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JAPAN TRAVEL GUIDE
Japan Economy
From 1868, the Meiji period launched economic expansion. Meiji rulers embraced the concept of a free market economy and adopted British and North American forms of free enterprise capitalism. Japanese went to study overseas and Western scholars were hired to teach in Japan. Many of today's enterprises were founded at the time. Japan emerged as the most developed nation in Asia.
From the 1960s to the 1980s, overall real economic growth has been called a "Japanese miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s. Growth slowed markedly in the 1990s during what the Japanese call the Lost Decade, largely because of the after-effects of Japanese asset price bubble and domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth met with little success and were further hampered by the global slowdown in 2000. The economy showed strong signs of recovery after 2005. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US and European Union during the same period.
As of 2009, Japan is the second largest economy in the world, after the United States, at around US$5 trillion in terms of nominal GDP and third after the United States and China in terms of purchasing power parity. Banking, insurance, real estate, retailing, transportation, telecommunications and construction are all major industries. Japan has a large industrial capacity and is home to some of the largest, leading and most technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles and processed foods. The service sector accounts for three quarters of the gross domestic product.
As of 2001, Japan's shrinking labor force consisted of some 67 million workers. Japan has a low unemployment rate, around 4%. Japan's GDP per hour worked is the world's 19th highest as of 2007. The Big Mac Index shows that Japanese workers get the highest salary per hour in the world. Some of the largest enterprises in Japan include Toyota, Nintendo, NTT DoCoMo, Canon, Honda, Takeda Pharmaceutical, Sony, Nippon Steel, Tepco, Mitsubishi and 711. It is home to some of the world's largest banks, and the Tokyo Stock Exchange (known for its Nikkei 225 and Topix indices) stands as the second largest in the world by market capitalization. Japan is home to 326 companies from the Forbes Global 2000 or 16.3% (as of 2006).
Japan ranks 12th of 178 countries in the Ease of Doing Business Index 2008 and it has one of the smallest governments in the developed world. Japanese variant of capitalism has many distinct features. Keiretsu enterprises are influential. Lifetime employment and seniority-based career advancement are relatively common in Japanese work environment. Japanese companies are known for management methods such as "The Toyota Way". Shareholder activism is rare. Recently, Japan has moved away from some of these norms. In the Index of Economic Freedom, Japan is the 5th most laissez-faire of 30 Asian countries.
Japan's exports amounted to 4,210 U.S. dollars per capita in 2005. Japan's main export markets are the United States 22.8%, the European Union 14.5%, China 14.3%, South Korea 7.8%, Taiwan 6.8% and Hong Kong 5.6% (for 2006). Japan's main exports are transportation equipment, motor vehicles, electronics, electrical machinery and chemicals. Japan's main import markets are China 20.5%, U.S. 12.0%, the European Union 10.3%, Saudi Arabia 6.4%, UAE 5.5%, Australia 4.8%, South Korea 4.7% and Indonesia 4.2% (for 2006). Japan's main imports are machinery and equipment, fossil fuels, foodstuffs (in particular beef), chemicals, textiles and raw materials for its industries. By market share measures, domestic markets are the least open of any OECD country. Junichiro Koizumi administration commenced some pro-competition reforms and foreign investment in Japan has soared recently.
Japan's business culture has many indigenous concepts such as the nemawashi, the nenko system, the salaryman, and the office lady. Japan's housing market is characterized by limited land supply in urban areas. This is particularly true for Tokyo, the world's largest urban agglomeration GDP. More than half of Japanese live in suburbs or more rural areas, where detached houses are the dominant housing type. Agricultural businesses in Japan often utilize a system of terrace farming and crop yields are high. 13% of Japan's land is cultivated. Japan accounts for nearly 15% of the global fish catch, second only to China. Japan's agricultural sector is protected at high cost.
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