During the 1960s and 1970s, imports grew in tandem with
exports, at an average annual rate of 15.4 percent during
and 22.2 percent during the 1970s. In a sense, import
much of this period was constrained by exports, because
generated the foreign exchange to purchase the imports.
1980s, however, import growth lagged far behind exports,
average annual rate of only 2.9 percent from 1981 to 1988.
level of import growth led to the large trade surpluses
emerged in the 1980s.
In general, Japan has not imported an unusually large
a share of its GNP, but it has been highly dependent on
a variety of critical raw materials. Japan has by no means
only industrialized nation dependent on imported raw
it has depended on imports for a wider variety of
often for a higher share of its needs for these materials.
country imported, for example, 50 percent of its caloric
food and about 30 percent of the total value of food
the late 1980s. It also depended on imports for about 85
its total energy needs (including all of its petroleum and
percent of its coal) and nearly all of its iron, copper,
The long-term growth in imports was facilitated by
major factors. The most important was general growth in
Japanese economy and income levels. Rising real incomes
demand for imports, both those consumed directly and those
into production. Another factor was the shift in the
greater reliance on imported raw materials. Primary energy
in the late 1940s, for example, were domestic coal and
The shift to imported oil and coal as major energy sources
come until the late 1950s and 1960s. The small size and
quality of many of the mineral deposits in Japan, combined
innovations in ocean transportation, such as bulk ore
meant that as the economy grew, demand outstripped
and cheaper imports were utilized.
The price of imports was also a factor in their growth.
Japan's import price index was at essentially the same
level as in
1955, partly because of the appreciation of the yen after
which reduced the yen price of imports, but also because
reduced costs of ocean shipping and stable prices for food
materials. For the rest of the 1970s, however, import
skyrocketed, climbing 219 percent from 1973 to 1980. This
price rise, especially for petroleum but by no means
it, was responsible for the rapid growth of the dollar
imports during the 1970s, despite the slower growth of the
During the 1980s, import prices fell again, especially for
petroleum, dropping by 44 percent from 1980 to 1988.
these price movements, the dollar value of petroleum
from about US$2.8 billion in 1970 to nearly US$58 billion
and then fell a low of US$26 billion in 1988 before making
recovery to US$41 billion in 1990 (see
A third factor affecting imports was trade
Reduced tariff rates and a weakening of other overt trade
meant that imports should have been able to compete more
Japan's markets. The extent to which this was true,
subject to much debate among analysts. The share of
imports in GNP changed very little from 1970 to 1985,
that falling import barriers had little impact on the
purchase foreign products. Falling trade barriers might
significant in the 1990s as liberalization continues.
Yet another factor determining import levels was the
rate. After the ending of the Bretton Woods System in
1971, the yen
appreciated against the United States dollar and other
The appreciation of the yen made imports less expensive to
but it had a complex effect on total imports. Demand for
material imports was not affected much by price changes
in the short run). Demand for manufactured goods, however,
responsive to price changes. Much of the rapid increase in
of manufactures after 1985, when the yen began to
rapidly, can be attributed to this exchange-rate effect.
All factors combined led to the rapid growth of imports
1960s and 1970s and their very slow growth in the 1980s.
economic growth combined with stable import prices and the
toward imported raw materials brought high import growth
1960s. The big jump in raw material prices in the 1970s
growth high despite lower economic growth. In the 1980s,
raw material prices, a relatively weak yen, and continued
economic growth kept import growth low in the first half
decade. Import growth finally accelerated in the second
half of the
1980s, when raw material prices stopped falling and as the
the value of the yen encouraged manufactured imports.
Japan imported a wide range of products, although
sources, raw materials, and food were the major items.
fuels, for example, rose from under 17 percent of all
1960 to a high of nearly 50 percent in 1980. They had
under 21 percent by 1988 (see
table 29, Appendix). A small
was experienced by 1991 when mineral fuel imports
increased to 23
percent. These shifts show the enormous impact of price
imports. Swings in imports of other raw materials were far
dramatic, and many declined over time as a share of total
Metal ores and scrap, for example, declined steadily from
percent in 1960 to less than 5 percent in 1988 and less
percent in 1991, reflecting the changing structure of the
which moved away from basic metal manufactures to higher
valueadded industries. Textile materials also dropped from 17
total imports in 1960 to just under 2 percent in 1988 and
1 percent in 1991, as the textile industry became less
and imports of finished textiles increased. Foodstuffs,
were relatively steady as a share of imports, rising from
12 percent in 1960 to 15.5 percent in 1988. By 1991 a
decline, 14.5 percent, was experienced.
Manufactured goods--chemicals, machinery and equipment,
miscellaneous commodities--gained as a share of imports,
variation among them was considerable. Manufactures were
percent of total imports in 1960, remained at just under
in 1980, and then expanded to 49 percent by 1988. By 1991
just over 45 percent. Imports of textiles, nonferrous
iron and steel products all showed significant gains, for
reasons that the raw material imports to produce them had
However, chemical and machinery and equipment imports
increase in share until after 1985.
The heavy dependency on raw materials that
until the mid-1980s reflected both their absence in Japan
process of import-substitution industrialization, in which
favored domestic industries over imports. The desire to
manufactured imports was intensified by the knowledge that
nation needed strong manufacturing industries to generate
to pay for needed raw material imports. Only with the
of the yen after 1985, and the drop in petroleum and other
material prices, did this sense of vulnerability ease.
were reflected in the rising share of manufactures in
the late 1980s.
Data as of January 1994