Custom «Japans Export Base» Essay Paper Sample

Japans Export Base

The export base analysis is useful in economic impact analysis. It estimates regional changes through a multiplier applied in the question development. Countries are only able to grow stronger economically by gaining the ability to climb up the industrial ladder to produce or manufacture products that have greater value than has been added to their basic inputs through processing and manufacturing. Japan realized this as early as in the 1960s and, and it adopted the industrial policy in the country, which has made Japan rise and be ranked 15th among 183 countries in ease of doing business (Flath, 2000).

Japan prides itself as a processing nation, which imports raw materials, processes them thus adding value to them, then exports them, and in this way the country is able to pay for the imports, as well as generate profits. This is reflected in their continuous gross domestic product growth; for example, in 2010 Japan was ranked by the International Monetary Fund as the country with the 24th highest gross domestic product in the world. The push factor to promote export in Japan stems from the need to promote export and promote Japans image as a processing nation. This has been done through the provision of incentives to the export trade by the government through the Industrial Policy, adopted in the 1960s. After the World War II, these incentives took the form of tax relief for exports, and the government gave its assistance to build export industries, hence promoting the growth and development of the export trade (Arrison, 1992).

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According to Weinstein (2005), Japanese export trade grew rapidly in the 1960s through to the 1970s, and declined a little bit in the 1980 following the global economic recession. Japans export products acquired a reputation of quality stuff, and thus the reputation of Japanese products grew profoundly. However, the Japanese government, despite its tremendous effort to promote export trade, has been faced by challenges, like the tsunami, earthquakes, and the persistence of the Yen strength against the weakening global demand; and this led to trading deficits on the Japans export in the recent years.

Japanese success in export trade created a backlash in some countries not only due to its success per se, but also the allegations of unfair competitive practices. However, Japanese success in business could be attributed to the county’s willingness to promote its export trade by its reluctance to raise the tariffs, or impose export quotas (Arrison, 1992).

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The promotion of export took two paths in the early years of export trade establishment; that’s the development of world indutries to substitute for imports, which enabled Japan to compete favorably in the international market, and also the provision of incentives for firms to export by subsidzing on the export tax. However, in 1964, when Japan joined the International Monetary Fund, tax exemption policies for exports were dropped to comply with the IMF procedures. In the recent years, export has been enhanced through the production of high quality products following advancement in technology and use of multinational cooperation.

Export trade has had a great historical significance in the Japanese economy as well as most Asian countries. The major exports of Japan are iron, steel, consumer electronics, automobiles, semiconductors, optical fibers, optoelectronics, facsimile and copy machines, optoelectronics among others. Japan exports its products to China, the USA, South Korea, Taiwan, and the United Kingdom among other countries. Japan has a top export market for 15 trading nations worldwide. Japan today is a member of a number of international trading organizations, such as the World Trade Organization, the G-8, the G-20 among others, (Flath, 2000).

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Currently Japan is advancing its economic partnerships rather than the use of the free trade organization advantages; thus the country is able to boost export trade, and increase the gains of the trade. The push factors for the Japanese export growth are high quality products, high production standards, and earning the reputation of a country producing high quality products.

Japan practices a diversified and advanced industrial technology, thus producing a variety of products, and hence favoring it in the export market. These export industries are distributed all over Japan thus leading to the general improvement of the country’s infrastructure, and it also allows for the exploitation of the country’s resources in order to not only boost the export trade, but also improve on the general economic growth of this country (Journal of Industrial Economy, 2001).

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Although Japan can be described as an export base country due to its great dependence on the export trade for economic development and growth, its domestic market also plays a significant role in the general development of the country. The agricultural sector also boosts development where the government subsidizes the growth of domestic rice, while heavily taxing the imported rice; this also discourages imports, and thus makes it able to form the export trade market.

Japan’s infrastructure is also a major contributor to the development of trade of both the local and export trade in Japan. Japans ability to produce its own power, for example, the use of petrol, coal, and natural gas among others makes production easier, and thus is promoting growth of the export trade. Japan also exports services in a form of manpower, and this also boosts their economic growth; for example, the Japanese Rolling Stock Association not only develops railways in Japan, but also is connecting the country with the overseas countries. This incredibly boosts the export trade, and also creates opportunities for Japanese companies to receive orders for overseas railway projects (Journal of Industrial Economy, 2001).

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In conclusion, Japan is predominantly an export base country, the economic growth of which largely depends on its export trade. However, Japan cannot be exclusively termed as an export base country but rather as an economic base country where the export sector works hand in hand with the local sector and other factors to determine the economic growth. This combination of effective local and international trade policies have worked efficiently, hence making Japan rise to the ranks of a world class economy country.

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