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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Peter Singleton who wrote (51)9/8/1998 8:54:00 AM
From: Henry Volquardsen   of 2794
 
This is a pretty interesting issue. As I read the article this is not an issue of them losing money on bad investments but of underfunding pension assets. This was a problem in the US years back but most companies have either funded their pension plans or moved to defined benefit programs.

Amyway a pension problem can lead complicate one of Japan's biggest weaknesses. Japan's population is aging rapidly, demographically it is one of the oldest in the world. And their birth rate remains low. Now this is a problem in other countries as well. But take the US, we remain open to immigrants so we get an influx at the younger end of the demographic which will still have a long working life. The homogenous nature of Japanese society makes it very unwelcoming to immigrants so they get no influx of younger workers. As the Japanese population continues to age the underfunding of pension assets will become a big problem.

As far as how this impacts the long term outlook for Asia, I believe we will see Japan decline in importance. In the not to distant future I belkieve we will gradually see China emerge as the dominant economic force in the region.
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