May 1, 2010｜Northeast Asia in General
Director and General Manager, Research Department, Hokuriku AJEC (Around Japan sea Economic exchange Conference)
The international situation in East Asia is changing greatly through China’s rise. This year it is seen as a virtual certainty that China will overtake Japan in terms of GDP, and the thing to be in awe of is the speed of that economic expansion. During the thirty-year period from 1979, when the Reform and Open-Door Policy commenced, to 2008, China continued an unprecedented long-term growth of an annual average GDP growth rate of 9.8%; even in 2009, when the entire world fell into a simultaneous economic slowdown, it achieved growth of 8.7%, and in this year of 2010 is set for double-digit growth. Voices can be heard from all sides saying that up to this point it was expected and that such high growth could not continue forever, yet even in the expectations of researchers with the starkest outlook—seeing high growth continuing to around 2015–2016—it is nothing other than humbling.
What such high growth brings is yearly new demand, and its scale increases in size as the scale of the economy enlarges; this colossal new demand itself rivets the attention—of every nation involved—onto China.
Japan is not a superpower like the United States, but to date it has been professed, by both itself and others, to have the second largest GDP in the world and to be Asia’s number one. With China’s rapid rise, however, the reality that has been emerging before one’s eyes is of Japan as a middle power, existing between the superpower of the United States and the colossus of China, which appears to be challenging the former. In this sense, it appears there is no great difference between Japan and the ROK. It is hard to contemplate that Japan, which doesn’t possess military clout, will be able to weigh into the formation of a world order where major powers face off against one another. As to what Japan can do, it has no other method than to develop matters subjectively and actively via economic diplomacy, foster a cooperative Asian international environment, and continue discovering its own space therein.
Japan has entered a period of declining population; in addition to there being the trend of the shrinking of the domestic pie, recently there is a situation where expansion is also not seen for the export market in the future, via the new installation and expansion of facilities of oil-producing nations and emerging and developing nations, centered on materials industries such as steel, cement and petrochemicals; and Japan is under pressure for a large-scale scrapping of installation capacity of some 20–30%. As the limits of domestic demand become apparent, however, involvement in overseas demand in industrial sectors with export potential is an absolute necessity. Removing the capture of overseas markets from the choices for Japan to take is simply not possible. It is appropriate that the Japanese government also, reaching this point, has clarified its position on involvement in Asian infrastructure upgrading projects combining the public and private sectors and centered on the Ministry of Economy, Trade and Industry. Against the annual dozen-billion-odd US dollars for Japan in its scale of plant export, by way of an example, the scale for the ROK has already reached US$40–50 billion, around four times that of Japan. The response of the Japanese government could instead be said to be way behind.
The matter of having to aim at involvement in overseas demand can also be said for many industrial sectors and geographical areas and regions, and in the Hokuriku region too involvement in overseas demand is an indispensible response for the future regional economy. Consequently, what I would like to say loud and clear is that I would like them to become more perceptive to overseas information, and in particular, I would like media organizations to look more toward the outside and continually bathe the people of the region in a news shower of overseas information. Regarding the response to changes in the international situation, in their manner of seeing it in a favorable light the ROK and others are more perceptive and on-the-ball. While having no intention of stirring up a sense of crisis, I think that sharpening their international sensibility is absolutely necessary for Japan and Japanese people, who in the future cannot come the superpower.