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The Impact of Globalisation upon the Japanese Economy

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Introduction

The Impact of Globalisation upon the Japanese Economy Globalisation has had a significant impact on Japan's economy. It has affected every part of the economy, even social life. These parts include the amount of international trade, the flow of international finance, the way businesses operate, consumers, government policy, labour market and also the environment. Globalisation has several main drivers that have specifically influenced the Japanese economy. These drivers include transnational corporations (TNC), the role of the government and government policies, trade liberalisation, technology and the deregulation of many financial markets around the world. These drivers have had a beneficial impact upon Japan, however it has also forced changes, which are arguably negative on the Japanese way of life and economy. Japan is an archipelago and is situated north east of China. Japan's economy is the second largest in the world, at US$4,190.7 billion gross domestic product (GDP) and have a high per capita income of approximately US$32,859 in 2003. The Japanese economy currently accounts for 7.1 per cent of global GDP and in 2002 was over 10 times larger than the Australian economy. In recent times it has slumped into recession with deflationary rates, economic growth has slowed dramatically, to a low of 0.2% in 2002, and -1.1% in 19981. However, in the previous three decades, Japan experienced a very high rate of economic growth by almost 10% each consecutive year. Domestic spending is the main factor in the Japanese economy, with consumer spending accounting for 55-60% of the economic activity, however consumer confidence in Japan is low and therefore presents a problem. ...read more.

Middle

was enacted to provide foreign investors with tax incentives and credit guarantees. Fourthly, the Foreign Investment in Japan Development Corporation (FIND) was established to support foreign-affiliated companies, and lastly, the Japan Investment Council was set up to help promote FDI. This has increased the amount of FDI into Japan notably, which has helped make Japan the second strongest economy in the world. The impact of globalisation upon business and industries in Japan has been mixed. It has redefined the way business operates, its structure and strategies. In particular, trade liberalisation has allowed businesses to enter and compete, forcing businesses to become more efficient. The introduction of new technologies has also meant that businesses must adopt these technologies to remain internationally competitive. Japan has for the past decade been setting the standard for world's best practice in business strategies and operations. This is evident with America's adoption of many strategies such as Just In Time inventory and Total Quality Management. However in recent years the large economies have caught up to Japan and Japan has been forced to change their systems. Globalisation has had a positive impact upon consumers. Due to the advertising and influential powers of TNCs in Japan, tastes have changed and broadened. TNCs are also providing goods and jobs to the population. For example 61.8% of the employed are working in tertiary sector, which is dominated by large TNC's.5 The government has prevented dumping of goods into Japan, and promoted trade of satisfactory goods, this is evident in Japan's rice industry. ...read more.

Conclusion

In response to the global push towards sustainable living the Japanese Government has introduced various policies, the main policy being the "Basic Plan for Establishing a Recycling-Based Society" which outlines various laws that have been enacted and planned for the future.11 It is evident that globalisation has had some severe impacts and implications upon the Japanese economy. However the impact upon trade, finance, businesses, consumers, and Government have all been positive. Whilst globalisation has negatively impacted upon the Japanese labour market and also economic growth, it is also a catalyst for Japan to regain its former position and economic growth. However, economic development in Japan has still not been affected much by globalisation but rather has remained steady. Japan's trade has been boosted because of globalisation, which has helped Japan retain its dominance as the second largest economy in the world. Finance and FDI have increased due to globalisation, and whilst businesses may have to change their strategies and implement technology in the long run this will benefit the Japanese economy. Consumers have gained wider and cheaper access to goods and services, and the Government has become more aware of the implications of their policies. In the end, globalisation has negatively affected some parts of the Japanese economy, but many parts of the economy have been improved and become more internationally competitive. With strong economic policies and reform, Japan has a bright future in the global economy. ...read more.

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