Japanese trade surplus has been very satisfactory in the past years. The country has enjoyed a steady increase in exports, and this fact was recently recognized by the World Bank. “The steady rise in exports is mostly driven by a strong foreign-trading industry and a favorable exchange rate,” it said. The growth of exports can only be taken as a positive signal for the Japanese economy. However, this is not all, because “there is still room for improvement.”
The growth of exports has considerably raised Japan’s fiscal deficits, although this is counteracted by lower interest rates. The government should reduce budget deficits further, but this is proving difficult due to the fact that political considerations are blocking the process. Japan’s trade surplus with other countries has also increased significantly since the beginning of this decade. But then again, this surplus is mainly driven by the export of services – and the service sector is contracting at the same time.
It seems that the country’s problem lies more on its inability to use its productive capacities fully. The large volume of exports leads to the degradation of productivity. The Japanese authorities need to realize that, if they want to maintain economic prosperity, they have to do more on reallocating resources towards core economy areas. At the same time, the only way of maintaining a high level of employment is through proper labour supply and development policy vietproud.
According to the World Trade Organization, Japan is not fully compliant with its trade agreements. Moreover, the excessive demand of some products by the country’s consumers have led to the increase in competition among exporters. The government has also not taken measures to preserve domestic supplies. The main reason why Japanese goods are much more expensive than those of other countries is the excessive role played by the country’s transport system. The country’s transport network is outdated and is not able to keep up with the increasing international competition.
The growth of Chinese labour market has made Japan to rethink its strategy of promoting tourism in China and promoting its own products in order to protect its domestic industry. The growth in tourism has resulted in the creation of lots of job opportunities in China and thousands of people migrate every year to Australia seeking jobs. However, there is no guarantee that these workers will find jobs in Australia. As a consequence, Australia offers a very attractive package to attract Chinese visitors. As a consequence, many foreigners migrate to Australia, take Australian jobs and become Australia’s residents.
As we can see, both the countries are facing the same problems. On one hand, China is unable to fulfill all its industrial and employment potentials due to the imbalanced policies of its market. On the other hand, Japan is unable to exploit its natural resources fully because of its slow economy. The countries have to address these issues in order to promote their respective industries and retain the trust of their consumers. There are many Japanese companies that have decided to take their business to China. If Japanese firms succeed in doing so, it will not only be a great help for China’s economy but also for Japan itself because it will raise the country’s image in the world.