Japanese industries seemed poised to dominate global technology and finance. In the 1990s, the picture completely reversed. Japan's economic growth averaged only 1.5 percent, half the United States' 3 percent. The vision of Japanese technological and financial superiority has faded. By itself, slow economic growth need not cripple a country as wealthy as Japan.
People can live well and pay for needed government services.
By contrast, the low birthrate threatens Japan's vitality through progressive depopulation. Without immigration, a country's population stabilizes if adult women have an average of two children. In Japan, women are now having an average of 1.5 children, according to the U.S. Census Bureau. The present population of 126 million is projected to drop to 101 million by 2050. About a third would be older than 65, up from 17 percent now.