Japan's economy is on the edge of entering a recession. This global power is the world's third largest economy. However, it has been consistently declining in growth without a current end in sight. Japan has been heavily impacted by the outbreak of the coronavirus in China. The Chinese and Japanese economies are closely tied to one another. With the slow down of China's economy, Japan has struggled to improve their already poor economic situation.
Japan's tourism industry has been greatly effected by the spread of the virus. Last year Japan welcomed 8.1 million Chinese tourist into their country. Japan sees more visitors from China than any other country in the world. With the effort to contain the disease a top priority, tourism has declined.
Do you believe Japan will enter a recession? Is there anyway to prevent the 'inevitable'?
https://www.cnn.com/2020/02/17/economy/japan-gdp-economy/index.html
9 comments:
Unfortunately, I don't think there is any stopping a recession in Japan. Once there are already multiple quarters of declining growth, there has to be a recession. Their economy is already going to be struggling and with China's issues already, they won't be getting a lot of help to stimulate growth. This will also affect its economy in the long run because China will not be able to assist Japan with its growth because China will already be so far slowed down from the Coronavirus.
I agree with Libby that there is no way to boost the economy. We see a strong economic interdependence between Japan and China, hence, the impact of coronavirus has further weakened the Japanese economy.
After the Second World War, Japan's economy developed rapidly, and once became the world's second-largest economy. Then the housing bubble burst and fell into "the lost 20 years." Some experts thought that the economic crisis was almost fatal to Japan and also played a guiding role in coming to Japan's economic development. Japanese residents have suffered from the after-effects of the 1980-2000 economic bubble for almost the last ten years.
There are many reasons for Japan's economic decline:
1.Insufficient economic demand
The total population is declining, the population is aging, and the Japanese economy has fallen into a vicious cycle of "lack of market demand-weak innovation-insufficient market demand."
2. The Dilemma of Innovation: The Craftsman Spirit Out of the Market
Japan's "craftsmanship spirit" inherits the tradition of making every detail of the product extremely good. The Japanese culture emphasizes making A into A +, A ++, or even A +++. However, the market is changing rapidly, and the only thing that may be needed is a B. Take Sony as an example: they are indulging in technological upgrades, but missing the digital music era.
3. Regulatory failure: the dilemma of fraud
Japanese corporate culture emphasizes collectivism and leadership authority, which can sometimes lead to internal supervision failures. For example, Toshiba has been caught in a financial fraud scandal; Takata has also been involved in fraudulent security data.
I agree with the prior comments. A recession in Japan is indeed inevitable. However, I think that if the Chinese manage to contain the coronavirus soon then the impacts that have so far affected Japan can lessen. How much help that will be, I don't know.
I believe in addition to the points in the article, the main problem in Japan is their lack of immigration to make up for the declining birth rate in the country. Immigration could fill a lot of the holes in the job market, especially the less-skilled positions. Japan's lack of interest in globalization and reliance on China has put them in this position. They will decide their own fate.
I agree with Louis in the fact that it is most definitely in their hands. The coronavirus is not the only cause of the possibility for a Japanese recession, but it definitely does not help the situation. If Japan increases their globalization techniques and goals, they may be able to help themselves, but it is also difficult to say the outcome of that since the world is more and more cautious due to the virus and know Japan and China are in close connection to each other.
After what I have seen in the US market over the past week, I could see Japan entering a recession due to it's already declining situation coupled with the recent outbreaks of the virus. I wouldn't however agree with the statement you made that Japan has struggled to improve their "already poor economic situation", considering they are the third largest global economy, their situation is not a poor one. Japan is a far more densely population country as well so I can see this virus affecting their labor force much more long term than it will in the US or other more Western countries.
Japan was already in a volatile state filled with economic/political reforms so any minor impact could have offset them and caused problems. They are now faced with a major problem, one that not only affects them, but the world economy as a whole. They will defiantly see a recession, but this issue goes far beyond the coronavirus.
I agree with the prior comments that Japan is likely to undergo a recession in the coming future as the number of people in Japan and around the world infected with the virus continues to increase. The decrease in tourism and trade are not only harmful to Japan, but to neighboring countries as well, which is harming the global economy as a whole. The global GDP is expected to drop to a worrying low in 2020 as the result of economies like Japan and China taking a hit from the virus and other political and economic factors.
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