Japan`s Rise
Japan is one of the world's leading economic
powers when concentrating on its
Gross Domestic Product of four point two
trillion United States dollars. Its
economy is only second to the United
States in terms of production. However,
Japan has not always contained a
relatively strong economy. The Japanese's
economic strategies have boosted
economy to new heights since its fall during
the second world war because of
their unorthodox manner of business etiquette,
innovative strategy, and
strong relations with stable economies such as Canada
and the United States.
The rise to the top did not occur without a large
struggle as many problems
did occur after the Second World War left Japan
economically devastated.
Japan's journey has left them at the present with
recession conditions.
Following world war two, Japan's economy was absolutely
devastated. From 1937
to its defeat in 1945 Japan poured all of its strength
into the war. The
industrial sector was diverted into a swollen military
production sector. The
strongest and swiftest workers were placed in the
military, and quite often
sent to die on the front lines of the war. The
citizens who stayed in Japan
often worked in military factories, and faced the
constant threat of air
raids. Once the war was over there was not a need for the
military industries
that were created and a thick number of four million
citizens became
unemployed. The new unemployed total had then reached thirteen
point one
million people. After the war Japan was on the verge of bankruptcy in
its
international payments. The trade deficit had expanded drastically and
the
balance of payments equilibrium was completely destroyed. Since Japan
was
allocating all of its resources into the war and to begin with was not a
country
with many raw materials they had no choice but to import an excessive
amount of
raw material in order to produce military hardware. Even so, the
war did award
JaPan with some benefits. The industries developed during
the war became the
major postwar industries, such as the steel and
transportation industries.
Wartime technology was reborn during the
postwar as Japan became one of the
world's leading countries in the
technology industry. Japan's technology
advances made it more competitive.
These technological developments included
advancements in the production of
steel by utilizing new technologies. The
increase in electrical power
produced by the Sakuma dam, as well as increased
technologies in the area of
shipbuilding; automobiles, electrical machinery,
sewing machines and cameras
helped put Japan on a path to being more
competitive. Through massive
restructuring and the creation of niche markets
such as Mitsui mining being
split up into Mitsui coal mining and Mitsui metal
mining, Japan was able to
establish a base for its future economy. The Japanese
have a very different
method of thought from everyone else in the world. In the
beginning of this
century, Japan lost its ability to feed it citizen's and began
to panic. They
had money to import food however, due to their morals they would
rather
conquer than pay money and give in. The country comes together as one to
try
to gain control as a nation. There is very little if any competition
among
Japanese companies when it comes to the foreign market. Japanese
corporations do
practice a form of conventional economic competition, but all
within their own
borders. This is what is known as the "one set" philosophy.
Each
company produces a set of various products. For example, all beer
companies
produce a lager, and draft and a dry beer. This is only inside
Japanese borders.
Economists state that it is impossible to specialize in
everything, but the
Japanese have an urge to be on the top in every
field. Even in the schools
children are pressured to be the best. It is a
very competitive environment and
if they can not cut it their career goals
will not be anything but an
ever-lasting dream. The whole society is based on
being the best at what ever it
may be. Although recently the new younger
generation is shifting towards a
conserver society, less work and more play
is the credo for this new breed of
human beings. Married couples as well as
single, free thinking individuals are
no longer willing to let their jobs
consume their lives, they take two day
weekends and escape to quite places
like a beach. The Americans complain about
declines in their steel industries
but few Americans believe that it is a
problem to import CD players and TV's.
The United States government does not
have any form of a plan to create a
domestic CD player or anything of the sort.
This is where the Japanese
are different from the rest of the world. The key is
that within the country
of Japan companies, and corporations competitive with
each other or not they
stick together to ensure the success of their country;
the United States on
the other hand does not compete with the rest of the world
as one for it is
the companies and corporations that compete individually
representing the
United States. As well, the Japanese capacity to produce high
quality
products is very emphasized in the world market. This is what permits
them to
ask themselves why import if we can produce a higher quantity with a
better
quality for a cheaper price? For example in 1985 a Boeing 747 crashed
into a
mountainside while flying from Tokyo to Osaka. The plane was purchased
from
the United States and the crash was due to a faulty repair job performed
by
Boeing engineers. I quote from a Japanese pollster, Takayoshi
Miyagawa,
"the Japanese people think we should make by ourselves whatever
concerns
human life." Another case in which Japanese pride is well
demonstrated is
when the space shuttle the Challenger exploded. For a year
afterwards the
Japanese repeatedly said, "if we had built it; it would
not have
happened!" This goes to prove how highly the Japanese's think of
their
craftsmanship. However, in 1988 they refused to use an American
vaccine, which
protected children against measles, mumps and rubella all in
one vaccine. The
Japanese Ministry of Health and Welfare instead
coordinated three of the
country's vaccine making companies to produce an
alternative to the American
vaccine. The Ministry made it mandatory to be
vaccinated. The refusal of
importing the American vaccine caused much grief.
The American version had
little if any side effects but the Japanese version
caused outbreaks of
meningitis c causing death and paralysis. Once these
outbreaks were reported the
vaccine was not mandatory but optional. Still
this just goes to show the
different ideals of Japan. In short the Japanese
and even the whole east of Asia
believes that the inconvenience of importing
to the consumer is less damaging in
the long run than the weakness of a
nation's productivity base. This truthfully
explains the Japanese and East
Asian mentality. The idea of the invisible hand
is one ideology brought on by
the decesed capitalist Adam Smith. He stated that
there should be no
government intervention in the economy. The producers of
Japan Produce
goods for the people who buy certain products which appeal to
them. Adam
Smith said that the producers would have to adapt to consumer needs
since the
consumer will only purchase what they want to. Therefore, the economy
will
take care of itself through guidance from the consumer, hence a consumer
run
society. Adam Smith's theories are very much a reflection of Japan's
economy.
The Japanese Canadian Relationship began with aspiration of exports
to
Japan, development and increased efficiency in Canadian agriculture,
industrial
and fishery sectors. The overall incentive was the growth of
national income
through better, more profitable and more certain export
opportunities. Canadians
viewed the trade agreements as an opportunity to
improve productivity and
competitiveness abroad and at home. Canadians had
two main goals for the
agreement; to secure a substantial further reduction
in the level of foreign
tariffs facing our exports and to reduce and bring
under control NTB's
inhibiting Canadian exports. Canada reduced protection on
industries to boost
efficiency and lower consumer costs however kept
protection where it was still
needed. The results of the agreement yielded a
comparable reduction of Canadian
tariffs- forty percent of Japanese, United
States and EEC tariffs together
helped along with comparable reduction of
Canadian tariffs. Agreements were made
to instate international discipline to
government procurement policies. The
biggest gain of the conference for
Canada was with United States exchange of
tariff concessions. A deal with the
United States was made that stated that
there must be an injury to their
economy as a precondition to imposing
countervailing duties. What Japan gave
us were tariff reductions in machinery,
chemicals, automotive and
transportation equipment. There was another agreement
signed covering
subsidies, countervailing duties, government procurement,
technical barriers
to trade, import licensing, (clear publication of procedures
and simplified
administrative practices) customs valuation and dumping. The
agreements also
brought into perspective future opportunities for both
countries; one which
was optimistic. Tariffs and other trade barriers are in the
process of being
reduced, and improved framework for international trade
co-operation through
numerous agreements was falling into place, less trade
restrictive measures
were being used by governments, and there was greater
transparency in the
system and less uncertainty for the business community. Due
to the
transparency in the Japanese market, Canada's role in the Japanese
economy
became one of the largest consumers of machinery, cars, steel, and
electronic
products. Canada also plays the role of supplier of raw materials
to
Japan. Canada sells natural resources to a quickly expanding country
with ever
expanding needs for raw materials with which to fuel their thriving
industrial
sector. Canada's exports to Japan include lumber, wheat, corn, and
products that
are land intensive. Arable land in Japan is scarce and
extremely expensive and
fifty-six percent of the forest area is privately
owned. The land that is used
is very commonly on steep hills, where decades
of reworking the soil has left it
in stages of plateaus on which rice patties
and farmland are held. The arable
land is divided into many small farms
averaging three point five acres in size.
Most of the land is over used
since the farmers overwork it trying to get as
much out of as possible. Thus,
Japan must rely on outside sources of agriculture
to supply its people with
the necessary products such as wheat, corn, and other
grains. Canada's
position directly across the pacific from Japan made it a
variable partner
for trade in these commodities. The USSR is in closer proximity
with Japan;
however, political differences and problems made Japan view the USSR
as an
extremely unstable and undependable source of agriculture. As
Japan
drastically increased its capacity to produce and to consume, it became
a major
part of the worldwide economy. However, as strong as the Japanese is,
it is
nonetheless susceptible to problems. There is a current recession in
Japan
caused by many factors, one of them being fiscal tightening
representing an
increase in government revenues and decreasing government
expenditures. Other
factors contributing to the Japanese recession included
Asian economic
turbulence and a Japanese banking system deprived of strength.
The magnitude of
the fiscal tightening was too large for the Japanese
economy. Japan was not able
to absorb the fiscal tightening due to the
economic crisis in some Asian
countries and because of the failure of major
financial institutions. After
nearly four years of expansion from1987 to
1991, the Japanese economy went
through a recession starting in 1991 and
lasting for thirty-two months. This
recession ended in March of 1993. The
recession of 1991 to 1993 was the second
largest recession in the postwar
period. The government made efforts to
reactivate the economy and introduced
seven fiscal stimulus packages in four
years from 1992 to 1995. The Bank of
Japan cut the bank rate to 0.5 percent in
1995 and has since kept it at
this record low. The government undertook a major
tax reform in 1994 and cut
income taxes through the tax schedule and through
increases in standard
personal and employment income deductions. Therefore by
decreasing revenues
the government attempted to promote spending. As a result
the national debt
increased by about six percent of the Gross Domestic Product.
Another
reason for this increase in debt was that the private sector was
unresponsive
to the stimulus. One of the reasons for sluggish business
investment within
Japan was due to the unstable nature of the economy and a thus
a flight of
capital to the United States and other stable markets. Manufacturing
industry
investments increased during the 1995- 1996 period, which was a sign
to
economists that the economy was back on the path of self- sustaining
expansion.
However the investment boom which was confined to a few
machinery sectors was
sort lived. Investments by construction and real estate
firms continued to
decrease, dragging down the economy. These private sector
companies were
increasingly investing their capital abroad in the form of
direct investments
which was leaving less and less money being inside Japan
to stimulate
production, increase jobs and therefore increase the money
supply. To worsen the
situation, a significant increase in import penetration
observed from 1993 to
1995 was snuffing out domestic production. The
decreasing amount of household
consumption in the 90's reflected the weak
state of the economy. Unemployment
grew, which raised concerns about job
security and reduced people's willingness
to consume. Weak demands for goods
and services began to affect employment.
Employment in manufacturing
started to fall; however the difference was absorbed
by the construction
industry which soon became overloaded. The construction
industry soon
followed suit. The unemployment rate reached high national levels.
Due to
corporate restructuring as well as other factors, male labor
unemployment
grew forcing the women of the households to try and find jobs,
which was
contrary to traditional values illustrating the severity of the
situation. As
the Japanese economy struggled to rise from the ashes, it built
itself an
economy based on technology, which is evident especially in the
machinery,
transportation and steel industries. In addition, Japan is one of
the world's
leading research platforms for new technologies in robotics and
electronics,
making Japan a self-sustained ever-expanding country. Japan has
stayed on the
leading edge of the world riding a wave of technology, which
will definitely
carry it into the next millennium. Broad-based technological
firms combined with
innovative, even unorthodox, business strategies are the
supporting columns of
this immense notion. It is very possible for the
Japanese people to overcome the
conditions brought upon by the recession
through the policies they have adopted,
different from our own, and become
the number one leading country in Gross
Domestic Product. This would put
Japan in the spotlight of the rest of the
world, and maybe then, we will
begin to consider many of the different ways they
do business.