While some observers say the change in the economic world order is “purely symbolic,” others say it should act as a wake-up call to both countries – Japan to get its economic house in order, China to become more politically responsible.
And although some Japanese may gaze across the East China Sea with a touch of envy at the growing economic might of the new kid on the block, most knew that this day was inevitable for a country with more than 10 times the population of their homeland’s 127 million.
“China’s domestic expansion is very positive for Japan’s economy,” says Takashi Shiono, an economist at Credit Suisse in Tokyo. “While some Japanese people might feel kind of envious, this is a huge opportunity for Japanese companies.”
It is a view echoed by Dr. Martin Schulz, senior economist at Tokyo’s Fujitsu Research Institute: “The faster China grows, the better it is for Japan.”
Meanwhile, Evan Osnos looks at the reaction from inside China:
While the story has rated front-page treatment in the U.S., it has sent China into a frenzy of self-flagellation, in the hope of reminding people that it is still home to a lot of very poor people. This reaction was not guaranteed. Beijing is not averse to crowing about certain superlatives, whether it’s the world’s largest I.P.O. or the world’s biggest chocolate show. So why be especially sensitive about something that everyone already expected? Deng Xiaoping famously urged his countrymen to “hide your brightness, bide your time,” but that’s probably only part of the story here. Assuming this is all a P.R. strategy ignores the fact that people on the sidewalk find it genuinely implausible, to the point of offensive, that they could be the world’s second-largest economy. Eventually, they’ll concede that it makes sense on sheer size, but they are quick to add that having that many people is a problem in itself. And self-perception matters if you’re trying to predict things like when Chinese consumers will begin to consume at a higher level, and thereby reduce the trade deficit.
See also a recent Charlie Rose show on the Chinese economy.