One of Geopolitical Futures’ most controversial forecasts is that by 2040, Japan will rise as East Asia’s leading power. Many readers often ask for an explanation of the logic in this forecast. They understand that GPF is bearish on China. And while some readers may disagree on that point, they usually see that the reasoning is sound and that China will face serious problems in coming years… problems that will strain the Communist Party’s rule.
Japan, however, seems a bridge too far. Its population is less than a tenth of China’s size (and it’s not just aging but shrinking). Japan also has a debt-to-GDP ratio over 229%. So, how is it that Japan will emerge in the next 25 years as East Asia’s most powerful country?
A full answer would require more space than we have in this article. But a good place to start is a broad comparison of the structure of China and Japan’s economies (the second and third largest economies in the world, respectively). This analysis will reveal strengths and weaknesses for both and will aim to bring our forecast into sharper relief.
This post was published at Mauldin Economics on JANUARY 30, 2017.