In 2024, a striking phenomenon is the continued recession of the Japanese economy.
Although once hailed as an Asian "economic tiger," Japan now appears to be falling behind in its economic competition with South Korea.
This article will take a closer look at the reasons for this shift and explore how South Korea has adopted a different strategy to achieve economic growth.
We must admit that the Japanese government's mistakes in fiscal and economic policies are one of the important factors leading to the current situation.
The fiscal austerity policy in 1997, especially the increase in consumption tax, had a serious impact on Japan's economic recovery.
As economist Suzuki Yoshio has pointed out: “Without economic reconstruction, there can be no fiscal reconstruction.
"This sentence still has warning significance today.
Japan's experience tells us that without sufficient economic growth, any reform and reconstruction will be difficult to achieve.
The impact of international trade cannot be ignored.
Japan's extremely expansionary monetary policy has led to a sharp increase in "free liquidity" around the world.
This not only failed to stimulate Japan's domestic stock market out of its doldrums, but instead accelerated capital outflows, especially to the U.S. Treasury and stock markets.
This capital outflow not only disrupted Japan's economic recovery process, but also undermined the balance of international payments worldwide, posing a threat to the stability of the world economy.
In contrast, South Korea has taken more effective measures to stimulate internal market dynamics.
By encouraging innovation, supporting the development of small and medium-sized enterprises, and increasing investment in research and development, South Korea has successfully built a more dynamic and diversified economic system.
In addition, the South Korean government has actively promoted international trade cooperation and enhanced the international competitiveness of its products through means such as signing free trade agreements.
It is worth mentioning that the difficulties Japan is currently facing are not irreversible.
By learning from South Korea's successful experience, Japan can take measures to stimulate the vitality of the domestic market, such as further tax cuts to increase investment expectations of enterprises and individuals, while strengthening economic cooperation with other countries to ease the pressure of capital outflow.
The differences in economic development between Japan and South Korea reflect the differences in their policy choices and strategic implementation.
By deeply understanding and comparing the economic strategies of these two countries, we can better grasp the current international economic trends and the driving forces behind them, thereby providing a reference for future decision-making.
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