Japan is very rich in terms of its highly developed economy.
The country is positioned as third in terms of nominal
GDP and fourth in purchasing power parity (PPP).
Japan has also occupied the third place in automobile and electronic manufacturing
industries and is also listed under the major innovative countries of the world.
In the recent era, the main challenges and
competition for Japan are China and South Korea.
Due to this competition, Japan is mainly concentrating on the
manufacture of hybrid vehicles, robots, and optical instruments.
Although Japan’s economy is continuously rising,
its population is diminishing to a great extent.
According to 2015 survey, the Japanese population
was initially decreased to 127 million and it is
estimated that this declining and aging issues in
Japan would continue till the mid of 21st century.
During 1960, Japan reduced its expenditure on
defense and focused on the industrial development.
This was the period between World War 2 and the cold war.
Japan accomplished its goal within the three decades by achieving the
second world’s largest economy position after The United States of America.
However, this development could not stand long as, during 1990’s
Japan’s growth was much slower than the other developed countries.
This fall sustained for 20 year due to which Japan was named as ‘Lost Decade’.
Japan has insufficient and scarce resources to
meet the demands of its growing population.
This is the major reason why the country preferred exports to a great extent.
Japan is the third largest importing country of agricultural products after the
United States and Europe and the first largest importing countries of fish.
Although gold, magnesium, and silver are extracted from the country and accomplish
the industrial needs, Japan still requires the support of other countries to import
iron ore, copper, bauxite, alumina, and other forest products.
The forest of Japan contributes to 70% of the total
till the forest was not operated and used properly.
Japan then discontinued the forest exploitation and only the timber of
Japanese forests was utilized for its industrial and manufacturing work.
Since Japan was the importer of raw materials,
it decided to construct diverse manufacturing
industries to process those raw materials and convert them into valuable products.
This modification also advanced the technologies, transportation,
energy, and communication that were used for the industrial process.
Economic history of Japan
The economic history of Japan is very popular because
of the three major decades and improvements.
The first period is known as Edo period (1603), the second period is Meiji restoration
(1868), and last is the defeat of World War 2 (the period of major growth).
Edo period
The period commenced in the 16th century when Japan was the leading
country in terms of metals like gold, silver, platinum, and etc.
however, the exports of this metals to other countries was restricted
due to which Japan could no more export the precious metals.
In the starting of the Edo period, Japan
successfully constructed its first warship known
as San Juan Bautista that supported the shipping
of Japanese embassy to America and Europe.
Japan desired to eliminate the power of Christianization in
the country which resulted in the seclusion period of Japan.
During this period, Japan’s economy established.
The urbanization in Japan developed following enhanced transport of several
commodities, the growth of domestic products, and handicraft industries.
Apart from this, it also developed the banking,
agricultural, and industrial facilities.
During the 18th century, Edo was populated by 1 million and even more people
whereas the population of Kyoto and Osaka was estimated to be 400,000.
When Edo was busy supplying the consumer products and food,
Kyoto and Osaka expanded their handicraft and trading business.
In the same era, Daimyo used to fetch the taxes of
agricultural production from the small harvesters.
However, these taxes were not the money but rice.
Generally, a total of 40% of rice was set as the tax.
Japan in the 16th century also expanded in terms of education and literacy as
it started studying the Dutch books that were supplied from Dutch to Dejima.
People used to study a variety of topics
including geography, natural science, medicine,
astronomy, art, languages, physical science, mechanical science, and much more.
Prewar period (1868-1945)
The post war period started after the Meiji restoration and remained until 1945.
In this period Japan experienced two major transformations and amendments.
The first changes took place in 1868 and continue
and persisted till the Second World War.
The second alteration began in 1945 and long last till the 1980’s.
During this period, the Meiji government adopted the western-based education system and
transferred a large number of young children
to The United States and Europe for studies.
The government also hired about 3000 foreign trained and skilled teachers
for the subjects including mathematics, technology, and languages.
Apart from education transformation, the Meiji government took various measures in
improving the railroads and participated in
diverse land reform programs to develop Japan.
In the beginning of this era, the Government
decided to upgrade the industrialization in Japan.
Private business played a vital role in industrial transformation and at the same time,
the public sector had a major contribution to enhance the private sector growth.
The major responsibility of government was to maintain the better economic condition
and availability of each and every essential resource to the private companies.
In 1930’s, the japans wage rate was calculated
as 10% less than that of the United States.
Post-war period (1945-present)
During the post-war period, the economic growth of Japan raised tremendously with
the 10% increase in 1960’s and 5% increases in 1970’s following 4% in 1980’s.
The upset period was declined and an innovated Japan came into existence.
However, this growth ended in a short period of
time and by 1990’s Japan faced various challenges.
In order to cover the losses, Japanese government formed the structural reform
policies but this further created hurdles in the economic growth of the country.
Several policies and techniques were adopted by the country
one of which was ‘quantitative easing’ to raise inflation.
However, this technique also flopped as it was
not enough to get rid of price deflation.
After few years, Japan showed a great recovery from the crisis and its
GDP rose up to 2.8% but the deflation still sustained for a long period
until Japanese banks declared the doubled supply of money for more than two years.
Infrastructure of Japan
During 2005, the energy of Japan was generated using
the petroleum, 5% of coal, and 14% of natural gas.
Electricity production was formed by the nuclear power but because of the
Fukushima Daiichi nuclear disaster, the nuclear plants of Japan were ended.
Japan has well-developed and top-most paved roads and railways.
The road in Japan is considered to be the major
transportation method adopted by the citizens.
Another infrastructure improvement came into
existence when Japanese government decreased the
price of fresh and used cars making it affordable
for the people to purchase them easily.
The Japanese government also persuaded the people to purchase the hybrid vehicles.
Japan has also the punctual train services that connect diverse cities including
Fukuoka, Kobe, Kyoto, Nagoya, Osaka, Sapporo, Sendai, Tokyo, and much more.
There are a total of 175 airports in Japan and airways
are considered as the effective way of traveling.
The largest and busiest airport in Japan is Tokyo international airport.
Japan is one of the largest importers of coal, natural gas, and net oil.
Japan has reduced the import of petroleum and
enhanced the import of natural gas and nuclear power.
Labor force
In June 2009, the unemployment rate in Japan was
5.2% but due to the expansion and fast recovery
from the crisis, the government managed to
bring down the rate to 3.7% in December 2013.
According to the 2008 reports, Japan had 66 million
of workers among which the women contributed to 40%.
However, the labor force kept on declining due
to the inadequate population of the country.
In 2005, Japan’s death rates of the people were more than that of the
birthrate which again created a huge hindrance to its economic development.
Law and government
In comparison to the other developed countries, Japan
is a leading country in terms of smaller tax rates.
Although a large number of Japanese workers are free from paying income
taxes, the corporate tax charged by the country is very high i.e., 36.8%.
The consumption tax in Japan is just 8% but the
Government is planning to increase the same to 10%,
and reduce the corporate tax rates.
Other economic indicators
Some major economic indicators of Japan are as follows:
Industrial production growth rate – 7.5%
Investment – 20.3% of GDP
Agricultural products – rice, vegetables, sugar, beets,
fruit, pork, eggs, fish, dairy products, poultry, and etc.
Exports commodities – machinery and equipment,
semiconductors, motor vehicles, chemicals, and much more
Imports commodities –fuels, foodstuffs, machinery and equipment,
chemicals, textiles, raw materials, foodstuffs, and etc.
Electricity consumption – 925.5 billion KHz
Electricity production – 957.9 billion KHz