold out so that younger people was
• 9:00
  Speaker 1: over there and the stud families, but it's not that
• 9:04
  Speaker 1: stopping young people from moving to Tokyo. Well, if you
• 9:10
  Speaker 1: go back to original topic, that these land ownership registrations
• 9:14
  Speaker 1: are not being updated, if that problem we're somehow solved,
• 9:19
  Speaker 1: would that be a way to get young people to
• 9:22
  Speaker 1: stay in the regions, if you could update the registrations
• 9:25
  Speaker 1: and maybe find a way to start developing the land
• 9:28
  Speaker 1: and add more amenities so they're not all concentrated in Tokyo.
• 9:32
  Speaker 1: Well that could be, but I guess the once again
• 9:35
  Speaker 1: underlying problem here is that the young people come to
• 9:40
  Speaker 1: Tokyo because they're looking for opportunities. So many prestigious universities
• 9:46
  Speaker 1: are located in Tokyo, and there are far more Korean
• 9:50
  Speaker 1: opportunities in Tokyo. So I think that government can these
• 9:54
  Speaker 1: regulations and do something about it. But it comes down
• 9:58
  Speaker 1: to this point, whether you can create enough economic incentives
• 10:04
  Speaker 1: for young people to stay in rural areas because some
• 10:11
  Speaker 1: people are sure, including myself, or have memories about their hometowns,
• 10:16
  Speaker 1: but they dive because there's not many jobs. It comes
• 10:22
  Speaker 1: down to it. So without tackling that economic issue, just
• 10:30
  Speaker 1: tinkling the regulations wouldn't too much in my opinion. And
• 10:35
  Speaker 1: you know, she what impact is this going to have
• 10:38
  Speaker 1: on infrastructure spending in provincial Japan? And I asked the
• 10:43
  Speaker 1: question in the context of I always marvel at how
• 10:46
  Speaker 1: well maintained, for example, the rail network and rail stations
• 10:51
  Speaker 1: are even well outside Tokyo. Then I come back to
• 10:54
  Speaker 1: the US, I write, amtrack and I want to kill myself.
• 10:58
  Speaker 1: That's exactly what I'm coming found about. And there are
• 11:01
  Speaker 1: some signs or remediate reports I hear about a few
• 11:06
  Speaker 1: or few of people living in rural areas and train
• 11:10
  Speaker 1: lines and being abandoned or not being sustainable economically because
• 11:16
  Speaker 1: you don't have enough people. So that's on a concern.
• 11:19
  Speaker 1: But I can say then it may not happening as
• 11:23
  Speaker 1: first as you expect because just last week, I just
• 11:28
  Speaker 1: traveled back to my hometown in western Japan called the
• 11:32
  Speaker 1: Yamaguchi Prefecture, and I just took a local train, the
• 11:38
  Speaker 1: very same train line that I used to take as
• 11:42
  Speaker 1: a high school student, and I was still punctual. It
• 11:46
  Speaker 1: came on time and took me and my kids and
• 11:50
  Speaker 1: my wife to where we need to go at the
• 11:53
  Speaker 1: exact the schedule of the time. So you know, it's
• 11:57
  Speaker 1: still your functional. But I can say that it may
• 12:03
  Speaker 1: reach to a point that you don't have enough people
• 12:09
  Speaker 1: to keep coin like that. So that's a big concern
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  Speaker 1: that I have, and it may happen in visible way
• 12:19
  Speaker 1: before most of us notice, meaning that some of the
• 12:24
  Speaker 1: you know, rules may be being abandoned and not being updated,
• 12:29
  Speaker 1: and all of a sudden we may realize that after
• 12:33
  Speaker 1: some kind of action happened. But definitely it's not something
• 12:37
  Speaker 1: that I wanted to see. Japan is very famous for
• 12:40
  Speaker 1: the trains running exactly on time, so if that ever
• 12:44
  Speaker 1: changed in any way would be definitely something to mark
• 12:47
  Speaker 1: in Japanese society. But let me ask about another angle
• 12:50
  Speaker 1: to this issue. Japan could solve its population issues pretty
• 12:55
  Speaker 1: quickly if it became more open to immigrants, and yet
• 12:59
  Speaker 1: it's very famously closed society, and Dan likes to talk
• 13:04
  Speaker 1: about how they'd rather put more robots in than get
• 13:07
  Speaker 1: workers from abroad. Yoshi, is this going to happen with
• 13:13
  Speaker 1: this ever forced the immigration issue open or is that
• 13:16
  Speaker 1: just a closed question? Well, the easy answer about robots
• 13:21
  Speaker 1: is that there's no doubt that a lot of Japanese
• 13:24
  Speaker 1: people have cultural affection with the robots because of animation
• 13:30
  Speaker 1: characters such as Astro Boy. But when it comes to immigration,
• 13:34
  Speaker 1: that's a tricky question. And I think I have to
• 13:37
  Speaker 1: say that I am speaking about this topic as a
• 13:42
  Speaker 1: paston who lives in Tokyo where most people are exposed
• 13:48
  Speaker 1: to foreign cultures and many visitors from abroad, and most
• 13:54
  Speaker 1: of posty makers do talk about immigration, if not on
• 13:58
  Speaker 1: the record, but that's not free. They can see the
• 14:01
  Speaker 1: potential to easy the Japan's demographic program by bringing in
• 14:06
  Speaker 1: more people from abroad, but it's just I would say
• 14:11
  Speaker 1: it's a different story for reasons outside the big cities
• 14:16
  Speaker 1: like Tokyo, because the people just not used to it
• 14:21
  Speaker 1: and they just don't know, and that always brings up
• 14:26
  Speaker 1: fear and and that's why it's getting tricky. For policymakers
• 14:32
  Speaker 1: to present as a realistic, immediate approach to solve this issue.
• 14:38
  Speaker 1: But do you never know? You know, one thing I
• 14:40
  Speaker 1: can say is that I was surprised how the many
• 14:46
  Speaker 1: choice from abroad its visiting rural areas in Japan these days.
• 14:52
  Speaker 1: Back in December, I took a family trip to Easy,
• 14:56
  Speaker 1: which is like a couple of hours west of Tokyo,
• 14:59
  Speaker 1: and on pretty much every train we hopped on with
• 15:03
  Speaker 1: just so many tourists from China or other Asian countries,
• 15:09
  Speaker 1: or European countries or the US. So at least to
• 15:13
  Speaker 1: those people are visiting those places and having some kind
• 15:16
  Speaker 1: of interaction with local people, so that may change in
• 15:21
  Speaker 1: a gradual's way the people's attitude about having neighbors from
• 15:27
  Speaker 1: other countries. You know, you are, suely. The more we
• 15:30
  Speaker 1: talk about this issue, and the more one looks at
• 15:34
  Speaker 1: news from Japan across economics, politics, culture, it seems like
• 15:41
  Speaker 1: the dominant, the overriding factor in pretty much anything happening
• 15:47
  Speaker 1: in Japan now is demographics and the fact that it
• 15:50
  Speaker 1: is simply running out of people. Well, my answer is
• 15:53
  Speaker 1: that yes, and I'm surprised at how wider that the
• 16:00
  Speaker 1: momographic issue is every time I tackle a story, I
• 16:06
  Speaker 1: just realized that it's pretty much behind all the major
• 16:12
  Speaker 1: themes that I think are key to the Japanese economy.
• 16:17
  Speaker 1: But I wouldn't say that if that means that all
• 16:20
  Speaker 1: the negative implications, because there are some discussions going that
• 16:27
  Speaker 1: maybe this economic headwind caused by demographic crisis maybe a
• 16:35
  Speaker 1: good thing because it can number one, cause companies or
• 16:40
  Speaker 1: posty makers to think hard about innovations and try to
• 16:45
  Speaker 1: adapt and change, and that can be a model for
• 16:50
  Speaker 1: many other nations because this is just not only Japan.
• 16:54
  Speaker 1: But I'm sure that Chinese population is getting older and
• 17:00
  Speaker 1: the demographic crisis will be much bigger than Japan. So
• 17:05
  Speaker 1: if it's coming maybe in in one or two decades later,
• 17:10
  Speaker 1: and then I know that the many developed donations having
• 17:13
  Speaker 1: this kind of issue. But getting back to you a question, yes,
• 17:18
  Speaker 1: I'm surprised. Every time I write about economic stories in Japan,
• 17:23
  Speaker 1: most of them have a demographic element as a background.
• 17:29
  Speaker 1: All right, Well, it's not the first time we've talked
• 17:32
  Speaker 1: about these issues on Benchmark, and probably won't be the
• 17:35
  Speaker 1: last either. Yoshi Nohara, thanks so much for joining us today.
• 17:39
  Speaker 1: Thank you very much. Benchmark will be back next week.
• 17:46
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• 17:48
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• 18:00
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• 18:02
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• 18:07
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