The last century, though the industry-government cooperation, the comparatively low defence-related expenditure (only 1% of GDP) and the mastery on state-of-the-art technology, Japan has developed an advanced economy. After the major economic slowdown in the early 1990s –after 30 years of a consecutive and impressive growth- Japan still remains an economic power -4th largest economy, after India, in 2015. Having recovered from the March 2011 Earthquake and Tsunami, Japan’s economy keeps growing today but with a slower pace compared to the past. In 2012, the government set ambitious goals and since then has forwarded economic and security reforms to improve the economy of the country, as well as its international presence. Having revised their economic agenda, they have visualized the raise of nominal GDP by 20% to Y600trillion (US $5.51 trillion), by 2020. Under the Trans-Pacific Partnership (TPP), Japan and 11 trading partners reached an agreement on opening Japan's economy to increased foreign competition, while creating new export opportunities for Japanese businesses. However, reducing government debt through taxation, cease deflation and demographic decline, are issues that need to be addressed to allow the further economic progress.
Japanese growth has been challenged many times during the last century. However, it can be noticed that the last decade or so, GDP growth has been following with small fluctuations the worldwide trend. In fact, despite the decrease of the global growth rate in 2015, Japanese GDP growth increased, from -0.1% (equal to $4.601 trillion) in 2014, to +0.8% in 2015. Projections show that GDP growth will continue in the next few years, but with small fluctuations.
The weakened yen, since of late 2012, resulted in Japan being the 4th largest supplier of goods imported by the United States, in 2013. Japan’s export volume remained flat in 2014, mainly due to weak demand in emerging markets, high kept prices by the companies, and expansion of overseas production. Despite the hurt on exports due to the global economic crisis of the last few years, Japan took advantage of the long decline in oil prices, decreased its deficit and finally managed to have a trade surplus in the last quarter of 2015, mainly due to reduced imports and increased exports. These changes can be attributed to the increased competitiveness in exports, the attractiveness of enterprises and Japanese multinationals, aligned with the Japanese White Paper for Trade objectives.
More specifically, the volume of the Japanese exports was about US $624 billion in 2015, reduced by US $65 million compared to 2014. The top export partners of Japan were the US (19% of total exports, equal to US $131 million), China (18%), Republic of South Korea (7.5%), Hong Kong (5.5%), Thailand (4.5%) and Singapore (3%).
Japan’s main exported goods (according to the 2-digit HS Coding) for 2015, included Motor Vehicle & Parts, Industrial & Electrical Machinery, Precision Instruments and Iron & Steel.
On the other side, Japanese imports amounted to about US $648 billion in 2015, reduced by about 20% from 2014. In the same year, Japanese imports represented 3.5% of total global imports. The main exporters to Japan were China (22.3% of total imports), the US (9%), Australia (6%), Saudi Arabia (5.8%) and UAE (5%).
The main imported goods included Oil & Mineral Fuels, Electrical and Industrial Machinery (but reduced compared to the exports of these categories), and Ores and Precision Instruments (about half the volume compared to the respective exports).
The 1st quarter of 2016, Japan’s unemployment rate dropped to 3.3% -2.13 million unemployed persons-, while the jobs on offer hit the highest level in 24 years.
Foreign Direct Investment (FDI) in Japan, was slightly increased to US $ 2.1 billion in 2014. However, Japan still seems to struggle attract foreign investments. On the opposite side, Japan has invested a significant amount of money abroad. Realizing the importance of inward investments, for the further national growth, Tokyo has planned a series of policies towards this direction –e.g corporate tax rate cuts common to EU and other Asian countries.