GDP fell to the fourth place in the world, and Japan's mood was stable

Today's Japanese public opinion, the posture is very low, no longer regard itself as the world's leader, but there is an atmosphere of "don't be left behind, make fewer mistakes", which may also be a kind of "terrible".

Written by 丨Gu Ye

In the past two days, there is a hot news about Japan: Japan's GDP will fall to the fourth place in the world.

According to Japan's Kyodo News Agency on October 23, the International Monetary Fund (IMF) predicts that Japan's nominal gross domestic product (GDP) will fall from third to fourth in the world in 2023, being overtaken by Germany.

It is estimated that Japan's nominal GDP in 2023 will be about $4.2308 trillion, down 0.2% from the previous year. Germany, on the other hand, grew by 8.4% to about $4.4298 trillion.

Graph/Network

How "uncomfortable" is this for the Japanese? In 1968, Japan surpassed what was then West Germany to officially become the world's second largest economy. Half a century later, feng shui took turns and was surpassed by Germany, a historic reincarnation.

And the IMF also added the knife: in 2026, India's GDP will also surpass Japan's, and Japan will not even be able to keep the fourth place.

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Of course, Japan's GDP is exceeded by Germany, which contains some moisture, the yen has depreciated too much against the dollar, and the IMF's forecasts are based on the dollar, so the Japanese data is too ugly.

There is some truth in that. By September this year, the yen had depreciated by about 12% against the dollar and 28.93% since 2022, and the yen's purchasing power was already at a 53-year low. With such a large devaluation, no one can really save it.

But to say that it is all due to exchange rates, it is not always true. The euro has also depreciated by more than 5% against the dollar since mid-July. Japan's problems cannot be shaken off, and Japanese economists believe that this is largely due to a combination of population decline and slow productivity growth.

In China, this news is even on the hot search, in fact, it is not particularly hot in Japan, and the response is not great. This is also very understandable, for bad news, the Japanese have long heard numbness.

▲Ginza, Tokyo (Photo/Figureworm Creative)

Just two weeks ago, Japanese economist Yukio Noguchi made a comparison, in 2012, Japan's GDP ranked 13th among developed countries recognized by the IMF, and in 2022 it fell to 27. There are only 40 developed countries identified by the IMF, and Japan is likely to fall out of the sequence of developed countries.

And what is even more exciting is that Japan's per capita GDP in 2022 will even be surpassed by Taiwan, China, and will be surpassed by South Korea in the future. Noguchi Yukio also specifically said that it is not right to put all the blame on aging, South Korea is not much better than Japan's aging, but economic growth is obviously faster than Japan.

Japan's economy can be described as a sinking boat, surpassed by Taiwan yesterday, surpassed by Germany today, and will most likely even be surpassed by South Korea and India in the future. Of course, these are not measured by the same indicators, but the side shows that the Japanese economy is really weak and cannot find any bright spots.

If you go to a Japanese bookstore and look at the headlines of Japanese newspapers, they are basically gray and full of singing and decaying.

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In fact, just some time ago, the Japanese economy seemed to suddenly support itself in the domestic media: the rapid report of Japan's gross domestic product (GDP) for April-June released by the Cabinet Office showed that the actual seasonal adjustment excluding the impact of price changes increased by 1.5% from the previous quarter, and increased by 6.0% on an annualized basis.

This figure far exceeded expectations and surprised even Chinese netizens accustomed to high digital growth. Affected by this news, the Japanese stock market rose sharply at that time, and the market was optimistic, predicting that it was expected to exceed the 600 trillion yen mark in 2024, reaching an all-time high.

But obviously, there are some problems behind this number. For example, the figure of 6% is mainly driven by external demand, which has increased by 7.2%, mainly for export and inbound tourism - obviously, this is a post-pandemic factor; But domestic demand is actually a negative growth of 1.2%, and consumption is very weak.

Figure/Figureworm Creative

Moreover, Japan has experienced a very significant price increase since the beginning of this year, and the economic boom and wage growth have almost been offset by actual feelings.

Interestingly, at the Provisional Diet of Japan on October 23, Prime Minister Fumio Kishida said "economy, economy, economy" three times in a row, wanting to express the importance of the economy; As a result, the opposition legislators who appeared later directly retorted, and in the context of rising prices, what ordinary people want is "give money, give money, give money".

But this did not seem to affect the publication of a bunch of articles analyzed by Japan at that time, it seems that the Japanese economy suddenly went down with a dose of adrenaline, immediately stood up, and hit ten more. I have to say that this actually projects a lot of emotions and imagination, and people seem to want to see the story of the blossoming of iron trees.

It is worth mentioning that the figure of 6% has been revised by the latest statistics, and the current figure is 4.8%.

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To be fair, in many ways Japan is clearly in decline. Almost all Japanese companies that can be famous today are stuck in the 90s of the last century; Products that defined industry standards have all but disappeared. Even Kazuo Inamori's business philosophy is probably not much interested, and now the most prominent on the bookshelf is "Elon Musk Biography".

Just like Toshiba, which was recently acquired, its turnover in 1990 was $21 billion, and Apple's turnover was $5.5 billion; By 2020, Toshiba's turnover was $28.6 billion, with little growth, while Apple came to $274.5 billion, an increase of more than 50 times; Of course, everyone knows the latest story, Toshiba was acquired and delisted, and Apple's market value exceeded 3 trillion.

In any case, it is difficult to whitewash with phrases such as "industrial upgrading", "a big chess game", "there is a Japan overseas". These common headlines in domestic self-media are probably more optimistic than many people in Japan.

Just because you shouldn't think too much about Japan doesn't mean it's not worth mentioning. In fact, a country that recognizes reality, puts aside arrogance, and begins to be pragmatic also has a calm power of its own.

For example, recently a news in Japan is quite hot, TSMC is going to set up a factory in Japan, and it will start operating in 2024. Don't think that this is such a high-end cooperation, the chips produced here are 22-28 nanometers, and TSMC's most cutting-edge technology is actually 5 nanometers and 7 nanometers, and the highest income is also at this level. That is to say, TSMC actually took some edge production lines and put them in Japan.

But even with such an outdated technology, the Japanese government still paid 400 billion yen to support it. The Japanese media also explained that although the added value of this level is not high, it is still profitable, and the automotive industry has a great demand for chips at this level.

In other words, Japan now does not pick and does not care about how much "face" - you know, Japan accounted for 50% of the world's chip production in the eighties and nineties of the last century. Today's Japanese society doesn't care much about whether it's "far ahead" or not, as long as it's good or good.

And the Japanese automotive industry, which is slow to respond by half a beat, has recently begun to make efforts in the field of pure electricity, and almost all mainstream car companies have announced new pure electric strategies. Japanese media have not shy away from praising China's advantages in the field of electric vehicles, and in July the Nikkei Shimbun published an editorial titled "Japan's auto industry should learn modestly."

Figure/Figureworm Creative

Today's Japanese public opinion, with a very low posture, no longer sees itself as a world leader, but exudes an atmosphere of "don't fall behind, make fewer mistakes", which may also be a "terrible" - it doesn't need to do much well, as long as it doesn't make too many mistakes.

Moreover, Japan has a high employment rate, and medical care and education are very mature, which ensures that Japan has a very stable civil society. Japanese society has struggled to see huge fluctuations in public opinion. This is also potentially beneficial, at least not to polarizing policy swings, and to help maintain a predictable space for development.

Kohei Saito, a professor of philosophy at the University of Tokyo, wrote a book called Anthropocene Capital, on the theme of which is not to see population decline and economic stagnation as a crisis, but to accept it calmly, stop talking about growth, and focus on people's lives, such as education and health care. I never imagined that this book became a bestseller in Japan, selling 500,000 copies, which also reflects the atmosphere of Japanese society.

This may also be a kind of capability, Japan does have a recession, but a "high-level recession": even if the data is not good, the society is generally stable, the people's living standards are good, and the technological capabilities maintain a comparative advantage. When the world is changing, although it is not a unique scenery, it can generally maintain a calm and decency. Besides, it's hard to say whether it will wait until a certain machine lucks.

When strong stimulus has failed, when the demographic situation and innovation capacity cannot fundamentally change in a short period of time, it is helpless but wise to try to maintain a "high-level recession".