Akio Okawara

Executive Director
Sumitomo Shoji Research Institute, Inc.

On May 1 Expo 2010 Shanghai China opened its gates. Seeing the excitement in Shanghai, people of my age, born in the post–World War II baby boom, are reminded of the similar excitement in Japan at the time of Expo '70 in Osaka, exactly 40 years ago. In fiscal 1970, the year the Osaka Expo was held, Japan's economy grew by 8.2% in real terms. This sounds high, but it actually represented a slump from the double-digit figures of the previous four years, when the country had been experiencing a prolonged boom. Furthermore, consumer prices climbed 7.3%, feeding fears of stagflation. Pollution was bad and getting worse. And the exchange rate was still set at ¥360 to the dollar. In these and many other respects the Japan of those days was greatly different from the Japan of today.

One of the top global news stories of 1970 was China's rising international profile. It was that year that China successfully launched its first satellite into orbit. It also conducted hydrogen bomb testing, established diplomatic relations with Canada and Italy, and pushed for admission into the United Nations (it became a member the following year). On the economic front, however, it was still only a minor presence.

The Chinese economy started developing at a dramatic clip after the government adopted its reform and open-door policies in 1978, and this year China is poised to overtake Japan and become the world's second-largest economy. In a book published in Japanese last year with the title China As No. 1, Kwan Chi Hung, senior fellow, Nomura Institute of Capital Markets Research, noted that even though China was about to surpass Japan in terms of its gross domestic product, in per capita terms it was only about a tenth of Japan's level. In Kwan's view, China is still in the developing stage and continues to be about 40 years behind Japan, meaning that it still has tremendous room for growth.

The nature of international expositions has changed over the years, but Expo 2010 Shanghai is a festival celebrating China's rising status, offering a stage for the display of advanced technologies aimed at creation of a low-carbon society and also for exhibits featuring ideas for a better life in the form of new products and services.

In recent years the sustainability of China's rapid growth has come under continued questioning. Most observers have judged that the economy would maintain its momentum through the Beijing Olympics in 2008 and this year's Shanghai Expo, but people are wondering what sort of course it will follow once the exposition is over. It is generally recognized that China must switch from export-led to domestically powered growth, and it is hoped that the Shanghai Expo will help promote this transformation.

Expo '70 in Osaka promoted the growth of consumer spending in Japan, particularly in the field of leisure, and Expo 2010 in Shanghai, featuring the theme "Better City, Better Life," may promote the improvement of urban environments and people's lives across China. Here in Japan, the population is shrinking and aging, and domestic demand alone cannot keep the economy advancing. This makes us all the more keen to see the Chinese economy keep expanding, in hopes that our neighbor's success as the global growth center will assist our own economic prospects.