A major Japanese innovation in international trade has
development of large integrated general trading companies.
corporations were first organized during the late
century as part of the effort to replace the foreign
dominating Japan's trade and to provide foreign marketing
to Japanese firms unfamiliar with the outside world.
At first, trading companies acted as specialized
for Japanese manufacturers in domestic and foreign markets
bought raw materials and other inputs for manufacturing
Later, trading companies also served as financial
absorbed foreign exchange risk for their customers,
technical advice to small firms whose products might be
and engaged in direct investment overseas, often to secure
sources of supply.
After World War II, the trading companies developed
some thirdcountry trade, some of which did not involve Japanese
firms. Such transactions included arranging for the sale
United States chemical plant to the Soviet Union and for
importing of Romanian urea into Bangladesh. By 1988 such
trade accounted for almost 20 percent of total sales of
largest trading companies in Japan.
In the 1980s, several thousand trading companies
Japan. The top nine companies, however, accounted for the
the transactions. In fiscal year
(FY--see Glossary) 1991,
led with sales of ¥20.0 trillion, followed by Sumitomo
trillion), Marubeni (¥18.2 trillion), Mitsui (¥16.2
Mitsubishi (¥15.7 trillion). Others in the top nine were
Iwai, Tomen, Nichimen, and Kanematsu-Gosho. These
very important in Japan's foreign trade. In 1988 they
handled 42 percent of exports and 74 percent of imports.
These companies were best at handling large-volume bulk
products, such as raw materials. They faced some
the 1970s and 1980s with fluctuations in international raw
markets, but they continued to play a very important role
Japan's international trade. During the 1980s, they
acted through direct investment.
Data as of January 1994