Japan and Industrial Adjustment in Asia: Overproduction Problems in the Synthetic Fibre Industry

Abstract

he Japanese economy increasingly strengthened linkages with East Asian countries after the late 1980s.1 Major manufacturing firms have established production bases in almost every key East Asian country, and linked them systematically. Such intensive production networks strengthened trade linkages between Japan and East Asia. While the U.S. has been the primary trade partner forJapan, East Asia as a group surpassed the U.S. in trade in 1992 and has increased its share afterward. Moreover, sound development in the East Asian economies has a vital influence overall on Japanese industry. This was clearly shown in the Asian currency crisis in 1997-98. Japanese firms the most intensive among firms from developed countries in their advancement into East Asia suffered considerable losses