Japanese Economy

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One should start by saying that economic growth of Japan after the end of the World War II was enormous. It resulted in Japanese economic ascension making Japan one of the few world most economically advanced nations. From the savage destruction brought during World War II. Japan has done wonders to create the strong economy it has today. Japan had managed to advance originally via proper government industry cooperation initiatives, strong work ethic of the Japanese people, adoption of new technology, great emphasis on educational advances and virtually non-existent defense allocation. Currently Japan is still one of the top economic powers after the USA, China, and the European Union. For the past 3 decades Japanese economic growth was spectacular: in the 1960s the GDP grew at an average rate of 10%, in the 1970s the GDP grew at an average rate of 5% and in the 1980s the average GDP growth was 4.3%. The 1990s were marked by remarkable slowdown of the economic growth of Japan because of the overinvestment that happened in 1980s and domestic macroeconomic policies that attempted to reduce the speculative access that existed in the stock and real estate markets. The Japanese government’s efforts to revive the slowing economy were unsuccessful, while the Japanese economy suffered further in the years 2000 and 2001 from the slowing of the US and Asian economies. Kenneth Pile states in “The Making of Modern Japan, 2nd Edition” one of the most remarkable features that distinguish the Japanese economy from any other economy in the world is the keiretsu principle, or the close cooperation between the manufacturers, producers, suppliers, distributors and banks that create synergy and increase in efficiency (Pile). Shunto, or the cooperation between the government and the businesses where the government provides support and assistance to chosen businesses. Shushin Kayo, or the paternalism, is the guaranteed lifetime employment in large corporations and unionized factories around Japan. Currently, many Japanese companies abandon their traditional business practice and engage in an American-type business activity in an attempt to improve competitiveness of corporations and lower costs. Koizumi, Junichiro and his government engaged in creation of various privatization and foreign direct investment laws hoping to boost the Japanese domestic economic growth yet did not achieve any visible results. Despite the existence of various laws, the economy does not seem to respond any how favorably. “Together with ageing population of Japan, the Japanese economy is expected to experience even more stress in the years to come” (Gao). Speaking about an agricultural sector of Japanese economy, note that it is highly subsidized and protected by the government’s regulations, laws and statutes that benefit primarily small scale farming and growing, rather than large-scale, Genetically modified farming as conducted in the USA and other countries in the west. Japan imports virtually all of its food and placed great tariffs on the imported foods that are also made at home. For instance, the imported rice is a subject to a tariff of about 500% and is restricted to about 5% of the total rice market in Japan. Japan imports other grains and meats. The only self-sustaining farming culture is fish, with Japan possessing the world’s largest fishing fleet and accounting for about 20% of the global fish catch. Industrial sector of the Japanese economy accounts for about 25% of the overall GDP of the country. Industrial sector depends on imported raw materials and fuels. Japan has world recognition for exporting automobiles and electronics and is a home of such large global companies like Sony, Nissan, Toshiba, Honda and Toyota. Japan currently invests heavily in its semiconductors industry, chemicals, machine tools and aerospace. Construction is one of Japan’s largest and most profitable industries currently benefits from the government’s multi-billion dollar...
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