The head of Japan's most powerful business lobby said yesterday he was fearful of China's rising power and believed its transformation into a capitalist economy could rock the world.
"I have been watching China with great interest. To be honest with you, I think China is a great threat [to Japan]," Hiroshi Okuda, chairman of the Japan Business Federation, told a news conference.
"If China transformed itself into a fully fledged capitalist economy, it would be like throwing a big rock in a small pond," said Okuda, who is also chairman of Japan's top automaker Toyota Motor Corp.
"It would create a great impact on not only Japan but also the world," he said.
Okuda also argued the Japanese government should cut corporate taxes to support research and development and pursue restructuring to turn around the comatose economy.
On Wednesday, the government announced Japan's gross domestic product grew by a revised 0.6 percent in the three months to June from the previous quarter, ending a year of recession.
Okuda said domestic demand remained depressed and warned China may overtake Japan's economy.
"I do not think Japan will be crushed by China soon but it is possible that Japan's economic power may be weakened by China," he said.
To coexist with a strong China, Okuda said Japan should develop state-of-the-art technology and science that China could not emulate.
"This is the only solution for us," he said.
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