Japan's Trade Position in a Changing World Market

Abstract

pOSTWAR Japan is deeply obsessed with the export or expire kind of fatalism, in spite of the remarkable manifestations of economic recovery from the devastating effects of World War II. The end of the boom due to the Korean war drove home the realization that Japan depends more than ever on external for internal viability as well as for co-prosperity with other nations. Thus we find the Japanese Diet (parliament), the press, and the economics profession all joining in a grim debate on import austerity, disinflation, yen devaluation, and China trade as possible remedies for the post-Korean dollar and sterling gaps 1 a debate reminiscent of Britain's prior to the I949 devaluation.2 However, Japan's balance of payments difficulties are far more deeply rooted than short-range policy discussions would indicate. For this reason I shall endeavor, in this paper, to discuss Japan's position in the context of the changed structure of the Japanese economy and with reference to the shifting pattern of world trade. Such a discussion may also throw useful light on the general problems of foreign and economic development in postwar conditions.