Fear China’s economy, perhaps, but not Japan’s

Due to, primarily, a combination of its decade-long real-estate driven stagflation, and its declining, rapidly aging population, Japan’s economy is actually diminishing by many standards. It is now just 20th in per-capita gross domestic product, for example, and its share of the world’s economy has slid from a peak of 18 percent in 1994 to just 10 percent in 2006. A study by PriceWaterhouseCoopers says the Japanese economy will be the size of Indonesia’s or Brazil’s by 2050. By that time, population decline will have reduced economic growth to zero, according to the Japan Center for Economic Research.

Actually, I’m not sure we’ll have to totally fear China or India in 2050. China’s size, not just a 1.3 billion population, but a contiguous land area as large as the U.S. including Alaska, can make national policy difficult to implement at the local level, as the failure of Beijing-based environmental efforts and other things show.

India, on the other hand, has even less infrastructure than China, a determination to pass China in population, and the chaos of a corruption-tinged world’s largest democracy. Until India can deliver more clean drinking water to its people, we don’t need to totally fear them either, reservoir of English-speaking engineers aside.

Who we should fear is the EU. A GDP as big as ours, larger population, democratic traditions, a banking/finance control system strong and independent of that of the U.S., a currency gaining world recognition, and an often-stronger, and often-different, take on regulatory issues.