Reuters have reported on the growing numbers of highly skilled Japanese workers, especially engineers, moving to the country's old rival, China. €My profession is going out of business in Japan,€ said Masayuki Aida, who worked for a Tokyo firm for 30 years but has spent most of his 50s in Dongguan, a manufacturing city in the Pearl River Delta.
According to Kazunori Takada, €For Aida and many like him nearing the national retirement age of 60 the choice was simple €" face a few years without an income as Japan raises the age at which employees get their pension or work for mainland Chinese and Hong Kong companies.€
€People aren't making products in Japan anymore,€ said Aida. €I wanted to pass on to younger generations all the knowledge and technology about molds I had obtained.€ According to the Japanese government, 2,800 Japanese live in Dongguan alone, a city of more than 8 million people.
According to Kazunori Takada, €Many of the Japanese engineers finding a second life in China do not have the cutting-edge technology that would deal another crushing blow to Japan Inc yet, analysts say, but the long-term impact could be severe because they will give Chinese manufacturers the skills to make high-quality goods efficiently.€
€China has pushed its own companies to innovate, but many experts cite an educational system that prizes rote learning as an obstacle. For many firms, buying talent is the quickest fix.€
China has begun exporting more high valued machinery and electronic products, 9.1% in the first quarter from a year ago, when they gained 7.6%. This brings China's high value exports to US$253 billion. While the benefits to China of Japanese immigration are great, the downside for Japan is immense.
As a result of decreasing fertility rates, longer life spans and negligible immigration, the land of the rising sun is seeing the sun set on its demographics. Now burdened with a debt twice the size of its economy, Tokyo has raised the age at which people can collect pensions to 65 even though most Japanese are forced to retire at 60.
In 2011, China took Japan's crown of having the world's second highest GDP €" a position Japan had held for 43 years. In 2012, Japan's trade deficit hit US$18.5bn as imports rose and exports declined.
According to Tetsushi Kajimoto, Leika Kihara and Tomasz Janowski of Reuters, Japan could face, €capital flight, soaring borrowing costs, tanking currency and stocks and a central bank forced to pump vast amounts of cash into local banks.€
According to Kajimoto, Kihara and Janowski, €to some economists who have followed Japan for years, the frustration is that the country has yet to solve its underlying problems of slow economic growth and stubborn deflation. As long as those conditions persist, it will be difficult to crawl out from under the debt burden.€
On current projections, by 2020 there will be three pensioners for every child under 15 years of age. It will not be long before one in six people are over the age of 80. By then Japan's population will be falling by around one million people each year.
Back in 1997, Milton Ezrati of the Council on Foreign Relations predicted that these challenging demographics €could force the country to sink its unusually high savings rate, reverse its trade surplus, export industrial production and liberalise its tightly controlled markets.€
According to The Economist, Japan's €median age (44) and life expectancy (83) are among the highest and its birth rate (1.4 per woman) is among the lowest anywhere. In the next 40 years its population, currently 127m, is expected to fall by 38m.€ Nearly half the population will be over 65 by mid-century.
The Economist warned that, €children of the baby-boomers are currently entering their 40s, which creates a secondary bulge at the middle-manager level of Japanese business. Because of a seniority-based pay system, this puts a huge strain on business costs, leaving less money to provide young people with training and good jobs.€
Even putting sales tax up to 25% or more will fail to reduce the debt burden if Japan remains stuck in deflation and anaemic growth, warns Koji Sakuma, chief economist at the Institute for International Monetary Affairs think-tank. €If we stay in this situation, this amount is never repayable. It's just impossible.€
According to Kazunori Takada, €For Aida and many like him nearing the national retirement age of 60 the choice was simple €" face a few years without an income as Japan raises the age at which employees get their pension or work for mainland Chinese and Hong Kong companies.€
€People aren't making products in Japan anymore,€ said Aida. €I wanted to pass on to younger generations all the knowledge and technology about molds I had obtained.€ According to the Japanese government, 2,800 Japanese live in Dongguan alone, a city of more than 8 million people.
According to Kazunori Takada, €Many of the Japanese engineers finding a second life in China do not have the cutting-edge technology that would deal another crushing blow to Japan Inc yet, analysts say, but the long-term impact could be severe because they will give Chinese manufacturers the skills to make high-quality goods efficiently.€
€China has pushed its own companies to innovate, but many experts cite an educational system that prizes rote learning as an obstacle. For many firms, buying talent is the quickest fix.€
China has begun exporting more high valued machinery and electronic products, 9.1% in the first quarter from a year ago, when they gained 7.6%. This brings China's high value exports to US$253 billion. While the benefits to China of Japanese immigration are great, the downside for Japan is immense.
As a result of decreasing fertility rates, longer life spans and negligible immigration, the land of the rising sun is seeing the sun set on its demographics. Now burdened with a debt twice the size of its economy, Tokyo has raised the age at which people can collect pensions to 65 even though most Japanese are forced to retire at 60.
In 2011, China took Japan's crown of having the world's second highest GDP €" a position Japan had held for 43 years. In 2012, Japan's trade deficit hit US$18.5bn as imports rose and exports declined.
According to Tetsushi Kajimoto, Leika Kihara and Tomasz Janowski of Reuters, Japan could face, €capital flight, soaring borrowing costs, tanking currency and stocks and a central bank forced to pump vast amounts of cash into local banks.€
According to Kajimoto, Kihara and Janowski, €to some economists who have followed Japan for years, the frustration is that the country has yet to solve its underlying problems of slow economic growth and stubborn deflation. As long as those conditions persist, it will be difficult to crawl out from under the debt burden.€
On current projections, by 2020 there will be three pensioners for every child under 15 years of age. It will not be long before one in six people are over the age of 80. By then Japan's population will be falling by around one million people each year.
Back in 1997, Milton Ezrati of the Council on Foreign Relations predicted that these challenging demographics €could force the country to sink its unusually high savings rate, reverse its trade surplus, export industrial production and liberalise its tightly controlled markets.€
According to The Economist, Japan's €median age (44) and life expectancy (83) are among the highest and its birth rate (1.4 per woman) is among the lowest anywhere. In the next 40 years its population, currently 127m, is expected to fall by 38m.€ Nearly half the population will be over 65 by mid-century.
The Economist warned that, €children of the baby-boomers are currently entering their 40s, which creates a secondary bulge at the middle-manager level of Japanese business. Because of a seniority-based pay system, this puts a huge strain on business costs, leaving less money to provide young people with training and good jobs.€
Even putting sales tax up to 25% or more will fail to reduce the debt burden if Japan remains stuck in deflation and anaemic growth, warns Koji Sakuma, chief economist at the Institute for International Monetary Affairs think-tank. €If we stay in this situation, this amount is never repayable. It's just impossible.€
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