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An eminently forgettable year for Japanese economy

Japan has been overtaken by China as the world's No. 2 economy. HT reports.

business Updated: Dec 28, 2010 22:21 IST

Japan has been overtaken by China as the world's No. 2 economy. Its flagship company, Toyota, recalled more than 10 million vehicles worldwide. Its fourth prime minister in three years resigned, and the government remains unable to jolt an economy entering its third decade of stagnation.

For once-confident Japan, 2010 may well mark a symbolic milestone in its slide from economic giant to what experts see as its likely destiny: a second-tier power with some standout companies but limited influence. This may be one year the Japanese will be happy to forget.

Problem is, there’s little to look forward to either. With a rapidly aging population, bulging national debt, political gridlock and a risk-averse culture slow to embrace change, Japan’s prospects aren’t promising. A few optimists hope the country can harness its strength in technology and its cultural appeal — from fashion and art to “anime” cartoons.

But talk to university students, and their outlook is bleak. Many worry about finding jobs and supporting families. The average household income has fallen 9% since 1993.

Makoto Miyazaki, a 22-year-old student at Keio University in Tokyo, senses forces outside his control — and Japan’s — are going to dictate his future.

“Internationally, Japan is between big countries like China and the US. And Korea is becoming a major competitor — that’s a big threat to Japan,” he said. “I feel like we have fewer choices.”

First Published: Dec 28, 2010 22:19 IST