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Opinion / Op-Ed Contributors

Polls won't change Abe's China policy

By Yin Xiaoliang (China Daily) Updated: 2014-11-24 08:25

Faced with a tanking economy and plummeting ratings, Japanese Prime Minister Shinzo Abe dissolved the House of Representatives last week and called snap polls next month in an attempt to revive his faltering leadership. The official explanation for the dissolution of the lower house was to seek a referendum on Abe's decision to delay a proposed increase in sales tax. But analysts believe Abe is trying to cut his political losses as his economic policy fails with the latest reports showing Japan's economy has slipped back into recession.

From the economic perspective, putting off the sales tax hike is further evidence of the failure of Abe's economic policy of extreme monetary easing, heavy government spending and economic reforms. As key components of "Abenomics", as Abe's economic policies are known, monetary easing and proactive fiscal spending have been dominated by the bureaucracy and imposed from the top level, so it would not be surprising to see them yield some results, especially because the government and the Bank of Japan have pumped in trillions of yen into the economy in the two years Abe has been in office.

But this top-to-bottom "growth policy" is not the solution to Japan's economic problems. For true economic recovery, Japan needs a bottom-to-top economic policy that would allow the non-government sector to play the main role. Easing official policies is only a precondition, not the recipe for the expansion of non-governmental investments.

Statistics show Japan's GDP shrank by 7.3 percent in the second quarter, the largest quarterly decline in five years. It shrank another 0.4 percent in the third quarter from the second, a decline for two consecutive quarters, which signifies recession and Abe's failure to realize his goal of using non-governmental investments to drive economic growth.

From the political perspective, Abe's move reveals his deep "political calculations": he is trying to use political trickery to cover up his economic failures. At a time when Japan faces recession, he has used his political power to dissolve the lower house and call snap polls instead of mobilizing social resources for economic recovery. This in essence reveals Abe's prefer-politics strategy.

Abe may believe that if his Liberal Democratic Party, which advocated the postponement of the sales tax hike, wins majority in the house again, it will signify voters support the delayed tax move.

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