Japan Is Back, China Is Over. The Trouble With Narratives
Economic accounts can be powerful — and misleading. Japan still has challenges and it’s shortsighted to write China off.
Flawed accounts.
Photographer: Tomohiro Ohsumi/Getty Images
Japan is back, China is over. Only a few years ago, such an assertion would have been dismissed out of hand. The latter was on the road to economic dominance and the former languished, characterized by endless stimulus that produced little tangible benefit, and doomed by a shrinking population. This narrative was overdue for a correction, and an alternative has finally arrived. Unfortunately, it shares some of the flaws of the old story.
The contemporary crush on Japan has much to commend it. Wages are gathering steam, the Nikkei 225 stock index recently surpassed the peak reached in the late 1980s, when the nation was seen as having some magic sauce that drove its ascent, and the central bank is preparing to end the world's last remaining experiment in negative interest rates. Even the difficult demographics look reasonable relative to Singapore, South Korea — and China. Like a classic market overshoot, few people are eager to speak ill of newly cool Japan.