What Are the Geo-Economic Consequences of Japanese Demography?

The phenomenon of demographic transition and falling birth rates has affected all industrialized countries for many years, and also most emerging countries. However, Japan is undoubtedly the one in which the consequences are already and will be the most extensive. The previously second economic power in the world has been overtaken by China, and the rivalry with this country is not only about industrial development but also about geopolitics. Indeed, the declining population of Japan threatens the long term economic, strategic and geopolitic future of the country. We explore three scenarios for the decades to come. In the first scenario, Japan takes no measures against its demographic plunge and needs to increase its military deterrence to secure its independence. In the second scenario, a moderate openness to immigration may mitigate the geo-economic consequences of the demographic issue. In the third one, the Chinese strategic threat may endanger the independence of Japan itself.