|
| |
Economy
The Tokyo headquarters of the Bank of Japan, the country's central bank.
Close government-industry cooperation, a strong work ethic, mastery of high
technology, and a comparatively small defense allocation have helped Japan
become the second largest economy in the world, after the United States, at
around US$4.5 trillion in terms of nominal GDP and third after the United States
and China if purchasing power parity is used.
Banking, insurance, real estate, retailing, transportation and
telecommunications are all major industries. Japan has a large industrial
capacity and is home to some of the largest and most technologically advanced
producers of motor vehicles, electronic equipment, machine tools, steel and
nonferrous metals, ships, chemicals, textiles and processed foods. It is home to
leading multinational corporations and commercial brands in technology and
machinery. Construction has long been one of Japan's largest industries, with
the help of multi-billion dollar government contracts in the civil sector.
Distinguishing characteristics of the Japanese economy have included the
cooperation of manufacturers, suppliers, distributors and banks in closely-knit
groups called keiretsu and the guarantee of lifetime employment in big
corporations. Recently, Japanese companies have begun to abandon some of these
norms in an attempt to increase profitability.
With a market capitalization of more than US$4 trillion, the Tokyo Stock
Exchange is the second largest in the world.Japan is home to the world's largest
bank, the Mitsubishi UFJ Financial Group, which has roughly US$1.7 trillion in
assets; the world's largest postal savings system; and the largest holder of
personal savings, Japan Post, holding personal savings valued at around US$3.3
trillion. It is home to the world's second largest stock exchange, the Tokyo
Stock Exchange, with a market capitalization of over US$4 trillion as of
December 2006. It is also home to some of the largest financial services
companies, business groups and banks. For instance several large keiretsus
(business groups) and multinational companies such as Sony, Sumitomo, Mitsubishi
and Toyota own billion- and trillion-dollar operating banks, investment groups
and/or financial services such as Sumitomo Bank, Fuji Bank, Mitsubishi Bank,
Toyota Financial Services and Sony Financial Holdings.
From the 1960s to the 1980s, overall real economic growth has been called a
"miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4%
average in the 1980s. Growth slowed markedly in the 1990s, largely due to the
after-effects of over-investment during the late 1980s and domestic policies
intended to wring speculative excesses from the stock and real estate markets.
Government efforts to revive economic growth met with little success and were
further hampered in 2000 to 2001 by the deceleration of the global economy.
However, the economy showed strong signs of recovery after 2005. GDP growth for
that year was 2.8%, with an annualized fourth quarter expansion of 5.5%,
surpassing the growth rates of the US and European Union during the same period.
Because only about 15% of Japan's land is suitable for cultivation, a system of
terrace farming is used to build in small areas. This results in one of the
world's highest levels of crop yields per unit area. However, Japan's small
agricultural sector is also highly subsidized and protected. Japan must import
about 50% of its requirements of grain and fodder crops other than rice, and it
relies on imports for most of its supply of meat. In fishing, Japan is ranked
second in the world behind China in tonnage of fish caught. Japan maintains one
of the world's largest fishing fleets and accounts for nearly 15% of the global
catch. Japan relies on foreign countries for almost all oil and food.
Transportation in Japan is highly developed. As of 2004, there are 1,177,278 km
of paved roadways, 173 airports, and 23,577 km of railways. Air transport is
mostly operated by All Nippon Airways (ANA) and Japan Airlines (JAL). Railways
are operated by Japan Railways among others. There are extensive international
flights from many cities and countries to and from Japan.
Japan's main export partners are the United States 22.9%, China 13.4%, South
Korea 7.8%, Taiwan 7.3% and Hong Kong 6.1% (for 2005). Japan's main exports are
transport equipment, motor vehicles, electronics, electrical machinery and
chemicals. With very limited natural resources to sustain economic development,
Japan depends on other nations for most of its raw materials; thus it imports a
wide variety of goods. Its main import partners are China 21%, U.S. 12.7%, Saudi
Arabia 5.5%, UAE 4.9%, Australia 4.7%, South Korea 4.7% and Indonesia 4% (for
2005). Japan's main imports are machinery and equipment, fossil fuels,
foodstuffs (in particular beef), chemicals, textiles and raw materials for its
industries. Overall, Japan's largest trading partner is China.
| |
|
