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Japan's economy contracts on shrinking consumption, exports

47 Comments
By YURI KAGEYAMA

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47 Comments
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Everyone to the money printer, quickly !!

0 ( +11 / -11 )

What's this obsession with growth?

Change the paradigm, people!

4 ( +15 / -11 )

People here praised Japan for not locking down and saving the economy, yet still she performs worse than any other country. Humility can definitely go along way over here.

-2 ( +13 / -15 )

It’s staggering just how many spineless fools there are in the government and the general public , that anyone imagined it was a good idea to stop anything because of some poxy virus, rather than just continue as normal and accepting that death and viruses is part of existence. Humans have become so precious

-13 ( +7 / -20 )

A car doesn’t need chips. It needs a motor, tires and gasoline, but no chips. Feel free to give me one without chips. That’s good for me, as I cannot afford to buy one, you have more free space to put unsold cars into and I have anyway following costs and service orders which is then good and contributing for the economy. Win-win… But you prefer lose-lose, right? So be it. lol

-5 ( +7 / -12 )

Shrinking consumption?? Well, time to increase taxes, I guess, by Japanese logic.

9 ( +15 / -6 )

MickeliciousToday  11:05 am JST

What's this obsession with growth? 

Change the paradigm, people!

It’s the same as obsession with inflation, “it’s good for the economy”. Producing 100 units of goods at $100 becomes producing 100 units at $102 and suddenly it’s called “economy is growing”. Japan’s “lost dedaces” were the best times for people - prices going down instead of up.

2 ( +8 / -6 )

Japan has never had a coronavirus lockdown. But it has periodically asked businesses to close or limit hours under “states of emergency.” It has also encouraged social distancing. That has crimped consumption and private investment. Private consumption sank 1.1% in July-September from the previous quarter, according to Monday’s data.

Hang on Bars and restaurants are one of the lowest paying industries in Japan yet are mentioned as a cause for crimped consumption? Social distancing also mentioned? We buy less because of this? Private investment? Is impacted by “states of Emergency??

Id hazard a guess nobody has money to spend but the government department can’t say that. when cost of living goes up food, fuel, tax, and the wages don’t, not a lot left for the domestic individual to spend. Even though 40% are part time workers and make up on paper 60% of the economy. It’s a miracle Japan is still the third largest economy, but slave labour does have benefits.

7 ( +11 / -4 )

I think Japan's economy today is about as big as it is ever going to get.

Even without the pandemic, the population is shrinking by about half a million people a year. That is half a million fewer workers, consumers and taxpayers, which inevitably means less economic activity contributing to GDP.

Within a few years the decline will be closer to one million per year and the year on year fall in economic activity will be even greater.

9 ( +12 / -3 )

Japan's economy contracts on shrinking consumption, exports:

The rise and drop of quarterly GDP were measured using year 2020 as the base.

Overall, Japan's annual GDP ( in year 2020 or even year 2021) would be in the negative territory if measured against that in 2019..

4 ( +6 / -2 )

Japan has never had a coronavirus lockdown. But it has periodically asked businesses to close or limit hours under “states of emergency.” It has also encouraged social distancing.

That has crimped consumption and private investment. Private consumption sank 1.1% in July-September from the previous quarter, according to Monday’s data.

Everybody his own opinion I guess, but the July - September period was when COVID-cases soared to 25,000 cases a day hence the need for some kind of action after months, possibly one full year of having the government sitting on their hands...But again, "priorities", like the Olympics, GOTO, usual scandals, etc.

Long story short: the J-gov nitwits aimed at protecting the economy (and prestige) over anything else and just contributed to cripple the economy even more than needed. バカですね。

3 ( +7 / -4 )

A car doesn’t need chips.

You can probably still find a few used cars and motorbikes that don't have chips in them, but good luck getting around Japan without navi, air-conditioning, fuel injection, a radio that works, and a host of other things.

0 ( +4 / -4 )

Even without the pandemic, the population is shrinking by about half a million people a year. That is half a million fewer workers, consumers and taxpayers, which inevitably means less economic activity contributing to GDP.

Not many workers are dying. Its mostly seniors that are retired.

-2 ( +2 / -4 )

It's simple. People need to be paid more. The more money they have, the more they spend.

Bottom-up economy works. Trickle-down economy has never worked. Ever.

10 ( +13 / -3 )

Thanks garypen; by the way where does the money come from (who pays) and which economy(ies?) should one look to as a case study for such success?

-2 ( +2 / -4 )

Ironically, Japan's LDP has been desperately trying to pump up inflation for decades. Now, they got inflation but it is poisonous against the Japanese economy.

0 ( +7 / -7 )

Not many workers are dying. Its mostly seniors that are retired.

But the number of old people retiring each year greatly exceeds the number of young people entering the workforce, so the labor force is still shrinking even if workers aren't literally dying off.

9 ( +11 / -2 )

The Looters Dont.

fxgai

Thanks garypen; by the way where does the money come from (who pays)

1 ( +4 / -3 )

In any logical universe - a country with falling population should expect its economy to contract.

Why the misguided focus on growth for growths sake?

4 ( +9 / -5 )

Yes I think that ONE TIME cash handout to kids under 18yo and poorest families will help Japanese economy to grow.

For sure it will create a lot of well-paid jobs and push consumer spending to the moon.

3 ( +5 / -2 )

"The Looters Dont."

What looters?

-3 ( +0 / -3 )

Even without the pandemic, the population is shrinking by about half a million people a year. That is half a million fewer workers, consumers and taxpayers, which inevitably means less economic activity contributing to GDP.

It's not though is it. It's half a million fewer old people draining the younger generations.

-4 ( +0 / -4 )

people are getting less so yes-spending less as well.its very simple.

-2 ( +2 / -4 )

Simian:

It’s staggering just how many spineless fools there are in the government and the general public , that anyone imagined it was a good idea to stop anything because of some poxy virus,

I'm sure a lot of dead people would agree with you.

-1 ( +2 / -3 )

That's because people are paid in peanuts.

There you go. Solved the mystery for ya.

1 ( +4 / -3 )

its combination of few facts.

japanese aged population is shrinking-so yes spending is lower as well.

japanese products are less competitive and attractive than those made by their neigbours/namely China,ROC,ROK/so yes-lower demands for japanese pricey products abroad.

japanese exporters are fightning with shipping companies over freight costs and availability of containers/space aboard of roro vessels...

japanese government acts as usual.

so yes there is no roam for some japanese growth in foreseable future...

2 ( +6 / -4 )

Economically Japan is highly advanced. The most advanced economy in the world? Maybe Singapore, Hong Kong, or small EU states like Holland or Denmark, non EU mother of all rogue states Switzerland or oil rich Norway are close or more economically advanced.

And it's perfectly according to Marx's basic analysis, economic growth has hit a wall, pretty much without any prospect for significant, lasting improvement. Capitalism has run it's course. Now it has nowhere to go but to the dustbin of history, if history can survive capitalism.

-2 ( +5 / -7 )

it really doesn't seem like it but Japan's real GDP per capita has actually been growing since 2010 (with some down years in between of course)...

so if you think its bad now, wait till we get to 2030 where the number of retirees will increase exponentially and the number of tax payers will significantly drop!

4 ( +5 / -1 )

Japanese economy contracts on shrinking wages and an ageing population / massive incompetence by the LDP.

0 ( +3 / -3 )

This is the perfect time to make immigration of skilled workers even harder, right.. because the way it is now, good professionals are choosing South Korea, Australia, China... waving goodbye to Japan.

Doesn't make any sense.

0 ( +3 / -3 )

@smithinjapan Shrinking consumption?? Well, time to increase taxes, I guess, by Japanese logic.

Exactly!! Less spending less taxes once the government realize they have short falls from taxes collected from the people where do they go? Back to the people and raise taxes, the government is a business, and they see the people as their product. Where else do they get "MOney" from. They have a blank check when there is no money in their budget they print money, when working people don't have money they can't write anything!

-1 ( +0 / -1 )

@garypen It's simple. People need to be paid more. The more money they have, the more they spend. Bottom-up economy works. Trickle-down economy has never worked. Ever. I agree to some point but what happens when people get paid more? The cost of goods and service increases. If a employer has to pay more he will raise it production profit to offset the cost of paying more to his employees. If someone works at McDonalds and the restaurant owner has to increase the prices of hamburgers to pay for the increase in employees pay. What will happen is the consumers will see a cost in prices the owner will not take that loss the only way to offset his increased payment is to increase his prices. So people look at it as been yes "I make $15/hr from $13/hr but the cost of a "HAPPY MEAL" increased from $4 to $6 dollars. There is no change except for the thought of saying you make more money when in reality its all the same because now you have to pay more taxes on that increase.

1 ( +1 / -0 )

Businesses in Japan must continue to grow correctly for the future.

-3 ( +0 / -3 )

Chinese and Korea rising.

Japan declining.

Japan must peace with its rising neighbors fast or else...

-4 ( +2 / -6 )

A car doesn’t need chips.

Sigh. There is no way to make a gasoline or diesel engine car or truck meet most nation's emissions regulations without microprocessor controlled ignition and fuel injection.

4 ( +4 / -0 )

Chinese and Korea rising.

South Korea has bigger social problems, worse corporate corruption and worse demographics that Japan plus a major problem with rapidly rising rents and home prices making housing unaffordable for many.

6 ( +6 / -0 )

And it's perfectly according to Marx's basic analysis, economic growth has hit a wall, pretty much without any prospect for significant, lasting improvement. 

That is an interesting comment that I think reflects poorly informed expectations on the part of many. When a nation is poor and less developed it is relatively easy to make big annual improvements in the nation's economy, social conditions and living standard. If a nation has the right government that invests in education, infrastructure and health care and fosters some economic freedom rapid growth is achievable. But once a nation reaches the technical level of the worlds leaders growth will slow down. That is natural and no form of government is going to change this fact. Once your nation has the highest technologies and is capable of the most advanced industries, growth is going to be limited to how fast one may innovate. Innovation is a whole lot harder than simply copying what others have done before and is why the most advanced nations do not grow as fast as they did during their earlier years when they were busy copying and developing. It is not an indictment of capitalism at all. Having one of the world's highest standards of living is nothing to complain about even if your gdp growth number is not as high as it once might have been.

2 ( +3 / -1 )

Zombie economy, wonder why China and US economy growing

-4 ( +0 / -4 )

In any logical universe - a country with falling population should expect its economy to contract.

Why the misguided focus on growth for growths sake?

I am not an economist and don't read much into the numbers people in cosy offices with fat paychecks release. what matters most and the yardstick I look at is the standard of living, money not circulating and in the hands of big corporations and banks means nothing to the average Taro and Hanako.

1 ( +1 / -0 )

Eastman

its combination of few facts.

japanese aged population is shrinking-so yes spending is lower as well.

Nope, spending is lower because pay is low.

japanese products are less competitive and attractive than those made by their neigbours/namely China,ROC,ROK/so yes-lower demands for japanese pricey products abroad.

Nope, Japanese products are not less competitive, Japanese companies are contented with the small domestic market and are not interested selling worldwide. Take for example the electronic toilet seats that Japan started, there are only 2 or 3 models in English and the 220-240V range whereas there are hundreds of models in the domestic market. Marketing is the issue, you don't market you don't sell. They are just not interested selling abroad, maybe they are scared their precious technology will be copied. It is not limited only to the toilet seat but almost all other products.

I inquired about a honda to buy at a honda dealership in Akita and the response I got was that they don't sell out of Akita pref. Unbelievable.

japanese exporters are fightning with shipping companies over freight costs and availability of containers/space aboard of roro vessels...

Ridiculous, the shortage of containers is global and not limited to Japan alone. the freight companies are also in the race to make as much profit as possible even if the pricing is unreasonable. Do we fight with supermarkets when they sell one peach for 680yen, no we don't

0 ( +1 / -1 )

@Samit Basu

China and Korea rising

China and Korea are going to face a reckoning in the future, based on their abnormally low birth rates and rapidly ageing population - Korea especially.

Whether or not Korea will thrive, depends on how Koreans as a society will learn from the mistakes of Japan and adapt.

2 ( +3 / -1 )

Very bad news.

Let's all join hands to support Japan!

1 ( +1 / -0 )

Basically, Japanese people have to live with a lower standard of living as all indicators show that growth is next to impossible

-2 ( +0 / -2 )

@drlucifer

For those of us living in Japan with experience of many years know the truth.

The reality of life in Japan is on display in the comments section-the articles aren’t able to show the realities

-2 ( +0 / -2 )

@kurisupisu

That's true everywhere.

0 ( +0 / -0 )

Especially true in Japan where so many things are hidden…

-2 ( +0 / -2 )

Really? Does shrinking population include shrinking consumption and exports, even if there wouldn’t be a pandemic or whatever recession or something…who could ever have expected that? lol

0 ( +0 / -0 )

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