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Business
Japan as Number Three... Four... Five
Saturday, July 31, 2010
 Tokyo -- China's currency regulator, Yi Gang, declared yesterday that his nation had now overtaken Japan as the world's second-largest economy.
More confirmation of this fact will be necessary, but few doubt that this event has either already occurred or else will happen quite soon.
In 2009, China reportedly surpassed the United States as the world's largest energy consumer, and Germany as the world's leading exporter.
For Japan, the glamour of being the world's Number Two economy - a distinction it has held since the late 1960s - is slipping away.
Worse yet, Japan is expected to slip even further down the rankings in coming decades as rivals in the developing world see their high-population economies begin to take off.
Almost inevitably, then, Japan is destined to settle into the position of a middle-power of one sort or another as the 21st century wears on.
The world-busting dreams of the 1980s Bubble era have already faded after two decades of domestic economic stagnation, and in time they will become little more than a historical footnote.
The deepest cause of Japan's relative decline is its demographic crisis.
With smaller families and a shrinking population, Japan's potential for rapid economic growth is undeniably limited.
Also, the level of prosperity that the nation has already attained seems to have cut into the sense of urgency that was once felt to work hard and sacrifice for the national weal.
Large-scale immigration could certainly help Japan's economy grow again, but in this case the island nation's inward-looking cultural proclivities work against the most economically-rational solution.
Few close observers believe that Japan is likely to throw open its gates to foreign workers in order to maintain global competitiveness.
Surveying the overall landscape, therefore, there is little reason to believe that Japan will be anything other than an advanced, but somewhat sleepy, corner of Asia that will still be a major player, but rarely a genuine global leader.
PanOrient News
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