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Is Japan the sick man of Asia?

11 Comments
By Henry Hilton

Once upon a time The Economist cleverly patented a Big Mac index to show the relative cost of the same giant burger item across the globe. 

Now might be a good moment to invent a global Misery Index. This could tell us which country is in the doldrums, who is doing a bit better and where things are really looking bright. Misery would then be defined as an amalgam of high inflation, low growth and weak currency rates. You would not be able to trade or eat it but the "INGRAC" could be calculated for most national economies and adequate comparisons would then follow.

Take Japan for starters. News just out is a double whammy : The country is now officially in recession and Germany has overtaken Japan, leaving it as the fourth largest world economy. How the mighty have fallen. Until the turn of this century, Japan had been second only to the United States, having worked its way up from defeat and occupation to the proud holder of the economic superpower title. Authors who explained how Japan's development model had made it so fast and was seemingly about to lead the "Pacific Century" could do no wrong.

Fast forward and few today will doubt that they are living in a decidedly gloomy era. Just throw in Prime Minister Fumio Kishida's scandal-wracked LDP government, add the unpleasant reality that inflation is high by past national standards, wages are not keeping up with price hikes and note that the nation's economic productivity level is mighty low. 

Next stir them together, sprinkle in naughty Toshiba's misbehavior and the ever-expanding budgets for the Osaka Expo and you surely get a Misery figure at the very top end of the chart.

All undoubtedly true and what's more neither the LDP's factions or, if you prefer, their supposed reincarnation as merely innocent study groups, nor the opposition parties appear able and willing to sort out the nation's problems.

Welcome folks to Japan's third "lost decade". 

Yet Japanophiles will be quick to tell skeptical readers that it isn't all doom and gloom. The evidence on their side of the ledger includes the fact that the Tokyo stock market has just hit a record high, and unemployment is low. They can underline, too, how millions of overseas tourists are eager to visit and splurge now that all COVID restrictions have been removed.

What may well get ignored, though, is that it has taken a generation and a half for markets to beat the market levels of the once applauded and then derided "bubble economy." Also the fact that the present tourism boom has been fueled in part by cheap currency can be overlooked amid the good news and photos of crowds in Harajuku and shoppers at electronic discount stores. Even the dowdy British pound and the euro have been knocking spots off the once all-conquering yen.

Yet if things look pretty bad here, it might be fair to ask where China also stands in the global "INGRAC" stakes. No one can adequately do the maths, however, since expert commentators invariably warn their audiences that the official stats coming out of Beijing are more than probably massaged to look good. Financiers and diplomats will tell you to knock a good few percentage points off as a general rule of thumb.

Exactly how much the figures should be discounted to make for fairer international comparisons is anyone's guess. What is undeniable, though, is that the years of China's double digit growth have gone and won't be coming back. 

All this leaves the Chinese Communist state only too aware that their young graduates are having trouble finding decent jobs and that times are getting harder with quite extraordinary property mega-collapses and major financial uncertainties. Housing booms have been replaced by busts and speculators have lost out across the board. Overseas investors who got out in time were the lucky ones.

Perhaps then the fairest, neutral solution in early 2024 is to come up with a shared Misery award for the twin sick men of Asia: Japan and China both deserve a wooden spoon apiece to hang on the doors of their finance ministries.

© Japan Today

©2024 GPlusMedia Inc.

11 Comments
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Is Japan the sick man of Asia?

Not only sick man but sick denial old men that can't and not willing to change anything.

In politics.

https://eastasiaforum.org/2023/02/27/the-problematic-politics-of-japans-ageing-electorate/

.

In business world.

https://www.nippon.com/en/japan-data/h00397/average-age-of-japanese-corporate-presidents-continues-to-rise.html

https://www.bloomberg.com/news/articles/2021-05-28/the-oldest-chief-executive-in-japan-set-to-retire-at-age-95

-9 ( +4 / -13 )

Take Japan for starters. News just out is a double whammy : The country is now officially in recession and Germany has overtaken Japan, leaving it as the fourth largest world economy. How the mighty have fallen.

"Sick man of Asia" was originally used to criticize early 20th century China but the similarity to 2024 Japan is that they are oppressed by a useless, parasitic mandarin class.

In the case of 2024 Japan the one party LDP.

Removing the LDP and their Japan Inc. combine of cronies could lead to a resurgence in Japan.

it is not too late.

3 ( +5 / -2 )

A lot of people world wide would love to live and work in Japan.

4 ( +8 / -4 )

A lot of people world wide would love to live and work in Japan.

Pretty much every person I talk to in Canada tells me that. I have a number of friends with kids who are intending to go once they graduate.

2 ( +4 / -2 )

Afraid so, only it should be "Sick OLD Man in Asia".

Clearly new policies and path needed to revitalize, better engagement with world digitally and better relations in general the key, especially based upon shared values, standards and mutual interests.

-2 ( +3 / -5 )

Misery [index] would then be defined as an amalgam of high inflation, low growth and weak currency rates. You would not be able to trade or eat it but the "INGRAC" could be calculated for most national economies and adequate comparisons would then follow.

Those that would try to do this, would come across the BIG elephant in the room, early on.

I speak to the high inflation part of this comment. And how difficult - nay impossible - it is to calculate, in markets where the shrink-ray is in full use.

Shrink-ray? Commonly known as Shrinkflation. Where manufacturers voluntarily use – and merchants agree upon - products in commerce being diminished, while asserting smaller price increases. You actually get less of a product by volume, weight, etc. while paying about what you did before shrinkage happened (or maybe a little more).

Cleaver? It is certainly a gift to politicians, as shrinkflation does NOT show up on monthly/quarterly/ annual inflation rates. How could it, when there simply is no objective and fair methodology to compare volume and value per item, per cost, over time. Except to ask consumers about what is going on with their cart-full of groceries, and how it affects their family budget. If you do this, it should eventually show up as a measure pf consumer confidence, but it takes time.

Oh, and “weak currency rates?” considering how much currency manipulation happens, on a global scale, this metric should probably come out of any proposed misery meter.

3 ( +3 / -0 )

As long the corrupt LDP doesn't have any competition in Japan, the country will continue to sink more and more. The Yen crashed, and it goes weaker by day, population decline is a thing, job salaries are getting lower by month (yeah, that is ridiculous), the innovation is dead and buried in Japan, the electric/electronics companies, once the pride of Japan are getting bankrupted or delisted from the Trade Markets due to lost of competitiveness, etc, etc.

Japan is sick and dying, and those incompetent oyajis from the Government do not have a clue of how to safely steer the boat out of the storm.

-6 ( +2 / -8 )

dagonToday  08:56 am JST

Take Japan for starters. News just out is a double whammy : The country is now officially in recession and Germany has overtaken Japan, leaving it as the fourth largest world economy. How the mighty have fallen.

"Sick man of Asia" was originally used to criticize early 20th century China but the similarity to 2024 Japan is that they are oppressed by a useless, parasitic mandarin class.

Don't say that. When the fascist imperial regime of Japan used that slogan on the Chinese Republic in 'Enter the Dragon', that gave Bruce Lee a justification/excuse to defend his national honor and put the wupazz to the Japanese diplomats.

Even though it's 2024, Japan is a free independent nation. China is a sad empire run by the CCP that promises a Marxian utopia but doesn't deliver one. The CCP lies, and their founder Mao was a murderous bastard who killed millions of his own Chinese. And the aftereffects still linger.

So who's the 'Sick Man' of (East) Asia, or even all of Asia? Certainly not Japan. Not by a long shot.

4 ( +4 / -0 )

@Skeptical, you're spot-on about shrinkflation. It's rampant in grocery stores, here in Canada. And it isn't going away.

1 ( +2 / -1 )

1glennFeb. 17 09:39 am JST

A lot of people world wide would love to live and work in Japan

I do agree with this for the most part. However, once they get here and actually understand the situation, most would probably realize that the pay, safety, etc is pretty good but you'll probably never be truly accepted nor rise high or taken seriously in a traditional Japanese company. That coupled with the lack of real pay raises, difficulty finding housing, especially if you are a person of color, will make them realize that overall, Japan will never really be welcoming and not the place you thought it to be before you came over. I've seen this countless times.

-2 ( +0 / -2 )

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