Demographic changes, such as aging populations and declining birth rates, pose challenges as well as offer opportunities for industries and countries. To overcome the challenges and seize the opportunities, especially to achieve long-term economic sustainability, economies need to enhance policies promoting innovations.

Now many countries in East Asia are facing the aging population and declining working-age population problem. Compared with other advanced countries, Japan encountered the population aging problem at a slightly earlier stage, starting in the mid-1990s. As Japan’s percentage of elderly population to the total population increased, it impacted the country’s economy, leading to a contraction in domestic demand and decline in both production and consumption, and restricting the growth of economy.

Some innovative companies have actively increased outward FDI (Foreign Direct Investment), providing cost advantages from inexpensive overseas labor to maintain their cost competitiveness. However, the global economy is facing the challenge of declining trade owing to the protectionism practiced by certain countries. Consequently, the chances of boosting growth through outward FDI may be limited.

Developing artificial intelligence is another solution to the negative impacts of the demographic changes. AI and robotics will play a crucial role in stimulating productivity and innovation by making payment for the decline in the working-age population, and the following increase in productivity will in turn raise the demand for labor by creating new employment opportunities.

AI, robotics and other advanced technologies give rise to new tasks within their fields and across other sectors. Therefore, it is necessary to employ cooperation policies to support corporations that promote innovations by increasing investment in research and development, facilitating the growth of new companies, and building a perfect system to protect intellectual properties. Since AI and robotics may replace certain jobs, it is essential to address the potential challenges they may create in the labor market and work out strategies to ensure a balanced and comprehensive transition.

【小题1】What do we know about demographic changes from the first two paragraphs?

A．There is no need to worry since the changes offer opportunities.

B．The changes won’t affect the long-term economic sustainability.

C．Japan is the only advanced country facing the changes at present.

D．Things should be done to overcome the challenges posed by the changes.

【小题2】What does the underlined word “contraction” mean in the second paragraph?

A．Push.

B．Decrease.

C．Pause.

D．Change.

【小题3】What is the writer’s attitude to FDI?

A．Favorable.

B．Intolerant.

C．Objective.

D．Indifferent.

【小题4】What does the writer advise to tackle the new tasks posed by advanced technologies?

A．Withdrawing investment in research and development.

B．Adopting policies that encourage innovation of corporations.

C．Establishing new companies to protect intellectual properties.

D．Creating potential labor market for more possible employments.