Speaking on her acclaimed memoir My Families and Other Samurai, Haruka Fukuda offered a deeply moving and insightful reflection on her family’s remarkable story, interwoven with the history of modern Japan. From samurai ancestry and wartime resilience to the corridors of power in Tokyo and London, her talk captivated the audience with its blend of personal narrative and historical sweep.

In conversation, she explored themes of identity, legacy and cultural belonging – offering rare glimpses into diplomatic circles, imperial education and state visits abroad, all told with warmth and grace. The event drew a full house, with members of the Japan Society of Scotland joining us for an unforgettable evening of storytelling and reflection.

We are grateful to Haruka Fukuda for sharing her story with such elegance and candour, and to our friends at the Japan Society of Scotland for their collaboration. Following the talk, guests had the opportunity to purchase My Families and Other Samurai and meet the author in person.

Please enjoy a selection of photos from the event below.

• Iran and Israel came to the brink of war after their forty-five year shadow conflict spilled over into open combat. Israeli forces were widely suspected to be behind an airstrike on the Iranian consulate in Damascus that killed several intelligence officers last month. In retaliation, Iran sent a massive barrage of cruise missiles and suicide drones towards Israel. Further crisis was averted after Israel’s high-tech Iron Dome system – assisted by British and American jets – intercepted 99% of the projectiles. Tensions remain high but have not escalated as feared. 

• Israeli forces are preparing for a final assault on the Palestinian city of Rafah, where nearly a million refugees have gathered. Reports of mass graves in areas evacuated by the IDF have sparked international controversy: each side blames the other for them. Rolling protests against Israeli actions in Gaza across the west have escalated this month, particularly in London and New York.

• Rival Palestinian groups Hamas and Fatah have met for discussions in Beijing. Hamas controls Gaza, while Fatah controls the West Bank; the two have been in a complicated frozen conflict since 2007. China is increasingly working as a neutral broker in the Middle East crisis, as the United States is perceived to favour Israel. 

Central Asia

• Lord Cameron, the British foreign secretary, has finished a mammoth tour of Central Asia, with stops in the ‘five Stans’ – Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan and even reclusive Turkmenistan, as well as Mongolia. The trip is meant to drum up goodwill towards Britain in a strategically vital region after a Foreign Office report decried a broad lack of attention to the area in government: no British cabinet member had visited Tajikistan, Kyrgyzstan and Turkmenistan before; and none has been in Uzbekistan since 1997. Whether it pays off remains to be seen.

• Afghanistan’s ruling Taliban have an unusual new priority – tourism. The hardline group, who returned to power in 2021, are promoting the country as a destination for international travellers. While most airlines avoid Afghan airspace, flights are available from Middle Eastern hubs like Dubai. Visas are exceptionally difficult to acquire – most Afghan embassies are still staffed by representatives of the pre-2021 government – but the Taliban have mooted the idea of a visa on arrival in the future. Taliban spokesmen have said that their target markets are China and Japan.

India and South Asia

• India’s six-week election – the world’s largest – has kicked off. The next month will see nearly a billion people vote, all using simple electronic voting systems. Narendra Modi of the BJP, the current prime minister, is seeking a third term. 

• A teenage chess prodigy from Tamil Nadu has become the youngest ever contender for the World Chess Championships. Dommaraju Gukesh, 17, will face off against the current world champion, Chinese grandmaster Ding Liren, later this year. Gukesh has been lionised in the Indian press as a symbol of the country’s rising status in the niche world of international chess.

East Asia

• Torrential rain hit Guangdong, in southern China, leading to flooding. 110,000 people were successfully evacuated; so far, four have died and ten remain missing. The manufacturing province, at the heart of China’s economy, is always subject to heavy rain during the monsoon season, but climate change appears to be leading to more intense rainfall each year. 

• Shenzhou 18, a manned Chinese space mission, took off from a cosmodrome in Gansu. Its crew of three took over the Tiangong space station from their predecessors from Shenzhou 17, who have since landed safely in Inner Mongolia. Over the next six months, the taikonauts will conduct experiments with fish, as well as plant stem cells. 

• South Korea’s Samsung Electronics has reported a ten-fold increase in profit this year, after massive global progress in artificial intelligence led to a surge in demand for their high-end memory chips. The chaebol, which represents a significant chunk of Korea’s economy, reported a $4.8 billion profit in the first quarter of this year. 

• The Japanese yen has hit a 34 year low, after a flash crash on international currency markets. At its worst, the yen was trading at 151 to the dollar. Analysts have pointed figures at the bungling of stimulus programmes by the Bank of Japan; others think it is a natural correction after a year of artificial pumping of Japanese stocks by western investors. The crash has turned Japan into a top destination for wealthy tourists looking for deals on shopping and holidays. Chinese and American tourists are best positioned by the relative strength of their currencies, but even British visitors could be in for a good deal, despite sterling’s own weakness.

Southeast Asia

• Spring temperatures have spiked across Southeast Asia. Thailand is suffering most from the extreme heat: meteorologists have declared that temperatures in Bangkok will not get below 30 degrees Celsius – including at night – for at least the rest of the month. Daytime temperatures in parts of the Philippines, Vietnam, Laos, Cambodia and Malaysia have all reached 40 degrees Celsius, causing widespread heatstroke and damaging rice crops. While humidity has remained high, rain is not falling as expected; current conditions should normally be seen in high summer, not spring. 

• 20 soldiers have died after an ammunition dump exploded in the Cambodian province of Kampong Speu. The cause is so far unclear, but it may be tied to the heatwave. 

Can we examine Society 5.0 from the liberal perspective?

The actors involved in shaping Society 5.0 are now strong companies rather than just society and the government as they were during Rousseau’s time which stretches towards the idea of industrial liberalism. J.J. Rousseau, a renowned scholar (18th century), had a profound understanding of the Industrial Revolution and its consequences for human society. Rousseau’s ideas can be found in works including “The Social Contract” and “Discourse on the Origin and Basis of Inequality Among Men,” which presses the state value of existence where people coexist peacefully with the natural world. What is truly at stake in the struggle between conservatives and liberals in all spheres of society and where this struggle is evident is what Rousseau’s works reveal. 

Soon the Industrial Revolution marked the advancement of technology, the growth of factories, and changes in society. According to Rousseau, the Industrial Revolution signified a change from a simpler, egalitarian state of nature to a complex civilisation marked by social hierarchy and alienation. His criticism anticipated the threats that industrialisation would bring social cohesion, break individual freedom, and hinder human well-being which is why implementing a fresh angle of human development by creating society 5.0 will enhance the interdependence of humans and AI, leading to a liberal sustainable future. 

The concept of Society 5.0 has set an example for the post-modernist world where humans can efficiently use machines and generate more job roles, be less worried about security, and live sustainably with peace and harmony. As a result of the general acceptance that technology may reduce the costs of mobilisation for both citizens and authorities, regimes have started to become more alert by taking action to restrict access to digital platforms. The drastic changes in the AI-based world hold the ability to introduce a new form of capitalism into the human-oriented society which can be seen thriving with the liberal approach to address the human-centric society in a broader aspect. This will also raise concerns about the potential long-term effects of tech-based authoritarianism.

In the short term, we all want to use autonomous vehicles before having food or clothing delivered by humans, to reduce food wastage, so let the AI-drones do it for you. Need to build cyber-physical systems? Let the AI help you! Want to utilise the STI  (Science, Technology, and Innovation) policy (a part of Abenomics)? Let the AI lead you. Many studies note that we can examine Society 5.0 from a liberal perspective, and be critical of the indulgence of stakeholders like the media, industry, and technology who support the same. Several parts of Society 5.0 are consistent with liberal concepts and aim to implement the SDGs 2030, in Japan. For better understanding, we can zoom in on;

1. The goal of Society 5.0 which aims to enable people by giving them access to technology, education, and knowledge. This is consistent with liberal ideas that value personal development chances and individual liberties.

2. By encouraging equal access to technical breakthroughs and advantages, the notion promotes the inclusion of all members of society. Liberals frequently support laws that level the playing field for everyone and lessen social injustices, most precisely, the role of international organisations like the UN and NGOs can be highlighted here.

3. The goal of Society 5.0 depends on technological use to improve society by tackling problems like environmental sustainability, healthcare, and education. These objectives are consistent with liberal principles of social justice and group welfare like commercial or green liberalism.

4. Although Society 5.0 places a strong emphasis on technology, it also recognises the role that government plays in fostering innovation and enforcing ethical technology use. Liberals frequently advocate for the government to have a balanced role in both regulating economic activity and advancing social welfare.

Drawbacks Alert!!

To comprehend liberal societal interests that are focused on how economic interdependence or international institutions may be affecting the future of AI, several scholars evoked additional elements, such as modernisation and AI. The expanding range of explanatory factors of theoretically preferred variables in this case highlights the growth of international institutions or economic interdependence. The diplomatic path towards liberal notions may also lead to the Netherlands and Japan developing a deeper partnership in the field of AI.

But wait! There are a few model limitations in the new Society 5.0 paradigm, where sustainable development is integrated at multiple levels including digitalisation. Let us look at some distinct criticisms of this paradigm;

1. Internet of Things (IoT) technology plays a major role in the digital transformation described in Society 5.0. It dramatically increases the quantity of private information about individuals and enterprises that might be exploited by hackers, which runs against liberal viewpoints.

2. When cobots are introduced into industrial processes, the number of workers decreases and the wages of specialised experts rise. This can lead to increased rivalry and raise questions about the principles of equality, as there may be a class conflict between human labourers and the efficiency of cobots.

3. Technology requires hardware replacements, which over time contaminates the environment and poses a threat to green liberalism.

The world’s efforts were shaped toward sustainability after the most crucial components of Society 5.0 were analysed. This started with the planning, which places people at the centre of the transition to Society 5.0 along with economic growth, technological advancement, and sustainability as liberal principles. Characterising Society 5.0 as a major goal to improve people’s quality of life and well-being in the future by developing a synergy between the real and virtual worlds is accurate. Fundamentally this liberal notion appears appealing because of its emphasis on equality, individual rights, and social progress. It is a broad vision that may be applied and understood in a variety of ways in a range of social and political circumstances.

A future with you: Society 5.0

When we consider Society 5.0 in a liberal economy, older people in countries like Japan, lost migrants, and refugees will gain a lot, starting from the ability to communicate, buy commodities, and use AI-powered services. Numerous useful facets of liberalism contribute to our understanding of how AI may impact human relations and Society 5.0 in the future. Applying a liberal perspective can be beneficial in numerous aspects to enhance the execution of Society 5.0. Implementing Society 5.0 can benefit Japan and the world in several ways by moving to a digitally enhanced version of the developed society where sustainability can be addressed by increasing employment and building similar strategies in the private and public sectors.

• Chinese tourists have set a new record for visits to Southeast Asia, exceeding even pre-Covid levels, after a string of mutual visa waivers freed up travel just before Spring Festival. Chinese citizens no longer need visas for Thailand, Singapore and Malaysia; and vice versa. China has also lifted visa requirements for French, German, Swiss, Dutch, Spanish and Irish visitors – but not British or Japanese ones. 

• Meanwhile, Chinese students are also shifting their attention away from the US, UK, and Australia in favour of lower-cost universities in friendlier countries, particularly Malaysia and Thailand, according to a new report by the Centre for China and Globalisation. This could spell trouble for Scottish universities, which have become particularly reliant on Chinese students in the last decade: they make up a quarter of the student body at Edinburgh, Glasgow, Stirling and Strathclyde; and about 10% at St Andrews and Aberdeen.  

• Hong Kong is lifting all curbs on property deals, including lowering taxes and scrapping stamp duty, after house prices fell to a seven-year low. The Chinese territory is also boosting its budget for tourism promotion in a bid to get visitors back after the pandemic. International visitor numbers, inward investment and stocks have all slumped since 2020; by contrast, neighbouring territory Macau is riding a tourism and investment boom. 

• 75% of medical trainees in South Korea are on strike, protesting government plans to increase student numbers. The Health Ministry says more doctors are necessary in a rapidly ageing society; the trainees say that having more doctors will drive down their salaries, already some of the highest in Korea. Healthcare is not free in Korea, and doctors establish their own practices, with many preferring easy but lucrative work in dermatology and cosmetic surgery to critically under-staffed fields like accident and emergency, paediatrics, and (ironically) gerontology. The students have triggered public outrage; 80% of Koreans back the government, arguing that Korea, with just 2.1 physicians for every 1,000 people compared to a global average of 3.7, has dangerously few doctors already. 

• New data has confirmed that Japan is still locked into a demographic doom-spiral. Fewer babies than ever before were born, the eighth consecutive year of decline. Meanwhile, the number of marriages has also fallen to fewer than half a million, the lowest since records began. There are vanishingly few births outside wedlock in Japan, and so low marriage numbers are an ominous indicator for future births. Japan and South Korea are at the forefront of a demographic crisis among developed nations: the ‘replacement rate’, or minimum necessary to keep a native-born population stable, is 2.1 children per woman, but Japanese women have, on average, 1.3 children; while their Korean counterparts have just 0.78. By mid-century, the majority of Japanese and Koreans will be over 65; if current trends persist, both will see their populations halve by 2200, and could go extinct by 2500. 

Southeast Asia

• Indonesia went to the polls on Valentine’s Day, in the largest single day of voting on earth. Although results will not be available for a month – ballots must be collected from 820,000 polling stations – former defence minister General Prabowo Subianto is unofficially in the lead. His running mate, Gibran Rakabuming Raka, is son of the immensely popular incumbent Joko Widodo, who retires this year. General Subianto is widely seen as the continuity candidate. 

• The ninth Singapore Airshow kicked off at Changi airport. Trade interest focused on the international debut of the Comac C919, China’s first domestically-produced large jet aircraft. Speculation is rife on if the lower-cost C919 could challenge the Euro-American duopoly on aircraft manufacturing, particularly in the global south. Over 1000 orders have been placed so far, according to Comac.

India and Central Asia

• Indian farmers marched on Delhi after negotiations with the government collapsed after a dispute over guaranteed crop prices. Protests have been rolling since 2021, and have since become part of a global movement. After farmers used tractors and diggers to break through roadblocks, police fired teargas from drones to disperse them. 

• A UN summit on the future of Afghanistan, held in Qatar, pointedly did not include the ruling Taliban, after Secretary-General Antonio Guterres said that the group’s demands for recognition were unacceptable. However, Sophie Ibbotson of the Royal Society for Asian Affairs predicts that this year will be a tipping point: the Taliban already have diplomats working in Iran, Pakistan, and Turkmenistan, and a charge d’affairs in Moscow, while China recently credentialed a Taliban ambassador in Beijing, the first country to do so. India and Japan have yet to officially recognise the Taliban, but have quietly reopened their embassies in Kabul.

Wiener Neustadt is a small town in Austria, known for its chocolate-box architecture: guidebooks recommend visiting the military academy, the mineral museum, and a moderately interesting water tower. One might easily imagine it has always been this way – a pleasant little place, untroubled by the wider world. 

But here, in 1241, one of the most extraordinary episodes in world history unfolded. That spring, the armies of the Mongol empire had burst out of the distant eastern steppes and laid waste to Poland, Bohemia, and Hungary. Whole cities were put to the sword, and assembled European forces lured into traps and shattered. Lumbering, heavily armoured knights were easily picked off from a distance by mounted archers wielding powerful composite bows. Two Mongol generals, Subutai and Jebe, chased Bela IV, the defeated king of Hungary, halfway to Greece. All Christendom was in crisis. Who were these mysterious, brutally violent horsemen? Could they be defeated? In that panicked summer, it looked as if they might conquer Europe.

In just forty years, Genghis Khan, his son Ogedei and his grandson Kublai had created history’s largest contiguous empire, stretching from China to Ukraine. At its greatest expanse, nomadic warriors who had saddled up on the Amur were watering their horses in the Danube. Had they pressed on a little further, Vienna would likely have fallen. Europe was in disarray, and ripe for the taking. 

What would have happened had they continued their rampage? Further east, the Mongols – with a suitably nomadic horror of cities – had burned Kyiv and Moscow to the ground: a divergence often said to have set Russia and Ukraine on a harder path than Western Europe. Their taste for heavy taxes and arbitrary violence there gave rise to the concept of a ‘Tartar yoke’ that may well explain subsequent Russian economic and political psychology (although, like all ideas that seem too good to be true, it has since been vigorously contested). Would Western Europe have suffered the same fate? The implications are staggering. Just what would the world today look like if Western Europe, just then gearing up for the Renaissance, had been snuffed out?

But it was not to be. The Mongols disappeared nearly as soon as they had arrived, filtering back into the steppes come autumn. Historians remain divided as to why. Maybe the pasturage in Hungary wasn’t good enough for their horses, and the mud was too thick. Perhaps they had been called back to Mongolia by the death of their Khan, as protocol demanded. Most likely, their high command had decided that Europe wasn’t worth the trouble. In the 1200s, it was a poor, backwards promontory of Asia. There were much richer pickings to be had in the civilised world: the caravanserais of the Silk Roads; the great cities of Islam, from Baghdad to Herat; the unparalleled wealth and technological sophistication of China; the silk and silver of Japan; the bazaars and spices of Java; the fine timbers of Vietnam. The Mongols would never return to Europe. 

Weiner Neustadt, therefore, has the dubious honour of marking the point where the Mongol tide broke. Here, one of the last great battles between European knights and nomadic horsemen was fought. Left behind in the wreckage was the most extraordinary captive. Though dressed in Mongol garb, he was clearly European. He spoke Hungarian, French, Latin and a number of unfamiliar Eastern languages. His face and voice were somehow familiar to prominent nobles who came to inspect this curious prisoner. One swore that he dimly remembered him from a failed crusade in Palestine twenty-five years earlier. Under torture, he confessed all. He was a monk. He was a disgraced member of the Knights Templar. He was an Englishman. 

His name went unrecorded, but a painstaking investigation by the Hungarian historian (and honorary Scot) Gabor Ronay in the 1970s concluded that he was probably Friar William, an advisor to one of the barons who had signed the Magna Carta in 1215. The rebel noblemen and their retinues were later exiled to the Continent; several went on pilgrimage to the Holy Land to atone. The Englishman appears to have joined them and stayed there after his masters were forgiven. He joined the Knights Templar, but was cast out for gambling, and wandered as a penitent as far south as Basra, picking up Arabic along the way. Here, Mongol secret agents identified and recruited him as an ideal candidate to join their remarkable empire. 

By now, the Mongols had begun their campaigns against the great Islamic empires of Central Asia. In the process they had begun to unify Eurasia, later establishing – albeit with extreme violence – the Pax Mongolica, or Mongol Peace. Chroniclers would say that, under their guard, a virgin carrying a golden bowl could walk from Damascus to Hangzhou unaccosted. It was, after all, the rule of the Mongols that made Marco Polo’s later journey to China possible – and it was a Mongol khan he was going to meet. 

Despite their well-deserved reputation for destruction – in true nomadic style, after levelling cities, they sometimes turned the ruins over to pasture their sheep – the Mongols were surprisingly progressive. The ruling khans, although themselves dedicated to a pagan monotheist cult of sky-worship, upheld religious pluralism, even hosting debates between Christians, Buddhists and Muslims for their edification and amusement, while their courts were oddly diverse. A Flemish monk, William of Rubruck, who made the arduous trek from Palestine to Mongolia in the 1250s, was astounded to find living at the khan’s court a handful of German prisoners, a French goldsmith, and ‘Basil, son of an Englishman’ (perhaps Friar William?) Of course, it wasn’t just Europeans. Most of the ‘Mongol horde’ were not even Mongols, but recruited from a grand alliance of steppe nomads. Meanwhile, the Khans were keen adopters of new technology. Their empire was stitched together by the world’s first truly international postal system; orders from Mongolia could reach the fringes of Europe in just a few weeks, as specially-trained horsemen barrelled across the steppe at a furious pace, changing mounts at a gallop. Chinese and Persian engineers were hired – and handsomely rewarded – for their knowledge of gunpowder and siege machinery and put to work everywhere from Afghanistan to Egypt. The army operated as a particularly uncompromising meritocracy: skill was rewarded with promotion, but failure resulted in summary execution. It was, in other words, the ideal employer for a rogue English monk. 

After being recruited in Iraq, the Englishman travelled east, further and further into the Mongol realms. His confession betrayed a familiarity with the farthest parts of the steppe, but it is unclear how long he was there, or what he was doing. Ronay, for one, believed that his European interrogators preferred to gloss over the awkward proof that their rivals were better organised and more forward-thinking, promoting on the basis of talent rather than bloodline. They did not want to consider how a humble English monk might have reached the upper echelons of the Mongol diplomatic corps, and they had no interest in what he could have told them about the mighty kingdoms of the east – the very things for which Marco Polo would become famous a generation later. Eventually, given his command of European languages, the Englishman was dispatched west to meet his fate at Wiener Neustadt. After his torture and confession, he was declared a traitor to Christendom. He was executed as a common criminal, and his body thrown in an unmarked grave, alongside those of his Mongol compatriots. There, he passed from history. 

Horsemen and history

This extraordinary story is perhaps one of the best introductions to the themes that Kenneth Harl hammers home in his new book, although it does not appear in his text. How have urban societies, from Europe to China, dealt with – and been shaped by – their nomadic counterparts? 

We generally neglect or misrepresent the roles of nomads. All too often, we’re primed to see them as history’s Other – wandering horsemen who periodically burst out of the untamed steppe to lay waste to the civilised world before retreating back into the endless grassland from whence they came. Nomad kings have nicknames like ‘the Scourge of God’, ‘the Conqueror’ and ‘the Prince of Destruction’. They can seem more like a natural disaster than like people. 

From the Great Wall of China to Attila the Hun versus the Romans, we often define ourselves against nomads. History is often a record of urban civilisations overcoming them, then rounding them up. From a contemporary perspective, it can seem as if the long contest is finally over, and cities have triumphed over the steppe. Today, fewer people than ever before in history remain truly nomadic. Even in Mongolia, the majority of the population live in Ulaanbaatar, the capital – in yurts that go nowhere. 

But what, Harl asks, if this shouldn’t be how we see nomads and nomadism? What if, instead, we should see them as a vital partner in the long story of civilisation? What if nomads brought not just chaos and destruction, but culture and trade as well? Who among us has stopped to think about what those who refused to settle in cities have done for those of us who live safe within their walls?

Most of us know a little about the nomad conquerors, even if we’re not historians. The book begins with Attila the Hun and ends with Tamerlane, via Genghis Khan – all of whom are familiar enough, even if we might focus more on their crimes than their achievements. But there is far more detail here. It is, undoubtedly, a deeply unfamiliar history, even for those with a passion for the subject. Those who’ve read John Man’s excellent books will know their Xiongnu from their Jurchens – but they will need to be keep notes here. Harl doesn’t pull his punches, and the book is a seemingly endless parade of kings, peoples and wars offered with minimal context and an impressive confidence that readers can keep up: Kavad (whoever he is) jettisons his Mazdakite allies, while later someone has ‘a desultory war against the Hephthalites’; a man appears and disappears in less than a page, having ‘won renown as the Sword of Islam’ (apparently a commonplace enough thing for Harl to not go into it). 

Harl is an academic historian, with a background in numismatics, or the study of coins: a field utterly vital to research but with a reputation for missing the forest for the trees. This has filtered into the text. Presented with a vast sweep of history, full of terrific characters and shocking scenes – cannibal kings drinking the blood of their wives to outfox death, kidnapped Chinese princesses writing heartbreaking letters home pining for favourite foods, and world-conquerors building towers of skulls outside vanquished cities as ghastly memorials to their own power – Harl has instead produced a steady, workmanlike account that moves more like a plodding European baggage train than a swift Mongol horseman. No stone is left unturned, and no detail ignored. While this is an admirable service to academe, there is little narrative energy to compensate, and Harl’s more unorthodox ideas arrive unannounced and recede just as quickly, while the conclusion is a rush job. There is no faulting the quality of his scholarship – he has surely forgotten more than most of us will ever learn – but there is no escaping the fact that the job has been done better elsewhere. Anthony Sattin has also recently come out with a better-paced but still rigorous account, while Peter Frankopan’s work remains the gold standard for balancing academic precision with popular appeal. The glowing reception of The Silk Roads nearly a decade ago showed that many of us in the west have a real interest in learning more about obscure peoples and faraway places. But those hoping for a thrilling canter through history’s forgotten half will have to look elsewhere. Harl’s book is strictly for the most dedicated enthusiasts, to whom we can say: good luck remembering just who the Mazadkites were. 

This festival dates back over 2,000 years and is rooted in various legends and customs. It involves the lighting and admiring of lanterns while symbolising the reunion of families and the social bond within communities. Traditionally, lanterns of all sizes and shapes are displayed, illuminating towns and cities. The festival also includes a variety of activities such as lion and dragon dances, walking on stilts, riddle-solving games attached to lanterns, and eating tangyuan, which are sweet rice balls that represent family unity and happiness.

The Lantern Festival is a time of joy and festivity, reflecting the rich cultural heritage and traditional values of the Chinese people. It celebrates the transition from darkness to light, embodying the pursuit of a bright and prosperous future.

History of the Lantern Festival

With origins tracing back to the Han Dynasty (206 BCE – 220 CE), the Lantern Festival is a vibrant celebration deeply rooted in Chinese culture. Its inception is linked to Buddhist monks lighting lanterns in honour of the Buddha, a practice that Emperor Ming of the Han dynasty expanded by mandating the lighting of lanterns in households, temples, and the imperial palace.

This festival has evolved over millennia, incorporating various legends and customs. Among these tales is the story of the Jade Emperor, who, in anger over the killing of his goose, planned to destroy a town with fire, only to be tricked by the townsfolk’s lanterns, mistaking their glow for the town’s destruction.

Other legends include worship of the deity Taiyi, believed to control the human world’s destiny, and the tale of Yuan-Xiao, a palace maid whose desire to reunite with her family led to the tradition of eating tangyuan (sweet dumplings) and the widespread use of lanterns to deceive a celestial being into sparing the city from fire.

The festival also honours deities such as Tianguan, the Taoist god of fortune, and has ties to Taoism and various folk customs celebrating light over darkness, family reunion, and societal harmony.

Through the ages, from the Tang Dynasty to the modern era, the Lantern Festival has remained a significant cultural event, symbolising good fortune, familial unity, and the joyous welcoming of spring, celebrated not just in China but by millions worldwide.

Celebrations Across Asia

The Lantern Festival is celebrated with distinct traditions and customs throughout Asia, reflecting the rich cultural diversity of the region. Here’s a glimpse into how different countries embrace this luminous festival:

China: Lantern Displays and Riddle Solving

In China, the Lantern Festival is an explosion of light and colour, with lantern displays ranging from traditional paper lanterns to elaborate floats and sculptures illuminated by LEDs. Cities across the country host lantern fairs, where families gather to admire the craftsmanship and creativity of the lanterns. A unique tradition is the solving of lantern riddles – puzzles written on lanterns or slips of paper attached to them, offering a playful way for festival-goers to engage with the celebrations. The festival is also associated with eating tangyuan, sweet glutinous rice balls symbolising family unity and happiness.

Thailand: Yi Peng Festival

In Thailand, the Lantern Festival is celebrated as Yi Peng (or Yee Peng) in the northern regions, particularly in Chiang Mai. It coincides with the full moon of the twelfth lunar month, usually in November, slightly later than the traditional Lantern Festival. Yi Peng is famous for its breathtaking sky lantern release, where thousands of paper lanterns are lit and released into the night sky, creating a mesmerising spectacle of floating lights. This act is believed to rid the participants of misfortunes and bad luck, symbolising the letting go of ills and miseries. The festival also features parades, traditional Lanna (northern Thai) dance performances, and the decoration of houses and temples with colourful lanterns, adding to the city’s vibrant festivities.

Hong Kong: Tai Hang Fire Dragon Dance

Hong Kong celebrates the Lantern Festival with a unique tradition that dates back over a century – the Tai Hang Fire Dragon Dance. The story goes that the people of Tai Hang village in the 19th century paraded a fire dragon through the streets to ward off a plague, and the tradition has persisted ever since. The dragon, which can be over 67 meters long, is made of straw and covered in incense sticks, which are lit at night, creating a spectacular fire dragon weaving through the streets of Tai Hang. The event draws thousands of spectators and is complemented by lantern exhibitions, traditional food stalls, and cultural performances, showcasing the vibrant and diverse nature of Hong Kong’s celebrations.

Taiwan: Pingxi Sky Lantern Festival

Taiwan’s Pingxi district hosts one of the world’s most famous Lantern Festival celebrations, the Pingxi Sky Lantern Festival. Here, thousands of sky lanterns, inscribed with people’s wishes and hopes for the new year, are released into the night sky, creating a breathtaking spectacle. The tradition, originating from the need to signal safety to distant relatives and friends during turbulent times, has become a symbol of peace and good fortune. The festival also features traditional food, games, and performances, making it a vibrant and memorable experience for all who attend.

Japan: Toro Nagashi

Japan celebrates the Lantern Festival differently, with one of the most poignant celebrations being Toro Nagashi, or the floating lantern ceremony. This event typically occurs in the summer during the Obon Festival, a period for honouring the spirits of ancestors. Participants write messages to their departed loved ones on paper lanterns, which are then gently set afloat on rivers, lakes, or the sea. The sight of lanterns drifting on the water, guiding spirits back to the other world, is both beautiful and sombre, reflecting the Japanese cultural emphasis on the cycle of life and death.

Malaysia & Singapore: Lantern Parades and Mooncake Tastings

In Malaysia and Singapore, the Lantern Festival is celebrated with much joy and enthusiasm, marking the end of the Chinese New Year celebrations. Communities come together for lantern parades, where children carry brightly lit lanterns through the streets, accompanied by lion and dragon dances. The festival is also a time for mooncake tastings, where families and friends share mooncakes, a traditional Chinese pastry filled with lotus seed paste and egg yolk, symbolising the full moon and completeness. These celebrations are a testament to the multicultural tapestry of Malaysia and Singapore, blending traditions from various ethnic groups into a vibrant cultural festivity.

The Significance of Lanterns in Asian Culture

Lanterns in Asian culture as symbols of hope, prosperity, and the triumph of light over darkness. These lanterns vary in shapes and colours signifying good fortune and strength, representing unity and the gathering of communities.

As the festival has evolved, incorporating modern technology like LEDs and themes of environmental consciousness, the traditional symbolism of lanterns has adapted to reflect contemporary values while retaining its historical essence. This fusion of past and present in the Lantern Festival underscores the enduring relevance of cultural traditions, offering a moment of collective joy and personal reflection on the universal human yearning for a brighter future.

Festive Foods

The Lantern Festival is not just a visual feast but also a culinary delight, accompanied by a plethora of activities that engage communities and foster cultural exchange. One of the hallmark treats of the Lantern Festival is tangyuan in China, sweet glutinous rice balls filled with black sesame or red bean paste. In Taiwan, a similar delicacy known as yuanxiao is enjoyed, with the preparation method differing slightly in the shaping of the balls.

Beyond these sweet delicacies, the festival is an opportunity to savour various traditional foods. In countries like Malaysia and Singapore, the festival sees an array of mooncakes, with intricate designs and diverse fillings, from lotus paste to mixed nuts, symbolising the full moon and prosperity. Meanwhile, in Japan, the celebration is often marked with dango, skewered rice dumplings, offering a simple yet profound taste of tradition.

A Reflection on the Lantern Festival’s Universal Appeal

In embracing the traditions of the Lantern Festival, we’re invited to reflect on the universal themes of unity and the passage of time, regardless of our geographical location. As the lights of the lanterns float up into the night sky or bob gently on the water’s surface, the Lantern Festival reminds us of the beauty of tradition, the importance of cultural preservation, and the joy that comes from partaking in a celebration that has captivated hearts for centuries.

We hope this exploration of the Lantern Festival inspires you to discover more about this enchanting celebration and perhaps experience a festival firsthand in a country that celebrates it.

• Regulators in Hong Kong ordered the liquidation of the beleaguered property giant Evergrande. Once the world’s most valuable property company, Evergrande owes its investors at least US$300 billion after failing to deliver on projects across China. Though some foreign commentators have claimed that China is now facing its own ‘Lehman moment’, such comparisons are overblown: much of the firm’s remaining wealth is stored in saleable physical assets rather than derivatives; even upper-bound estimates of its debts are half those of Lehman’s in 2008. 

• Fujitsu, the Japanese IT company, is reportedly considering privately compensating British sub-postmasters embroiled in a scandal caused by faulty software supplied by the firm. Between 1999 and 2015, 700 sub-postmasters – many of them British Asians – were wrongly prosecuted for fraud and theft, leading to dozens of prison sentences and suicides; after a decades-long grassroots fight for justice, minuscule compensation was grudgingly arranged by the British government, only for many postmasters to see it immediately taken back by tax authorities.

• A Japanese arsonist who killed 36 people in 2019 has been sentenced to death. Shinji Aoba, now 45, broke into the offices of an animation studio in Kyoto against whom he had a grudge and started a fire. Aoba was caught up in the blaze and seriously disfigured, necessitating years of surgery before he could stand trial. Judges dismissed his defence’s claim of mental illness and ordered him to be hanged. 

• Foreign diplomats have begun returning to North Korea, with the Mongolian ambassador, Luvsantseren Erdeneddavaa, reported to have taken up residence last month. The intensely secretive Stalinist state closed its borders in 2020 and expelled all foreigners in response to COVID-19. As of this year, only nine countries have missions in Pyongyang; no Western diplomats have yet been allowed back. 

• South Korean President Yoon Suk-Yoel has warned that the North will continue to interfere with domestic affairs before April’s elections. The Kim family regime has been unusually bellicose recently and started this year with a series of nuclear-capable cruise missile tests aimed at the South and Japan. 

• A conservative campaigner in Thailand is seeking the dissolution of the Phak Kao Khai, or Move Forward Party, on obscure constitutional grounds. Ruangkrai Leekitwattana has already twice tried to convince courts in Bangkok to ban the socially progressive anti-junta party, claiming it’s a threat to the monarchy. Move Forward won national elections in May last year before its presidential candidate, Pita Limjaroenrat, was forced to step down by parliamentary factions linked to the country’s powerful military. 

• A new railway between Bangkok and Vientiane, the capital of Laos, will open by April. The line will be one of the last missing pieces in a giant new rail network connecting China and Southeast Asia and will make it possible to go from Singapore to Beijing overland. 

• India has celebrated its 75th Republic Day, marking the anniversary of the adoption of the Constitution of India. The day was marked with a national holiday and impressive military displays. It marks the end of India’s yearlong celebration of its 75th birthday. 

• A Russian private jet has crashed in mysterious circumstances in Afghanistan while transiting the Wakhan Corridor en route from Bangkok to Moscow. The Taliban say that four survivors have been found and taken to Kabul. Few visit the country now, and international air traffic has avoided Afghan airspace since the Taliban takeover in 2021. 

• Iran and Pakistan have carried out airstrikes on each other’s territories. The two are not at war, but fighting the same nebulous group of Balochistani militants in their respective frontier districts. Tensions remain high but have not escalated as feared. 

• Lord Cameron, the British foreign secretary, has abruptly announced that Britain will no longer transfer the Chagos Islands to Mauritius, as had previously been agreed after the UN ordered a handover. The island chain, in the northern Indian Ocean, is home to a strategically important American airbase at Diego Garcia. The announcement has enraged the native Chagossian community, who were forcibly removed from the islands in the 1960s and now live in exile in the UK; but has been well-received by parts of the British press. 

In contrast to the low-tech Somali pirates who haunted the northwest Indian Ocean twenty years ago, the Houthi stand out for their technological and tactical sophistication of their attacks. Although a non-state actor, they have access to the kind of firepower most rebel groups would only dream of, using advanced anti-ship cruise missiles and a mixture of commercial and military drones, alongside a fleet of fast speedboats, and at least one helicopter. The Houthi, previously a minor regional concern, are now key actors in an increasingly complex geopolitical dispute between the Western alliance and the global South. 

The Red Sea, one of the world’s most vital waterways, has become bitterly contested, forcing hundreds of ships plying the routes between Asia and Europe to change course and go around the Cape, adding thousands of miles to their journeys – and tens of thousands of dollars to their daily costs. Trade in oil, gas, grain, bulk cargo and consumer goods has been disrupted, with significant knock-on effects. So what, exactly, is going on?

Who are the Houthi?

The Houthi are a rebel group under the control of the al-Houthi clan, founded in the mid 1990s to oppose what they, as devout Shi’ites, see as the overweening influence of Saudi-funded Sunni Wahabists in Yemen. Since 2004, they have been fighting Yemen’s government; in 2014 they launched a lightning assault on the capital, Sana’a, which kickstarted a civil war that grinds on today. At least 150,000 have been killed as a result, and the fighting has plunged Yemen into the direst imaginable poverty. By far the world’s poorest country, some 80% of its people require urgent humanitarian assistance.

The world has, however, largely stood back. In 2015, Saudi Arabia launched an intervention characterised by indiscriminate bombing, tacitly supported and supplied by the UK and US, which has only worsened the situation. A decade of war has changed nothing: the Houthi remain in control of the capital, as well as much of the coast and the country’s northwest. Having evolved from a ragtag rebel group to a professionalised militia, they have a viable standing army and are the de facto rulers of Yemen. 

The Houthi are not jihadists, and until last year had little interest in taking their war anywhere outside of Yemen. They issued frequent, luridly colourful denunciations of Israel – but these are frankly commonplace in the region, and were not taken as seriously as they perhaps should have been. As a Shi’ite tribal movement in a largely Sunni region, the Houthi quickly attracted the support of Iran’s Revolutionary Guard, who have been quietly supplying and training them, just as they had with Lebanon’s Hezbollah, and more recently the Palestinian militant group Hamas (who are Sunni, but now form part of Iran’s ‘Axis of Resistance’ across the Middle East, a series of non-state militias maintained as deniable assets for operations against Teheran’s enemies). Although Iran denies it, it’s under their tutelage and with their equipment that the Houthi were transformed into the formidable international actor they are today; and it’s fear of conflict with Iran that keeps them largely protected from Western military action. 

Why are they attacking ships?

The Houthi claim that their attacks are in response to Israel’s ongoing assault on Gaza – itself launched in the aftermath of Hamas’s October attack – and have taken it upon themselves to disrupt any shipping that they claim is supporting Israel’s war. However, they define this quite broadly, and their operations have since morphed into a general harassment of western shipping, rather than specifically Israeli vessels. The Houthi appear to have solid intelligence-gathering capabilities, as well as access to military-grade radar or satellite imagery, as they seem to know the ultimate nationality – not just the registered flag or home port – of the ships passing under their guns, as well as the location of western warships, which have also come under attack.

True to their stated aims, they have mainly attacked vessels linked to the Western alliance. (For complex tax and legal reasons, most ships, even if ultimately owned and operated by a company in Europe, America or the Far East, are usually registered in Liberia, Panama or the Marshall Islands; it can take even dedicated analysts days to find out who actually owns them; that the Houthi are able to figure out who is who suggests at least one disaffected shipbroker in their ranks; or access to intelligence from a major power). By contrast, Russian-linked tankers have been running the Bab-el-Mandeb unscathed, as have Chinese vessels, which have taken the additional precaution, according to mainland newspapers, of flying large five-star flags from their sterns to ensure safe passage. 

The question for policymakers is whether the Houthi are operating independently, or whether they are under orders from Teheran. Iran, for its part, denies any link, and some analysts believe that there may be some truth to these claims. Although Iran has undoubtedly supplied and trained the Houthi, Hezbollah and Hamas, there is less certainty as to whether or not the militias are still on Teheran’s leash: they may have grown beyond the control of the Revolutionary Guard. Perhaps they never were; it would be in keeping with Iran’s grander strategy to introduce an element of chaos to regional affairs by unleashing well-equipped militias without having to expend any effort micromanaging them. 

A series of warnings issued to the Houthi by the Western alliance had no effect; nor did last week’s airstrikes appear to have much impact. Further attacks have since taken place, and look set to continue for the immediate future. This raises the very real possibility that the world will have to adjust to a situation where the Red Sea is no longer a viable trade route. 

What is the impact on international trade?

There are few better places to disrupt international trade than from the Red Sea. Linking the Indian Ocean with the Mediterranean via the Suez Canal, it handles 12% of all global marine traffic and is the fastest route between Europe and Asia, running freighters carrying everything from containers to bulk goods. While there are alternatives – for instance, routing traffic around the Cape of Good Hope – these are nearly double the length, and far more expensive. When the canal was blocked for six days in March 2021 when the MV Ever Given ran aground, it cost $9.6 billion in lost trade, for less than a week’s disruption. 

In response to the Houthi attacks, the major shipping firms – Maersk, MSC and Hapag-Lloyd among them – have announced that they will re-route around the Cape, while Lloyds of London has hiked up insurance rates accordingly. This has had the unfortunate side effect of driving up shipping prices significantly, which will be directly reflected in consumer inflation at home. (However, anyone who brokers voyages via time-charter should get a nice spring bonus now). 

Particularly concerning are the impacts the Houthi blockade will have on Europe’s oil and gas supplies. Gulf oil comes invariably through the Red Sea, as does Australian and Indonesian liquid natural gas. With Europe already cut off from Russian hydrocarbons by US sanctions (and the timely sabotage of the Nord Stream pipeline just to make sure), the future of its energy mix is even more volatile, in the depths of an already punishing winter. Supplies that have to round the Cape will cost dearly, further driving up wholesale prices, with the knock-on effects on inflation that we have all become so familiar with over the last three years. Expect German manufacturing to continue its slow-motion collapse, especially as parts from China arrive more slowly.

However, not everyone will suffer from the blockade. As mentioned above, Russian and Chinese ships continue to sail the Red Sea without risk. Their governments have both stood back from the Israel-Gaza crisis and so are not a target for the Houthi. This raises the intriguing possibility, should the attacks continue, of a two-track global trade network: of a world where the Red Sea is closed to Western shipping, but not to other powers, giving them a formidable price advantage. 

What has been the international reaction?

Reactions to the Houthi blockade have been mixed. The US, UK and Canada have taken a kinetic approach, sending warships to patrol the Red Sea and intercept Houthi missiles where possible. The US-led mission, known as Operation Prosperity Guardian, was until last week defensive in posture and has received support from Denmark, the Netherlands, Australia, Bahrain and – surprisingly – South Korea. The internationally-recognised Yemeni government has even grudgingly approved foreign strikes on its own soil, saying that the Houthi need to be stopped. 

Press briefings have claimed that the operation is simply to ensure the safety of international maritime trade; however, it is clear that it is inextricably linked to Israel’s war, leading some to point out an inconvenient truth: the US is now conducting military operations in the Red Sea in response to attacks that are a result of a conflict it is doing much to prolong, by continuing to veto UN demands for a ceasefire in Gaza. In short, the US is now fighting a fire it helped to start, and expecting credit. 

Nor are the optics of the operation good, particularly in the global south. The US and UK have never escaped the shadow of Iraq and Afghanistan, and now yet again find themselves embroiled in another regional conflict. Bombing the world’s poorest country is never a good look; doing so in indirect support of Israel’s punishing assault on Gaza hardly helps things. While the UN Security Council has belatedly released a demand that the Houthi stop their attacks, last week’s attacks were conducted without UNSC authorisation, bringing back bitter memories of Iraq, or of America’s decades-long air war in the Islamic world. 

It is worth noting which countries have remained neutral. Japan has stayed quiet, despite a number of its vessels coming under attack – perhaps because it gets most of its oil from Iran – and France has remained above the fray. Russia, as an ally of Iran, has been afforded special protection; while China, an increasingly significant player in the Middle East, has led a remarkable effort at the UN to insist on the necessity of a negotiated peace and adherence to international law, and decry the quick resort to military action by the western powers. If anyone can be said to be ‘winning’ the Red Sea crisis, it is Beijing, which has leveraged existing goodwill among the nations of the Global South to build up a large neutral bloc at the UN and position itself as the adult in the room: a surprising result, to be sure. 

The Red Sea crisis is far from over. In many ways, it is a symptom of an increasingly anarchic world: one where non-state actors have cruise missiles, where civil wars in small countries can kneecap international trade; and where the world’s old powers are finding that their reach isn’t quite what it used to be. We can expect to see more events like it. 

• Since mid-November, the Houthis, an Iran-backed militant group operating in Yemen, have stepped up attacks on cargo ships in the Red Sea which is part of the main sea route connecting Europe to East Africa and Asia. The Houthis have declared war on Israel as a result of Israel’s military operations in the Gaza Strip. At present, the Houthis have adopted the strategy of seizing cargo ships, as their previous approach of firing ballistic missiles towards Israel has shown to be ineffective. Several countries now patrol the Southern Red Sea as part of Operation Prosperity Guardian (OPG) which notably does not involve Saudi Arabia or Egypt. According to the Atlantic Council, 7 out of the 10 biggest shipping companies have avoided the route through the Red Sea. Additionally, BP has halted oil and gas shipments through this region, leading to extended transit paths and rising costs.

• The 7-day-ceasefire between Israel and Hamas ended on the morning of the 1^st of December. During the ceasefire, humanitarian assistance was delivered and prisoners were exchanged. The Israel Defense Force (IDF) alleged that Hamas launched a rocket into Israel an hour before the ceasefire was due to conclude. As a result, fighting resumed as Benjamin Netanyahu, Prime Minister of Isreal, claimed that Hamas had failed to meet its obligations to release all prisoners and adhere to the ceasefire. In response, Hamas accused Israel of rejecting offers for the release of additional captives and blamed the country for resuming fighting. Moreover, the IDF mistakenly shot three Israeli hostages during an operation on 16^th December. The IDF acknowledged the incident violated engagement rules and stated those soldiers involved will face disciplinary measures. On December 8th, a UN resolution proposed by the United Arab Emirates and backed by over 90 member states, urging for an immediate humanitarian ceasefire in Gaza, was vetoed by the US, while the United Kingdom abstained. Subsequently, on December 22nd, the UN Security Council adopted a compromise resolution advocating for temporary ceasefires, enhanced humanitarian aid, and the establishment of corridors for aid delivery.

Central Asia

• Progress is being made in resolving the long-standing boundary dispute between Kyrgyzstan and Tajikistan. Officials from both nations report that 90% of the 604-mile (972 kilometre) border has been agreed upon following bilateral talks in the Southern Kyrgyz province of Batken. Kyrgyz President Sadyr Japarov is optimistic about settling the dispute by the spring of next year. Both countries’ security chiefs have agreed to continue discussions on the remaining contested sections.

• Kyrgyz lawmakers passed a bill to change the country’s flag. Adopted one day after the country joined the United Nations in 1992, the current flag depicts a tunduk of a yurt and sun rays against a red backdrop. Initiated by President Sadyr Japarov, the amendment will straighten the sun rays, shifting away from a sunflower resemblance, aligning with the term “kunkarama,” which means ‘dependent’ as well as ‘sunflower’ in Kyrgyz.

South Asia

• The Bharatiya Janata Party (BJP), led by India’s current Prime Minister Narendra Modi, has secured a significant victory in three out of four major states. This comes as a big success ahead of the national general elections in May next year. The BJP won the states of Rajasthan and Chhattisgarh from the main opposition party, Congress, while holding on to Madhya Pradesh. These four states represent 160 million voters and account for 15% of the parliament seats.

• In Pakistan, former Prime Minister Imran Khan, who is currently incarcerated, was indicted in a state secret case but has been granted bail. This marks the second time Khan faces corruption charges, with the first indictment for a three-year prison sentence being overturned by a higher court due to procedural errors. Government officials accused Khan and his wife of receiving millions of dollars worth of land as a bribe from a real estate magnate. Despite being granted bail, Khan has remained in jail since early August, with no clear indication of release as Pakistan gears up for its general election on February 8th. 

Southeast Asia

• Two boats carrying a total of 400 Rohingya refugees have been adrift in the Andaman Sea due to engine failure and urgently require rescue. Earlier this month, the United Nations High Commissioner for Refugees (UNHCR) issued an urgent plea for coastal nations to provide assistance. While one of the boats was ultimately rescued, the fate of the other remains unknown. Every year, thousands of Rohingya Muslims undertake perilous sea voyages to escape persecution in Buddhist-majority Myanmar and dire conditions in overcrowded refugee camps in Bangladesh, often aiming for Malaysia or Indonesia.

• The Islamic State has claimed responsibility for an explosion at a Catholic mass in Marawi City at the Mindanao State University in the southern Philippines.  The group announced that it targeted a congregation of “Christian disbelievers,” resulting in four fatalities. President Ferdinand Marcos Jr. has denounced the attack, attributing it to foreign terrorist involvement.

• China has mediated a ceasefire and encourage ongoing dialogue between Myanmar’s ruling military and rebel factions following an offensive initiated by the rebels on October 27th. The conflict, primarily in Northern Shan state, has displaced 300,000 individuals and raised concerns in neighbouring China. The mediation for a ceasefire and the pressure by China on the military junta to adhere to it show its influence in Myanmar.

• During Xi Jinping’s two-day visit to the Vietnamese capital Hanoi, China and Vietnam strengthened their bilateral relationship, signing 36 documents covering security, national defence, foreign policy and infrastructure development. This move by China to enhance ties with Vietnam follows the United States’ recent upgrade of its diplomatic relationship with Vietnam to the highest level in September. While China and Vietnam have aligned interests in economic areas, disagreements, for example, over the borders in the South China Sea remain.

East Asia

• At 4pm local time on New Year’s Day, an earthquake with a magnitude of 7.6 and its epicentre on the Noto peninsula in the Ishikawa Prefecture struck central Japan, leading to widespread destruction. Buildings have collapsed, and as of Tuesday morning, the death toll has reached 48, with rescuers working tirelessly to find survivors. While initially a tsunami warning was issued for the Sea of Japan, these warnings have now been downgraded to a tsunami advisory.

• Japan has announced it will sell Patriot missiles to the US starting in the first quarter of 2024, marking a reversal to the decade-old ban on the export of weapons. The policy change comes amidst a deterioration of relations with China and North Korea as well as a lack of military support to Ukraine. By supplying Patriot missiles to the US, Ukraine might benefit indirectly as additional capabilities become available to the US. Nevertheless, under the new export regulations, Japan maintains its prohibition on the direct export of military equipment to countries engaged in conflict.

• In the early morning of December 18th, a 6.2 magnitude earthquake struck the northwest Chinese provinces of Gansu and Qinghai, approximately 800 miles (1,300 kilometres) southwest of Beijing. By Christmas, the quake had resulted in 149 confirmed deaths,  1,000 injuries and the destruction of 14,000 homes. Gansu officials have estimated the earthquake caused approximately 532 million yuan (around £58.7 million) in damages to the agriculture and fisheries sectors.

• The anticipated trial of Hong Kong’s pro-democracy media tycoon, Jimmy Lai, has begun. Arrested in December 2020 under the newly implemented National Security Law (NSL), Lai continues to refute all allegations. His detention has provoked widespread international criticism with the UK and the US calling for Lai, who also holds British citizenship, to be released.

• North Korea has launched a long-range ballistic missile in the first round of tests in a month. Observers speculate that this action may be in reaction to the strengthened nuclear deterrence strategies of South Korea and the United States. The missile is believed to be an intercontinental ballistic missile (ICBM) with a range of more than 9,300 miles (15,000 kilometres), putting the entirety of the United States within possible reach depending on the trajectory and warhead size. In response to this escalation, US and South Korean officials have agreed to incorporate nuclear operation scenarios in their joint exercises scheduled for the following summer, a move that North Korea has strongly condemned. Rising tensions are further exacerbated by North Korea’s launch of its first military reconnaissance satellite on November 21st, a move that defies United Nations prohibitions.

But it hasn’t turned out that way. In the last few years, we have seen tremendous corporate governance reform in Japan – almost in the blink of an eye. While it might seem like a niche topic, it has the potential to deliver incredible returns for investors and international businesses moving forward. 

To fully understand contemporary Japanese corporate governance reform, it is helpful to understand what it looked like during the miracle years between 1960 and 1990. At the time, companies were designed to reward Japanese banks, the main players in the economy and the providers of the significant lines of credit that, in retrospect, drove the miracle. The top companies during the 1970s could easily generate 20% returns to their underwriters, feeding a cycle of further investment – but companies did not necessarily consider how to reward retail investors. 

In the 1980s and 1990s, pushed by US and European efforts – starting with the 1985 Plaza Accords – to make Japan less competitive, the Diet began to introduce corporate governance reform, reducing the scope of administrative guidance, among other aspects. In reality, reform was limited – there was little incentive for companies to reward retail investors instead of the big banks. Companies created ‘value traps’, hoarding cash and caring little about providing returns, delivering buybacks or trading above book value. It was in the companies’ interest to hoard cash, particularly after the Plaza Accords devalued the yen and led to significantly reduced competitiveness (especially compared to South Korea and China, the real winners of the Accords). 

This all attracted negative media attention. As James Mackintosh of the Financial Times once wrote, ‘whenever Japanese company stocks look cheap, they get cheaper – and stay cheap’; while Henry Tapper, an independent analyst, has called Japan ‘the country where value investors go to die’. Even a cursory Google search will find dozens of similar opinions. 

Perhaps Tokyo was listening. Corporate governance reform kicked in nearly overnight in 2023. Just recently, the Hong Kong-based investor Oasis Management pushed Fujitec to replace its directors with candidates from their own shortlist, and ousted the chairman: the classic hostile takeover. Instead, they looked to deliver value to investors, rather than coddle existing management. Such a move would have been unthinkable during the golden years, when stability was prized above all.

Likewise, the Tokyo Stock Exchange is currently ‘encouraging’ (Japan-watchers will know that this really means ‘requiring’) listed companies to ‘demonstrate a better use of capital’ – particularly by showing how they can deliver benefits to shareholders. Japanese companies have recently shown more willingness to engage in buybacks, which reached a 16-year high in 2023. Similarly, Mitsui’s recent buyback was its largest ever. Warren Buffett, whose activities often run ahead of major market shifts, has been ploughing billions into the Japanese market to chase higher returns, now that his analysts are reporting more confidence following reforms. After nearly thirty years of stagnation, the tide may well be turning. 

If companies are able to trade significantly above book value, retail investors have the opportunity to make considerable returns – even on par with investing in the US S&P 500. Foreign investors made inroads to the Japanese market after the crash early on in the pandemic made stocks available at a huge discount. It will be interesting to see if Japanese law catches up with what is happening on the ground, and if the trend is sustainable in the long run. 

Podcast Description

We are joined by Gavin Wilkins, the Chief Commercial Officer (CCO) of Hawksford, a leading international provider of Corporate, Private Client and Fund services, to discuss ‘Business and trade relations between Scotland and ASEAN’. 

Gavin brings over 20 years of experience in finance, specialising in international capital management, fund services and alternative assets among much else. He has worked and travelled widely across Asia and is a committee member of the British Malaysian side. 

In this podcast we will be discussing the ASEAN region, home to the world’s fastest growing economies, and specifically what Scottish companies and investors can do to help access these markets and how it can help. 

Topics discussed:

• Singapore as a centre of international trade
• The economic landscape for ASEAN, how it compares globally and how much it impacts the UK
• Opportunities for Scottish entrepreneurs and businesses in ASEAN and the markets to explore 
• Key lessons about how companies can set up and operate their businesses within Singapore

India

India hosted the G20 summit in New Delhi in September, bringing to an end its year-long presidency of the multilateral club. During the conference, the US, India and the Gulf States announced a plan to build a new trade route to rival the Chinese Belt and Road. The Indian government also trialled an alternative name for the country – Bharat.

India-Canada relations are in crisis after the Canadian prime minister Justin Trudeau, citing US intelligence reports, claimed that agents of the Research and Analysis Wing (RAW), India’s spy agency, were behind the assassination of a Sikh separatist in British Columbia. Hardeep Singh Nijjar, who had become a Canadian citizen, was gunned down in a parking lot in March. He was a prominent advocate for the creation of a separate Sikh state, Khalistan. The crisis threatens to draw in the US, which has been cultivating an alliance with India, and Britain, as both Canada and India are members of the Commonwealth.

Kerala, in southern India, is dealing with a sudden outbreak of Nipah virus. The disease, which comes from bats, has a 75% fatality rate, and can spread asymptomatically. Its initial symptoms are similar to Covid.

China

The two-year saga of beleaguered property developer Evergrande, the world’s most indebted company, continued. The company, founded in 1996, had borrowed heavily to build thousands of apartment complexes, many of which were sold but never finished. Thousands of its customers have since found themselves paying mortgages for non-existent homes. The company first defaulted on its debts in 2021, triggering a rolling crisis in the country’s massive real-estate sector. A huge chunk of Chinese wealth is held in property, and there are fears of international financial contagion on the scale of the 2008 meltdown should Evergrande, or its equally troubled competitor Country Garden, collapse. The company’s chairman and senior executives are reported to have been arrested, as the central government has stepped in to try and prevent a fiscal implosion.

The 19th Asian Games opened in the eastern city of Hangzhou. So far, Chinese teams have dominated the league tables, bringing home 105 gold medals, to Japan’s 26 and South Korea’s 25. In a break with tradition, the opening ceremony relied on digital effects rather than fireworks, meaning that those gathered outside the stadium to watch had to do so on their phones instead. The games will close on 8th October.

Typhoon Haikui hit the southern coast. In Maoming, a small city in Guangdong province, at least seventy crocodiles broke loose from a farm during flooding and swam around a residential neighbourhood. They were quickly recaptured.

Two builders in Shanxi province, northern China, drove their bulldozer through part of the Great Wall to get to work faster. Archaeologists have determined that the damage is irreparable, and the pair have been detained.

East Asia

Travis King, an American soldier who dramatically absconded to North Korea by charging across the DMZ in July, has been expelled by the secretive country. King, 23, was facing disciplinary charges in the US after serving time in a South Korean prison for a drunken rampage in downtown Seoul. As part of a deal brokered by the Swedish embassy, King was transferred to Chinese authorities, who then delivered him to the US embassy in Beijing. He is being held at an American base in Japan while the Army decides what to do with him. King has not been charged with desertion, as psychologists have yet to determine if he is mentally fit to stand trial.

Japan is considering the creation of English-speaking special business zones in Tokyo, Osaka, Sapporo and Fukuoka to encourage international investment and attract foreign asset management firms. The scheme, which will see administrative procedures being carried out exclusively in English, alongside the slashing of red tape and the lowering of corporate taxes, is hoped to help Japan compete with Hong Kong and Singapore. Both have successfully leveraged low taxes and English-speaking populations to become financial powerhouses.

Southeast Asia

Indonesia hosted the annual ASEAN summit in Jakarta. The bloc, which has maintained peace in ‘the Balkans of Asia’ for thirty years, faces increasing challenges, particularly from a failure to solve the ongoing civil strife in Myanmar. Its members, most of whom are neutral, are also finding it more difficult to maintain their positions in the face of US-China tensions. US President Joe Biden skipped the summit, sending his deputy Kamala Harris in his place. The vice-president, who is almost as prone to gaffes as her boss, confused North and South Korea during her keynote speech, praising her country’s ‘very important relationship with the Republic of North Korea’.

Biden instead flew to Hanoi, the capital of Vietnam, for talks with the country’s ruling Communist Party. American strategists have been attempting to build an alliance with Vietnam for nearly a decade as a counterweight to Chinese ambitions. Although the visit was meant to project confidence in the United States, the increasingly frail president – thought to be running again in 2024 – did not help matters when he went off-script during a question-and-answer session with friendly journalists. Translators were left momentarily baffled when he deployed a favourite phrase of his, ‘lying dog-faced pony soldier’, in a discussion about climate change. Asked if he planned to speak to Chinese President Xi Jinping, he abruptly responded ’I tell you what, I don’t know about you, but I’m going to go to bed now’. Aides then cut off his microphone, and began playing light jazz before ushering him off stage – still talking.

A cult headed by a man claiming to be the reincarnation of Jesus Christ has taken over a remote island in the Philippines, where it is said to be holding nearly 1500 children hostage. There have been allegations of widespread sexual abuse by the cult’s diminutive leader, Jey Rence B Quilario, and his deputies, who have organised their roughly 3000 followers into a well-armed militia.

Central Asia

Prosecutors in Switzerland have charged Gulnara Karimova, the daughter of former Uzbek strongman Islam Karimov, with multiple counts of corruption, and accuse of her of operating a vast transnational crime syndicate between 2005 and 2013 that laundered money and solicited bribes in Uzbekistan, Russia, Sweden, Norway, France, the Netherlands, the US and the UK as well as in Switzerland. Karimova, who once owned $20 million worth of luxury property in London, play-acted as a socialite, fashion designer and pop singer before being imprisoned in 2014 after a change of government in the former Soviet state. She remains in prison in Uzbekistan, and it is not clear if she will be extradited.

The Russian military is apparently recruiting soldiers from Nepal, Uzbekistan, Tajikistan and Kyrgyzstan to make up numbers for its war in Ukraine and stave off the need to call a general mobilisation. Russia has suffered somewhere between 80,000 and 300,000 casualties since invading Ukraine in February 2022, and has long sought to outsource the worst of the fighting – initially to regular battalions drawn from minority regions like Buryatia, and latterly to the mercenaries of the Wagner Group, many of whom were violent prisoners who had been promised their freedom in exchange for six months at the front line. However, Wagner has been stood down since a short-lived rebellion in June, and its two leaders, Yevgeny Prigozhin and Dmitry Utkin, were killed in a plane crash last month. This may explain the drive to recruit foreigners. The Nepalis appear to be contractors who freely enlisted; many of the Central Asians are thought to be press-ganged migrant workers, or prisoners offered the same deal as Wagner’s troops. A handful of Cubans have also turned up in Ukraine, claiming to have been duped into service.