What Are the Geo-Economic Consequences of Japanese Demography?

Abstract

The phenomenon of demographic transition and falling birth rates has affected all industrialized countries for many years, and also most emerging countries. However, Japan is undoubtedly the one in which the consequences are already and will be the most extensive. The previously second economic power in the world has been overtaken by China, and the rivalry with this country is not only about industrial development but also about geopolitics. Indeed, the declining population of Japan threatens the long term economic, strategic and geopolitic future of the country. We explore three scenarios for the decades to come. In the first scenario, Japan takes no measures against its demographic plunge and needs to increase its military deterrence to secure its independence. In the second scenario, a moderate openness to immigration may mitigate the geo-economic consequences of the demographic issue. In the third one, the Chinese strategic threat may endanger the independence of Japan itself.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1 Source : https://dashboard.e-stat.go.jp/en/timeSeriesResult?indicatorCode=0201010000000010000

2 United Nations, World population prospects. Accessed 6 July 2022. https://population.un.org/wpp/

3 https://www.nippon.com/en/japan-data/h01363/

Additional information

Notes on contributors

Sophie Nivoix

Sophie Nivoix is Professor in Management Sciences at the University of Poitiers, France, and a member of the CEREGE (UR 13564) laboratory. Her work focuses in particular on risk and return, financial equity markets, in Europe and Asia, and on banks. She has published numerous academic articles, book chapters, and co-authored or coordinated several books, including “Firm Internationalization, Intangible Resources and Development”, Routledge, 2023 and “Economic transitions and international business”, Routledge, 2019. Her destinations as a visiting professor include Morocco, Poland, Lebanon, China and India. E-mail: [email protected]

Serge Rey

Serge Rey is Professor of Economics at the University of Pau & Pays de l’Adour, France, and member of the TREE (UMR CNRS 6031) laboratory. He was previously Director of the Social Sciences and Humanities College. His research interests are in the international macroeconomics, the economics of the exchange rate and applied econometrics, with a particular focus on Pacific economies and in particular Japan, and French Overseas territories. He has published on these issues numerous academic articles, book chapters and co-authored or coordinated several books, including “Sustainable Development in Asia”, Springer, 2022. E-mail: [email protected]