Japan'S Export Superpower Era Ends

The strongest in the world Exit One of the engines is losing power.

For decades, with strong manufacturing capabilities and export oriented trade policies, Japan has been global. market A large number of export cars, consumer electronics and semiconductor devices.

But this is a thing of the past.

It is expected that the Japanese government will announce the first full year trade deficit since 1980, the Japanese government announced on Wednesday. Economists warn that if the yen stays strong and global demand is weak, Japan will continue to trade deficits in the next few years.

Cause Japan Trade Part of the reason for this startling transformation is the one-off factors such as last March's great earthquake and tsunami. The earthquake and tsunami destroyed factories, disrupting supply chains, and disrupting many nuclear power plants in Japan. However, the earthquake seems to have only accelerated the downward trend of the competitiveness of Japanese enterprises. With Japan's export superpower slowly moving towards ageing, this downward trend has shown signs a few years ago.

More and more Japanese companies have shifted their production lines overseas. Mori Masahiko (Masahiko Mori), chairman of Mori Seiki Co., a machine tool manufacturer, said it was a turning point for the company. The company was founded in 1948 and will set up its first overseas factory in Davis, California this year. Mori Masahiko said he hopes that in five years, the output of overseas machine tools will reach about 40% of the total output, while overseas production is virtually zero.

Although Japan once forced the rest of the world to follow its footsteps, it is now uncontrolled by other big powers. The rapid rise of emerging market economies such as China and Brazil has pushed Japan's imports from oil to natural gas to the cost of imports of rare earths for cameras, cell phones and automobiles. Mori Masahiko said that because of the high price of rare earth, the price of magnets that the company needs to use in electric motors has doubled.

Japan's trade figures reflect the downturn in domestic manufacturing. In the first 11 months of 2011, Japan suffered a trade deficit of 2 trillion and 300 billion yen (about 30 billion US dollars), while in 2010, a surplus of 6 trillion and 600 billion yen was achieved. Analysts pointed out that the data released on Wednesday almost impossible to show that Japan had enough trade surplus in December last year to offset the deficit in the first 11 months.

Yukio Edano, Japan's economic and industrial secretary, said in an interview with the Wall Street Journal last week that he did not deny that if the government did not take any measures, Japan might be in a long-term trade deficit trend. Eno Yukio (Edano)

Credit Suisse, head of economic research in Tokyo, and Hiromichi Shirakawa, who worked in the Bank of Japan, predicted that Japan will have a trade deficit this year as well as in 2011. He said that as long as the yen continues to maintain its high level against the US dollar, high energy prices and relatively weak global demand, Japan will not be able to resume its trade surplus.

Such a change is clearly not a good thing for Japan. If the trade deficit continues, Japan may turn from a stable capital supplier to a net borrower. In the case of Japan's public debt relative to GDP ratio is higher than Italy, debt financing may eventually become a problem.

Although the yen exchange rate is at a high level, if Japan's external trade deficit continues, the yen will eventually fall sharply. A weaker yen will help Japanese manufacturers, but it will put pressure on the Japanese economy, which is increasingly accustomed to relying on imports.

In the decades since the end of the Second World War, the Japanese economy has taken off by the export and created a lot of wealth. Japanese economic leaders have been complacent with the "economic miracle" created by the Japanese economy. In 1981, because Japanese cars were too popular in the US, the US government had to put pressure on the Japanese automakers to "voluntarily" restrict exports. Shortly afterwards, the United States accuses Japan of dumping products at low prices in the global market. {page_break}

In order to contain Japan's exports worldwide, the United States, major European countries and Japan signed the Plaza Accord in 1985, forcing Japanese yen to appreciate against major currencies, thereby improving the cost of Japanese products in the global market. The agreement has a huge impact on the exchange rate, which has risen sharply from 1 US dollars in 1985 to 239 yen to 1 US dollars in 1988 to 128 yen.

However, Japan's huge trade surplus has not narrowed significantly, partly because the Japanese government is trying to reduce the impact of the yen's appreciation by injecting huge amounts of low-cost capital into its own economic sphere. But this practice triggered asset bubbles, which severely distorted the Japanese economy and financial markets. The result of the bubble burst was stagflation after twenty years. The negative impact of the Plaza Accord has been the main reason why the Chinese government has been reluctant to yield to the pressure of the United States to allow the renminbi to appreciate.

In recent years, the performance of Japanese manufacturing enterprises has been losing to competitors from China and Korea. The quality of these competitors is often the same as that of Japanese companies, but the cost is much lower. According to a survey conducted by Deloitte Touche Tohmatsu and Council on Competitiveness on global manufacturing executives in 2010, the competitiveness of Japanese manufacturers will not only lag behind developing countries but also lag behind the US in the next few years, thanks to the aging of population and the rising cost of domestic production in 2010.

The intensification of overseas market competition has forced Japanese manufacturing giants such as Toyota Motor Co. and Sony Corp (Sony Co., also known as Xinli company) to reduce the prices of overseas products. The appreciation of the Japanese yen has further reduced the profit margins of these enterprises. (Motor)

The Fukushima Daiichi nuclear accident occurred in March last year, which has led to Japan's overall arrest of its nuclear power and indirectly boosting its energy costs.

The Tokyo Electric Power Co. Inc., the operator of Fukushima Daiichi nuclear power station, announced last week that the average electricity price of the enterprise users increased by an average of 17%. This is the first increase since 1980, on the grounds that the public is opposed to the restart of nuclear reactors, resulting in Tokyo's electricity being more dependent on high cost oil.

Other Japanese power companies are also facing resistance to restart nuclear reactors. The Japanese government has warned that the Japanese nuclear power plants may be shut down in the summer rush hour, and businesses will be forced to implement electricity saving or alternate power outages. Japanese manufacturers have plans for this, for example, Mori is ready to take power saving measures in its factories in western Japan.

It has been pointed out that the nuclear accident accelerated the transformation of Japanese economy in a wider range. Hiroyuki Ishige, who served as trade official and Japan External Trade Organization in the 80s of last century, said that this is a necessary stage for Japan's economy to mature. Ishige pointed out that the Japan Trade Promotion Council was founded in 1951. The purpose of the Japan Trade Promotion Association was to promote Japanese exports. Now it has been transformed into an institution that encourages investment in Japan and provides consulting services for small businesses planning overseas development.

Japan is still a prosperous country. From the global automotive market to the endoscopy market, Japanese manufacturing enterprises have a large share of the market. Some of the factors that contributed to the decline in Japan's exports are temporary, such as the sluggish overseas demand caused by the weakness of the US and Europe, and the record high of the yen against the US dollar and the euro. Once the appreciation of Japanese yen is curbed, the competitive advantage of Japanese manufacturing enterprises will also be reappeared.

Moreover, data from Japan's Ministry of Finance show that Japan's foreign exchange reserves and foreign investment, such as investment in US Treasury bonds, are 251 trillion yen higher than other countries' investments in Japan. Japan has more capital account surpluses than any other country in the world.

Eisuke Sakakibara, a former Japanese financial official, said that Japan's trade did show a deficit trend, but as long as current account remained in surplus, there was no problem at all.

The decline of Japan's foreign trade took place in the background of aging population. Decades of zero economic growth have eroded the huge wealth accumulated by the industrious and frugal Japanese people in the period of economic prosperity. This has led to fears that Japan may not be able to raise its public debt by as much as 1000 trillion yen a day.

The situation of Mori Masahiko's production of Seiji machine reflects the strength of Japan's export decline and import rise from one aspect. The company is located near TOYOTA motor headquarters in central Japan, producing lathes, milling machines, and other equipment to manufacture all kinds of products from cars to aircraft. 98% of the company's products are still manufactured in Japan, and the necessary components are supplied entirely by Japanese enterprises.

This nearly 100% domestically oriented business led to the company's troubles last year. The early earthquake and tsunami destroyed some factories in northeastern Japan, resulting in disruptions in some raw materials.

What's more, about 65% of the company's annual sales of $1 billion 500 million a year came from overseas markets, and the strength of the yen has dealt a heavy blow to its overseas sales.

Mori Masahiko said that when the US $1 changed to around 80 yen (now 1 US dollars for 77 yen), the equipment would be sold to the US for higher profits. He finally decided to build a factory in California last year, and expects that 20% of the final products will be produced in the United States, and another 20% will be produced in Europe.

In the field of Tokyo, known for its many family workshops, Takako Suwa said it was considering opening an overseas branch for her company, Daiya Seiki Co.. Daiya Seiki is a small factory with more than 30 employees, producing precision measuring instruments used by car manufacturers. Miss Suwa said that the company's new orders were not available at the moment. Because the large Japanese automakers are going overseas to build factories, the precision instruments produced by the company are in short supply.

But the future business is worrying miss Suwa. She began to weigh the benefits of moving part of the production line to an industrial park in Thailand. It is an industrial park built by some small businesses in the Datian area. She is considering taking some low profit auto parts and tools that are too expensive in Japan to mass production.

Miss Suwa said that in addition to reducing costs, if the Japanese yen continues to appreciate, the manufacturing environment in Japan will continue to deteriorate, and such a factory can also play a bridgehead role in overseas markets.

Miss Suwa said that the trend of the yen going strong is likely to continue, and the trouble for the company may not be over yet; if so, it is impossible to ensure the survival of the company solely by Japan's business.