Why China Won’t Become the Next Japan

Civic Leadership Forum Silicon Valley Stop Hate Series

DDTV Community

08/19/2022

Why China Won’t Become the Next Japan

China is facing some big challenges right now: a real estate crisis, population issues, trade tensions with the U.S., and worrying debt levels. These problems remind many people of Japan in the 1980s, sparking fears that China’s economy might slow down like Japan’s did. Japan went through what’s called “Japanification,” where economic activity slowed, prices and wages fell, and growth potential declined.

However, China’s larger economy, strong manufacturing base, self-sufficiency, and global economic influence, along with its robust military capabilities, are key factors that differentiate it from Japan. China’s consistent enrollment of students in science and engineering programs has bolstered its industrial and technological advancements. Unlike Japan, where declining enrollment in technical fields has reduced human capital, China continues to grow in this area.

To address its aging population, China replaced the one-child policy with a two-child policy in 2016 and a three-child policy in 2021. The government plans to gradually extend the retirement age by 2030, making small, flexible adjustments to better utilize the workforce. This suggests that China will likely see steady population growth in its cities due to its low urbanization rate and younger retirement age, even as the overall population declines.

Key Takeaways:

Educational Focus: China’s emphasis on science and engineering education surpasses Japan’s, potentially driving industrial and technological progress.
Demographic Policies: China is addressing its aging population with policies like extending the retirement age and encouraging higher birth rates.
Economic and Military Strength: China’s vast economy, global influence, self-sufficiency, and military power help deter economic and military threats.
Urbanization and Social Factors: Urbanization and other social factors help mitigate the effects of an aging population in China.
Human Capital: While Japan has seen a decline in human capital due to shifts in education, China continues to grow in higher education enrollment.
Economic Foundation: China’s strong economic base, technological support, and citizen backing set it apart from Japan’s past economic challenges.
Lessons from Japan: China can learn from Japan’s experience by focusing on self-reliance, reforming education, housing, and immigration policies, and developing key industries internally.