Summary of the Analysis
This article breaks away from the conventional financial news format, which typically focuses on dry statistics such as GDP and unemployment rates. Instead, it starts with everyday observations that are easily understandable to the general public—such as the stagnation in Japanese people's height growth, decreased food consumption, shrinking activity ranges, and industries shifting towards more niche markets. These details debunk the notion that Japan’s national fortune is on the decline. The real reason is Japan’s economic stagnation over the past 30 years following the bursting of its bubble. The entire society has shifted towards a more conservative mindset, with changes in consumption habits, lifestyle choices, and business development strategies. This transformation, reflected in everyday life, provides a more accurate picture of Japan’s current situation than cold economic data.
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Detailed Interpretation
1. Height and Food Consumption: More Honest Economic Indicators than GDP
Many people used to think that the increase in Japanese height after the war was due to a national milk-drinking campaign. However, according to the latest data from the Japanese Ministry of Health, Labour and Welfare, the average height of 17-year-old males in 2023 is 170.8 cm, a decrease of 1.2 cm from the peak of 172 cm in 2010. This is the first time in post-war Japan that the height of teenagers has been declining. The issue is not with genetics but with younger people’s reluctance to spend. Teenagers, who used to have limited pocket money during their growth spurt, now only afford the cheapest onigiri (rice balls) from convenience stores for lunch. In the bubble economy era, Japanese people would eat beef and imported mangoes at every meal, but now they find fruits costing over 100 yuan too expensive. The Ministry of Agriculture, Forestry, and Fisheries reports that the average annual rice consumption has dropped from 118 kg in 1962 to just 51 kg. It’s not that everyone has switched to eating meat; rather, they can’t afford to buy more. The portions of bento sold in convenience stores have also decreased by one-third. People prefer smaller portions to save a few dollars, indicating that when they have more money, their first impulse is to spend it on food.
2. Shrinking Living Ranges
In the 1980s, during Japan’s bubble economy, people were buying luxury goods and traveling hundreds of kilometers for weekend spas. Over a million people traveled abroad each year, meaning one in ten Japanese did so. A survey by the Japanese Ministry of Internal Affairs and Communications shows that 60% of 20-30-year-olds travel outside their prefecture less than twice a year. Many young people in Tokyo have never even visited the Tokyo Tower. Commuting distances have also decreased, with people now choosing jobs that are within a 10-minute walk from home, and they even try to save on monthly subway passes. The reason is that going out incurs costs—subway fares, buying water, and shopping. As a result, people have confined their activities to a 3-kilometer radius, with their lives revolving around home, convenience stores, and work. This reduction in mobility has led to a decline in industries that rely on people moving around, such as tourism, travel, and physical retail.
3. Industries Moving Towards Niche Markets
In the 1980s, Japanese industries were dominant globally, with semiconductors accounting for 70% of the global market share, and the automotive industry nearly overtook Detroit, USA. The real estate market was so large that it could buy half of the United States. Companies were willing to invest billions in new technologies. Today, Japan’s emerging industries are mostly small, niche products, such as producing ultra-thin screws for smartphones, high-end limited-edition stationery, or short-lived internet-famous puffs. A small workshop that earns a few million yuan a year is considered a successful business. No one dares to invest billions in high-risk industries like semiconductors or renewable energy. Japan’s investment in hydrogen energy over the past decade has failed to produce a global leader, and its share of the semiconductor market has dropped to less than 10%. The reason is a lack of entrepreneurial spirit: banks are reluctant to lend to large projects, and young people avoid working long hours in emerging industries. Instead, they opt to become civil servants or open small cafes. The ambition of Japanese industries has shrunk from global dominance to simply achieving moderate prosperity, which cannot drive significant economic growth.
4. The So-called “Decline in National Fortune” is Not Metaphysical
The notion that Japan’s national fortune is declining is unfounded. Over the past 30 years, Japanese people have seen the housing prices of their parents’ generation halve and companies laying off employees frequently. This has led to a widespread belief that future wages will not increase much, or that they might even lose their jobs. As a result, no one dares to take on high-risk investments, such as buying large homes or starting a business. People save all their money, avoiding spending on things like travel or having children. This mindset leads to a cycle where businesses struggle to sell products, companies are hesitant to expand or raise wages, and wages remain stagnant, further reducing spending. The so-called “decline” is simply the outcome of lower expectations across society.
5. Japan’s “Shrinking” is a Common Transition for All Economies
People often mock the Japanese for being frugal and introverted, but this is a common challenge for all economies that have experienced rapid growth. When an economy reaches its peak, it faces a choice: do people want to take risks and invest in new industries to maintain growth, or do they prefer a more modest lifestyle? Japan has chosen the latter, leading to a gradual transformation of its society. There is no right or wrong answer, but this example shows that when growth expectations decline, it affects every aspect of society, from behavior to industry development.
6. All Economies Face This Transition
Japan’s transformation is not unique. Every economy that has grown rapidly for decades will eventually face this dilemma: whether to invest in new industries or to settle for a more modest existence. Japan’s path shows that once growth expectations drop, people’s behavior and choices, even their physical well-being, naturally shift towards a more conservative direction. This is a natural consequence of lower expectations, not some mysterious force.