|
Japan Imports
During the 1960s and 1970s, imports grew in tandem with
exports, at an average annual rate of 15.4 percent during
the 1960s
and 22.2 percent during the 1970s. In a sense, import
growth over
much of this period was constrained by exports, because
exports
generated the foreign exchange to purchase the imports.
During the
1980s, however, import growth lagged far behind exports,
at an
average annual rate of only 2.9 percent from 1981 to 1988.
This low
level of import growth led to the large trade surpluses
that
emerged in the 1980s.
In general, Japan has not imported an unusually large
amount as
a share of its GNP, but it has been highly dependent on
imports for
a variety of critical raw materials. Japan has by no means
been the
only industrialized nation dependent on imported raw
materials, but
it has depended on imports for a wider variety of
materials, and
often for a higher share of its needs for these materials.
The
country imported, for example, 50 percent of its caloric
intake of
food and about 30 percent of the total value of food
consumed in
the late 1980s. It also depended on imports for about 85
percent of
its total energy needs (including all of its petroleum and
89
percent of its coal) and nearly all of its iron, copper,
lead, and
nickel.
The long-term growth in imports was facilitated by
several
major factors. The most important was general growth in
the
Japanese economy and income levels. Rising real incomes
increased
demand for imports, both those consumed directly and those
entering
into production. Another factor was the shift in the
economy toward
greater reliance on imported raw materials. Primary energy
sources
in the late 1940s, for example, were domestic coal and
charcoal.
The shift to imported oil and coal as major energy sources
did not
come until the late 1950s and 1960s. The small size and
poor
quality of many of the mineral deposits in Japan, combined
with
innovations in ocean transportation, such as bulk ore
carriers,
meant that as the economy grew, demand outstripped
domestic supply
and cheaper imports were utilized.
The price of imports was also a factor in their growth.
In 1973
Japan's import price index was at essentially the same
level as in
1955, partly because of the appreciation of the yen after
1971,
which reduced the yen price of imports, but also because
of the
reduced costs of ocean shipping and stable prices for food
and raw
materials. For the rest of the 1970s, however, import
prices
skyrocketed, climbing 219 percent from 1973 to 1980. This
dramatic
price rise, especially for petroleum but by no means
confined to
it, was responsible for the rapid growth of the dollar
value of
imports during the 1970s, despite the slower growth of the
economy.
During the 1980s, import prices fell again, especially for
petroleum, dropping by 44 percent from 1980 to 1988.
Reflecting
these price movements, the dollar value of petroleum
imports rose
from about US$2.8 billion in 1970 to nearly US$58 billion
in 1980,
and then fell a low of US$26 billion in 1988 before making
a slight
recovery to US$41 billion in 1990 (see
table 28,
Appendix).
A third factor affecting imports was trade
liberalization.
Reduced tariff rates and a weakening of other overt trade
barriers
meant that imports should have been able to compete more
fully in
Japan's markets. The extent to which this was true,
however, was
subject to much debate among analysts. The share of
manufactured
imports in GNP changed very little from 1970 to 1985,
suggesting
that falling import barriers had little impact on the
propensity to
purchase foreign products. Falling trade barriers might
become more
significant in the 1990s as liberalization continues.
Yet another factor determining import levels was the
exchange
rate. After the ending of the Bretton Woods System in
1971, the yen
appreciated against the United States dollar and other
currencies.
The appreciation of the yen made imports less expensive to
Japan,
but it had a complex effect on total imports. Demand for
raw
material imports was not affected much by price changes
(at least
in the short run). Demand for manufactured goods, however,
was more
responsive to price changes. Much of the rapid increase in
imports
of manufactures after 1985, when the yen began to
appreciate
rapidly, can be attributed to this exchange-rate effect.
All factors combined led to the rapid growth of imports
in the
1960s and 1970s and their very slow growth in the 1980s.
Rapid
economic growth combined with stable import prices and the
shift
toward imported raw materials brought high import growth
in the
1960s. The big jump in raw material prices in the 1970s
kept import
growth high despite lower economic growth. In the 1980s,
falling
raw material prices, a relatively weak yen, and continued
modest
economic growth kept import growth low in the first half
of the
decade. Import growth finally accelerated in the second
half of the
1980s, when raw material prices stopped falling and as the
rise in
the value of the yen encouraged manufactured imports.
Japan imported a wide range of products, although
energy
sources, raw materials, and food were the major items.
Mineral
fuels, for example, rose from under 17 percent of all
imports in
1960 to a high of nearly 50 percent in 1980. They had
declined to
under 21 percent by 1988 (see
table 29, Appendix). A small
increase
was experienced by 1991 when mineral fuel imports
increased to 23
percent. These shifts show the enormous impact of price
changes on
imports. Swings in imports of other raw materials were far
less
dramatic, and many declined over time as a share of total
imports.
Metal ores and scrap, for example, declined steadily from
15
percent in 1960 to less than 5 percent in 1988 and less
than 4
percent in 1991, reflecting the changing structure of the
economy,
which moved away from basic metal manufactures to higher
valueadded industries. Textile materials also dropped from 17
percent of
total imports in 1960 to just under 2 percent in 1988 and
just over
1 percent in 1991, as the textile industry became less
important
and imports of finished textiles increased. Foodstuffs,
however,
were relatively steady as a share of imports, rising from
just over
12 percent in 1960 to 15.5 percent in 1988. By 1991 a
slight
decline, 14.5 percent, was experienced.
Manufactured goods--chemicals, machinery and equipment,
and
miscellaneous commodities--gained as a share of imports,
but the
variation among them was considerable. Manufactures were
about 22
percent of total imports in 1960, remained at just under
23 percent
in 1980, and then expanded to 49 percent by 1988. By 1991
they were
just over 45 percent. Imports of textiles, nonferrous
metals, and
iron and steel products all showed significant gains, for
the same
reasons that the raw material imports to produce them had
declined.
However, chemical and machinery and equipment imports
showed little
increase in share until after 1985.
The heavy dependency on raw materials that
characterized Japan
until the mid-1980s reflected both their absence in Japan
and the
process of import-substitution industrialization, in which
Japan
favored domestic industries over imports. The desire to
restrict
manufactured imports was intensified by the knowledge that
the
nation needed strong manufacturing industries to generate
exports
to pay for needed raw material imports. Only with the
appreciation
of the yen after 1985, and the drop in petroleum and other
raw
material prices, did this sense of vulnerability ease.
These trends
were reflected in the rising share of manufactures in
imports in
the late 1980s.
Data as of January 1994
|
