Japan TRADE AND INVESTMENT RELATIONS
Sources: The Library of Congress Country Studies; CIA World Factbook
Japan is engaged in trade and investment with nearly every country in the world. Generally speaking, however, its greatest economic interaction is with other developed countries, and over time this interaction has grown.
In 1990 about 59 percent of exports went to developed countries, 40 percent to developing countries, and 1 percent to communist countries. The largest single destination of Japanese exports was the United States, which accounted for an extraordinary 31.5 percent of all exports. The United States was the major growth market for Japanese exports in the 1980s; it had accounted for only 24 percent of the total in 1980. West Germany, Britain, the Republic of Korea (South Korea), and Taiwan were the next largest markets, at the much lower level of about 6 percent each in 1990 (see table 34, Appendix).
Of imports, 51 percent came from developed countries in 1990, 42 percent from developing countries, and 7 percent from communist countries, with the developed countries' share rising over the course of the 1980s as raw materials, which predominate in developing country sales to Japan, declined in price. Despite Japan's dependence on foreign sources of energy and raw materials, the United States was the largest single source of imports, accounting for 22.3 percent in 1990, larger than the combined share (13.4 percent) for all Middle Eastern countries, the suppliers of much of Japan's oil. Over time, however, dependence on United States imports had slipped rather steadily, from 34.6 percent in 1960, as sources of supply diversified. Other major sources of 1990 imports were South Korea (5 percent), Australia (5.3 percent), China (5.1 percent), Indonesia (5.4 percent), Taiwan (3.6 percent), Canada (3.6 percent), and West Germany (4.9 percent) (see table 35, Appendix).
Historically, Japan has had trade deficits with raw material suppliers and surpluses with other countries. In the 1980s, however, balances with all trading partners shifted somewhat in Japan's favor. Its surplus in trade with developed countries rose from US$12 billion in 1980 to US$67 billion by 1988, before declining to under US$51 billion in 1990. And the balance with developing countries shifted from a deficit of US$25 billion in 1980 to a surplus of nearly US$9 billion in 1990. Its deficit in trade with the Middle East, peaked at about US$30 billion in 1980, sinking to less than US$22 billion in 1990 (see table 36, Appendix).
Partly because of this rapid shift toward surplus, and because of continued problems of access to Japanese markets, Japan faced increased tensions with a number of its trading partners during the 1980s. The decade was marked by contentious negotiations especially with the United States. Complicating the nature of all these relationships was the very swift rise of Japan as a major investor in the domestic assets of its major trading partners.
Data as of January 1994
NOTE: The information regarding Japan on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Japan TRADE AND INVESTMENT RELATIONS information contained here. All suggestions for corrections of any errors about Japan TRADE AND INVESTMENT RELATIONS should be addressed to the Library of Congress and the CIA.