ON THE COVER
Wataru Ito
Pool
From Alibaba’s leadership
change to the rise of Generation Z,
the year ahead promises
to be anything but dull.
In our special year-end
double issue, the Nikkei Asian Review
previews 19 trends, topics and
events to watch in 2019.
ALIBABA AFTER
JACK MA
The mood may not be entirely fes-
tive when Alibaba Group Holding
celebrates its 20th birthday on Sept.
10. That same day, founder Jack Ma
Yun will step down as chairman of
the e-commerce conglomerate.
“A big question is whether and how Alibaba will continue
without Jack Ma,” Joseph P.H. Fan, a professor at the Chinese
University of Hong Kong, told the Nikkei Asian Review.
Alibaba became a household name under Ma, thanks in no
Illustrations by Eric Chow / Photos by Reuters except as noted
small part to Singles Day, the Nov. 11 shopping event the com-
pany invented in 2009. It now surpasses the Thanksgiving shop-
ping season in the U.S. in terms of sales.
Ma, who will retire as a board member in 2020, will be replaced
as chairman by CEO Daniel Zhang Yong. Ma says he has been
preparing his successor by making himself scarce at the company
and giving Zhang complete authority to decide on investments
up to 20 billion yuan ($2.89 billion). Nevertheless Fan has his
doubts. “No one can replace Jack Ma in terms of his vision and
his public image, which wins attention and perhaps trust from
stakeholders.”
KENJI KAWASE, Nikkei Asian Review chief
business news correspondent
Nikkei Asian Review - Special excerpt from Dec. 31, 2018-Jan. 13, 2019
Print edition. Nikkei Inc. No reproduction without permission.
 ON THE COVER
MODI SEEKS
ANOTHER TERM
Prime Minister Narendra Modi is
hoping to secure a second five-year
term in office in India’s next general
election, which is to be held by May
2019. But he may be facing an uphill
battle after his party lost big heartland states in recent polls.
Indian National Congress, the main opposition, put in a stel-
lar performance in these “semifinals,” toppling Modi’s Bharatiya
Janata Party in Rajasthan, Madhya Pradesh and Chhattisgarh.
Those victories helped INC and its leader Rahul Gandhi revive
their fortunes, though the opposition is still not seen as strong
enough to knock the BJP out of the central government.
Still, the national election will not be a cakewalk for Modi,
who also faces the growing discontent of distressed farmers and
rising unemployment.
The prime minister is “most likely to win re-election, but at
the helm of a coalition rather than with an outright majority of
BJP parliamentarians,” say analysts at Eurasia Group, a political
risk consultancy.
KIRAN SHARMA, Nikkei staff writer
THE 5G
REVOLUTION BEGINS
Ordinary consumers -- or at least early adopters -- will finally be
able to experience 5G technology in 2019, allowing them to take
advantage of broadband-like speeds on smartphones and other
mobile devices.
The telecoms industry is promoting 5G as a huge step forward,
eventually forming the basis of futuristic capabilities such as ho-
lographic calls, mobile AI computing, autonomous driving and
even remote surgery. In the nearer term, first-wave users will be
able to experience high-definition video broadcasts of live events
such as concerts or sports events.
Samsung Electronics, Huawei Technologies and possibly
Apple are expected to introduce products using the new tech-
nology in 2019, but industry executives say they don’t expect 5G
services to reach critical mass right away.
“We expect to see a lot of 5G-ready devices in the market in
2019,” said Joe Chen, president of mobile chipmaker MediaTek.
“However the massive adoption of 5G technology will not be-
come reality before 2020.”
CHENG TING-FANG, Nikkei staff writer
TURBULENT YEAR
FOR MARKETS?
The end of 2018 was a turbulent one for markets in Asia and much
of the world, as investors fretted about U.S. interest rate hikes,
China’s economic slowdown and the trade war between
Washington and Beijing. None of those worries look like they
are going away in 2019, which could spell a bumpy ride for
Asian markets.
The U.S. Federal Reserve plans to raise interest rates twice
in 2019, a move that is expected to spark capital outflows from
emerging economies. This could “affect Asia’s economy nega-
tively,” says Yoshinori Shigemi, a global market strategist for J.P.
Morgan Funds.
On the China front, the Organization for Economic Cooper-
ation and Development has cut its growth forecast to 6.3% for
2019, and predicts a slowdown to a 30-year low of 6% in 2020.
A major reason for its dampening outlook is the trade disputes
with Washington.
Along with the trade war, Brexit and other political issues
like India’s election will be major themes to look out for. “With
so much uncertainty, it will be difficult for investors to move
assets, especially during the first half of 2019,” said Kazuharu
Konishi, chief fund manager at Mitsubishi UFJ Kokusai
Asset Management.
JADA NAGUMO, Nikkei staff writer
A NEW ERA (LITERALLY)
FOR JAPAN
When Emperor Akihito ends his 30-year reign on April 30, it will
also mark the end of Japan’s Heisei era. His elder son, Crown
Prince Naruhito, will assume the throne the following day -- start-
ing Year 1 of a new, as-yet-unnamed era.
The 85-year-old emperor announced his desire to abdi-
cate due to health concerns in 2016. After much debate, the
government passed a one-time law that exempted him from
a Meiji-era (1868-1912) requirement that emperors reign
until death.
The abdication saga has drawn attention to the fact that the im-
perial family, like Japan itself, is facing a demographic crisis. This
is due in part to a male-only succession rule, which strips women
of their royal status if they marry a commoner.
“The number of male family members is falling rap-
idly,” said Naotaka Kimizuka, a professor at Kanto Gakuin
University. “This is a serious issue in ensuring the sustainability
of the family.”
For now, the public is occupied with nostalgia over the end of
the Heisei era -- and making plans for the special 10-day national
holiday that will take place around the coronation.
WATARU SUZUKI, Nikkei staff writer
Emperor Akihito, now 85,
cited health concerns as a
reason for stepping down.
Reuters
MALAYSIA GOES
TO COURT
If 2018 was the year that saw a Malaysian
“youth wave” election, 2019 may be the year
of the blockbuster trial.
First in the dock is former Prime
Minister Najib Razak, whose trial is sched-
uled for Feb. 12.
Najib is facing nearly 40 charges re-
lated to the multibillion dollar scandal at
1Malaysia Development Berhad (1MDB). His wife, Rosmah
Mansor -- known for her extravagant spending on diamonds and
luxury handbags -- is also awaiting trial on nearly 20 criminal
charges, including money laundering and tax evasion.
Others to face trial are two former ministers in Najib’s cabinet,
as well as government officials, all for graft committed before the
May 9 election. Low Taek Jho, the alleged mastermind of the scan-
dal and a fugitive believed to be in China, has been indicted in
absentia for the missing $4.5 billion in funds belonging to 1MDB.
The crackdown on corruption was part of the election mani-
festo of Mahathir Mohamad, whose victory over Najib triggered
the first change of government since independence in 1957.
Many Malaysians rejoice at the prospect that the trials will
Nikkei Asian Review - Special excerpt from Dec. 31, 2018-Jan. 13, 2019 Print edition. Nikkei Inc. No reproduction without permission.
improve the country’s poor image since the 1MDB issues came
to light in 2015. “Malaysia should act in a more aggressive man-
ner to claim damages over our tarnished image,” said Anwar
Ibrahim, president of the People’s Justice Party, in November.
CK TAN, Nikkei staff writer
BUMPS IN
THE ROAD
Authorities in Beijing may not like the phrase, but it seems that a
“consumption downgrade” in China is beginning to bite.
U.S.- China trade tensions and a slowing economy are expected
to weigh on Chinese minds as they consider whether to make big
purchases, including cars and property.
Chinese automakers just witnessed the first decline in the
car market in 28 years. The China Association of Automobile
Manufacturers, an industry body, predicted “zero growth” for
2019. Dealers will likely slash prices to pump up sales, analysts say.
And after years of spending more and more of their hard-
earned money on houses, many urbanites are concluding that
they simply can’t afford a place of their own.
Now the property industry is facing a slowdown, with analysts
forecasting prices to drop around 10% next year.
Some of the country’s largest developers are holding moun-
tains of debt after years of growth. Now they are scrambling to
diversify into other industries such as technology, autos and en-
tertainment -- with little success so far.
Many are pinning their hopes on Beijing, hoping that the au-
thorities won’t permit a sharp decline in a sector deemed “too big
to fail.” President Xi Jinping’s pledge to make housing affordable
will be put to test.
NIKKI SUN, Nikkei staff writer
THIRD TIME LUCKY?
Prime Minister Shinzo Abe is plan-
ning to raise Japan’s consumption tax
in October, part of his attempt to chip
away at the country’s massive debt. The question is, will he do it?
Abe has pledged tax hikes before, in 2015 and 2017, but he
postponed the move out of concern that it would harm the econ-
omy. That’s what happened in 2014, when a consumption tax hike
resulted in a sharp downturn in consumer spending.
Abe seems to feel more confident now. Japan’s economy
 ON THE COVER
entered its seventh year of growth in December -- its longest ex-
pansion since the end of World War II -- and the labor market is
the tightest it has been since 1973. Hosting the Summer Olympics
in 2020 is expected to provide a further boost.
But with the U.S. Federal Reserve expected to continue rais-
ing interest rates and a trade war raging between the world’s two
largest economies, 2019 may offer plenty of reasons for Abe to get
cold feet -- again.
MITSURU OBE, Nikkei staff writer
Pop group BTS has gained fans far
Reuters
beyond their native South Korea.
SONIC BOOM:
K-POP GOES GLOBAL
Forget Samsung Electronics’ Galaxy smartphone or Hyundai
Motor’s Ioniq electric car. South Korea’s most popular export
just might be a seven-member boy band called BTS. The group
topped the Billboard charts twice last year -- once in May with
“Love Yourself: Tear” and again in September with the follow-up
“Love Yourself: Answer.”
In another indication of South Korea’s soft power, music videos
by BTS have drawn hundreds of millions of views on YouTube.
Taking advantage of BTS’s global fandom, the group’s agency
Big Hit Entertainment plans to list on the Korea Exchange in
2019. Analysts say the agency is looking to challenge the indus-
try’s top listed company, SM Entertainment, which has a market
cap of 1.2 trillion won ($1.06 billion).
“As K-pop fandom becomes more globalized, Korean bands are
expanding their tours beyond Asia to the U.S. and Latin America,”
said Lee Ki-hoon, an analyst at Hana Financial Investment. “We
expect the Korean entertainment industry will enjoy a great earn-
ings season by 2020 thanks to global fans of Korean songs.”
KIM JAEWON, Nikkei staff writer
ELECTIONS AND A POSSIBLE
CORONATION IN THAILAND
Thailand is set to hold a general election on Feb. 24, its 26th since
the overthrow of absolute monarchy in 1932. The last attempt at a
poll, in 2014, was prevented by street demonstrations and a coup
that installed Gen. Prayuth Chan-ocha, then chief of the army, as
prime minister.
Come polling day, Prayuth’s unelected term will have run
four years and nine months. Only one elected Thai government
has ever served a full four-year term -- that of Prime Minister
Thaksin Shinawatra, elected in 2001. Thaksin also pulled off two
other unprecedented feats: getting re-elected in 2005 and increas-
ing his parliamentary majority while doing so.
It remains to be seen if 2019 will also see a much rarer milestone
-- a coronation. The last was that of King Bhumibol Adulyadej
nearly 70 years ago in 1950. His son, King Maha Vajiralongkorn
Bodindradebayavarangkun, succeeded his father upon the lat-
ter’s death in October 2016. In 2018, Prayuth said the coronation
ceremony would precede the general election, but in this it seems
he was mistaken. Setting a coronation date evidently remains a
royal prerogative.
DOMINIC FAULDER, Associate editor, Nikkei Asian Review
BENT OUT OF SHAPE
Smartphone screens have grown larger
and larger over the years, making it
easier to watch a video but harder to fit
them in a jeans pocket or small purse.
A possible solution will arrive in 2019:
foldable screens.
The new technology is expected to
inject some needed excitement into the smartphone market,
which has been slowing as makers struggle to come up with
innovative features. Samsung Electronics and China’s Huawei
Technologies -- the world’s No. 1 and No. 2 smartphone mak-
ers by shipments -- plan to launch their first foldable handsets
in 2019.
“A new generation of technology breakthroughs is opening the
door to a phase we have never seen before,” Samsung CEO Koh
Dong-jin said Nov. 8. Apple hasn’t announced any plans for a
foldable smartphone, but analysts say it could follow suit in the
coming years.
LAULY LI, Nikkei staff writer
A RETURN OF THE
MAHATHIR-ANWAR LEADERSHIP?
Anwar Ibrahim enters 2019 in much the same position he was
in some 20 years ago: in line to replace Mahathir Mohamad as
prime minister of Malaysia.
The once close relationship between the two men turned sour
in the late ‘90s, during Mahathir’s first stint as leader. The two
clashed over the Asian financial crisis, and Anwar was eventu-
ally jailed on sodomy charges that he says were fabricated for
political reasons.
As part of an election-winning deal in 2018, however,
Mahathir has promised to hand over power to his onetime pro-
tege “in a year or two.”
The focus now is on the two men’s relationship. One former
minister recently proposed that they give the “1997 recipe” an-
other try, with Anwar becoming Mahathir’s deputy ahead of the
leadership handover.
Anwar, however, seems to be playing his cards more carefully
this time.
“I never push for [a succession deadline],” Anwar told the
Nikkei Asian Review in an interview in October.
But he also issued a warning to any would-be challengers.
“I have forgiven those who jailed, insulted and accused
me,” Anwar told party members in November. “I am nice and
friendly with everyone, but don’t try to walk over me or I will
take you on.”
CK TAN, Nikkei staff writer
Nikkei Asian Review - Special excerpt from Dec. 31, 2018-Jan. 13, 2019 Print edition. Nikkei Inc. No reproduction without permission.
Expectations are muted that a
second North Korea-U.S. summit
will yield any breakthroughs
Reuters
on denuclearization.
TRUMP-KIM II?
Donald Trump and Kim Jong Un are set to meet again in 2019, but
it appears unlikely that this second summit will yield any more
progress than their historic first meeting in Singapore last June.
The problem is that Washington and Pyongyang remain at
odds over how to denuclearize the Korean Peninsula. The U.S.
has repeatedly said it will not loosen sanctions on North Korea
until the country takes concrete steps toward denuclearization.
North Korea counters that the U.S. should reward it for the steps
it has taken so far -- namely destroying a nuclear test site and a
missile engine test site.
“President Trump says that he has good relations with
Chairman Kim Jong Un, but it is nothing more than diplomatic
rhetoric. Washington’s trust in North Korea is at the bottom,”
said Choi Kang, vice president of the Asan Institute for Policy
Studies. “Pyongyang is also stepping up its criticism of the U.S.,
saying it will take denuclearization actions only when sanctions
are lifted.”
KIM JAEWON , Nikkei staff writer
The relationship between
Anwar Ibrahim, left, and Prime
Getty Images
Minister Mahathir Mohamad is
expected to have a major
impact on Malaysian politics.
 ON THE COVER
THREE MILESTONES,
ONE CELEBRATION
There will be three major mile-
stones for China in 2019, though
not all will be celebrated equally
-- or even acknowledged.
From Beijing’s point of view,
the most significant will be the 70th anniversary of the found-
ing of the People’s Republic of China on Oct. 1. The party will
be keen to play up China’s success in surpassing the former
Soviet Union’s 69 years of existence to become the longest-
lasting communist state.
It is a day that Beijing worried might not come. The causes
of the USSR’s collapse have been the subject of intense study
among Chinese officials and scholars, and many major policy
moves in recent years -- such as the assertion of party primacy
over state institutions and the ongoing crackdown on ethnic and
religious minorities -- can be seen in part as attempts to avoid
Moscow’s mistakes.
Two landmark student-led campaigns in China will also have
anniversaries in 2019. The 1919 May Fourth movement, a series
of protests reflecting youthful aspirations for national revival, fed
directly into the founding of the Chinese Communist Party two
years later. The 1989 Tiananmen movement, which saw students
demand political modernization, culminated in a bloody crack-
down that June.
Given the government’s highly effective campaign to ban all
references to the Tiananmen crackdown inside China, it is likely
that only one of these movements will be officially remembered.
ZACH COLEMAN, Nikkei Asian Review deputy editor
‘EL CLASICO’ AND
THE FUTURE OF INDONESIA
Indonesia’s presidential election in April will once again pit in-
cumbent Joko Widodo against former Gen. Prabowo Subianto -- a
rematch that has been dubbed “El Clasico” because both men are
so familiar to voters. But Widodo may also face another persistent
challenger in 2019: fickle currency markets.
A declining Indonesian rupiah tormented the Widodo govern-
ment for much of 2018. At one point, the currency had fallen as
much as 11% against the dollar, giving Widodo’s rivals an open-
ing. Even though inflation has stayed in check, vice presidential
candidate Sandiaga Uno has been warning audiences of house-
wives about the threat of rising prices.
The latest polls show Widodo leading at nearly 55% sup-
port, with Subianto at 30.6%. To make up ground, “the Prabowo
camp will probably look to combine economic nationalism
with populism leading up to the voting day,” said Jun Honna,
professor at Japan’s Ritsumeikan University and an expert in
Indonesian politics.
SHOTARO TANI, Nikkei staff writer
AN EARLY ELECTION
IN SINGAPORE?
Singapore must hold its next general elec-
tion by April 2021, but Prime Minister Lee
Hsien Loong has hinted that it could come
two years early.
Lee seems to be weighing his timing
carefully. The trade-reliant economy will likely see a slowdown
in the next 12 months, according to a survey of economists by the
Monetary Authority of Singapore. All 23 respondents cited intensi-
fying trade friction as a risk to growth. Public discontent over this,
as well as planned tax hikes and the income gap, could provide
ammunition for opposition parties.
The ruling People’s Action Party revamped its executive team
in late November. This included Finance Minister Heng Swee Keat
being named first assistant secretary-general, a move seen as a key
step for him to succeed Lee as prime minister.
If Lee -- the son of Singapore’s founding father Lee Kuan Yew --
can secure a smooth leadership transition, it would go a long way
toward convincing voters that the party is capable of navigating
an increasingly turbulent global environment.
KENTARO IWAMOTO, Nikkei staff writer
Prime Minister
Lee Hsien Loong is
all smiles at an ASEAN
event in Singapore
last September.
Reuters
#METOO COMES
TO INDIA
The #MeToo movement took off in
India in 2018, exposing predators in en-
tertainment, the media, academia, poli-
tics and business. The coming year may
see further progress cemented, includ-
ing tougher enforcement of workplace sexual harassment laws.
The movement -- which began in Hollywood in 2017 -- reached
India when Bollywood actress Tanushree Dutta revived a 2008
charge of inappropriate conduct against noted actor Nana Patekar.
In the months that followed, several prominent men accused of sex-
ual harassment have lost their jobs, including veteran journalists,
famous Bollywood directors and actors, and even one of Narendra
Modi’s ministers. In November, Flipkart co-founder Binny Bansal
resigned as CEO of the e-commerce company following allegations
of sexual assault by a former employee.
Businesses are already taking steps to counter harassment,
such as reviewing their internal policies and carrying out strin-
gent background checks on potential hires -- including their social
media histories.
“The hashtag has become a household name,” says Rituparna
Chatterjee, an independent journalist and one of the most promi-
nent #MeToo activists on Twitter. “The main challenge in 2019 will
be to keep the conversation alive.”
ROSEMARY MARANDI, Nikkei staff writer
JAPAN SCRUMS
DOWN FOR OLYMPIC
REHEARSAL
Tens of thousands of thirsty fans will
converge on Japan in September to cheer
on their teams in the first Rugby World
Cup ever to be held in Asia -- and the first
to take place outside of the sport’s traditional heartlands. Japan
and Russia will kick off the six-plus weeks of action in Tokyo,
with the final taking place on Nov. 2 at International Stadium
in Yokohama.
Billed as the world’s third-largest sporting event, the tourna-
ment -- 48 games played in 12 stadiums across Japan -- will also
serve as a dry run for the Tokyo Olympics the following summer.
New Zealand’s All Blacks are perennial favorites, while Japan will
hope to improve on their performance in 2015, when they pulled
off the biggest shock in the tournament’s history to beat South
Africa but failed to get out of the group stages.
Nikkei Asian Review - Special excerpt from Dec. 31, 2018-Jan. 13, 2019 Print edition. Nikkei Inc. No reproduction without permission.
Tickets are not cheap -- seats for the final start at 25,000 yen
(about $220) -- but demand is high. Organizers say that more than
4.5 million applications have been received, with more than 40%
coming from overseas. Fans will be hoping the host stadiums
do not run out of beer -- as Yokohama did when Japan played
Australia there in 2017.
ANDREW SHARP, Nikkei Asian Review deputy politics
and economy news editor
THE RISE OF
GENERATION Z
A big shift is coming. In 2019, Generation Z -- people born in or
after 2001 -- will overtake millennials as the most populous gen-
eration in the world, according to a data analysis by Bloomberg.
Gen Z will represent 32% of the total population, while millen-
nials -- those born between 1980 and 2000 -- will account for 31.5%.
The rise will come mainly from countries with rapid popula-
tion growth, like India, which will be home to more than 470 mil-
lion members of Gen Z -- 51% more than in China. Sub-Saharan
Africa will also see a Gen Z surge. Millennials will continue to be
the most dominant group in big economies like China, the U.S.,
Japan and Germany.
Growing up with smartphones and social media, Gen Z as a
whole is a tech-savvy cohort whose rapid rise -- along with the
increasingly digital nature of the economy -- is expected to trans-
form the employment landscape. And as the next consumer jug-
gernaut, Gen Z can look forward to being aggressively courted by
marketers.
JADA NAGUMO, Nikkei staff writer
Stepping out in Delhi:
Generation Z is on
track to outnumber
millennials globally.
Kosaku Mimura