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Economy of Japan

From Academic Kids

Japan's industrialized, free-market economy is the fourth largest in the world after the United States, China and recently India in terms of international purchasing power parity. When the EU is considered as one market, Japan ranks 5th. 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. While Japan's long-term economic prospects are considered good, Japan is currently in its worst recession since World War II. Sliding stock and real estate prices marked the end of the "bubble economy" of the late 1980s. Real GDP in Japan grew at an average of roughly 1% yearly between 1991-98, compared to growth in the 1980s of about 4% per year. Growth in Japan in this decade has been 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, in 2004 enjoying the highest rate of growth since 1990. The projected OECD forecast for 2005 is a slower 1.5% growth rate.

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Agriculture, Energy, and Minerals

Only 15% 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 km&sup2 (14 million acres) cultivated. Japan normally produces a slight surplus of rice but imports large quantities of wheat, sorghum, and soybeans, primarily from the United States. Japan is the largest market for U.S. agricultural exports. Potatoes are also grown, mostly in Hokkaido, as well as where they were first introduced by Dutch traders, in Nagasaki in the late 18th century.

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.

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 forest products.

Labor

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.

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Bankruptcy

Several leading Japan's companies went into bankruptcy in the 1990s and including after the bubble burst and after the Asian financial crisis.

Statistics

GDP: purchasing power parity - $3.582 trillion (2003 est.) - 5.0689 USD (2004)

GDP - real growth rate: 2.7% (2003 est.) - 2.6% (2004)

GDP - per capita: purchasing power parity - $29,200 (2004 est.)

GDP - composition by sector:
agriculture: 1.3%
industry: 25.4%
services: 73.3% (2003 est.)

Investment (gross fixed): 23.9% of GDP (2003)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 4.8%
highest 10%: 21.7% (1993)

Inflation rate (consumer prices): -0.3% (2003 est.) -0.5% (2004)

Labor force: 66.66 million (2003)

Labor force - by occupation:
agriculture: 5%,
industry: 25%,
services: 70% (2002 est.)

Unemployment rate: 5.3% (2003) 4.7% (2004)

Budget:
revenues: $1.327 trillion
expenditures: $1.646 trillion, including capital expenditures (public works only) of about $71 billion (2003 est.)

Public debt: 154.6% of GDP (2003)

Agriculture - products: rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fish

Industries: among world's largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, processed foods

Industrial production growth rate: 3.3% (2003 est.)

Electricity - production: 1037 TWh (2001)

Electricity - production by source:
fossil fuel: 56.68%
hydro: 8.99%
nuclear: 31.93%
other: 2.4% (1998)

Electricity - consumption: 964.2 TWh (2001)

Electricity - exports: 0 kWh (2001)

Electricity - imports: 0 kWh (2001)

Electricity - standards: 100 volts at 50 Hz from the Oi River (in Shizuoka) northward; 60 Hz southward

Current account balance: $135.9 billion (2003)

Exports: $447.1 billion f.o.b. (2003 est.)

Exports - commodities: motor vehicles, semiconductors, office machinery, chemicals

Exports - partners: US 24.8%, China 12.1%, South Korea 7.3%, Taiwan 6.6%, Hong Kong 6.3% (2003)

Imports: $346.6 billion f.o.b. (2003 est.)

Imports - commodities: machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)

Imports - partners: China 19.7%, US 15.6%, South Korea 4.7%, Indonesia 4.3% (2003)

Reserves of foreign exchange & gold: $664.6 billion (2003)

Debt - external: $NA (2002 est.)

Economic aid - donor: ODA, $7 billion (FY03/04)

Currency: yen (JPY)

Exchange rates: yen per US$1 - 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)

Fiscal year: 1 April31 March

See also

External links



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