How does China’s continued economic growth affect the outlook for Japan?
Masanao: Some would argue that China is in competition with Japan, and therefore China’s growth will be negative for the Japanese economy. That notion would probably be right over the very long-term horizon, but for the next three to five years, I do not believe that would be the case. The data show Japanese exports are more complementary to China’s than competitive, whereas other Asian countries such as Indonesia, Thailand and Korea are in direct competition. In that sense, Japan is in a position to enjoy the global demand for China’s exports, which should be supportive for Japan’s reflationary story.
