Two leading economy watchers have struggled to name a single positive in the nation's current predicament.
Tokyo University's Professor Takatoshi Ito, who had just spent the best part of an hour dissecting the country's economic missteps, eventually plumped for the increasingly entrepreneurial attitude of Japan's women as a sole cause for some optimism.
Nomura Institute of Capital Markets Research senior fellow Chi Hung Kwan had the advantage of speaking second at the forum, where both men were challenged to find a single ray of economic sunlight in Japan.
After an agonising pause, he eventually mumbled something about technology to get himself off the hook.
They were speaking in Tokyo after the Nikkei 225 index crashed through 9000 this week, its lowest level since May last year.
Japanese stocks have been falling in response to the strength of the yen, which is choking export earnings.
The malaise is as bad outside the listed sector, with only about 30 per cent of all companies in Japan booking a profit in the most recent financial year, but tax "minimisation" methods are thought to play a role in the result.
On preliminary figures, Japan's economy grew by an anaemic 0.1 per cent between April and June, snuffing out hopes of a nascent recovery and surrendering its No. 2 size crown to China.
Calls for intervention to devalue the currency grew this week, with Sumitomo Mitsui Banking Corporation president and Japanese Bankers Association chairman Masayuki Oku calling for the government to step into the currency market to bring down the yen's value against the US dollar.
Imagine his groans when the government announced on Monday that Prime Minister Naoto Kan and Bank of Japan governor Masaaki Shirakawa had spoken by phone that day, but did not touch on intervention.
Despite the economic house falling down around their ears, neither Mr Kan nor Mr Shirakawa deemed a face-to-face meeting necessary. Although the strength of the yen, which hit a 15-year high of Y84.72 against the US dollar this month, is certainly hurting Japan's economy and delaying an end to deflation, there are more systemic and long-term problems in Japan, both Professor Ito and Dr Kwan argued during Tuesday's talk about China usurping Japan's position as the world's second largest economy.
He believes China will surge past the US by the mid 2020s as growing domestic demand joins high investment levels in fuelling growth.
"China has become more important, not just as the workshop of the world, but the market of the world," Dr Kwan told the Foreign Correspondent's Club of Japan.
He said China's economy showed many of the characteristics of Japan's economy 40 years ago, as it was about to enter its remarkable bubble period when it, too, threatened to overtake the US in terms of GDP.
He said electricity consumption, life expectancy and infant mortality figures were remarkably close when comparing the two.
Although China's per capita GDP was a 10th that of Japan's, it was on the cusp of a huge expansion before demographics would bring its growth down to 5 per cent in the 2030s, he said.
But for the current decade, Dr Kwan is still predicting growth of 8 per cent in China, tapering to 6 per cent in the 2020s.
The silver lining for Japan, which has forged close economic and diplomatic ties with China, is that its neighbour's growth is propping up Japan's economy.
Dr Kwan said he believed the two economies were complementary, China supplying cheap production and Japan technology and capital.
The only real competition in manufacturing was in low-tech industries where Japanese firms were having to be propped up anyway, he said. Professor Ito said the pain of Japan's two "lost decades" had made its workers and managers too risk-averse and inward looking, adding that its youth, in particular, had become insular and reluctant to leave their home cities, let alone their country, to pursue opportunities.
"Through these decades of stagnation Japan's people have lost their confidence and don't know what to do," he said.
"In that state of mind no one wants to take risks."
Professor Ito blamed political turmoil for the slump, along with "institutional" constraints, or archaic workplace traditions in Japanese companies that prevented hiring the best people regardless of age or gender.
His recipe for reviving Japan includes concluding a free-trade agreement with China to bring some of its manufacturing sector home after dismantling tariff barriers and reforming the country's often-criticised education system.
"If we solve these problems maybe we have the chance to avoid a third lost decade, but I have to say the prospect is not good," Professor Ito said.
http://www.theaustralian.com.au/business/economists-lost-for-kind-words-as-japans-decline-continues/story-e6frg8zx-1225910113673
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