Japan Economy

By | November 28, 2019

Japan is the third largest economy in the world, falling behind China in second place and the United States in first.

In the 1980s and 1990s, however, Japan occupied the rank of second richest nation in the world, with the USA in first place.

Among the main factors that justify Japanese economic performance relative to other Asian nations and even the rest of the world’s countries are US impositions after World War II.

Defeated, Japan signed surrender in 1945 and remained under US rule until 1952, when it regained autonomy.

Post war

At the helm, the United States applied measures to transform the Japanese economy, culture, and politics. With the completion of land reform, the country left behind the feudal past. The Army was disbanded and turned into a self-defense force whose outside interference was prohibited by the Constitution.

The constitution also made Japan a secular state. Before that, the official religion was Shinto, in which the emperor himself was considered a god. As a result, Emperor Hiroite, who ruled from 1929 to 1989, renounced his divinity and acted directly in the political, cultural and economic reform of Japan.

As a US contributor, the Japanese government borrowed from and modernized the industry, providing war equipment to the Americans, who were suppressing communist activity in Asia.

Korean War

It was Japanese industry that was primarily responsible for supplying arms to the United States during the Korean War, which took place between 1950 and 1953, and Vietnam, between 1960 and 1975.

Japanese economic performance was also influenced by cheap labor, increased investment in technology research and mass education. From 1947 to 1970, Japan grew proportionally more than any nation in the world.

The Japanese economy grew 9.7% between 1947 and 1950, while the United States grew 2.4% in the same period, and the United Kingdom 1.5%. Between 1966 and 1970, Japan grew by 14.6%, more than double France with 6% and well above the United States (3.1%), the United Kingdom (2.6%) and Germany (5.2%).

The Japanese industry was already quite diverse in 1880, with the operation of textile factories, especially cotton and silk. From 1901, steel, metallurgy, chemistry and mechanics began to appear.

Japanese technology

It is the technology industry, however, the main driver of growth in the modern era. Japan is at the forefront of robotics, nanotechnology, electronics and computer research. Although scarce raw material, being dependent on exports, the transformation of products through technological support guaranteed Japan outstanding economic growth.

In short, Japan imports primary products and exports technology. This trend was only halted in the 1990s, when the country faced one of the worst economic crises in history and due to financial speculation in the real estate sector. This phenomenon is called the housing bubble.