Japan's veteran pharmaceutical company Far East was exposed to data fraud for 30 consecutive years
Following the Kobayashi Pharmaceutical Red Yeast Rice Scandal, another old Japanese pharmaceutical company was exposed to a scandal. According to Japan's "Yomiuri Shimbun" recently reported, Japan's Far Eastern Company, the manufacturer of the well-known gastrointestinal medicine "Zhenglu Pill", was exposed to tampering with the test data of the drug for more than 30 consecutive years due to insufficient production ingredients. Far East has apologized to consumers. According to the company's official website, "Zhenglu Pill" has a history of more than 100 years and advertises that it can treat "gastrointestinal discomfort".
The report quoted a report from the Toyama Prefecture government, where Jidong is located, that in a local surprise inspection, the active ingredient in the drug was found to be seriously inconsistent with the advertised efficacy, and worse, in order to conceal the truth, Jidong has been tampering with experimental data for the past 30 years, so that "Zhenglu Pill" can pass the audit and go on sale. Regarding the results of the inspection, Jidong said that it admitted and apologized to consumers. So far, the company has independently recycled 5.16 million copies of "Zhenglu Maru" that went to the market. At the same time, the Toyama prefectural government has ordered the Jidong company to suspend sales for 22 days and stop production for 23 days from April 30.
However, this is not the first data fraud scandal in Japan's manufacturing industry in recent times. IHI, a well-known Japanese engine manufacturer, admitted on the 24th that one of its subsidiaries had tampered with the fuel efficiency data of more than 4,000 engines since 2003. According to Japanese media, one of the factories involved may have been falsifying data since the 80s of the last century. Judging from the current investigation, 4,361 of the 5,537 engines used in ships and other equipment produced by the above two factories since 2003 are involved in data fraud, accounting for nearly 79%. These engines are supplied to the Japan Coast Guard and Hokkaido Railway Company. Hideo Morita, vice president of IHI, has bowed and apologized at the previous press conference, and some netizens complained sharply, and immediately apologized after the accident, which can be called "the spirit of craftsmanship".
Why is the manufacturing industry, once a source of pride for Japanese people, now so lost?
In June 2021, Mitsubishi Electric was exposed to data fraud for more than 30 years, in July 2018, Nissan Motor Company admitted that it had falsified exhaust emissions and fuel consumption measurement data at five of its plants in Japan, and in October 2017, steel manufacturer Kobe Steel admitted to tampering with some copper, In November of the same year, non-ferrous metals giant Mitsubishi Materials admitted that its subsidiaries Mitsubishi Wire Industry and Mitsubishi Copper Extension had falsified product data.
Once upon a time, Made in Japan was almost synonymous with reliability, durability and quality, and who would have thought that the truth about Made in Japan would be so fragile when a single toilet seat could attract consumers around the world. It has been observed that the most direct reason is that it is driven by profits. Counterfeiting can greatly increase a company's revenue and profits, and according to the requirements, substandard products should be scrapped and then re-refined, which will consume a lot of labor, time, and cost. In 2018, when Japan's Kobe Steel was exposed to fraud, it responded that fraud is sometimes "due to the pressure of KPIs that cannot be completed", which is one of the examples.
There is also public opinion that the halo of Japan's manufacturing industry is no longer there, which is not only due to the Japanese corporate culture, but also inseparable from the lack of innovation drive of Japanese enterprises, such as the gap between the concept of modern corporate governance and the traditional Japanese corporate culture and management concept, resulting in many problems between the pursuit of short-term benefits and long-term business strategies of Japanese enterprises.
Strong international shocks are also part of the reason. Some scholars believe that the current Japanese manufacturing in terms of price, brand, quality and other aspects of the international challenge, when Japan's industrial production capacity is in a downward channel, such as manufacturing costs and manufacturing time is limited, how enterprises will respond to it is worth paying attention to.
Chen Yan, president of the Japan Enterprise (China) Research Institute, told the media, "When companies no longer pursue quality and authenticity, and choose to maintain the appearance of counterfeiting when they cannot complete a good quality and energy-saving model, it will bring huge distrust to the society of Japanese products." This is a major issue that Japanese companies must solve."
The depreciation of the yen hit a new low, can Japan's manufacturing industry get out of the crisis?
Shenzhen Satellite TV Direct News noticed that from the time span of the violations of the companies that have been exposed to fraud scandals, most of them can be traced back to 20 to 40 years ago, that is, before and after the bursting of the Japanese economic bubble (the 90s of the 20th century). Some analysts pointed out that since the bursting of Japan's economic bubble, most enterprises are facing pressure on profitability, lack of motivation to increase investment in R&D and innovation, and the speed of industrial upgrading has slowed down, and at the micro level, it will inevitably be reflected in the reduction of enterprise efficiency and competitiveness. Under such circumstances, under pressure from profits, counterfeiting has become a means for Japanese manufacturers to remain competitive.
At a time when Japan's established companies have been exposed to fraud scandals, the rapid depreciation of the yen will also bring more uncertainty to the Japanese economy. On the 25th, the yen exchange rate against the US dollar in the Tokyo foreign exchange market fell to 155.74 yen per dollar, hitting a new low in 34 years.
According to the analysis, the situation that has been believed to be "the depreciation of the yen is good for the Japanese economy" is changing. At present, Japan's dependence on imports of daily necessities such as smartphones, home appliances, and clothing is increasing, and higher prices due to the depreciation of the yen tend to squeeze household payments. On the other hand, the ability of the yen's depreciation to boost exports has weakened as manufacturing has shifted overseas. However, Shenzhen Satellite TV Direct News noticed that there is a trend of Japanese manufacturing industry returning to its homeland. According to the data of the 2023 edition of the "Manufacturing White Paper" released by Japan, except for South Korea and ASEAN countries, the production bases of Japan's manufacturing enterprises in other countries and regions have shifted, showing a trend of returning to their home market rather than overseas transfer.
Source: Mitsubishi UFJ Research & Consulting, "Survey on the Direction of Japan's Manufacturing Issues and Responses," March 2023
According to the analysis, it is undeniable that Japan's manufacturing industry still maintains a dominant position. However, in this trend of manufacturing returning to developed countries, the international competitive environment is also changing. In the past, the assembly process in manufacturing has relied on cheap labor in emerging countries, so investment funds continue to flow from developed countries to emerging countries. However, with the gradual return of the manufacturing industry to developed countries in the future, the demand for funds in developed countries will become stronger. As a developed country, Japan's monetary easing policy to get rid of deflation led to the depreciation of the yen. However, in the absence of an increase in exports, the depreciation of the yen will only have a negative impact on Japanese producers. Therefore, Japanese manufacturing should not rejoice in the depreciation of the yen, in fact, they are facing a difficult test.
Author: Lin Shuqi, chief writer of Shenzhen Satellite TV Direct News
Editor: Yang Ying, editor-in-chief of Shenzhen Satellite TV Direct News
Typesetting: Zheng Zhijia, Shenzhen Satellite TV direct news editor