Japan
China is about to become the world’s second-largest economy, supplanting Japan, the New York Times reports.
This “will bring an end to a global economic order that has prevailed for 40 years, with ramifications across arenas from trade and diplomacy to, potentially, military power,” the Times notes.
China is already the second-largest economy measured by purchasing power, of course. But as early as next year it could achieve this status at exchange rates as well, a crucial turning point, as it is a better measure of global economic clout.
China is projected to overtake the US in total purchasing power before 2020, the Times says. Then comes the big moment:
Based on current growth and currency trends, Mr. Kwan forecasts that the Chinese economy could surpass that of the United States in 2039. And that date could move up to 2026 if China lets its currency appreciate by a mere 2 percent a year.
Meanwhile, Japan is not faring as well:
China’s rise could accelerate Japan’s economic decline as it captures Japanese export markets, and as Japan’s crushing national debt increases and its aging population grows less and less productive — producing a downward spiral. “It’s beyond my imagination how far Japan will fall in the world economy in 10, 20 years,” said Hideo Kumano, economist at the Dai-Ichi Life Research Institute.
Japan is already fraying, by some standards:
Many here ask whether Japan is destined to be the next Switzerland: rich and comfortable, but of little global import, largely ignored by the rest of the world… The per-capita gross domestic product of Japan … stalled at $34,300 in 2007; it is now a quarter below American levels and 19th in the world. Both income inequality and poverty are on the rise.
No Japanese companies are now in the top 10 firms by market capitalization, and Japan’s largest, Toyota, is 22nd. Only 5 other Japanese companies are in the top 100.
Japan’s self-regard has taken a hit; a new poll finds Japanese to be the least proud of their country among 33 nations surveyed.
(Japanese self-image: tip from @Urbanverse)
(Image of Shanghai courtesy alexkost, Flickr)
A researcher has found that fertility may go up again after countries reach a high level of development.
The pattern has long been that fertility is declining pretty much everywhere, and in the developed world is has dropped below replacement levels — about 2.1 babies per woman — in many countries.
Lower fertility has many societal, economic, and environmental benefits, but rapid fertility drops drive rapid “aging” of a society, with rising ratios of seniors to workers.
According to Rob Stein in the Washington Post, Hans-Peter Kohler found that countries which reach a high quality of life often increase their birthrates. The threshold is a human development index (HDI) of 0.9, which reflects high levels of income, longevity, and education.
Kohler speculates that the key may be social structures and employment situations that enable women both to work and have children. This would explain, he notes, why Japan has not achieved this fertility rebound, given its high level of gender inequality.
Immigration could clearly play a factor, as most developed countries (but not Japan) have greatly increased immigration in recent decades, but Kohler says it cannot account for the full effect — and this would not explain why Canada has not had such a rebound.
Sociologist S. Philip Morgan casts some doubt on the development-driven theory, telling the Post that other factors could be at work, such as ideological changes. (These two ideas are not necessarily contradictory; development is an important driver of ideological change, according to theorists such as Ronald Inglehart.)
(Image courtesy yananine, Flickr)
The Washington Post reports on how little will there is to deal with the causes of Japan’s projected demographic collapse.
The article notes that the country may lose 70% of its workforce by 2050, at the same time it is faced with supporting a massive population of seniors.
The oncoming problems could be alleviated with immigration and a higher birth rate, but these are impeded by social malfunction:
- Japan’s strong sense of ethnic unity makes immigration a non-starter: “the issue is too politically toxic for extensive public discussion.”
- The low birth rate has a lot to do with how women are treated in the workforce and at home, but Japan seems to lack the will to do much to change this. The article reports renewed calls for “enlightened government intervention” on the issue, but those have gone and gone before.
Japan does not seem to face a disastrous implosion, like some socially malfunctioning societies of the past — see the Greenland Norse in Diamond’s Collapse — but it may choose diminishing strength, relevance, and perhaps prosperity over change.
See Futureatlas for more on this issue.
Image: usable with link and credit to Futureatlas.com
In a new poll, most Japanese feel that North Korea and China are potential military threats to their country.
When asked whether these countries constituted threats, Japanese responded:
- 80% — North Korea
- 55% — China
- 39% — Russia
These results suggest that:
- Japanese may be inclined to keep the US close if it is viewed as a responsible protector
- the North Korean nuclear program will continue to cause great alarm in Japan, and in certain circumstances could overcome the Japanese aversion to nuclear weapons
Columnist Fred Hiatt examines Japan’s demographic challenge — “sustained and inexorable population decline” — in the Washington Post.
As a result of this decline, the country’s population is projected to drop from 128 million now to 100 million in 2050. Crucially, the average age will be high and the elderly population large, with some 36 million people 65 and over.
A central issue is that women would like to have more children, but delay or avoid marriage and childbearing because Japanese society in general, and husbands in particular, leave women overburdened and without options.
In essence, Japan has given women too little equality, but enough freedom that they can back away from the system that they feel abuses them.
Hiatt writes:
In fact, robots and other ways to improve productivity are one of four possible routes to economic growth despite an aging population. The others would be making better use of women; immigration, which has increased slightly but remains unpopular in this ethnically cohesive country; and keeping the elderly working longer.
One result will be a continued flow of innovative ideas in robotics from the country.
Hiatt alludes to a fundamental question that Japan will pose: what is the meaning and purpose of economic growth? “What is happiness? Can we be happy without economic growth?” asks a Japanese demographer.
A lot of evidence suggests that growth may not be essential to well-being; income ceases to contribute substantially to happiness when development brings levels to about $10-15,000 thousand dollars a year in per capita income. Japan may test whether a society can remain satisfied without an upward trajectory.
More on the article at Future Uncertain.
Conservative commentator David Frum argues that the apparent nuclear weapon test attempt by North Korea demands that the US seek three goals:
- “enhance the security of those American allies most directly threatened by North Korean nuclear weapons: Japan and South Korea”
- “exact a price from North Korea for its nuclear program severe enough to frighten Iran and any other rogue regimes considering following the North Korean path”
- “punish China”
To achieve this, he advocates four policy initiatives:
- Speed up the development of missile defense systems.
- “End humanitarian aid to North Korea and pressure South Korea to do the same.”
- “Invite Japan, South Korea, Australia, New Zealand and Singapore to join NATO — and even invite Taiwan to send observers to NATO meetings.”
- “Encourage Japan to renounce the Nuclear Nonproliferation Treaty and create its own nuclear deterrent.”
Analysis
Both the goals and the policies are internally contradictory. Policies 1, 3, and 4 seem more designed to alienate China than to punish North Korea. Given that China is in unprecedented agreement with other powers on North Korea, this is likely more based on hostility toward China than the issue at hand.
If China is alienated, goal 2 — punishing North Korea — becomes much more difficult, and policy 2 loses much of its meaning.
The North Korean problem is likely to find resolution, one way or another, but a hostile China might define the 21st century.
Missile defense systems might have some utility, but also threaten China’s deterrent — which Frum sees as a benefit — and could spark an arms race and a less stable US-Chinese relationship.
If a primary goal is enhancing South Korean security, it is unclear why the US should have to pressure the South Koreans to follow its policies. As the most directly affected state, South Korea should have considerable say in what happens next.
An Asian expansion of NATO is interesting, but might be more likely to dilute the meaning the alliance than strengthen Asian security. European allies would be foolish to interpose themselves between China and Taiwan when the US was provoking China, as it would be with these policies.
As for encouraging Japan going nuclear, this might only add to instability, given general East Asian distrust of the Japanese.
Writing in the WP, Steve Clemons of the New America Foundation warns of a “campaign of right-wing intimidation of public figures that is squelching free speech and threatening to roll back civil society.”
Emboldened by the recent rise in nationalism, an increasingly militant group of extreme right-wing activists who yearn for a return to 1930s-style militarism, emperor-worship and “thought control” have begun to move into more mainstream circles — and to attack those who don’t see things their way.
This raises two sets of questions:
- Is something about this new, given that Japan has had a sometimes-violent rightist fringe for half a century? Is the more-nationalist climate such that now it means something different?
- Can Japan really swing in the direction the far right desires? Is it a liberal democratic nation well-integrated into the international system, or is this is a veneer that could fall away in the event of a true crisis?
The Economist Intelligence Unit released its 2006 e-readiness rankings yesterday. The index is a measure of a country’s readiness for e-business, judged by Internet access, broadband penetration, innovation, information security, and other factors. More telling than the ranking is the country’s distance from a score of 10.
The ratings are a good indicator of general abilities in IT, and thus an important component of present and future competitiveness.
The top countries
Rank. Country — score out of 10 (2005 rank)
1. Denmark — 9.00 (1)
2. US — 8.88 (2)
3. Switzerland — 8.81 (4)
4. Sweden — 8.74 (3)
5. UK — 8.64 (5)
6. Netherlands — 8.60 (8)
7. Finland — 8.55 (6)
8. Australia — 8.50 (10)
9. Canada — 8.37 (12)
10. Hong Kong — 8.36 (6)
11. Norway — 8.35 (9)
12. Germany — 8.34 (12)
13. Singapore — 8.24 (11)
14. New Zealand — 8.19 (16)
14. Austria — 8.19 (14)
16. Ireland — 8.09 (15)
17. Belgium — 7.99 (17)
18. South Korea — 7.90 (18)
19. France — 7.86 (19)
Other countries of interest
Rank. Country — score out of 10 (2005 rank)
21. Japan — 7.77 (21)
22. Israel — 7.59 (20)
23. Taiwan — 7.51 (22)
25. Italy — 7.14 (24)
30. United Arab Emirates — 6.32 (X)
31. Chile — 6.19 (31)
35. South Africa — 5.74 (32)
37. Malaysia — 5.60 (35)
39. Mexico — 5.30 (36)
41. Brazil — 5.29 (38)
42. Argentina — 5.27 (39)
45. Turkey — 4.77 (43)
46. Saudi Arabia — 4.67 (46)
48. Venezuela — 4.47 (45)
49. Romania — 4.44 (47)
51. Colombia — 4.41 (48)
52. Russia — 4.30 (52)
53. India — 4.25 (49)
55. Egypt — 4.14 (53)
56. Philippines — 4.04 (51)
57. China — 4.02 (54)
60. Nigeria — 3.69 (58)
61. Ukraine — 3.62 (57)
62. Indonesia — 3.39 (60)
64. Kazakhstan — 3.22 (62)
65. Iran — 3.15 (59)
67. Pakistan — 3.03 (64)
Regional standouts in the developing world are Chile, South Africa, and the United Arab Emirates. The low scores of some countries, notably India, China, and Russia, disguise significant specialized capabilities in infotech.
If the countries did come to blows over the island dispute, Asia / Korea Tide argues out that South Korea is poorly equipped to face the Japanese navy and would face defeat.
(Via Coming Anarchy)
Possible combatants: Japan, South Korea
Causes: Disputes over minor islands and their accompanying sea zones, historical animosity due to Japanese colonization of Korea
Probability in next decade: low; though South Korea has already threatened force, the common interests of the two most advanced Asian democracies should keep them in check