For the past year, the biggest news story about Japan has been its territorial disputes with China and Korea. As important and potentially dangerous as this issue is, many media outlets in the US have paid relatively little attention to the other significant social, economic, and political issues that Japan is facing. Among the most complex and important of these is Japan’s low fertility and associated population decline.

In 2013 Japan lost about 250,000 people, continuing a trend unlikely to abate any time in the near future. The 2013 population of Japan was about 126 million, while the Japanese government projects a drop to about 46 million if nothing intervenes to alter current trends (such as a dramatic change in immigration policy). The cause is fairly simple: Japanese have among the lowest total fertility rates (TFR) in the world at about 1.4 and this rate has been consistently under 2.0 (2.1 is needed to keep a population stable) since the mid-1970s. At the same time, the Japanese population is among the longest-lived in the word with about 25% of the people over 65 and only 13% in their teens. As the elderly have started to pass away, the population has started to shrink. ="#.utmv-vmo5z8">

On the surface, this looks like a very troubling problem and some Japan watchers have argued it does not bode well for Japan’s future as an economic and political power in the world or in East Asia. Problems clearly do lie ahead. The most obvious is related to the cost of healthcare. In 2000, Japan initiated a long-term care insurance (LTCI) program designed to help manage and provide the care needed by an increasingly aged population. Like many social insurance problems, the young pay for the care of the old; when those younger people reach old age, there are insufficient younger people to pay without significant tax increases. As was predicted at the time, LTCI has proven to be quite costly, leading to long-term care expenditures (including out-of-pocket expenses) that have more than doubled from four trillion yen in fiscal year 2000 to 8.4 trillion yen in fiscal 2011. And projections have these expenditures increasing to 20 trillion yen by 2025, which will represent 3-4% of GDP. This has generated a public discussion about the future of LTCI leading to a report in August of 2013 by the government’s National Council on Social Security Reform on revising the program.

Obviously, an additional issue associated with the rapid growth in the aged population is social. Traditionally, adult children have provided care for elder parents with minimal involvement of public institutions. Despite attempts by the government to maintain significant involvement of adult children in elder care for both social and economic reasons, the simple fact of low fertility leaves few options beyond expanding public services to manage and provide elder care. There simply will not be enough children in the future to provide necessary care and Japanese are much less inclined to expect their children to provide needed care than they were in the past.

Beyond social and economic problems, population decline has generated a variety of other issues. According to anthropologist John Knight, rural depopulation is exacerbated by broad economic forces that drain labor from rural areas to cities as people seek education, work, and attractive urban lifestyles. There are some towns particularly in mountain areas that have no residents under the age of 50. This type of community became international news last summer when 15 elderly people in the mountain village of Mitake were murdered by a 79 year old resident. The victims represented 1/3 of the total population of a village consisting entirely of elders.

Knight has also explored environmental consequences of rural depopulation, such as the movement of flora and fauna into communities that have increasing numbers of abandoned buildings and fewer people. Bears and other animals are presenting risks to residents and crops, creating an additional push for people to move from rural to more urban areas of the country. Indeed, throughout smaller towns in rural Japan, it is common to seen numerous abandoned houses and other buildings. In the village where I have conducted ethnographic research since the 1990s, a short survey of the area last summer generated an estimated 40% of the houses empty.

Other problems associated with population decline include a shortage of members of Buddhist temples, making it difficult to support these religious institutions financially. In many cases there are insufficient member families in temple parishes to support either the temple buildings or the priest (and family) who operates the temple and takes care of rituals—most of which are for the deceased and are the most important religious activities in which Japanese people typically engage.

These population changes certainly present problems for Japan’s future, but the country is not alone. Other parts of East Asia are facing similar issues. South Korea’s total fertility rate for 2012 was 1.24 and the PRC’s rate is estimated to be 1.55 for 2013. Both of these are well below the replacement rate of 2.1 necessary to simply maintain a population. As a result, both China and Korea, like Japan are poised to experience population decline in the future.

While these population changes present challenges for Japan, this should not be interpreted as meaning Japanese necessarily see this negatively. I have frequently spoken with Japanese about population decline, and they often see this in fairly positive terms, even while recognizing the challenges the country will face in the near-term. One man in his 70s echoed the thoughts of many with whom I have spoken: “I think the population decline is a good thing. The country is too crowded as it is; fewer people would be an improvement.” This man emphasized that in the long-run a smaller population would place lower demands on limited resources such as energy and would make for less crowded and thus more livable urban areas. This certainly seems reasonable given that the Metropolitan Tokyo area has a population of approximately 36.5 million—slightly less than California (38 million).

Perhaps most important from a political perspective is to recognize that a smaller population does not necessarily mean that Japan will become less of an economic or political player in East Asia. As noted above, other countries in the region are facing similar problems that are simply a few years behind Japan’s leading-edge position. And Japan has repeatedly shown prowess in developing technological solutions to its problems, a recent example being the increased use of robotic technologies for providing care to homebound elderly. This has been encouraged through government policies aimed not only at providing needed care, but also at stimulating economic growth through investing in a technology with which Japan not only has a great deal of experience, but also is and should continue to be a world leader in the future.

More likely than leaving Japan economically and politically behind, a declining population represents a significant variable in how political and economic relations will unfold in East Asia for the foreseeable future. In the long-run, population decline is less of a problem than it is a variable that the governments of East Asia will need to respond to and manage. How that process will run its course and influence relations among and the power of these countries is difficult to predict. But it is unlikely that, when taken in the broader context of East Asian population change, a smaller population will necessarily cause Japan to drop out as a major economic and political player.

John W. Traphagan is a Professor of Religious Studies and faculty affiliate of the Population Research Center at the University of Texas at Austin.