Forecasting Japan: China Rises

Editor's Note: Since the end of the Cold War, the Pacific Rim has seen China rise and Japan stagnate. However, Japan is approaching an epochal shift that will enable it to challenge the current order. This analysis is the second in a four-part a series that forecasts the nature of that shift and the future of Japan. Part one explored the origins of Japan's slow-burning crisis. 

Japan's current political order is a holdover from the Cold War, when the country was buoyed by U.S. strategy in the Pacific. But when that configuration changed dramatically after the fall of the Soviet Union, Japan continued to cling to the old system – it had no other option. Tokyo is now looking ahead to a future of demographic decline and increased government spending. While Japan will likely be able to manage these issues, the country's slow-burning internal crisis will begin to interact with broader regional shifts in the next 5-10 years, the most important of which is the ongoing transformation of China. The external changes in Japan's region will ultimately cause the country's internal political order to undergo an epochal shift of its own.