"Japan's Per Capita GDP to Be Surpassed by Korea Next Year"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] It is predicted that Japan's per capita Gross Domestic Product (GDP) will be surpassed by Taiwan this year and by Korea next year. As China's economy, which has pursued a 'zero-COVID' policy, slows down, there is also a forecast that it will not surpass the United States even by 2035.

According to the Nihon Keizai Shimbun on the 15th, the Japan Center for Economic Research (JCER) announced through its 'Asia Economy Medium-Term Forecast' report released the day before that it summarized the economic growth outlook for 35 countries and regions in the Asia-Pacific region up to 2035, and made these predictions.

According to the International Monetary Fund (IMF) and the United Nations, Japan's per capita GDP last year was $39,583, which is 13% and 22% higher than Korea's ($34,940) and Taiwan's ($32,470), respectively. JCER initially predicted in December last year that Japan's per capita GDP would be surpassed by Korea in 2027 and Taiwan in 2028, but it now expects the timing of the reversal to be brought forward due to the depreciation of the yen. Additionally, it viewed that the improvement in labor productivity is greater in Korea and Taiwan than in Japan, which affects per capita GDP.

JCER also forecasted that China's economy will not surpass the U.S. economy by 2035. This reverses last year's prediction within just one year. The basis for this is that China's economic growth rate has significantly declined compared to previous forecasts. JCER stated, "China's real GDP growth rate, which was 3.9% as of the third quarter, is expected to fall below 3% in the 2030s," adding, "It could drop to as low as 2.2% by 2035."

In terms of nominal GDP, which reflects inflation, JCER analyzed that even by 2035, the size of China's economy will only reach about 87% of that of the United States.

The intensification of U.S.-China disputes was cited as the biggest factor behind China's economic slowdown. The Biden administration in the U.S. has blocked exports of semiconductor production equipment, and the acceleration of global companies' withdrawal from China, as well as rising military tensions surrounding the Taiwan Strait, are expected to have an impact.

COVID-19 lockdown measures were also seen as a major obstacle. As the Chinese government implemented a zero-COVID policy to prevent the spread of the virus by locking down cities, household consumer sentiment sharply declined. China's Consumer Confidence Index, which reflects household consumers' perception of the current economy (above 100 is positive, below is negative), dropped to 86-88 from April to October, when Shanghai was fully locked down, marking the lowest level since the COVID-19 outbreak.

This content was produced with the assistance of AI translation services.