Geopolitics drives Japan’s economy

Ahmadabad, India, Sept. 14, 2017: Japanese Prime Minister Shinzo Abe (L) and Indian Prime Minister Narendra Modi celebrate during the groundbreaking ceremony for a project to build a high-speed railway using Japanese bullet trains
Japanese Prime Minister Shinzo Abe (L) has cultivated a friendly relationship with his Indian counterpart, Narendra Modi, for both business and geopolitical reasons (source: dpa)
  • Demographics are forcing more Japanese firms to operate abroad
  • China’s rise gives Tokyo a reason to support such initiatives
  • Japan’s sway in the region is likely to grow through business and investment
  • Japan’s alliances with India and Australia will grow stronger

Since 2010, Japan’s population has been shrinking. This trend will intensify, and by 2050 the country’s population is expected to be a third smaller than it is today. Companies that want to grow will increasingly have to go abroad to find employees. This drive overseas is reinforced by powerful geopolitical developments, most notably the rise of China.

Of its neighbors in the region, China and Korea have had the strongest impact on Japanese culture. Through Buddhism, which came to Japan from China in the 6th century, Japan has a spiritual linkage to India. However, while Japanese companies were quick to enter China once economic reforms opened the country, they were slow to discover India.

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