CHAPTER OUTLINES: Introduction. Post-War Growth-the end of the Japanese miracle? Japan’s Trading Imbalance with the Western Industrialised Countries-background to the problem, the structure of Japan’s trade. Japan’s Import Barriers: How Open is the Japanese market? The Macroeconomic Determinants of the Japanese Trade Surplus. Japan’s Regulated Financial Markets. Conclusion.
In Chapter 1, we saw that one of the most significant developments in world trade over the past half-century has been the sudden and rapid emergence of Japan as one of the leading industrialised nations of the world. In a relatively short space of time, Japan has grown from being a semi-industrialised nation with a low average income to become one of the world’s largest exporters of manufactured goods and one of the most prosperous nations in the world. Although, in the 1990s, the ‘Japanese miracle’ experienced a dramatic setback, it remains the case that Japan’s ascendancy has been one of the most important events of the post-war era. On reflection, the rise of Japan may be regarded as the first phase in a deeper and more extensive process that has resulted in a large number of developing countries achieving rapid industrialisation through export expansion. The next chapter discusses the growth of these ‘other Japans’. In this chapter, we focus attention on Japan. As we shall see, although there are similarities between the experience of Japan and the ‘newly industrialising economies’, there are also some important differences.
The first part of this chapter discusses some of the reasons for Japan’s post-war success and for the sudden, rude interruption to growth that she experienced in the 1990s. However, the primary concern of this chapter is with the problems that the rise of Japan has created for the western industrialised countries. As we shall see, a feature of Japan’s post-war growth has been the success with which she has expanded her exports of manufactured goods to the western industrialised countries. At the same time, her imports of manufactured goods from them has not grown at an equivalent rate. This has led to friction between Japan and her western trading partners. Within the western industrialised countries, there have been growing demands for protection against Japanese goods. Disputes between Japan and