Japanese Economy

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Japanese Economy Energy
2
Japanese Economy Energy

• This Presentation mainly discuss Japanese
  economy, energy demands and some related
  information. It is appropriate for high school
  students who have interest in Japanese Energy
  Policy.

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Geography

• Area 377,864 sq. km. (145,902 sq. mi.) slightly
  smaller than California.
• Cities Capital--Tokyo.
• Other cities--Yokohama, Osaka, Nagoya, Sapporo,
  Kobe, Kyoto, Fukuoka.
• Terrain Rugged, mountainous islands.
• Climate Varies from subtropical to temperate.

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People

• Population (2007 est.) 127.5 million.Population
  growth rate (2007 est.) -0.088.
• Language Japanese.
• Education Literacy--99.
• Health (2007 est.)
• Infant mortality rate--2.8/1,000.
• Life expectancy--males 78 yrs., females 85
  yrs.
• Work force (67 million, 2003) services--42
  trade, manufacturing, mining, and
  construction--46 agriculture, forestry,
  fisheries--5 government--3.

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Introduction to Economy (1)

• GDP (2007 est.) 5.103 trillion (official
  exchange rate) 4.34 trillion (PPP).
• Real growth rate (2007 est.) 1.9. Per capita
  GDP (2007 est. PPP) 33,800.
• Natural resources Fish and few mineral
  resources.
• Agriculture Products--rice, vegetables, fruit,
  milk, meat, silk.
• Industry Types--machinery and equipment, metals
  and metal products, textiles, autos, chemicals,
  electrical and electronic equipment.

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Introduction to Economy (2)

• Japan's industrialized, social market economy is
  the world's third-largest, adjusted to purchasing
  power parity (PPP), after the United States and
  People's Republic of China. Also, Japan is
  the world's second-largest economy by real GDP,
  nominal GDP and by market exchange rates. Its
  economy is highly efficient and competitive
  in areas linked to international trade
  although productivity is lower in areas
  such as agriculture, distribution, and services.
  Government-industry cooperation, a strong work
  ethic, mastery of high technology, and a
  comparatively small defense allocation have
  helped Japan advance with extraordinary speed to
  become one of the largest economies in the world.
  Its reservoir of industrial leadership and
  technicians, well-educated and industrious work
  force, high savings and investment rates,
  and intensive promotion of industrial
  development and foreign trade have produced
  a mature industrial economy. Japan has few
  natural resources, and trade helps it earn the
  foreign exchange needed to purchase raw
  materials for its economy.

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Introduction to Economy (3)

• Distinguishing characteristics of the Japanese
  economy include the cooperation of manufacturers,
  suppliers, distributors, and banks in
  closely-knit groups called keiretsu the powerful
  enterprise unions and shunto cozy relations with
  government bureaucrats, and the guarantee of
  lifetime employment (shushin koyo) in big
  corporations and highly unionized blue-collar
  factories. Recently, Japanese companies have
  begun to gradually move away from some of these
  norms in an attempt to increase their global
  competitiveness and profitability (the latter due
  mostly to their increased reliance on equity
  rather than debt financing).

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Introduction to Economy (4)

• For three decades, Japan's overall real economic
  growth had been spectacular a 10 average in the
  1960s, a 5 average in the 1970s, and a 4
  average in the 1980s.

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Introduction to Economy (5)

• Sliding stock and real estate prices marked
  the end of the "bubble economy" of the late
  1980s, and ushered in a decade of stagnant
  economic growth. These problems may have
  been exacerbated by domestic policies
  intended to wring speculative excesses from
  the stock and real estate markets. Real GDP in
  Japan grew at an average of roughly 1.5
  yearly between 1991-1999, compared to growth
  in the 1980s of about 4 per year. Growth in
  Japan throughout the 1990s was slower than
  growth in other major industrial nations, and
  the same as France and Germany. Government
  efforts to revive economic growth have met
  with little success and were further hampered
  in 2000 to 2001 by the slowing of the global
  economy. However, GDP per worker has
  increased steadily even through the
  nineties, given that from 1993 to 2007, 10 of
  the population distribution moved from the
  "working age" to "elderly age."

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Introduction to Economy (6)

• Starting in 2003 Japan's economy began to grow
  strongly, growing at 2.0 per year in 2003 and
  2004, and 2.8 percent in 2005. Unlike previous
  recovery trends, domestic consumption has been
  the dominant factor in leading the growth. As
  predicted, the economic recovery continued in
  2006 and 2007. Former Prime Minister Shinzo Abe,
  who was working on Japan's economic revival,
  signed a treaty with Saudi Arabia and UAE about
  the rising prices of oil.

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Introduction to Economy (7)

• The Japanese economy began to see signs of
  trouble again in 2008. In January, Ota Hiroko,
  the Minister of State for Economic and Fiscal
  Policy, announced that Japan's economy can no
  longer be considered 1st class economy due to a
  number of facts including a decline in the
  countrys per capita gross domestic product,
  resulting in the fall of Japan's GDP per
  capita to 18th among the 30 member nations of
  the Organization for Economic Cooperation
  and Development (OECD) in 2006 and the reduction
  of Japans share of aggregate world income to
  below 10 for the first time in 24 years.

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Economy 1 Agriculture

• Only 15 of Japan's land is arable. The
  agricultural economy is highly subsidized and
  protected. With per hectare crop yields among the
  highest in the world, Japan maintains an overall
  agricultural self-sufficiency rate of about 40
  on fewer than 5.6 million cultivated hectares (14
  million acres). Japan normally produces a slight
  surplus of rice but imports large quantities of
  wheat, corn, sorghum, and soybeans, primarily
  from the United States. Japan is the largest
  market for U.S. agricultural exports.

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Economy 2 Minerals

• Deposits of gold, magnesium, and silver meet
  current industrial demands, but Japan is
  dependent on foreign sources for many of the
  minerals essential to modern industry. Iron ore,
  coke, copper, and bauxite must be imported, as
  must many forest products.

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Economy 3 Industries(1)

• Industries Manufacturing, construction,
  distribution, real estate, services, and
  communication are Japan's major industries today.
  Agriculture makes up only about 2 of the GNP.
  Most important agricultural product is rice.
  Resources of raw materials are very limited and
  the mining industry rather small.

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Economy 3 Industries(2)

• Japan's industrialized, free market economy is
  the second-largest in the world. Its economy is
  highly efficient and competitive in areas linked
  to international trade, but productivity is far
  lower in protected areas such as agriculture,
  distribution, and services. After achieving one
  of the highest economic growth rates in the world
  from the 1960s through the 1980s, the Japanese
  economy slowed dramatically in the early 1990s,
  when the "bubble economy" collapsed, marked by
  plummeting stock and real estate prices.

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Economy 3 Industries(3)

• Japan's reservoir of industrial leadership and
  technicians, well-educated and industrious work
  force, high savings and investment rates, and
  intensive promotion of industrial development and
  foreign trade produced a mature industrial
  economy. Japan has few natural resources, and
  trade helps it earn the foreign exchange needed
  to purchase raw materials for its economy.

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Economy 4 Exports

• The Japanese economy is one of the strongest in
  the world. Only the USA has a higher
  GNP. The Japanese currency is the Yen.
• Exports Japan's main export goods are
  cars, electronic devices and computers. Most
  important single trade partner is the USA which
  imports more than one quarter of all
  Japanese exports. Other major export
  countries are Taiwan, Hong Kong, South Korea,
  China and Singapore.

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Economy 5 Imports

• Imports Japan has a large surplus in its
  export/import balance. The most important import
  goods are raw materials such as oil, foodstuffs,
  and wood. Major suppliers are the USA, China,
  Indonesia, South Korea, and Australia.

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Giant consumer market (1)

• Despite its struggles, the Japanese market is
  still the world's giant. The ratio of imports of
  raw materials and fuel, including mineral
  fuels such as crude oil and textile raw
  materials, to total value of imports was 26 in
  2001. Considering that raw materials and fuel
  accounted for 66 of total imports in 1960, this
  is a great drop. Conversely, the ratio of
  finished goods, such as machinery, equipment,
  and textile goods, has increased.

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Giant consumer market(2)

• The ratio of imports of finished goods to total
  imports exceeded 50 in 1989 because of increases
  in imports of machinery from European countries
  and the U.S., and of home electric appliances and
  textile goods from Asian countries. This ratio,
  lower than the 75-80 of Western countries, has
  led to criticism that Japan's market is closed.
  In fact, Japan's large imports of natural
  resources and agricultural products statistically
  lower the finished-product import ratio.

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Value of Imports by Product (2001) 1
Product type Value of total
Foodstuffs 431.31 12.4
Fish and shellfish 133.61 3.8
Meat 83.81 2.4
(Beef) 22.97 0.7
Fruits and vegetables 61.55 1.8
Grains, processed grain products 46.82 1.3
Textile raw materials 8.29 0.2
Raw cotton 3.44 0.1
Wool 1.7 0.0
Metal ores and scrap metal 77.16 2.2
Iron ore 30.7 0.9
Copper ore 20.35 0.6
Other raw materials 126.26 3.6
Lumber 49.42 1.4
Pulp 13.2 0.4

• (Units USD100 million, )

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Value of Imports by Product (2001) 2
Mineral fuels 702.03 20.1
Crude oil 388.64 11.1
Liquefied natural gas 131.24 3.8
Coal 61.9 1.8
Petroleum products 74.51 2.1
Chemical products 256.38 7.3
Pharmaceuticals 50.33 1.4
Plastics 29.91 0.9
Metal products 149.52 4.3
Non-ferrous metals 84.22 2.4
Iron and steel 28.35 0.8
Machinery and equipment 1,088.64 31.2
Computers 223.96 6.4
Semiconductors, ICs 153.97 4.4
Automobiles 64.29 1.8
Communications equipment 43.7 1.3
Textile products 238.03 6.8
Clothes and accessories 190.92 5.5
Total 3,491.92 100
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Raw Material

• The extent and nature of Japan's economic
  vulnerability to an interruption in the
  supply of imported raw materials.

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Raw Materials 1

• Deposits of gold, magnesium, and silver meet
  current industrial demands, but Japan is
  dependent on foreign sources for many of the
  minerals essential to modern industry. Iron ore,
  coke, copper, and bauxite must be imported, as
  must many forest product

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Raw Materials 2

• The Japanese steel industry depends entirely on
  imports for iron ore and coal, the main
  steelmaking raw materials.

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Raw Materials 3

• Iron ore imports in 2005 totaled 132.31 million
  tons, down 1.9, or 2.57 million tons, from the
  previous year. Among major suppliers, Australia
  shipped 81.29 million tons, down 4.9, accounting
  for 61.4 of all imports. Brazil supplied 27.68
  million tons, up 15.6, for a 20.9 share,
  followed by India, with 10.40 million tons, down
  14.3, for a 7.9 share.

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Raw Materials 4

• Coal imported in 2005 amounted to 62.79 million
  tons, down 3.5, or 2.27 million tons, from the
  previous year. Imports from Australia reached
  43.21 million tons, up 3.0, representing 68.8
  of all imports. Canada shipped 6.55 million tons,
  up 22.4, for a 10.4 share, China supplied 5.26
  million tons, down 30.8, for an 8.4 share, and
  Indonesia shipped 1.28 million tons, down 16.3,
  for a 2.0 share.

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Raw Materials 5

• Regarding ferrous scrap, Japan's exports have
  exceeded its imports since 1996, making the
  country a net exporter. Ferrous scrap exported
  from Japan in 2005 totaled 7.58 million tons,
  hitting a record high for the second straight
  year. Nearly all of this tonnage was supplied to
  three countries China, South Korea, and Taiwan.

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Raw Materials 6

• With steel demand growing in China and other BRIC
  markets, steel production is increasing
  worldwide, making raw materials supply and demand
  tight. In order to ensure stable supplies of
  steel products in this situation, Japanese
  steelmakers are striving to secure raw materials
  by taking such measures as concluding long-term
  quantity contracts and acquiring mining rights
  and interests.

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Raw Materials 7

• With supply and demand continuing tight, efforts
  were made to secure stable supplies of raw
  materials.

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• Japanese Gas Market

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Why are Japanese so anxious about energy security?

• 1 Japans energy consumption is enormous, due
  to its massive economy
• 2 Japan is one of the worlds poorest countries
  in terms of natural resources.

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What should be done to secure a stable energy
security?
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Energy Security

• Given its heavy dependence on imported energy,
  Japan has aimed to diversify its sources. Since
  the oil shocks of the 1970s, Japan has reduced
  dependence on petroleum as a source of energy
  from more than 75 in 1973 to about 57 at
  present. Other important energy sources are
  coal, liquefied natural gas, nuclear power, and
  hydropower. Demand for oil is also dampened by
  higher government taxes on automobile
  engines over 2000 cc, as well as on gasoline
  itself, currently 54 yen per liter sold retail.
  Kerosene is also used extensively for home
  heating in portable heaters, especially farther
  north. Many taxi companies run their fleets
  on liquefied gas with tanks in the car trunks. A
  recent success towards greater fuel economy was
  the introduction of mass-produced Hybrid
  vehicles.

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The New Direction of Japanese Energy Policy
and the Role of Gasification
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• Energy Efficiency

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What else do you think can be done to secure a
stable energy security?