Japan

IV

Economy

In recent decades the Japanese economy has expanded rapidly. The industrial base of Japan has shifted from light industries to heavy industries, chemicals, and electronics, which together constitute at least two-thirds of the total value of yearly exports. In 2004, the annual gross national product of Japan was US$4,734 billion (World Bank figure), one of the largest in the world, yielding a per capita income of US$38,950. The national budget for 1993 included revenues of US$893 billion and expenditures of US$1,013 billion.

Before and during World War II much of the Japanese economy was controlled by about a dozen wealthy families, collectively called the zaibatsu (“wealth cliques”). The greatest of these families were the Mitsui, Iwasaki (operating under the company name Mitsubishi), Sumitomo, and Yasuda; they controlled most of the coal, iron, pulp, and aluminium industries. In 1945 and 1946 family ownership of these immense trusts was dissolved by the Allied occupation authorities. The business organizations remained intact, however, and have since acquired even greater economic power by expanding into shipping, banking, and other industries.

Following the bursting of the so-called “bubble economy” in the early 1990s, Japan entered a prolonged period of relative economic stagnation. Chief causes were heavy corporate debts (partly concealed by Japanese accounting practices), aggravated by a collapse in property prices and a slump in share values. These factors combined to devalue the assets of both companies and individuals, leading to low consumer confidence, poor sales, and very cautious investment. Japan was not directly affected by the Asian economic crisis of the mid-1990s, as its own crisis was already under way, with many banks and companies technically insolvent. Politicians and bureaucrats attempted to tackle Japan’s various interlocking economic problems with various methods, including market-opening reforms and public spending boosts, but with little effect. By the end of the decade, the Japanese economic model once held up as an example to the world had clearly run its course and was badly in need of complete restructuring.

A

Agriculture, Forestry, and Fishing

The farm population has declined in recent years. The importance of agriculture, however, has not decreased. More than 40 per cent of the cultivated land is devoted to rice production, which in the mid-1990s represented about one-third of the total crop income. Rice remains the staple of the Japanese diet; alterations in the national diet, however, and development of better yielding strains of rice have brought about significant overproduction. Wheat and barley are other important grain crops.

In 2005 annual production in tonnes included rice, 11 million; potatoes, 2.90 million; sugar beet, 4 million; sugar cane, 1.35 million; mandarin oranges, 1 million (1995); cabbage, 2.6 million (1995); sweet potatoes, 1 million; onions, 1.2 million (1995); and cucumbers, 866,000 (1995). Other crops include melons, tomatoes, apples, wheat, soya beans, tea, tobacco, and other fruits and vegetables.

Because arable land is scarce and consequently valuable, relatively little acreage is used for livestock. Nevertheless, Japan in 2006 had 9.62 million pigs, 4.39 million cattle, and 283 million poultry birds. The arable land is divided into small farms and almost 70 per cent of this land consists of farms of 1 hectare (2.5 acres) or less. Most farmers also work part-time in industry. The land is tilled intensively; almost all farms have electricity and most use modern machinery. Japanese farmers frequently raise two or more crops yearly. Much of the land suffers from soil exhaustion. Heavy use of chemical fertilizers, improved strains, and advanced techniques, however, have made Japanese farms among the most productive in the world.

About 68.2 per cent of the total land area of Japan is woodland, some two-fifths of which contains softwoods. Approximately two thirds of the forest area is privately owned. Although Japan ranks high in world production of timber, the steadily increasing domestic demand for timber compels the country to import much of its needs. Roundwood production in 2005 was about 16.3 million cu m (575 million cu ft).

Fish is a food staple for the Japanese and is second in importance only to rice. Consequently, fishing is one of the most important industries, both for the domestic and export markets. The Japanese fishing fleet is one of the world’s largest. The industry may be divided into three principal categories: offshore, coastal, and deep-sea fishing. Offshore fishing from medium-sized boats accounts for a substantial amount of the total catch, but only about one-quarter of the total value of production. Deep-sea fishing by large vessels that operate in international fishing grounds brings in a catch about equal to that of offshore fishing, while coastal fishing, either by small boats, set nets, or breeding techniques, represents almost half of the industry’s total production. In 2004 the annual catch totalled some 5.18 million tonnes and included sardines, bonito, crab, pike, prawn, salmon, pollack, mackerel, squid, clams, saury, sea bream, scallops, tuna, and yellowtail. In addition, Japan is among the world’s few remaining whaling countries, and large amounts of seaweed and other marine plants are harvested.

B

Mining

The mineral resources of Japan are varied but limited in quantity. Limestone is the principal mineral. Other mined minerals include coal, copper, lead, zinc, and quartzite, but quantities of these are insufficient to meet domestic demand.

C

Manufacturing

Japanese industry suffered extensive damage in World War II. Subsequently, the country undertook a reconstruction that resulted in a complete modernization of its manufacturing facilities. Primary emphasis was placed on the chemical and petrochemical industries and the heavy-machinery industry. By the mid-1950s industrial production had surpassed pre-war levels; manufacturing growth averaged 9.4 per cent annually during the period from 1965 to 1980 and 6.7 per cent a year during the period from 1980 to 1988. In the mid-1990s Japan was the leading shipbuilding country in the world and among the leading world producers of electrical and electronic products, steel, and motor vehicles. Crude steel production in 1995 was some 101.6 million tonnes; and pig iron output was about 75 million tonnes. Japanese industry also produced 7.6 million passenger cars, 2.5 million lorries and trucks, 44.6 million watches, 7.8 million colour television sets, 11.4 million 35-mm cameras, and numerous other electric and electronic items for the home and workplace. Japanese companies were increasingly investing in industrial plants outside Japan.

In the mid-1990s Japan was also among the leading world producers of basic chemical raw materials. Japan was one of the leading textile manufacturers in the world and among the three largest world producers of synthetic fibre. Silk and cotton production during this period, however, declined in importance to the economy.

D

Tourism

During 2005, around 6.73 million foreigners visited Japan. During 1995, an estimated 13.6 million Japanese travelled overseas. Japan’s income from tourism in 2005 totalled US$37.5 billion.