As Japan assesses the global risk landscape following a year of the COVID-19 pandemic, its business and political leaders see an array of challenges at both the regional and global level, as well as potential opportunities for Japan from the new Biden administration and the state of US-China relations. This was the topic of a keynote speech given by Mayer Brown Corporate & Securities partner Satoru Murase (NY) at a Marsh & McClennan Japan virtual event on February 10, 2021, held to highlight the January release in Japan of the World Economic Forum Global Risks Report 2021. Marsh partnered with the World Economic Forum on the report, which outlines global risks, long and short term, such as climate change, weapons of mass destruction, epidemics and economic disparity.
Satoru described how China and the United States are strategically at odds, locked in a battle over trade and technology that intensified under the Trump administration and even now has bipartisan support. Unsurprisingly, the newly inaugurated Biden administration is focused first and foremost on domestic issues—crucially, political divisions, the COVID-19 pandemic, and its economic and societal costs. With the United States and many countries struggling with COVID-19-driven domestic issues, there is little room for international cooperation vital to overcoming COVID-19 as well as the global risks of climate change, military conflict and economic instability. This is of dire concern for governments and businesses around the world, including in Japan, which hopes for increased US global engagement.
Satoru spoke about these challenges in the context of the Global Risks Report 2021 before some 250 attendees, including senior Japanese business executives, CEOs and policymakers from a number of areas, including risk compliance; legal; and environmental, social and governance.
As Japan looks abroad, according to Satoru, it sees China’s economy showing strong growth and recovery trends, while the United States trails behind in its battle with COVID-19. “Japan’s leaders and business executives must walk a global tightrope between the US, a strong Western ally, and a new global power, China,” whose market is increasingly vital for Japan, as well as other Asian and Western countries.
Despite its COVID-19 crisis, Japan enjoys political stability as a democracy, an open free economy and international competitiveness in business and technology. Thus, Satoru maintains that Japan has an increasingly important role in Asian business and political stability. This role presents great opportunities for Japan and its economy but will also increase Japan’s global obligations, especially if US and China relations deteriorate further.
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