Term Paper on "Japanese Rise to Economic Power"

Term Paper 8 pages (2318 words) Sources: 1+

[EXCERPT] . . . .

Japan's Economic

Japan and the Rise to Economic Superpower

Recession & Economic Rise

Globalization and the economic boom experienced by Japan as well as other countries located in the region of the Pacific Rim has culminated in problems that were not previously experienced in the region. Specifically the interactions and relationships of interdependence are new leaving each country feeling somewhat vulnerable due to their dependence upon one another. It is critical that these countries find a way to cooperatively and collaboratively find cohesion in economical pursuits in order to heighten their productivity. This can be accomplished through creation of inter-networks and intra-networks within the economical structure and framework in this region, however, due to sensitivities that are left over from the Cold War it is likely that handling one another with 'kid gloves' will be the protocol for success for some time yet to come.

Japan and the Rise to Economic Superpower

Recession & Economic Rise

Statement of Thesis

The purpose of this work is to explain the rise of Japan to the position of an economic superpower and to discuss how Japanese economic expansion has changed its relations with other nations on the Pacific Rim.

Introduction

Japan's economy is experiencing slow recovery after a recession in the latter part of the 1990's and as well Japan has undergone criticism for the imposition of high tariffs on goods imported into the country of Japan. The conditions of employment are undergoing changes with the job tradition of 'lifetime employment' in Japan no longer a given factors.

Other stated transitions are those of:

Young people are becoming more westernized, challenging traditional culture.

High density living is crowding out agricultural land.

Japan is one of the few whaling nations and has come under international criticism for its continued hunting of whales. (Morse, 1997)

I. Pacific Rim Countries

Pacific Rim countries are those nations which border the Pacific Ocean and the Island Countries situated in it. These countries have become important and this importance continues to increase in the economic region that is interconnected. Twenty-one countries inclusive of the United States, Canada, Taiwan, Singapore, Hong Kong and South Korea with 21 nations in all are members of the Asia-Pacific Economic Cooperation (APEC) established as a forum for discussion in relation to varied economic concerns, issues or topics and in encouraging economic cooperation as well as for promotion of trade among the market-oriented. Has coincided with Japan's emergence as an economic superpower and with the rise of highly developed industrial economies in Taiwan, Singapore, Hong "

Japan has the largest car industry worldwide. The agriculture sector is one that is smaller and stated to be "in decline" with "far fewer people...involved in growing food now than a few decades ago and crop production is falling." The most important of all Japan's economics sectors is that of industry with 30% of the workforce being employed in the automotive industry. This is a problem due to heavy reliance on imports in terms of raw material and fuel. (Twenty-First Century Online, 2005) Japan's growth rate of 5% is the highest among the G7 countries. Japan is expected by many authorities to replace the United States as the pre-eminent economic superpower in Pacific Asia.

Chalmers Johnson, author of 12 books on Asian subject material is writes in his Pacific Rim report that, Since the cold war came to its unexpected end about five years ago, three main global trends have prevailed. Those trends, as stated by Johnson (2005) are:

1) "One trend is a movement toward regional economic integration. Examples include the European Union, the North American Free Trade Agreement, and the various proposals for some kind of free trade zone encompassing the entire Pacific, all of non-English-speaking East Asia, or all of Southeast Asia." (Johnson, 1997)

2) "A second trend is the movement toward subnational ethnic fragmentation, meaning the breakup of former states into new ethnic units. Examples include the disintegration of the former USSR, the former Czechoslovakia, and the former Yugoslavia along with heightened communal tension, often leading to violence, in many parts of the world." (Johnson, 1997)

3) "The third trend is a tendency to cling to the old Cold War system even when it no longer makes any sense and is a major economic." (Johnson, 1997)

In relation to the third issue Johnson (2005) states that "The power of this inertia and these entrenches interests is seen most clearly in Japanese foreign policy, in the United State's maintenance of a defense budget larger than that all of its allies combined, and in the continued existence of NATO." Johnson (2005) writes, "Japan's main sectors of public opinion - the bureaucracy, business leaders, journalists, and intellectuals - have started to prepare the country ideologically for a strategic disengagement from the United States and a recasting of priorities in favor of an attempt to lead Asia." The theory of Samuel Huntington argues that the wars and conflicts in the futures will not be built upon a basis of conflict among states but that the future tensions and conflicts will be of a nature of "clashing civilizations" or "those broad criteria defined by history, language, ethnicity, and religion." The net savings rate of Japan is stated to be continuing a trend above a fifth of GNP, which is two and a half times the average for other economies in the industrialized world. "During the year of 1993 the trade surplus of Japan's trade with other countries in East Asia were stated as it was one that had already "exceeded its' trade surplus for the first time with the United States.

Very important to note is the fact that the growing economic dominance of Japan as well as the degree of integration among nations of the region. "The means of integration are trade, direct investment, aid, financial services, technology transfer, and the example of Japan as an Asian model of development." (Johnson, 2005) Japanese is the provider of trade, direct investment, aid, financial services, technology transfer and as well the sample of Japan as a model of development."

II. Key Issues in Asia Empowerment:

The five key issues in the empowerment of Asia which is inclusive of many problems that are of a difficult nature and have a great chance of destabilization not only Asia but the entire globe.

The issues are stated to be as follows:

Chinese growth rates

Claims of "Greater China" circulating among overseas Chinese.

Japan's need fro but seeming inability to shift to a consumer-driven economy; and the unification of the terms of a future Asia-Pacific balance of the power and the role of the United States in maintenance of it. (Scalapino, (1998)

III. Recession and Productivity Factors in Japanese Economy

Although Japan has experienced a recent recession the economy in Japan is generally considered to be equal to and even stronger than that of the United States economy. Stated in the work entitled, "Japan's Economy: 21st Century Challenges" is that one of Japans largest areas of concern was that of productivity. Japan is the world leader in machine tools, consumer electronics and motor vehicles but is somewhat behind in the area of telecommunications and software industry. Stated is that, "Productivity problems are a major reason why Japanese manufacturers have some of the world's highest production costs. The irony is that many of the practices that have made the Japanese economy so successful in the past, including strong government involvement in the economy and the permanent employment/seniority system, are now hindering Japans' future international competitiveness." Regulatory problems in relation to the government bureaucrats of Japan exists as well which is unfortunate in a market which calls for "maximum flexibility in the private sector." (Ellington, 1995) These regulatory problems are numerous with examples stated to be "If a bank wishes to open a bank in a distant locale, it must first obtain permission from the Tokyo-based Ministry of Finance. [and] if a local government wishes to move a stop sign, it must obtain permission form the Ministry of Transportation." [and] "The Ministry of Health's Food Sanitation Act requires a total of 21 approvals if a store wishes to sell meat, fish, bread, or frozen foods." (Ellington, 1995)

It is clear that overregulation is a causative factor in the Japanese having to pay on the average one-third more for goods and services than Americans. This regulation by the Japanese government quite simply "drives productivity down as companies devote an inordinate amount of time to satisfy bureaucrats. The digest article touches on the resulting affects to the "lifetime employment" in the Japanese economy in relation to companies being overburdened with employees that they cannot lay off which causes a disadvantage internationally in competition and further states that the seniority system "tends to discourage innovation and risk-taking, the very qualities that are vitally needed in high-tech and service industries." Finally the study states that "barring a major catastrophe such as war, Japan will still be an economic superpower for the foreseeable future." (Ellington, 1995)

IV. Industrial Policy as an Economical… READ MORE

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