International Trade Between Japan and the United States

Topics: Gross domestic product, Economic growth, Economics Pages: 9 (3344 words) Published: December 16, 2009
1. Executive Summary
Since World War II, Japan started to focus on its economic growth and eventually became the second largest GDP in 1967. Japan is currently the world’s fourth largest exporter and sixth greatest importer in the processing industry and high-technology. As Japan’s position has grown, their political, economical power in the world has grown, too. However, as many Asian and Latin countries’ economical development efforts are growing rapidly, Japan’s former position is threatened. Especially in the case of China, since they opened the market, now they are 4th biggest country in terms of economic size. The biggest reason that China has a big potential is its big market size and huge population. India or China’s economic size can be big, but the national income will be hard to get into high-national income countries group and potential growth limitation will come earlier than other advanced countries had gone through. If densely populated country such as China becomes the highest-national income country, former powerful economic countries such as Japan or the United States will have to give up their wealth in the world market. That is not going to happen in terms of earth energy and resources limitation, environmental pollution, and trade or market share. The countries which have developed high-technology, fundamental science and intermediate components, such as Japan, will keep their economic position in the world. For example, even now if Japan stopped making components, then most machineries in the world will not work. The economic growth rate can be small, but Japan will steadily grow with the world’s top foreign exchange holdings and highly advanced technology, overall low political and commercial risks, and proximity to other East Asian countries such as China geographically. It’s not common that foreign companies invest in Japan. However, we can learn and develop from Japan’s successful economic models, policies, and technology.

2. Country Demographic Description – Market Size
Japan has the tenth largest world population, around 127 million.(1) However, over the past few years, the population growth rate is decreasing due to falling birth rates and less immigration. (1) In 2007, the Japanese government announced that Japan had an estimated 33,500 new births in 2006, ranking Japan as one of the least growing nations in the developed world. Due to late marriage, advanced education, increasing numbers of working women, and the high cost of child education the birth rate is low and advanced medical technologies and healthy life styles are making the mortality rate low. Now Japanese industries which are damaged from this aging society, such as railroad companies, universities, children’s industry, wedding industry, need to reconstruct their business strategy and organization. Also many Japanese industries are trying to expand their market for the older and focus on both young people and the older people’s tastes at the same time. For example, Toyota introduced a mini van ‘Raum’ which is easy to use and attractive to all kinds of ages. This model is a car especially designed so that a diversified generation can enjoy the style and functions of it. Many universities also try to open various classes for the older generation. Japan is a homogeneous group ethically, culturally, and racially. According to the CIA fact book, Japanese ethnics are composed of 99.4% Japanese and they use Japanese as an official language. Japanese places considerable emphasis on the group rather than the individual. From a company’s point of view, Japanese people are hard workers and they unify well for the organization’s benefits that they belong to. CIA fact books stated in 2002, Japanese gender ratio is almost equally split between male and female. The literacy rate based individuals aged 15 that can read and write is ninety percent of the total population in 2002. (14) Emphasizing education in...
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