Core Insights - The former Governor of the Bank of Japan, Masaaki Shirakawa, highlighted that Japan's declining population and aging demographic are significant challenges that reduce productivity, which is a critical issue for Japan [2][3] - Shirakawa emphasized that the most important factor for living standards is per capita GDP, which is determined by productivity, rather than the commonly held belief that Japan's low growth is primarily due to deflation [2] Summary by Relevant Categories Impact of Demographic Changes on Productivity - Aging populations lead to a shift in consumption preferences towards healthcare rather than education, resulting in a decline in productivity growth [2] - An aging society may hinder the acceptance of new technologies, which are essential for enhancing productivity [2] - In economies with declining populations, overall productivity tends to slow down due to the increased difficulty in reallocating resources across different regions [2] - A decrease in population size results in a smaller future talent pool, which correlates positively with the number of innovators, thereby slowing down the pace of innovation [2] Lessons for China - China has the advantage of observing Japan's experiences in dealing with demographic challenges and can learn from these insights [3] - The critical factor for economic growth is the ability to rapidly reallocate resources to enhance productivity; failure to do so may lead to economic decline [3]