URSABLOG: Seismic Faults

Back in 1999 Ryo Tatsuki wrote a manga novel that predicted a disaster in March 2011. In that same month Japan suffered a devastating 9.0-magnitude Tohoku earthquake which caused the subsequent tsunami, and all the catastrophic consequences that followed. Then in 2021 Tatsuki published a new manga called The Future I Saw: Complete Edition, which predicted a “catastrophe” around July 5th 2025. That is, yesterday.

Scouring the internet this morning to find news of Japan related disasters, especially seismic ones, there is in fact a concerning concentration of tremors in a group of islands to the south-west of the archipelago. Indeed here was an earthquake yesterday, of 5.4 magnitude, that apparently led to authorities warning all 89 residents of Akuseki Island to evacuate.

Akuseki Island is a remote, rugged island, about half-way between the mainland islands grouping and Okinawa. It is, I understand, known for its hot springs and lively summer celebration of local deity Boze, who – dressed in fan palm leaves and a large Polynesian-style mask – carries a phallic staff and chases around the women and children of the island, blessing them with sacred mud and scaring evil spirits away. Well, each to their own.

The earthquake warnings are serious and persistent enough to recommend evacuation, but this stretch of islands is not exactly overpopulated or heavily visited. Of course, a tsunami, especially one on the scale that devasted eastern Japan in 2011 can be destructive and deadly, but the island is nearer to Shanghai than Tokyo – in fact the island is about the same distance to Osaka as to Zhoushan – so China should be a worried as Honshu about the tremors down there.

But Tatsuki’s prediction is being taken seriously enough to have generated rumours that have led tourists from Hong Kong (1,740 km from Akuseki) to postpone or cancel trips to Japan this summer, according to the Financial Times. Airlines are cutting back on flights and travel agencies are discounting the prices of packaged tours, having started observing the drop in demand as long ago as March. Cathay Pacific’s budget arm HK Express said it had registered a “short-term” impact on summer bookings to Japan, but added that it believed “interest will rebound once the rumours subside”.

Some feng shui masters in Hong Kong have warned of natural disasters in Japan this year, including TV personality “Master Seven” who urged people to refrain from visiting the country in April and May. Well, not so masterly after all.

Which leads me to another such wild prediction widely – and wildly – circulated in recent months that has no real basis in fact either: that the US will be able to expand both its shipbuilding industry and its national merchant fleet in the coming years. This prediction has come from such dangerous publications as White House Executive Orders and the SHIPS FOR USA Act currently rumbling through Congress. Other noise has drowned these noble ambitions recently – like that of the bombs falling on Iranian nuclear processing facilities – but the Orders and the legislation remain. The focus of these is to combat China’s dominance in shipping and in shipbuilding, something that was off the radar of either main political party in the US until United Steel Workers (USW) brought it to their attention in the approach to last year’s US presidential election.

The US has had no market share to speak of in either global shipping or shipbuilding markets since at least the 1970s for China to grab hold of, but China has taken huge chunks out of Japan’s market share of newbuilding in recent years. Japan’s share of global vessel deliveries shrank to 12% in 2024 from 25% in 2018. China took 70% of new global orders in 2024, up from 32% in 2018.

So the news that Imabari Shipbuilding has taken a 60% stake in Japan Marine United (JMU) must be good news? The Japanese shipbuilding industry seems to think so, and want the Japanese government to support them. A special committee under the ruling party has proposed to Prime Minister Shigeru Ishiba a ¥1trillion (US$ 7 billion) public-private fund to modernise facilities and build “national shipyards” that the government can lease to private groups. Good news for all dry bulk carrier owners with an eye for design and quality.

There’s geopolitics in this too, and a potential solution that may help US get out of the shipbuilding corner it has painted itself into. In recent tariff negotiations with Washington Tokyo has proposed establishing a fund to jointly revitalise shipbuilding, which Trump administration officials support, apparently.

But China’s increasing dominance in shipbuilding has – although the numbers are striking – has not been a story of undercutting Japanese prices or quality. I would love to see more Japanese built ships in the water, and Japanese yards taking orders: there is more than enough demand. Japanese tax laws have caused a seizing up of the number of secondhand ships coming into the market, because Japanese owners will not sell unless they have replacement ships (or similar tax depreciative investments) coming online in the two years from the completion of the sale; the order book is at least three years and counting.

Japan’s shipbuilding production capacity is limited by things it cannot control. Geography is one: the country, especially in the south, is mountainous with a lack of spare flat land. There are also labour shortages: the demographic challenges of an aging population are well documented, but with a reluctance to loosen immigration restrictions by the government combined with a reluctance of younger people to work in difficult and testing conditions outdoors in all weathers, means that there is little shipyards can do to increase capacity. Japan can only build the ships they have the capacity to build.

Consolidation is a step but not the panacea, and anyway is a process that has long been underway. Imabari and JMU jointly launched Nihon Shipyard, focused on commercial vessel design, in 2021 after the former took a 30% stake in its smaller rival. Mitsui E&S sold its remaining newbuilding operations to Tsuneishi this year. Mitsui weren’t doing much shipbuilding in Japan anyway: they formed a joint venture in 2018 with Chinese controlled Yangzijiang Shipbuilding Group to create Yangzi-Mitsui Shipbuilding Co., Ltd.

Tsuneishi itself no longer builds conventional ships in its Japanese yards, most being built in its yards in Zhoushan in China or Cebu in the Philippines. The late lamented Sumitomo Heavy Industries has closed, and Sasebo Heavy Industries now only carries out repairs and machinery construction. Kawasaki has two joint venture shipyards – NACKS and DACKS – in Nantong and Dalian respectively, but has long since exited shipbuilding in Japan proper.

Imabari sees taking over JMU as part of a plan to “lead in technological capabilities that are strengths of the Japanese shipbuilding industry,” which I don’t think is strictly true considering the mammoth – and advanced – facilities already available in South Korea, and increasingly in China. Undaunted, Yukito Higaki, president of Imabari, has said he wants Japan to nearly double its market share to 20% per cent and to take leadership in next-generation low-emission vessels, such as those fuelled by ammonia or methanol, or whatever, by the 2030s. I really hope he succeeds.

Obviously this consolidation is with a very beady eye on subsidies, but whilst US$ 7 billion seems a lot it’s nothing compared to the US$ 91 billion that the Europe-based Centre for Economic Policy Research estimated China provided to its shipbuilders between 2006 and 2013, even if a lot of that value was comprehensively destroyed between 2014-2018 as many shipyards went out of business for one reason or another.

Back in the 1970s, the United Kingdom – which until the 1960s had been not only the largest shipbuilder but also had the largest merchant navy in the world – embarked on restructuring and consolidating its shipbuilding industry in the face of ‘cut-throat’ competition from Japan, part of largely failed attempts by governments of either political persuasion to reshape their industrial – and industrial relations – policies in the face increasing global competition, a contest which they lost. The country, and the economy, found other things to do.

Someone recently – with a straight face and in all seriousness – suggested to me that the apparent increase in seismic activity around the world was down to climate change and/or (I can’t entirely recall) man’s general messing around with planet. I tried to explain that in the great scheme of things, human beings – whilst having an inexhaustible ability to mess their own environment up – have very little, if any, effect on what happens in the collision of solid matter pushed around by tectonic momentum many kilometres below us.

In response to the manga rumours, Ryoichi Nomura, director-general of the Japan Meteorological Agency, put in plainly: “With our current scientific knowledge, it is impossible to predict the exact date, time, location, and size of an earthquake,” he said.

Earthquakes occur when the build-up of tectonic pressure needs to find a release, and as the subterranean masses reorganise themselves, the energy released causes the ground above to move. Many geopolitical and macroeconomic events are the results of long built-up pressures that were unseen or simply went unnoticed or uncommented on. Just as it is impossible to predict an earthquake before it happens, it is impossible to stop a tsunami once the earthquake has triggered it.

Manga may have many things going for it, but I don’t think I trust it as an oracle or as a guide to survival. I feel much the same way about Executive Orders and strategic mergers.

Simon Ward