Eric's Beijing Diary

China is impressed by Koizumi's landslide victory over the weekend. His "political suicide" clearly paid off. It was a bold move. It was a risky thing to do, and it could have finished him off, but it worked. The issue is privatization, represented most significantly by the national Post Office, a bureaucracy which has grown to be the largest bank in the world as measured by total deposits. Resistance to Koizumi's reform efforts has come from traditionalists in his own party, who are sentimentally and politically attached to the Post Office.

The Post Office has been a part of the landscape in Japan in the generation that followed the second World War. I still remember when I was seven or eight years old, and Dad took us down to the Post Office in Sakata to open our first bank accounts. But the Post Office has grown to be a mammoth bureaucracy, which bleeds the taxpayers, and tends to foster corruption. I am not opposed to government. But history has demonstrated quite consistently that business functions are usually better managed by private entities. You name the business, and most of the time, a private company can do it more profitably and efficiently than can a government agency.

On this point, today's China is sympathetic. Marxism as a philosophy is dead. Privatization is in. Economically speaking, China is a very Republican society. But China has been opposed to Koizumi because of his visits to the Yasakuni Shrine, and because he has consistently resisted China's demands to yield to Chinese control the oil fields that Japan claims. The Chinese did not pass up the opportunity to demonstrated their clumsiness with diplomacy by sending warships to the disputed area just before the election. Obviously, it didn't work. Maybe this will teach them something. Somehow, I don't think so. When it comes to diplomacy, the Chinese have a long long way to go.