It has been suggested that instead of going downhill, the economy of Japan is surging. However, one should note that Japan has spent more than a decade or an even longer period of time to walk out of its predicament. Japan has faced a long list of issues when it was trapped in its plight. Indeed, now Japan is heading to trends that China should beware of.
The issue of how to understand the relations between global and the Chinese economy have been repeatedly raised under the scenario of the new global economic situation. New discussions often lead to hot debates, and the presence of a new global economy would offer some form of stimulating factor for people to change their perspectives and take a fresh look at old problems.
It appears that it will be inevitable for the Chinese economic trend to duplicate what has been experienced by the Japanese economy; the only difference is the question of magnitude, and such situation shows how much the Chinese economy inclines towards Japan. Here, we list out the similarities and differences of the "Japanese inclination" in Chinese economy:
1. The decline in economic growth rate. The economic growth rate of China has been kept at 12% for the past few years but it has since declined to the current approximate 6%. The same is true for the economy of Japan. In the high-speed development era of 1960s to 1980s, Japan's growth rate of GDP was 12 %, yet its economic growth rate has now descended to 2%. The difference between China and Japan in terms of rate of economic growth is that China's rate is sliding down extremely fast and it lacks stable control.
2. The highest aging population in the world. The aging crisis in Japan is a well-known fact, while China has intentionally pretended to be ignorant about its own aging population for a long time. Both China and Japan have the highest number of aging populations in the world. However, the aging crisis is far riskier in China than Japan. This is especially so when China has a huge number of dissatisfied youths.
3. Repercussions of property development. Both China and Japan once placed major focus on property development. Both countries have subsequently suffered due to property development. Property in China is still under strict control while property prices in Japan drop after the property bubbles burst there. Japan is unable to sell its remaining properties in over 100 years. The economy of both countries spiked due to property and suffered a major setback due to sluggish growth in property. As it is, China continues to be trapped. It is either to carry on with property development or wait for a dead end. Therefore, many in China still only maintain a superficial understanding of property.
4. Both China and Japan belong to production type of society with emphasis on investment and production. The domestic manufacturing industry of both countries enjoyed its period of prosperity in the past both had been known as "world factory". The manufacturing sector in Japan underwent a stable transformation period, where the industry expanded from Japan to overseas. Due to major intervention invoked by policy, China did not acknowledge this right from the beginning by holding the perception that industries are going through upgrade and restructuring. Later, this has become a direct relocation of capital out of China, while those who are unable to do so are left behind. Such policy is largely passive in face of the changes that are taking place in the industries. Nevertheless, the outcome for both China and Japan is similar as both countries have lose their status as the ` world factory.'
5. The formation of urban environments. High-density urban areas are found in both China and Japan. For Japan, the formation of high-density industrial zone is due to geographical requirements, investment and the driving force from the industry, while in the case of China, the country is attempting to promote the conversion of high-density urban areas into high-density industrial zones through policies.
6. Both China and Japan are Eastern societies where the government is highly influential. The current Ministry of Economy, Trade and Industry and its predecessor, the Ministry of Trade and Industry used to be regarded as the main entity in charge of the economy and companies in Japan. It makes decisions on financing, allowance and subsidies which leads to high growth in economy, though the current situation is different from the past. The same holds true for China. Due to the major intervention by the government in a large number of projects, several economic sectors are basically playing the role akin to national board of directors.
7. Conglomerates enjoy prominence in terms of social status. Basically, those in charge of conglomerates in Japan and China are usually also prominent figures in the country. As such, they are always assumed to be right in their statements.
8. Materialism. Both the Chinese and Japanese societies are wealth-oriented and materialism has become the main pursuit of many. The definition of success has also become closely linked to money. The fundamentals of both societies are quite similar too.
9. Large number of dissatisfied younger demographics. The younger generation in China and Japan poses a challenge for both countries. The concept of having a smaller family due to low fertility rates has its origin in Japan. Various issues sparked off by the establishment of subcultures have found their place in both China and Japan. In fact, the fashion and latest trends of both countries are similar too, it is just a matter of which country comes first.
10. Both countries share the same position in world trade. Japan was the first country sanctioned by the United States, and now China is facing a similar issue. As major countries which exports products and are relative champions in manufacturing, both countries have faced attacks by consumer groups of various countries. It has been the same for both the past and the present. This is especially true for China as it lacks experience to counter the situation, and the scenario it is faced with is even riskier.
From the perspective of macro and micro aspects, from economy to society, from a development era to period of future trends, the path taken by both Japan and China is pretty similar. For China, the experience of the Japanese comes in most handy. In fact, it is also a form of restraint imposed due to the requirements of achieving an objective environment. China is keen to find its own path but this is something that is practically impossible. The fundamentals of the economy has made it mandatory for China to face similar issues and problems encountered by Japan in its development.
Final analysis conclusion:
For a long time, China is keen to learn from others in developing its economy and is looking for a role model. China has learned from South Korea and even from Singapore. In hindsight, though, Japan is the only country that China can look up to which offers practical and effective solutions. practical and useful target must be identified in order for China to take experience and opportunities.
