Economy | Discuss Japan-Japan Foreign Policy Forum - Part 4

Archives : Economy

No.44
No.44, Economy  Mar. 8, 2018

Declining Birthrate and Aging Population in Asia― Educational Support to Low-Income Households Improves Quality of Labor Force and Productivity

< Keypoints > Birthrates and average life expectancy in Asia now on a par with developed countries Estimates suggest that consumption tax needs to rise by 8% or more in Thailand Policies providing subsidy on child-rearing such as child allowances is not recommended. Policies providing subsidy on children’s educational cost, which can sustain the long-term development, should be the priority in developing countries. Population aging has become a global concern. With a rapidly increasing proportion of old people in the population, governments are forced to increase expenditure on social security, thus causing pressure on public finances. The shrinking of working-age population indicates less labor force and fewer taxpayers to share the fiscal burden.  Add to that the low birthrate,  which has been lower than the replacement rate required to maintain the size of the population as it is now in developed countries, further increases ... ... [Read more]

No.43
No.43, Economy  Feb. 28, 2018

20th Anniversary: Countries Affected by the Asian Financial Crisis Are Confronted with Common Issues Accompanied by Growth ― Japan Must Be a Successful Example of Tackling the Income Gap and Aging Population

Key Points Criticism of East Asia’s unsuccessful development model misses the point. Economic growth requires robust initiatives in both the private and public sectors. Leapfrogging may be possible for latecomer countries in the field of information technology. The Asian financial crisis started in July 1997, wreaking havoc on economies in the region throughout the following year. It had a devastating impact on countries like Thailand, South Korea and Indonesia, which had previously enjoyed strong economic growth, causing significant currency devaluation and a collapse in domestic demand. The debacle could be characterized as a new type of crisis caused by the massive short-term capital flows into countries where international capital transactions had become liberalized. What was the impact of the financial turmoil in the Asian region which has had a long history of economic development? Following the crisis, significant social changes occurred in the most ... ... [Read more]

No.43
No.43, Economy  Feb. 22, 2018

Is the Bank of Japan Technically Insolvent? Dangers Involved in Long-Term Deterioration of BoJ Financial Position

Increasing interest is focusing on the Bank of Japan’s exit strategy, or its strategy for ending its ongoing ultra-easy monetary policy. On April 19 [2017], the Liberal Democratic Party Administrative Reform Promotion Headquarters ([formerly] chaired by House of Councilors member Kono Taro) advised the government to study the risks associated with the Bank of Japan’s exit strategy. World central banks in charge of monetary policy are steadily moving to normalize monetary policy. On June 14 [2017], the Board of Governors of the Federal Reserve System in the United States unveiled a new exit strategy. The Fed will gradually reduce reinvestment of bond principal payments on securities holdings acquired in the course of its conduct of monetary policy with a view to reducing its total assets. It will begin reductions within the year if all goes well. Following its Governing Council meeting of June 8 ... ... [Read more]

No.43
No.43, Economy  Feb. 22, 2018

ASEAN’s Problem of Declining Birthrates and Population Aging ― How to Cope with Widening Domestic Gaps

  ASEAN countries are facing more rapidly declining birthrates and population aging than Japan. At the same time, the widening income gaps are leading to increased social unease, and this situation is aggravated by the digital society. As regional issues shift from the economy to politics and society, how should Japan relate to ASEAN countries?   Depopulation, declining birthrates and population aging are common issues not only for Japan, but for the entire Asian region. The global population will continue to increase this century, whereas Asia, including the Association of Southeast Asian Nations (ASEAN), will see populations decrease by the middle of this century. That is, Asia will become a depopulation region half a century earlier than the rest of the world. This is because declining birthrates have been progressing throughout Asia. The total fertility rate (equal to the number of children that women ... ... [Read more]

No.43
No.43, Economy  Feb. 8, 2018

Future of the Automotive Industry: Preparing for structural changes in the supply chain networks

Although a gasoline-fueled car is usually said to contain approximately 30,000 parts and components, a closer look reveals that depending on the way of counting, it can be as large as 100,000 with some 10,000 parts used to make just an engine. In the case of an electric vehicle (EV), which runs on a battery-powered motor instead of a fuel-powered engine, there is no need for fuel system parts such as a fuel tank, ignition system components such as a spark plug, exhaustion and emission control system parts such as a muffler, air intake system parts such as a throttle, lubrication system parts such as a fuel pump, cooling system components such as a radiator, and transmission system components such as an automatic transmission (AT) (according to the EVsmart Blog). As such, the number of parts and components used to make an EV is ... ... [Read more]

No.43
No.43, Economy  Feb. 8, 2018

Future of the Automotive Industry Strategies with a View to the Future of EVs and Beyond: Exploring the Application of Technologies to Other Fields

Key Points The elimination of either FCV or EV  by market competition is unavoidable Competition will intensify as obstacles to market participation are lowered by the widespread popularization of EV Current revenues cannot be maintained with a changeover to EV Both the British and French governments have announced policies to ban the sale of conventional combustion engine-powered vehicles by the year 2040. This, together with the toughening of environmental regulations by other countries such as China and the United States, indicates that the global movement shifting away from engine-powered cars is accelerating. Amidst all of this, the greatest issue for Japan is that the road that lies ahead, after this shift away from engine-powered cars remains unclear. Does it lead to electric vehicles (EV), or to fuel cell vehicles (FCV)? The major reason for this uncertainty is that manufacturers have divided into two camps. ... ... [Read more]

No.42
No.42, Economy  Dec. 20, 2017

EV Revolution to Bring Drastic Change to Auto Industry

Toyota’s EV concept car (TOYOTA Concept-i) Executive Vice President Didier Leroy of Toyota Motor said, “We have no doubt that EVs will be one of the key solutions in the near future. That is why we have created a new company with Mazda and Denso to develop EV architecture with a view to mass production” at the 2017 Tokyo Motor Show. PHOTO: COURTESY OF TOYOTA MOTOR   Electric vehicles (EVs) without engines appear to be gaining momentum as a driving force behind a drastic turning point in the 100-year history of internal combustion engine vehicles, and are beginning to cause a major paradigm shift in business for auto manufacturers around the world. This new trend in automobile technology has been given further momentum by significant developments in government policies, social values and the technological environment that were seen during the course of 2017. In ... ... [Read more]

No.40
No.40, Economy  May. 8, 2017

Interviewing an Expert on International Trade Efforts to Implement the TPP Fail — Exercise Leadership to maintain a high level of trade negotiations

The TPP is an agreement that was reached to create a huge value chain in the Asia-Pacific region. With its implementation becoming uncertain, what role is expected of Japan in trade negotiations? Editorial department of Wedge: Why does it make sense for Japan to ratify the Trans-Pacific Partnership (TPP) as soon as possible, while President-elect Trump says that he will announce the United States’ withdrawal from the TPP on the day of his inauguration? Urata Shujiro: The TPP will be implemented if either the twelve nations complete the domestic procedures within two years after signing in February 2016, or if more than six nations accounting for 85% of the total GDP of the twelve nations complete them, even after two years have passed. I do not expect that Trump will change his campaign promises before the mid-term election. That said, even if the United ... ... [Read more]

No.40
No.40, Economy  May. 3, 2017

Views on the Chinese economy: Step-by-step Action on Capital Outflows ― Avoiding a hasty transition to a floating system

< Key Points > Reform state-owned enterprises to promote private sector development Strengthen the financial system to prevent international capital outflows Liberalize trade and investment to avoid friction with the United States China’s economic growth rate for 2016 was 6.7%, a persistent slowdown from the peak of 2010 (10.6%) in the post-Lehman shock period. The economy has clearly shifted from high growth to medium growth. This is due to both long-term and structural factors affecting the Chinese economy and medium-term factors triggered by domestic and overseas economic changes in the wake of the 2008 global economic crisis. Long-term and structural factors relate to China’s trend towards a lower potential growth rate. Specific factors include (1) a peak-out in the country’s working-age population (aged 15–64), (2) reduced labor movement from rural to urban areas (passing of Lewis’ turning point), (3) lower growth in public infrastructure ... ... [Read more]

No.40
No.40, Economy  May. 2, 2017

Is U.S.-Japan Trade Friction Avoidable? Stay Resilient with Fair Arguments against Unfair Criticism ―Japan must not accept import obligations

< Key Points > Free trade and investment promotion should be addressed through economic dialogues Japan must accelerate structural reforms in agriculture, which is heavily protected by high tariffs Japan is compelled to accept the invitation to the Free Trade Agreement (FTA) negotiations with the United States It has been a little over one month since the inauguration of Donald Trump as the President of the United States. His political style remains unpredictable without a clear logical approach, leaving the entire world guessing with serious uncertainties. The US government is faced with quite a few lingering risk factors, particularly with respect to its international trade policies. I am deeply concerned about the Trump administration’s attitude, which looks as though it is prepared to disregard the principles of non-discrimination or the international tariff agreements that have been embraced by the World Trade Organization (WTO) over ... ... [Read more]