United Airline
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Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 5:38 am

OK Japan is still one of the richest/most powerful countries in the world and it is the world's 2nd largest economy by GNP. But will it ever regain its peak in the 80s and 90s? I believe there is a chance since the basics are still very strong and the people are very smart/hardworking and they are very advanced.
 
LAXintl
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 6:02 am

Did China not just unseat Japan as the 2nd largest economy a few months ago?

To me it seems Japan will continue to lose its geoeconomic power. Demographically the country is shrinking with an aging population, and economically it has been basically stalled for a decade plus. Japan does not strike me as a nimble dynamic place anymore, with much of its economy tied up in large corporate bureaucracy, plus the world has so many other lower priced places with upcoming economies.
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United Airline
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 8:08 am

Quoting LAXintl (Reply 1):
Did China not just unseat Japan as the 2nd largest economy a few months ago?

GDP wise yes. Not sure about GNP. And I don't really trust China's figure that much

Quoting LAXintl (Reply 1):
To me it seems Japan will continue to lose its geoeconomic power. Demographically the country is shrinking with an aging population, and economically it has been basically stalled for a decade plus. Japan does not strike me as a nimble dynamic place anymore, with much of its economy tied up in large corporate bureaucracy, plus the world has so many other lower priced places with upcoming economies.

Any chance to save it and make it strong again? Well I am sure it is a top top super rich economic super power. Perhaps they should invite more foreigners to work there and start to become more international? Or should they ask their people to have more kids?
 
Doona
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 11:40 am

Quoting United Airline (Reply 2):
Perhaps they should invite more foreigners to work there and start to become more international? Or should they ask their people to have more kids?

They're gonna need to do something, they're facing a demographic disaster. Read somewhere that in 2050, there will be 20 million fewer people living in Japan (and this projection is a few years old by now, might have changed since). Relaxing some of their fairly tough immigration laws would be a good idea. A limited number of guest worker programs and eastern European prostitutes aren't enough.

One thing they told me when I was there five years ago was that the problem wasn't only that the population would be shrinking, but also that since Japanese economy is more reliant on domestic sales than before, they need to get the people to start spending money. Apparently, people have it, but are more inclined to save than spend, which is an admirable quality in today's society, but in this case not ideal for the Japanese economy.

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Venus6971
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 3:48 pm

With Japans population saving and not spending which is also happenning here in the US. That spells bad news for China since they under value their currency and we don't buy much of there stuff. If we are not spending as much here in the US on Chinese goods meens alot of Chinese unemployment which means social unrest if factory workers can't feed theri families.
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Aaron747
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 4:46 pm

Quoting United Airline (Reply 2):

Any chance to save it and make it strong again?

Not without serious political and structural changes, no. Even the corporate sector is proving too slow to react to the inevitable. Smart Japanese firms are embracing "Englishization" as a strategy to enable their workforces to respond to a growing trend of getting beyond the domestic sales mentality, and in some sectors JV and M&A activity involving foreign companies is certainly significant. The fact remains though that English skills among many corporate Japanese pale in comparison to similarly educated folks in neighboring countries, and this is a giant hurdle for corporate Japan to jump over before it has any hope of regaining competitiveness. The government is still absolutely clueless about ESL even after 40+ years of various programs to stimulate it.

Quoting United Airline (Reply 2):
Well I am sure it is a top top super rich economic super power.

Not sure what this even means other than the fact there are enough wealthy people in Japan to support a large showoff spending subset of the economy - but you could say the same of Russia at this point!

Quoting United Airline (Reply 2):
Perhaps they should invite more foreigners to work there and start to become more international?

Hah. If anything recent economic turmoil has turned many Japanese more inward, which is proving detrimental to further efforts to globalize. Young Japanese are less interested in traveling abroad and learning English according to recent polls. How the hell they think they can maintain the lifestyle their parents gave them with such attitudes is beyond me - a very rude awakening is coming.

Quoting United Airline (Reply 2):
Or should they ask their people to have more kids?

Impossible - a good chunk of the current younger generation were completely spoiled by their parents and are selfish to the point of seeing children as an impediment to future financial security. Nearly 40% of young women don't marry until their mid-30s now, if they are even interested in marrying at all. The government has thrown money at people to have kids, but it's having a pretty negligible effect thus far.
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United Airline
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 6:11 pm

Quoting Aaron747 (Reply 5):
Not sure what this even means other than the fact there are enough wealthy people in Japan to support a large showoff spending subset of the economy - but you could say the same of Russia at this point!

There are lots of very rich in Japan but not sure if they are willing to spend
 
ltbewr
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 7:59 pm

Japan has reached a certain level of maturity much like the USA has and past their peak. They may never fully recover from the real estate investment bubble that busted in the 1990's and the shifting of manufacturing to lower labor cost countries.

Their banking system is still a mess and may never recover many several US $ trillions equivalent in lost mortgage and business investments. Like the USA, they too are going to have to face major problems from a longer living population and not enough young people with good enough jobs to help pay for the growing needs of the elderly. Japan's major companies have suffered a number of setbacks, the situations as to Toyota and unsafe cars being a good example, Other countries products from their corporations, like South Korea's Hyundai and Samsung are equal or near equal the Japanese corporate products like Toyota and Sony and in cars and electronics respectively. Then you have the huge growth of the PRC and other Asian countries, limited natural resources, so need to import all needed, especially oil and minerals. Japan also suffers from a culture that makes it difficult to accept shame and move on, unlike the USA and some other countries.
 
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MillwallSean
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RE: Will Japan Regain Its Former Glory?

Sun Jan 23, 2011 9:31 pm

Well Japans finances are in absolute disarray. Increasing and huge debt, constantly living over their means. Thats not a sign of an economy on the up. To the contrary its a clear sign of an economy on the decline.

Japan needs to change, they cant depend on their old Japan Inc anymore and their production costs are as expensive as western companies. Japan never really managed to solve that problem, not being able to produce with lower costs.

Japan needs changes and at present I don't see where it can come from. the present strategy of expanding overseas that has been outed seems rather foolish. Japan cant really compete overseas anymore with a competitive advantage.
they don't have the lowest interest rates, they don't have lower production costs. in fact most of their unskilled production takes place in other Asian countries so...

No japan have to go through what the US and Northern Europe did in the late seventies now but they don't show any signs of wanting to make changes. Thats a bad sign indeed.
And there gamble on the dollar isnt exactly paying off right now when the US government wants to keep the dollar low. Both reduces exports and Japan is unlike China very dependant on exports t the US, and makes it hard to realise any profits r use the dollar reserve they have.

No they will struggle they are tied to the US economy in many ways though so a huge recovery in the US and for the dollar might help.

Quoting Venus6971 (Reply 4):
With Japans population saving and not spending which is also happenning here in the US. That spells bad news for China since they under value their currency and we don't buy much of there stuff. If we are not spending as much here in the US on Chinese goods meens alot of Chinese unemployment which means social unrest if factory workers can't feed theri families.

Hmm or perhaps its the opposite that's occurring right now.
China is worried about one thing at present and that is inflation. Inflation can lead to dissatisfaction among the Chinese. Unemployment is the least of the issues facing China at present. To the contrary they have seen a rapid increase in salaries(in the coastal regions (modest for a westerner) and that's why there is pressure on prices. Thats a real concern for the Chinese leaders and that's why we will not see the yuan changed much.
We shall see I would have kept my eye on the interest rate in China its been kept rather low for a long time i am not so sure they will continue allowing this when there is inflation pressure.
Chinas interest rates going up will send shock waves around the worlds economies if not done in a very measured way. Luckily the Chinese leadership have been very keen on slow movements and no drastic changes but if the inflation becomes a problem i expect them to focus on it.
The Chinese leadership usually looks domestic first, second and third. we often forget this.

Inflation can lead to unrest, not a topping of the government, most Chinese are very happy right now, but it can lead to demands for changes.
Thats also a concern for many other countries, with the US economy limping, one leg of the world economy is lost. Having Europe doing well cant save it so East Asia's economy growing has been vital. A slowdown in China will happen eventually but it would be good if it didn't happen right now. Most economies would struggle a lot of that happened.

And China isnt especially dependent on its exports to the US, just look at how little of their total production that is destined for the US.
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Derico
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RE: Will Japan Regain Its Former Glory?

Mon Jan 24, 2011 7:04 am

What is this obsession herre with bubbles?

Japan in the 1980s was a bubble. The USA in the late 1990s and 2000s was a bubble. Dubai was a bubble (and I said so when everyone here laughed me out for it). The Euro integration was a bubble. Ireland, Spain were bubbles. China is on it's way to being a bubble but it's population is so massive that is a long way away.

There is nothing glorious about financial bubbles.

Is Japan as dynamic as it could be? No. Is it a third rate power? No.

Same with Germany, everyone talking a few years ago about how Germany was so sickly after the miracle 60s and 70s, same comments about Italy and it's ''Italian miracle'', and France. Same with the UK...

What people here remember fondly as the great times were nothing but froth and overspeculation. With the passage of time people remember only the dynamism of the times, the companies starting up all over, the development, the expansion, the real state, the new malls, highways, etc... but it's all always overdone and eventually you pay for it, like all those countries above did.
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Superfly
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RE: Will Japan Regain Its Former Glory?

Mon Jan 24, 2011 7:24 am

Quoting Aaron747 (Reply 5):
Not without serious political and structural changes, no. Even the corporate sector is proving too slow to react to the inevitable. Smart Japanese firms are embracing "Englishization" as a strategy to enable their workforces to respond to a growing trend of getting beyond the domestic sales mentality, and in some sectors JV and M&A activity involving foreign companies is certainly significant. The fact remains though that English skills among many corporate Japanese pale in comparison to similarly educated folks in neighboring countries, and this is a giant hurdle for corporate Japan to jump over before it has any hope of regaining competitiveness. The government is still absolutely clueless about ESL even after 40+ years of various programs to stimulate it.


I've heard that Japan is having a hard time getting English teachers from the West mainly because of the high cost of living in Japan. The highest paid English teachers are in Japan, yet they still can't attract them because rent, food, beer, clothes, transportation all cost too much money.

Quoting Derico (Reply 9):
Japan in the 1980s was a bubble. The USA in the late 1990s and 2000s was a bubble.


The difference is that the Japan bubble in the 1980s actually produced something - cars, motorcycles, electronics and robots.
The dotcom bubble of the 1990s produced absolutely nothing but press releases and a sock puppet.
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Derico
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RE: Will Japan Regain Its Former Glory?

Mon Jan 24, 2011 4:13 pm

Quoting Superfly (Reply 10):

The difference is that the Japan bubble in the 1980s actually produced something - cars, motorcycles, electronics and robots.
The dotcom bubble of the 1990s produced absolutely nothing but press releases and a sock puppet.

Well, both were bubbles. Bubbles are based on something (railroads, industry, commodities, real estate). In the end their result is the same. It's like the difference between a surface tumor and one deep in your track.
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LAXintl
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RE: Will Japan Regain Its Former Glory?

Tue Jan 25, 2011 2:35 am

I'm in Asia this week, and the mornings paper had a story of how the Japanese government was proposing to reduce corporate tax-rates by 5% to aid its companies doing business overseas. It mentioned that Korea and China were big threats to the Japanese business and lower taxes would aid them competitively.
Story also mentioned that by 2050, the population of Japan is estimated to drop to 90 million from the current 127 million. Of those 90mil, 40% will be 65, so its critical Japan look abroad for markets as home consumption in no way can support things alone.

Not a pretty situation.
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allrite
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RE: Will Japan Regain Its Former Glory?

Tue Jan 25, 2011 4:19 am

Traditional economic practice seems to assume unconstrained population and economic growth. Without some amazing science fictional advances (cheap and easy space travel and colonisation etc etc) this would appear to be ultimately unsustainable due to the constraints of the planet.

Birthrates seem to drop substantially as nations become more developed and often the populations of developed nations only really grow through immigration from the huge pool of undeveloped countries.

Japan happens to be at the leading edge of this situation and thus presents a challenge to the standard economic and social models. I don't know what the solution is, but I think it is a useful and important challenge to see if we can come up with alternatives.

Even populous China faces a future where the old/young demographics are skewed towards the former. I recall some statistic for Japan which had four "young" people supporting one "old" person today, changing to half that in the near future. Imagine that your work pays taxes to support not only yourself but half another person who isn't working (retired). Then one person who isn't working, then two people who aren't working... And then they have more voting rights then you... no skateboards on my street! Get off the grass! Work harder you young bum!

It will be very difficult for Japan to open up for immigration. Their society is not at all inclusive. Let lots of others in and they will become disenfranchised, which leads to all sorts of social problems, especially as the new culture pushes against the old, often uncodified, rules and behaviors.

But their culture surely cannot remain static in this world of global influences. I do hope that they can continue to support the odd eccentric and keep longer term thinking rather than the short term profiteering view that seems to influence so many western corporations today.

As a frequent visitor (but only that, so I usually get enjoy the good bits through rose-tinted glasses without the downsides) to Japan I know that I will be sad to see many of the changes to Japan. Japanese society would be impossibly stifling for me to live in but I love the elegant and unique quality of their creations and foods, rather than the constant assault of same-old same-old goods that overwhelm us elsewhere, globalised to the lowest common denominator until you could be anywhere. It's also nice to go somewhere where there is pride in their country and creations rather than wanton theft and damage (okay, there *is* graffiti in Japan, but nowhere near as much as in Australia). I love catching slow trains to the old mountain towns that must be dying and would be long without a service here in Australia.
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