Japan Stats

Question 2

Stats for US post-war governance

Answer 2

92% owned land after Land reforms
2 billion injected into Japan economy

Question 3

US favourable trading terms

Answer 3

Good: 65% of exports and 85% of imports
closed technological gap by 1960 with over 2000 contracts for US patented tech and infrastructure
1968 trade surplus

Bad:
1981 Voluntary Export Restrictions (VER) on Japanese Cars max 1.68 million cars imported
1987 retaliation 100% tariffs on over $300 million worth of Japanese exports

Question 4

International developments

Answer 4

Good:
Korean War Vietnam War: Special procurements 3billion (Marshall Aid equivalent) 27% of Japanese exports
Toyota profits from military trucks expand into consumer cars
9% growth per annum
GDP increased up to Britain+France (13% of world)

Bad:
Plaza 1985 and Louvre 1987 accords apreciate yen loss of comparative advantage
Oil shocks 73 - GNP decrease 1.4% - first negative since post-war
Oil shocks 79 - GDP down 0.4% but mitigated by MITI
Opening up - protected economies could not compete

Question 5

Keiretsus

Answer 5

Kanban system - as and when needed - cut cost, efficient - 33% faster with 27% less defects
Stability and long term focus: can overlook short term losses/costs for the bigger picture
1949-1963: 2000 contracts for patented processes (70% from US)
1960s sticking to self-sufficiency - dominated global market in 1980s

Question 6

MITI

Answer 6

Good: MITI identify growth industries - BOJ credit rates 2% lower than market rate
dollar value of exports up 25x
10% GDP growth rate
most efficient car and shipmakers by 1970
70% of all tv and radio production in 1976
1980: 50% of market share of semiconductors

Bad:
inefficiency in later stages - took decades to shut down steel plants due to pressure from voting leverage

Question 7

Plaza Accord and Louvre Accord

Answer 7

appreciation of yen > loss of export competitiveness > search for international opportunities > 6 billion in 1984 to 44 biilion by 1990

Question 8

US trade deficit

Answer 8

deficit against Japan sustained up till 1980s politically unacceptable > US deficit greater year after year > started with 1960 Japan “one dollar blouse” > prompted protectionism against TV, steel

Question 9

Government mismanagement

Answer 9

Extensive borrowing from Euro-Dollar market (186 trillion yen by 1990) to make up for lack of credit > lent such funds+BOJ low 2.5% interest rate > people poured loans in stocks, property > then used for collateral to borrow and buy more > overinflated property market > 50% of all land > BOJ raise interests rates up to 6% in 1989 > bubble crash