Japan's automobile industry will shrink in the long run due to fierce competition from China, the World Bank said in a report released Thursday.
"Our analysis projects a contraction of automobile production in Japan and the newly industrializing economies," the World Bank said in its report "East Asia Integrates."
The 264-page report released by the World Bank's Singapore office says China's current plan to restructure its auto industry following its 2001 accession to the World Trade Organization is expected to make it a more efficient assembler of vehicles and eventually an exporter, leading to a contraction in production in other newly industrializing economies of the region as well as Japan.
"This prospect could provoke a major reorganization of the industry across the region," it says.