Little recovery seen for rural Japan's land prices
Japan's 127.7 million population is forecast to peak in the next year or so and to decline by around 20 per cent by 2050.
The population is also expected to concentrate increasingly in major cities. Some 100,000 people move to the Tokyo area each year from the countryside, according to government data.
But economists said the shift of people and businesses to cities, and the resulting slide in land prices in the countryside, was not necessarily bad as Japan tries to makes its economy more efficient. "As the population declines, it is more natural for people and businesses to concentrate in certain areas and for land prices to reflect that," said Azusa Kato, an economist at BNP Paribas.
Economically, there was no need for populations to be spread out evenly, she said.
"For example, it's more difficult to provide good social services if people are too spread out," she said. "A major problem in Japan's fiscal policy has been a system that spent a lot everywhere." Heavy public works spending has been credited for helping to distribute wealth evenly in Japan's postwar economy, but it also left the country with the highest debt in the industrial world.
While moving factories to China and other parts of Asia may hurt the countryside in coming years, economists say, Japan needs to move on to more service-based and technologically advanced businesses anyway.
"With a shrinking population, the key issue is how to improve productivity," said Naoki Iizuka, chief economist at Dai-ichi Life Research Institute.
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