While everyone's huffing and puffing about China, the May issue of the American Prospect had a nifty little story about Japan that offers a nice counterbalance. Not only is Japan not in poor economic health, claims Eamonn Fingleton, it's doing perfectly fine these days, with a strong manufacturing sector, the largest current-account surplus in the world (although I'm not sure that's always such a good thing), a leading position in certain very-key industries, and its citizens are affluent in a way most countries can only dream about. So why, then, do we get all these scare stories about Japan's permanent depression? Ah, the ol' Tokyo propaganda:

In short, the "lost decade" story was a hoax. The Western media were duped by a total reversal in Japan’s public-relations program. Whereas Japan had once aggressively emphasized both its real and imaginary strengths, that emphasis switched in the 1990s to a highly counterintuitive “bad news” strategy.

Very devious! Of course, the one strike against Japan—and Fingleton doesn't discuss this—is that the country is aging rapidly, and unwilling to take on new immigrants. That could end up hurting, although I'm somewhat skeptical that the "aging society" problem is, in fact, as big a problem as it's made out to be. Meanwhile, let's not forget that China's aging pretty rapidly too, and will probably reach some geriatric point long before it reaches Western levels of productivity, which means it will be much less-equipped to deal with its swarms of seniors than Japan will. On the other hand, the benefit of being an authoritarian country like China is that it can use brute force to handle its aging society: coerce young couples into having lots of babies, say, or cutting senior citizens off from their pensions. Russia has been experimenting with the latter, to rather brutal effect.