A.J. McGinley 12/17/09
Macroeconomics Japan’s economy
Japan is a small country formed of islands, rich with culture, history, and GDP. Despite Japan’s small amount of land and raw materials, and it’s need to import most of it’s resources, it has the second highest per capita in the world, overcome only by the United States of America. So how does Japan overcome this huge lack of resources? By having some of the biggest service-based corporations in the world; Telecommunications, banking, insurance, airlines, and retailing companies have skyrocketed japans economy up to very high levels. And their small population of a couple 100 million is what gave them their amazing per capita..
While Japan doesn’t have many resources it still has plenty of exports. Their agricultural exports are practically all rice, being japans main source of food, but also contain fruit, Japanese herbs, and different types of fish such as the Koi, although the agricultural exports only make up about 2% of the total.
Since Japan has the most prominent electronics corporation in the world it would also make sense that they also export large quantities of electronics, which is another huge source of income for their country. Their main electronic export to the United States is cars, which is surprising considering that their cars are designed for driving on the left side of the road. The U.S. also imports a large quantity of computer accessories and video equipment along with other miscellaneous electronics. And as expected of their low amount of natural resources they import many organic materials; Medicine, corn, and organic chemicals, along with many medical related items.
A huge part of their imports consists of energy, the fuel of economies. With Japan’s lack of land, flowing water, oil, and natural gas, they get past this crippling weakness by importing substantial amounts of oil and natural gas, and are using nuclear power, creating an import of over 80% of all their energy. Japan is continuing to import technology and uranium and continuing to build nuclear power plants despite protests. Now one third of Japan’s energy comes from nuclear power and has kept them from the massive amounts of imports to sustain them. However Japan is also prone to earthquakes, and with over 50 nuclear power plants on that small piece of land can cause catastrophic damage if they are destroyed.
Another obstacle for the Japanese is their population. Japan is suffering from a type of baby boom similar to the one the United States is having. They have a large number of elderly people, approximately 21% which is currently the largest percentage in the world. Coupled with the declining birth rates their population has begun shrinking.
Since the way that Japan’s economy works is that the older you are the more you are paid, the large amount of aged workers are forcing companies to spend more for their workers instead of hiring the cheaper and thus more attractive younger generations.
A possible theory to Japan’s huge success could be the “keiretsu”. The keiretsu is a form of business in which one business is a “parent” of sorts to many other businesses and can act as an observing entity and/or an emergency bailout entity. For example the banks had control over many companies and kept them from going bankrupt. This made the banks extremely powerful preventing hostile takeovers because no one could challenge them. The uncertainty in this form of business us that it grants one company immense power, a form of monopoly.
Another small but unique source of income for Japan is the anime industry. Anime and manga is a form of entertianment and/or art form distictive to Japan. It’s very popular in Japan and has spread to most contries in the form of television anime, manga, and even figurines. While the anime industry is dropping like everything else, it still makes up 5.28% of Japan’s GDP (2.26 billion US $).
The main problem with Japan’s market right now is the reccession. America, China, India, and all of Japan’s other trading partners are experiencing severe economic impedements. Since Japan’s economy relies nearly entirly on the exporting of their durable good such as cars, equipment, and other electronic devices, global economic crisis is causing people to switch to more perishable and inexpensive goods to save money, cutting the United States’ exports to all countries. Japan is not alone in the lose of exports as China has also had a severe drop of exports to the U.S.. Approximatly 700 million U.S. dollars.
With the increasing cost of work force and the loss of their most important exports, Japan is probably being hit the hardest out of all the economic titans. With almost no natural resources to fall back on if this economic crisis doesn’t clear up quickly then Japan might suffer permenant damage tot heir economy.
Im done...i hope. It was suppose to be 5 pages but i could never wirte that much.
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Topic: Does anime increase Japan's GDP? (Read 10777 times)