Introduction: China and Japan in the global economy

The global economic centre of gravity is shifting from the West to the East. Today, Asia is the home to about 60 per cent of the world’s population and produces nearly 40 per cent of the world’s Gross Domestic Product (GDP). Asia is growing rapidly and in the absence of a major distraction is likely to produce more than a half of global GDP by 2050. The dramatic transition in the global economy over the past few decades has resulted in a remarkable shift within the Asian continent as well. For example, in 1995, Japan’s GDP was more than twice that of China, India, and ASEAN combined. Over the last 20 years, China’s GDP has grown more than tenfold, India’s more than fivefold, and ASEAN’s nearly fourfold. Today, China’s GDP alone is more than twice Japan’s GDP. Meanwhile, Japan’s GDP per capita is still four times that of China. While Japan’s status is weakening and China’s strengthening, there is increasing uncertainty over leadership in Asia which prompts major concerns over regional economic integration and development.