Economy of Japan: Difference between revisions
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==Agriculture== |
==Agriculture== |
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Only 29% of Japan's land is suitable for cultivation. The agricultural economy is highly subsidized and protected. With per unit area crop yields among the highest in the world, Japan maintains an overall agricultural self-sufficiency rate of about 50% on fewer than 56,000 km² (14 million acres) cultivated. Japan normally produces a slight surplus of wheat but imports large quantities of [[rice]], [[potatoes]], and [[alfalfa]]s, primarily from [[China]]. Japan is the largest market for EU agricultural exports. Apples, Pears and Oranges are also grown, mostly in [[Hokkaido]], as well as where they were first introduced by Dutch traders, in [[Nagasaki]] in the late 18th century. |
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==Industry== |
==Industry== |
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Revision as of 09:50, 1 August 2006
Template:Economy of Japan table
Japan's industrialized, free-market economy is the world's third-largest by purchasing power parity (PPP) after the United States and China, and second-largest by market exchange rates. Its economy is highly efficient and competitive in areas linked to international trade, but productivity is lower in areas such as agriculture, distribution, and services. After achieving one of the highest economic growth rates in the world from the 1960s through the 1980s, the Japanese economy slowed dramatically in the early 1990s, when the "bubble economy" collapsed. Its reservoir of industrial leadership and technicians, well-educated and industrious work force, high savings and investment rates, and intensive promotion of industrial development and foreign trade have produced a mature industrial economy. Japan has few natural resources, and trade helps it earn the foreign exchange needed to purchase raw materials for its economy.
Sliding stock and real estate prices marked the end of the "bubble economy" of the late 1980s, and ushered in a decade of stagnant economic growth. Real GDP in Japan grew at an average of roughly 1.5% yearly between 1991-1999, compared to growth in the 1980s of about 4% per year. Growth in Japan throughout the 1990s was slower than growth in other major industrial nations, and the same as France and Germany. Japan endured periods of recession around the turn of the millennium, exacerbated by recession in the United States, but from 2003 began to grow strongly again at 2.0% and this rate has held steady through 2004 and projected by a survey of economists through 2005. Japan has already achieved over 5% growth in the first half of 2005.
Natural resources
A mountainous, island nation, Japan has inadequate natural resources to support its growing economy and large population. Although many kinds of minerals were extracted throughout the country, most mineral resources had to be imported in the postwar era. Local deposits of metal-bearing ores were difficult to process because they were low grade. The nation's large and varied forest resources, which covered 70 percent of the country in the late 1980s, were not utilized extensively. Because of the precipitous terrain, underdeveloped road network, and high percentage of young trees, domestic sources were only able to supply between 25 and 30 percent of the nation's timber needs. Agriculture and fishing were the best developed resources, but only through years of painstaking investment and toil. The nation therefore built up the manufacturing and processing industries to convert raw materials imported from abroad. This strategy of economic development necessitated the establishment of a strong economic infrastructure to provide the needed energy, transportation, communications, and technological know-how.
Given its heavy dependence on imported energy, Japan has aimed to diversify its sources. Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from more than 75% in 1973 to about 57% at present. Other important energy sources are coal, liquefied natural gas, nuclear power, and hydropower. Demand for oil is also dampened by higher government taxes on automobile engines over 2000 cc, as well as on gasoline itself, currently 54 yen per liter sold retail. Kerosene is also used extensively for home heating in portable heaters, especially farther north. Many taxi companies run their fleets on liquefied gas with tanks in the car trunks. A recent success towards greater fuel economy was the introduction of mass-produced Hybrid vehicles. (see also Energy production in Japan)
Deposits of gold, magnesium, and silver meet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry. Iron ore, coke, copper, and bauxite must be imported, as must many fore
Macro-economic trend
This is a chart of trend of gross domestic product of Japan at market prices estimated by the International Monetary Fund with figures in millions of Japanese Yen.
| Year | Gross Domestic Product | US Dollar Exchange |
|---|---|---|
| 1980 | 240,707,315 | ￥225.82 |
| 1985 | 323,541,300 | ￥236.79 |
| 1990 | 440,124,900 | ￥144.15 |
| 1995 | 493,271,700 | ￥93.52 |
| 2000 | 501,068,100 | ￥107.73 |
| 2005 | 502,905,400 | ￥110.01 |
For purchasing power parity comparisons, the US Dollar is exchanged at ￥125.16.
In 1950, both Japan and India produced about 65% of the output of China. By 1975, China produced just over 25% and India merely 15% of the output of Japan.
Agriculture
Only 29% of Japan's land is suitable for cultivation. The agricultural economy is highly subsidized and protected. With per unit area crop yields among the highest in the world, Japan maintains an overall agricultural self-sufficiency rate of about 50% on fewer than 56,000 km² (14 million acres) cultivated. Japan normally produces a slight surplus of wheat but imports large quantities of rice, potatoes, and alfalfas, primarily from China. Japan is the largest market for EU agricultural exports. Apples, Pears and Oranges are also grown, mostly in Hokkaido, as well as where they were first introduced by Dutch traders, in Nagasaki in the late 18th century.
Industry
The nation's industrial activities (including mining, manufacturing, and power, gas, and water utilities) contributed 46.6% of total domestic industrial production in 1989, up slightly from 45.8 percent in 1975. This steady performance of the industrial sector in the 1970s and 1980s was a result of the growth of high-technology industries. During this period, some of the older heavy industries, such as steel and shipbuilding, either declined or simply held stable. Together with the construction industry, those older heavy industries employed 34.9% of the work force in 1989 (relatively unchanged from 34.8 percent in 1980). The service industry sector grew the fastest in the 1980s in terms of GNP, while the greatest losses occurred in agriculture, forestry, mining, and transportation. Most industry catered to the domestic market, but exports were important for several key commodities. In general, industries relatively geared toward exports over imports in 1988 were transportation equipment (with a 24.8 percent ratio of exports over imports), motor vehicles (54 percent), electrical machinery (23.4 percent), general machinery (21.2 percent), and metal products (8.2 percent).
Industry is concentrated in several regions, in the following order of importance: the Kantō region surrounding Tokyo, especially the prefectures of Chiba, Kanagawa, Saitama and Tokyo (the Keihin industrial region); the Nagoya metropolitan area, including Aichi, Gifu, Mie, and Shizuoka prefectures (the Chukyo-Tokai industrial region); Kinki (the Keihanshin industrial region); the southwestern part of Honshū and northern Shikoku around the Inland Sea (the Setouchi industrial region); and the northern part of Kyushu (Kitakyushu). In addition, a long narrow belt of industrial centers is found between Tokyo and Hiroshima, established by particular industries, that have developed as mill towns. These include Toyota City, near Nagoya, the home of the automobile manufacturer.
The fields in which Japan enjoys relatively high technological development include semiconductor manufacturing, optical fibers, optoelectronics, optical media, facsimile and copy machines, industrial robots, and fermentation processes. Japan lags slightly in such fields as satellites, rockets, and large aircraft, where advanced engineering capabilities are required but they made headway through their aerospace exploration agency, JAXA with possible manned independent mission to moon, and in such fields as computer-aided design and computer-aided manufacturing (CAD/CAM), and databases, where basic software capabilities are required, and natural resources exploitation, due to the lack of them.
Labor Force
Japan's labor force consists of some 64 million workers, 40% of whom are women. Labor union membership is about 12 million. The unemployment rate is currently 4.9%--a post-war high. In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form the Japanese Trade Union Confederation.
One major long-term concern for the Japanese labor force is a low birthrate. In the first half of 2005, the number of deaths in Japan exceeded the number of births, indicating that the decline in population, initially predicted to start in 2007, has already started. While one countermeasure for a declining birthrate would be to remove barriers to immigration, the Japanese government has been reluctant to do so.
see also: Labor market of Japan
Current Economic Issues
Heterodox economists tend to claim that Japan is far stronger economically than is usually appreciated [1]. Some mainstream economists acknowledge that Japan, which unlike most other Western countries has maintained its industrial base, and has vast capital reserves, currently has a strong economic outlook.
The privatization of Japan Post, the Japanese postal system which also runs insurance and deposit-taking businesses, is a major issue. A political battle over privatization caused a political stalemate in August, 2005, and ultimately led to the dissolution of the Japanese House of Representatives. The Postal Savings deposits, which have until now been used to fund public works projects, many of which have had questionable economic value, stands in excess of 1.9 trillion U.S. dollars, and could be a major force in energizing the private sector.
The decline in the Japanese population as a result of a low birthrate threatens the long-term economic vitality of Japan. A higher percentage of elderly in the population will put pressures on the pension system, and will ultimately force a higher burden on the current generation of laborers.
Other Economic Indicators
Industrial Production Growth Rate: 6.6% (2004)
Investment (gross fixed): 24% of GDP (2004)
Household income or consumption by percentage share:
- Lowest 10%: 4.8%
- Highest 10%: 21.7% (1993)
Agriculture - Products: rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fish
Exports - Commodities: motor vehicles, semiconductors, office machinery, chemicals
Imports - Commodities: machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)
Exchange rates:
Japanese Yen per US$1 - 109.690016 (2005), 115.933 (2003), 125.388 (2002), 121.529 (2001), 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)
Electricity:
- Electricity - consumption: 946.3 billion kWh (2003)
- Electricity - production: 1.017 trillion kWh (2003)
- Electricity - exports: 0 kWh (2003)
- Electricity - imports: 0 kWh (2003)
Electricity - Production by source:
- Fossil Fuel: 56.68%
- Hydro: 8.99%
- Nuclear: 31.93%
- Other: 2.4% (1998)
Electricity - Standards:
Oil:
- production: 17,330 barrel/day (2001 est.)
- consumption: 5.29 million barrel/day (2001 est.)
- exports: 93,360 barrel/day (2001)
- imports: 5.449 million barrel/day (2001)
- net imports: 5.3 million barrel/day (2004 est.)
- proved reserves: 29.29 million barrels (1 January 2002)
