First, when the economy faces a shortage of demand, it is generally regarded that the role of monetary easing measures is to close the negative output gap by stimulating the economy from the demand side. As I explained earlier, the negative output gap in Japan seems to have closed for the first time in almost six years, according to the Bank’s estimate.
More likely, Southeast Asia and China will complement each other in an international division of labour, for example, with Southeast Asia providing the components and intermediate processing, and factories in China doing the final assembly for the Chinese market. The desire of MNCs to diversify their investments beyond one or two countries will also promote such an outcome.