Economy of JapanTheeconomy ofJapanis the third largest in the world bynominal GDP,[12][13]the fourth largest bypurchasing power parity[14]and is the world's second largestdeveloped economy.[15]According to theInternational Monetary Fund, the country'sper capita GDP(PPP) was at $36,899, the 22nd-highest in 2013.[16]Japan is a member ofG7. The Japanese economy is forecasted by theQuarterly Tankan survey of business sentimentconducted by theBank of Japan.[17]Due to a volatile currency exchange rate, Japan's GDP as measured in dollars fluctuates widely. Accounting for these fluctuations through use of theAtlas method, Japan is estimated to have a GDP per capita of around $38,490.Japan is the world'sthird largest automobile manufacturing country,[18]has thelargest electronics goods industry, and is often ranked among the world's most innovative countries leading several measures of globalpatent filings.[19]Facing increasing competition from China and South Korea,[20]manufacturing in Japantoday now focuses primarily on high-tech and precision goods, such asoptical instruments,hybrid vehicles, androbotics. Besides theKant region,[21][22][23][24]theKansai regionis one of the leading industrial clusters and manufacturing centers for the Japanese economy.[25]Japan is the world's largestcreditornation,[26][27]generally running an annual trade surplus and having a considerable net international investment surplus. As of 2010, Japan possesses 13.7% of the world's privatefinancial assets(thesecond largest in the world) at an estimated $14.6 trillion.[28]As of 2013, 62 of theFortune Global 500companies are based in Japan.[29]Economy ofJapan

Financial center inTokyo

CurrencyJapanese yen(JPY)

Fiscal year1 April 31 March

Trade organisationsAPEC,WTO,OECD,G-20,G8and others

Statistics

GDP$4.210 trillion (2015 est.) (nominal;3rd)$4.70 trillion(2013 est.) (PPP;4th)

GDP rank3rd(nominal) /4th(PPP)

GDP growth1% real (QoQ, Q1 2015)2.3% nominal (QoQ Q1 2015)

GDP per capita$33,223 (2015 est.) (nominal;24th)$36,899 (2013 est.) (PPP;23rd)

GDP by sectoragriculture: 1.2%, industry: 27.5%, services: 71.4% (2012 est.)

Inflation(CPI)3.2% (May 2014)[1]

Population belowpoverty line16% (2010)[2]

Gini coefficient38.1 (2002)

Labour force65.93 million (2011 est.)

Labour force by occupationagriculture: 3.9%, industry: 26.2%, services: 69.8% (2010 est.)

Unemployment3.4% (2015 est.)[3]

Main industriesmotor vehicles, electronic equipment, machine tools,steelandnonferrous metals, ships,chemicals,textiles, processed foods

Ease-of-doing-business rank24th[4]

External

Exports$697 billion (2013 est.)

Export goodsmotor vehicles 13.6%; semiconductors 6.2%; iron and steel products 5.5%; auto parts 4.6%; plastic materials 3.5%; power generating machinery 3.5%

Main export partnersChina18.1%United States17.8%South Korea7.7%Thailand5.5%Hong Kong5.1% (2012 est.)[5]

Imports$766.6 billion (2013 est.)

Import goodspetroleum 15.5%; liquid natural gas 5.7%; clothing 3.9%; semiconductors 3.5%; coal 3.5%; audio and visual apparatus 2.7%

Main import partnersChina21.3%United States8.8%Australia6.4%Saudi Arabia6.2%United Arab Emirates5.0%South Korea4.6%Qatar4.0% (2012 est.)[6]

FDIstock$1.41 trillion (2013)

Grossexternal debt$2.767 trillion (Q3 2014 est.)[7]

Public finances

Public debt226.10% of GDP (2013 est.)[8]

Revenues$1.739 trillion (2013 est.)

Expenses$2.149 trillion (2013 est.)

Economicaid$9.7 billionODA(February 2007)

Credit ratingStandard & Poor's:[9]AA- (Domestic)AA- (Foreign)AAA (T&C Assessment)Outlook: Stable[10]Moody's:[10]A1Outlook: PositiveFitch:[10]A-Outlook: Positive

Foreign reservesUS$1.26

Overview of economy[edit]In the three decades of economic development following 1960, Japan ignored defense spending in favor of economic growth,[30][31]thus allowing for a rapid economic growth referred to as theJapanese post-war economic miracle. By the guidance ofMinistry of Economy, Trade and Industry,[32]with average growth rates of 10% in the 1960s, 5% in the 1970s, and 4% in the 1980s, Japan was able to establish and maintain itself as the world's second largest economy from 1978 until 2010, when it was supplanted by thePeople's Republic of China. By 1990, income per capita in Japan equalled or surpassed that in most countries in the West.[33]However, in the second half of the 1980s, rising stock and real estate prices caused theeconomic bubbleto the Japanese economy byBank of Japan. Theeconomic bubblecame to an abrupt end as theTokyo Stock Exchangecrashed in 199092 and real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5% was slower than growth in other major developed economies, giving rise to the termLost Decade. Nonetheless, GDP per capita growth from 2001-2010 has still managed to outpace Europe and the United States.[34]ButJapan public debtremains a daunting task for the Japanese government due to excessive borrowing, social welfare spending with an aging society and lack of economic/industrial growth in recent years to contribute to the tax revenue.[35]Japan had recently embraced the new strategy of economic growth with such goals to be achieved in 2020 as expected.[36]TheICTindustry has generated the major outputs to the Japanese economy.[37][38][39][40][41][42][43][44][45][46]Japan is the second largest music market in the world (for more, seeJapan Hot 100).[47]With fewer children in the aging Japan, JapaneseAnimeindustry is facing growing Chinese competition in the targeted Chinese market.[48]JapaneseMangaindustry (from the Japanese Manga (and anime) profession[49][50]) enjoys popularity in most of the Asian markets.[51]The issue of export-oriented economy from the Japanese currency intervention causes the effect of improving export but reduces import due to weaker Yen by the Japanese government.[52]Amountainous, volcanicisland country, Japan has inadequatenatural resourcesto support its growing economy and large population, and therefore exports goods in which it has a comparative advantage such asengineering-oriented,Research and Development-led industrial products in exchange for theimportof raw materials and petroleum. Japan is among the top-three importers for agricultural products in the world next to the European Union and United States in total volume for covering of its own domestic agricultural consumption.[53]Japan is the worlds largest single national importer of fish and fishery products.[54][55][56][57][58]Tokyo Metropolitan Central Wholesale Market[59][60]is the largest wholesale market for primary products in Japan, including the renowned Tsukiji fish market.[61][62]Japanese whaling, ostensibly for research purposes, has been challenged as illegal under international law.Although many kinds of minerals were extracted throughout the country, most mineral resources had to be imported in the postwar era. Local deposits of metal-bearing ores were difficult to process because they were low grade. The nation's large and varied forest resources, which covered 70 percent of the country in the late 1980s, were not utilized extensively. Because of political decisions on local, prefectural, and national levels, Japan decided not to exploit its forest resources for economic gain. Domestic sources only supplied between 25 and 30 percent of the nation's timber needs. Agriculture and fishing were the best developed resources, but only through years of painstaking investment and toil. The nation therefore built up the manufacturing and processing industries to convert raw materials imported from abroad. This strategy of economic development necessitated the establishment of a strong economic infrastructure to provide the needed energy, transportation, communications, and technological know-how.Deposits ofgold,magnesium, andsilvermeet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry.Iron ore,copper,bauxite, andaluminamust be imported, as well as many forest products.Economic history[edit]

An 1856ukiyo-edepicting Echigoya, the currentMitsukoshiMain article:Economic history of JapanTheeconomic history of Japanis one of the most studied economies for its spectacular growth in three different periods. First was the foundation ofEdo(in 1603) to whole inland economical developments, second was theMeiji Restoration(in 1868) to be the first non-European power, third was after thedefeat of World War II(in 1945) when the island nation rose to become the world's second largest economy.First contacts with Europe (16th century)[edit]Main article:Nanban tradeJapan was considered as a country rich inPRECIOUS METALS, mainly owing toMarco Polo's accounts of gilded temples and palaces, but also due to the relative abundance of surface ores characteristic of a massive huge volcanic country, before large-scale deep-mining became possible in Industrial times.[63]Japan was to become a major exporter of silver, copper, and gold during the period until exports for those minerals were banned.[64]RenaissanceJapan was also perceived as a sophisticatedfeudal societywith a high culture and a strong pre-industrial technology. It was densely populated and urbanized. Prominent European observers of the time seemed to agree that the Japanese"excel not only all the other Oriental peoples, they surpass the Europeans as well"(Alessandro Valignano, 1584, "Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales).Early European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing. This stems from the fact that Japan itself is rather poor in natural resources found commonly in Europe, especially iron. Thus, the Japanese were famously frugal with their consumable resources; what little they had they used with expert skill.The cargo of the first Portuguese ships (usually about 4 smaller-sized ships every year) arriving in Japan almost entirely consisted of Chinese goods (silk, porcelain). The Japanese were very much looking forward to acquiring such goods, but had been prohibited from any contacts with theEmperor of China, as a punishment forWakpirate raids. The Portuguese (who were calledNanban, lit. Southern Barbarians) therefore found the opportunity to act as intermediaries in Asian trade.Edo period (16031868)[edit]The beginning of theEdo periodcoincides with the last decades of theNanban trade period, during which intense interaction with European powers, on the economic and religious plane, took place. It is at the beginning of the Edo period that Japan built her first ocean-going Western-style warships, such as theSan Juan Bautista, a 500-tongalleon-type ship that transported a Japanese embassy headed byHasekura Tsunenagato the Americas, which then continued to Europe. Also during that period, thebakufucommissioned around 350Red Seal Ships, three-masted and armed trade ships, for intra-Asian commerce. Japanese adventurers, such asYamada Nagamasa, were active throughout Asia.In order to eradicate the influence ofChristianization, Japan entered in a period of isolation calledsakoku, during which its economy enjoyed stability and mild progress.[citation needed]Economic development during the Edo period includedurbanization, increased shipping of commodities, a significant expansion of domestic and, initially, foreigncommerce, and a diffusion of trade andhandicraftindustries. Theconstructiontrades flourished, along with banking facilities andmerchantassociations. Increasingly,hanauthorities oversaw the risingagriculturalproduction and the spread of rural handicrafts.By the mid-eighteenth century, Edo had a population of more than 1 million andOsakaandKyotoeach had more than 400,000 inhabitants. Many othercastle townsgrew as well. Osaka and Kyoto becameBUSY TRADINGand handicraft production centers, while Edo was the center for the supply of food and essential urban consumer goods.Rice was the base of the economy, as the daimyo collected the taxes from the peasants in the form of rice. Taxes were high, about 40% of the harvest. The rice was sold at thefudasashimarket inEdo. To raise money, the daimyo usedforward contractsto sell rice that was not even harvested yet. These contracts were similar to modernfutures trading.During the period, Japan progressively studied Western sciences and techniques (calledrangaku, literally "Dutch studies") through the information and books received through the Dutch traders inDejima. The main areas that were studied included geography, medicine, natural sciences, astronomy, art, languages, physical sciences such as the study of electrical phenomena, and mechanical sciences as exemplified by the development of Japanese clockwatches, orwadokei, inspired from Western techniques.Prewar period (18681945)[edit]Since the mid-19th century, after the Meiji restoration, the country was opened up to Western commerce and influence and Japan has gone through two periods of economic development. The first began in earnest in 1868 and extended through to World War II; the second began in 1945 and continued into the mid-1980s.Economic developments of theprewar periodbegan with the Rich State and Strong Army Policy by theMeiji government. During theMeiji period(18681912), leaders inaugurated a new Western-based education system for all young people, sent thousands of students to the United States and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages in Japan (Oyatoi gaikokujin). The government also built railroads, improved road, and inaugurated a land reform program to prepare the country for further development.To promoteindustrialization, the government decided that, while it should help private business to allocate resources and to plan, the public sector was best equipped to stimulate economic growth. The greatest role of government was to help provide good economic conditions for business. In short, government was to be the guide and business the producer. In the early Meiji period, the government built factories and shipyards that were sold to entrepreneurs at a fraction of their value. Many of these businesses grew rapidly into the largerconglomerates. Government emerged as chief promoter ofprivate enterprise, enacting a series of probusiness policies.In the mid-1930s, the Japanese nominal wage rates were 10 times less than the one of the U.S (based on mid-1930s exchange rates), while the price level is estimated to have been about 44% the one of the U.S.[65]Postwar period (1945present)[edit]

Japanese exports in 2005See also:Japanese post-war economic miracleandEconomic history of JapanFrom the 1960s to the 1980s, overall real economic growth was extremely large: a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s.[66]By the end of said period, Japan had moved into being a high-wage economy.[67]Growth slowed markedly in the late 1990s also termedthe Lost Decadeafter the collapse of theJapanese asset price bubble. As a consequence Japan ran massive budget deficits (added trillions in Yen to Japanese financial system) to finance largepublic worksprograms.

Graphical depiction of Japan Product 's product exports (2012) fromHarvard Atlas of Economic ComplexityBy 1998, Japan's public works projects still could not stimulate demand enough to end the economy's stagnation. In desperation, the Japanese government undertook "structural reform" policies intended to wring speculative excesses from the stock and real estate markets. Unfortunately, these policies led Japan into deflation on numerous occasions between 1999 and 2004. In his 1998 paper, Japan's Trap, Princeton economics professorPaul Krugmanargued that based on a number of models, Japan had a new option. Krugman's plan called for a rise in inflation expectations to, in effect, cut long-term interest rates and promote spending.[68]Japan used another technique, somewhat based on Krugman's, calledQuantitative easing. As opposed to flooding the money supply with newly printed money, the Bank of Japan expanded the money supply internally to raise expectations of inflation. Initially, the policy failed to induce any growth, but it eventually began to affect inflationary expectations. By late 2005, the economy finally began what seems to be a sustained recovery. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US andEuropean Unionduring the same period.[69]Unlike previous recovery trends, domestic consumption has been the dominant factor of growth.Despite having interest rates down near zero for a long period of time, the Quantitative easing strategy did not succeed in stopping price deflation.[70]This led some economists, such as Paul Krugman, and some Japanese politicians, to advocate the generation of higher inflation expectations.[71]In July 2006, the zero-rate policy was ended. In 2008, the Japanese Central Bank still has the lowest interest rates in the developed world, deflation has still not been eliminated[72]and the Nikkei 225 has fallen over approximately 50% (between June 2007 and December 2008). However, on April 5, 2013, theBank of Japanannounced that it would be purchasing 60-70 trillion yen in bonds and securities in an attempt to eliminate deflation by doubling the money supply in Japan over the course of two years. Markets around the world have responded positively to the government's current proactive policies, with theNikkei 225adding more than 42% since November 2012.[73]The Economisthas suggested that improvements to bankruptcy law, land transfer law, and tax laws will aid Japan's economy. In recent years, Japan has been the top export market for almost 15 trading nations worldwide.Infrastructure[edit]

Shinkansen N700 SeriesMain articles:Energy in JapanandTransportation in JapanIn 2005, one half ofJapan's energywas produced from petroleum, a fifth from coal, and 14% from natural gas.[74]Nuclear power in Japanmade a quarter of electricity production but due to theFukushima Daiichi nuclear disasterthere has been a large desire to end Japan's nuclear power program.[75][76]In September 2013, Japan closed its last 50 nuclear power plants nationwide, causing the nation to be nuclear free.[77]Japan's spendings on roads has been considered large.[78]The 1.2 million kilometers of paved road are one of the major means of transportation.[79]Japan hasleft-hand traffic.[80]A single network of speed, divided, limited-access toll roads connects major cities and are operated bytoll-collecting enterprises.[81]New and used cars are inexpensive, and the Japanese government has encouraged people to buyhybrid vehicles.[82]Car ownership fees and fuel levies are used to promote energy-efficiency.[82]Rail transportis a major means of transport in Japan.Dozens of Japanese railway companiescompete in regional and local passenger transportation markets; for instance, 6 passengerJRenterprises,Kintetsu Corporation,Seibu Railway, andKeio Corporation.[83]Often, strategies of these enterprises containreal estateordepartment stores next to stations, and many major stations have major department stores near them.[84]The Japanese cities ofFukuoka,Kobe,Kyoto,Nagoya,Osaka,Sapporo,Sendai,TokyoandYokohamaall havesubwaysystems. Some 250 high-speedShinkansentrains connect major cities.[85]All trains are known for punctuality, and a delay of 90 seconds can be considered late for some train services.[86]There are 98 passenger and 175 totalairports in Japan, and flying is a popular way to travel.[2][87][88]The largest domestic airport,Tokyo International Airport, isAsia's second busiest airport.[89]The largest international gateways areNarita International Airport(Tokyo area),Kansai International Airport(Osaka/Kobe/Kyoto area), andChbu Centrair International Airport(Nagoya area).[90]The largest ports in Japan includeNagoya Port, thePort of Yokohama, thePort of Tokyoand thePort of Kobe.[91]About 84% of Japan's energy is imported from other countries.[92][93]Japan is the world's largest liquefied natural gas importer, second largest coal importer, and third largest net oil importer.[94]Given its heavy dependence on imported energy, Japan has aimed to diversify its sources.[95]Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from 77.4% in 1973 to about 43.7% in 2010 and increased dependence on natural gas and nuclear power.[96]Other important energy source includes coal, andhydroelectricityis Japan's biggest renewable energy source.[97][98]Japan's solar market is also currently booming.[99]Kerosene is also used extensively for home heating in portable heaters, especially farther north.[100]Many taxi companies run their fleets on liquefied natural gas.[101]A recent success towards greaterfuel economywas the introduction of mass-producedHybrid vehicles.[82]Prime MinisterShinzo Abe, who was working on Japan's economic revival, signed a treaty withSaudi ArabiaandUAEabout the risingPRICES OF OIL, ensuring Japan's stable deliveries from that region.[102][103]Macro-economic trend[edit]

Real GDP growth rate from 1956 to 2008

Quarterly change in the real GDP (blue) and the unemployment rate (red) of Japan from 2000 to 2010. SeeOkun's law.This is a chart of trend of gross domestic product of Japan at market prices estimated by theInternational Monetary Fundwith figures in millions of Japanese Yen.[104]See also[105][106]YearGross domestic productUS dollar exchangeInflation index(2000=100)Nominal per-capita GDP(as% of USA)PPP capita GDP(as% of USA)

19558,369,500360.0010.31

196016,009,700360.0016.22

196532,866,000360.0024.95

197073,344,900360.0038.56

1975148,327,100297.2659.00

1980240,707,315225.82100105.8571.87

2005502,905,400110.019785.0471.03

2010477,327,13488.549889.871.49

For purchasing power parity comparisons, the US dollar was exchanged at 109 in 2010.[107]Industries[edit]Industries by GDP value-added 2012.[108]Values are converted using the exchange rate on April 13, 2013.[109]IndustryGDP value-added $ billions 2012% of total GDP

Other service activities1,23823.5%

Manufacturing94718.0%

Real Estate69713.2%

Wholesaleand retail trade66012.5%

Transportandcommunication3586.8%

Public administration3296.2%

Construction3276.2%

Finance and insurance3065.8%

Electricity,gasandwater supply1793.4%

Government service activities410.7%

Mining30.05%

Total5,268100%

Sectors of the economy[edit]Agriculture sohai[edit]Main article:Agriculture, forestry, and fishing in Japan

Rice is a very important crop in Japan as shown here in arice paddyinTawaramoto, Nara.The Japanese agricultural sector accounts for about 1.4% of the total country's GDP.[110]Only 12% of Japan's land is suitable for cultivation.[111][112]Due to this lack of arable land, a system of terraces is used to farm in small areas.[113]This results in one of the world's highest levels of crop yields per unit area, with an overall agricultural self-sufficiency rate of about 50% on fewer than 56,000km (14 million acres) cultivated.Japan's small agricultural sector, however, is also highly subsidized and protected, with government regulations that favor small-scale cultivation instead of large-scale agriculture as practiced in North America.[111]There has been a growing concern about farming as the current farmers are aging with a difficult time finding successors.[114]Rice accounts for almost all of Japan's cereal production.[115]Japan is the second-largest agricultural product importer in the world.[115]Rice, the most protected crop, is subject to tariffs of 777.7%.[112][116]Although Japan is usually self-sufficient in rice (except for its use in making rice crackers and processed foods) and wheat, the country must import about 50% of its requirements of other grain and fodder crops and relies on imports for half of its supply of meat.[117][118]Japan imports large quantities of wheat andsoybeans.[115]Japan is the 5th largest market for EU agricultural exports.[119]Over 90% ofmandarin orangesin Japan are grown in Japan.[118]Applesare also grown due to restrictions on apple imports.[120]Fishery[edit]Main article:Fishing industry in Japan

Global fish catch in JapanJapan ranked fourth in the world in 1996 intonnage of fish caught.[121]Japan captured 4,074,580 metric tons of fish in 2005, down from 4,987,703 tons in 2000, 9,558,615 tons in 1990, 9,864,422 tons in 1980, 8,520,397 tons in 1970, 5,583,796 tons in 1960 and 2,881,855 tons in 1950.[122]In 2003, the total aquaculture production was predicted at 1,301,437 tonnes.[123]In 2010, Japan's total fisheries production was 4,762,469 fish.[124]Offshore fisheries accounted for an average of 50% of the nation's total fish catches in the late 1980s although they experienced repeated ups and downs during that period.Coastal fishing by small boats, set nets, or breeding techniques accounts for about one third of the industry's total production, while offshore fishing by medium-sized boats makes up for more than half the total production. Deep-sea fishing from larger vessels makes up the rest. Among the many species of seafood caught are sardines,skipjack tuna, crab, shrimp, salmon,pollock, squid, clams,mackerel,sea bream,sauries, tuna andJapanese amberjack. Freshwater fishing, including salmon, trout and eel hatcheries and fish farms,[125]takes up about 30% of Japan's fishing industry. Among the nearly 300 fish species in the rivers of Japan are native varieties of catfish, chub, herring and goby, as well as such freshwater crustaceans as crabs and crayfish.[126]Marine and freshwater aquaculture is conducted in all 47 prefectures in Japan.[123]Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch,[127]prompting some claims that Japan's fishing is leading to depletion in fish stocks such astuna.[128]Japan has also sparked controversy by supporting quasi-commercialwhaling.[129]Industry[edit]Main article:Manufacturing in JapanJapanese manufacturing and industry is very diversified, with a variety of advanced industries that are highly successful. Industry accounts for 24% of the nation's GDP.[110]Industry is concentrated in several regions, with theKant regionsurrounding Tokyo, (theKeihin industrial region) as well as theKansai regionsurrounding Osaka (theHanshin industrial region) and theTkai regionsurrounding Nagoya (theChukyo-Tokai industrial region) the main industrial centers.[21][22][23][24][25][130]Other industrial centers include the southwestern part ofHonshand northernShikokuaround theSeto Inland Sea(the Setouchi industrial region); and the northern part ofKysh(Kitakysh). In addition, a long narrow belt of industrial centers called theTaiheiy Beltis found between Tokyo andFukuoka, established by particular industries, that have developed as mill towns.Japan enjoys high technological development in many fields, includingconsumer electronics,automobile manufacturing,semiconductormanufacturing,optical fibers,optoelectronics,optical media,facsimileandcopy machines, and fermentation processes infoodandbiochemistry. However, many Japanese companies are facing emerging rivals from theUnited States of America,South Korea, andChina.[131]Automobile manufacturing[edit]Main article:Manufacturing in Japan

Lexus LS. The rapid growth and success ofToyota'sLexusand other Japanese automakers reflects Japan's strength and global dominance in the automobile industry.Japan is thethird biggest producer of automobiles in the world.[18]Toyotais currently the world largest car maker, and the Japanese car makersNissan,Honda,Suzuki, andMazdaalso count for some of the largest car makers in the world.[132][133]Mining and petroleum exploration[edit]Main article:Mining in JapanJapan's mining production has been minimal, and Japan has very little mining deposits.[134][135]However, massive deposits of rare earths have been found off the coast of Japan.[136]In the 2011 fiscal year, the domestic yield of crude oil was 820 thousand kiloliters, which was 0.4% of Japan's total crude processing volume.[137]Services[edit]Main article:Trade and services in Japan

Japan Airlines, though faced with massive debts as of 2010, is considered one of the largest airlines in the world.Japan's service sector accounts for about three-quarters of its total economic output.[110]Banking, insurance, real estate, retailing,transportation, and telecommunications are all major industries such asMitsubishi UFJ,Mizuho,NTT,TEPCO,Nomura,Mitsubishi Estate,ON,Mitsui Sumitomo,Softbank,JR East,Seven & I,KDDIandJapan Airlinescounting as one of the largest companies in the world.[138][139]Four of the fivemost circulated newspapers in the worldareJapanese newspapers.[140]TheKoizumigovernment setJapan Post, one of the country's largest providers of savings and insurance services for privatization by 2015.[141]The six majorkeiretsusare theMitsubishi,Sumitomo,Fuyo,Mitsui,Dai-Ichi KangyoandSanwaGroups.[142]Japan is home to 251 companies from theForbes Global 2000or 12.55% (as of 2013).[143]Tourism[edit]Main article:Tourism in Japan

Himeji Castle, inHimeji,Hygo Prefecture, is one of the most visited sights in Japan.In 2012, Japan was the fifth most visited country in Asia and the Pacific, with over 8.3 million tourists.[144]In 2013, due to the weaker yen and easier visa requirements for southwest Asian countries, Japan received a record 11.25 million visitors, which was higher than the government's projected goal of 10 million visitors.[145][146][147]The government hopes to attract 20 million visitors a year by the2020 Summer Olympicsin Tokyo.[146]Some of the most popular visited places include theShinjuku,Ginza,ShibuyaandAsakusaareas inTokyo, and the cities ofOsaka,KobeandKyoto, as well asHimeji Castle.[148]Hokkaidois also a popular winter destination for visitors with several ski resorts and luxury hotels being built there.[146][149]Finance[edit]

The mainTRADING ROOMof theTokyo Stock Exchange, one of the largest stock exchanges in the world.TheTokyo Stock Exchangeis thefourth largest stock exchange in the worldbymarket capitalization, as well as the 2nd largestSTOCK MARKETin Asia, with 2,292 listed companies.[150][151][152][153][154]TheNikkei 225and theTOPIXare the two importantstock market indexesof the Tokyo Stock Exchange.[155][156]The Tokyo Stock Exchange and theOsaka Stock Exchange, another major stock exchange in Japan, merged on January 1, 2013, creating one of the world's largest stock exchanges.[154]Other stock exchanges in Japan include theNagoya Stock Exchange,Fukuoka Stock ExchangeandSapporo Securities Exchange.[157][158]Labour force[edit]Main article:Labour market of Japan

Unemployment rate of JapanThe unemployment rate in December 2013 was 3.7%, down 1.5 percentage points from the claimed unemployment rate of 5.2% in June 2009 due to the strong economic recovery.[159][160][161]This is regarded as an underestimate.[citation needed]Even part-time workers with extremely low hours are classified as employed.In July 2006, the unemployment rate in Japan was 4.1%, according to theOECD. At the end of February 2009, it stood at 4.4%[162]This seemingly modest rate however understates the situation. According to The Economist, the ratio of job offers to number of applicants has declined to just 0.59, from almost 1 at the start of 2008, while average work hours also declined. Average wages also went down by 2.9% over the 12 months ending in February. In 2008,Japan's labour forceconsisted of some 66 million workers40% of whom were womenand was rapidly shrinking.[163]One major long-term concern for the Japanese labour force is a low birthrate.[164]In the first half of 2005, the number of deaths in Japan exceeded the number of births, indicating that the decline in population, initially predicted to start in 2007, had already started. While one countermeasure for a declining birthrate would be to remove barriers toimmigration, despite taking new steps towards it, the Japanese government has been reluctant to do so, and foreign immigration to Japan has been unpopular among citizens.[165]In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form theJapanese Trade Union Confederation. Labour union membership is about 12 million.Law and government[edit]Japan ranks 27th of 185 countries in theEase of Doing Business Index2013.[166]Japanhasone of the smallest tax ratesin the developed world.[167]After deductions, the majority of workers are free frompersonal income taxes.Consumption taxrate is only 8%, whilecorporate taxrates are high, second highest corporate tax rate in the world, at 36.8%.[167][168][169]However, theHouse of Representativeshas passed a bill which will increase the consumption tax to 10% in October 2015.[170]The government has also decided to reduce corporate tax and to phase out automobile tax.[171][172]Shareholder activismis rare despite the fact that the corporate law gives shareholders strong powers over managers.[173]Recently, more shareholders have stood up against managers.[174]The government's liabilities includethe second largest public debt of any nationwith debt of over one quadrillion yen.[175][176][177]Former Prime MinisterNaoto Kanhas called the situation 'urgent'.[178]Japan's central bank hasthe second largest foreign-exchange reservesafter the People's Republic of China, with over one trillion US Dollars in foreign reserves.[179]Culture[edit]Overview[edit]Nemawashi(), or "consensus building", in Japanese culture is an informal process of quietly laying the foundation for some proposed change or project, by talking to the people concerned, gathering support and feedback, and so forth. It is considered an important element in any major change, before any formal steps are taken, and successfulnemawashienables changes to be carried out with the consent of all sides.Japanese companies are known for management methods such as "The Toyota Way".Kaizen(, Japanese for "improvement") is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers.[180]By improving standardized activities and processes, Kaizen aims to eliminate waste (seeLean manufacturing). Kaizen was first implemented in several Japanese businesses during the country's recovery after World War II, including Toyota, and has since spread to businesses throughout the world.[181]Within certain value systems, it is ironic that Japanese workers labor amongst the most hours per day, even though kaizen is supposed to improve all aspects of life.Some companies have powerful enterprise unions andshunt. TheNenko Systemor Nenko Joretsu as it is called in Japan, is the Japanese system of promoting an employee in order of his or her proximity toretirement. The advantage of the system is that it allows older employees to achieve a higher salary level before retirement and that it usually brings more experience to the executive ranks. The disadvantage of the system is that it does not allow new talent to be merged with the experience and those with specialized skills cannot be promoted to the already crowded executive ranks. It also does not guarantee or even attempt to bring the "right person for the right job". Relationships between government bureaucrats and companies are often close.Amakudari(amakudari?, "descent from heaven")is the institutionalised practice where Japanese senior bureaucrats retire to high-profile positions in the private and public sectors. The practice is increasingly viewed as corrupt and a drag on unfastening ties between private sector and state that prevent economic and political reforms.Lifetime employment(shushin koyo) and seniority-based career advancement have been common in theJapanese work environment.[167][182]Japan has begun to gradually move away from some of these norms.[183][184]Salaryman(Sararman?, salaried man)refers to someone whose income is salary based; particularly those working for corporations. Its frequent use by Japanese corporations, and its prevalence in Japanesemangaand anime has gradually led to its acceptance in English-speaking countries as a noun for a Japanesewhite-collarbusinessman. The word can be found in many books and articles pertaining to Japanese culture. Immediately following World War II, becoming a salaryman was viewed as a gateway to a stable, middle-class lifestyle. In modern use, the term carries associations of long working hours, low prestige in the corporate hierarchy, absence of significant sources of income other than salary,wage slavery, andkarshi. The term salaryman refers almost exclusively to males.Anoffice lady, often abbreviated OL (Japanese: eru), is a femaleoffice workerin Japan who performs generallypink collartasks such as serving tea andsecretarialorclericalwork. Like many unmarried Japanese, OLs oftenlive with their parentswell intoearly adulthood. Office ladies are usuallyfull-timepermanent staff, although the jobs they do usually have little opportunity forpromotion, and there is usually thetacitexpectation that they leave their jobs once they get married.Freeter(furt?)(other spellings below) is a Japanese expression for people between the age of 15 and 34 who lack full-time employment or are unemployed, excluding homemakers and students. They may also be described asunderemployedorfreelanceworkers. These people do not start acareerafterhigh schooloruniversitybut instead usually live asparasite singleswith their parents and earn some money with low skilled and low paid jobs. The low income makes it difficult for freeters to start a family, and the lack of qualifications makes it difficult to start a career at a later point in life.Karshi(karshi?), which can be translated quite literally from Japanese as "death from overwork", is occupational sudden death. The major medical causes of karshi deaths are heart attack and stroke due to stress.Skaiya(skaiya?), (sometimes also translated ascorporate bouncers,meeting-men, orcorporate blackmailers) are a form of specializedracketeerunique to Japan, and often associated with theyakuzathat extort money from or blackmail companies by threatening to publiclyhumiliatecompanies and their management, usually in their annual meeting(skai?).Sarakin(?)is a Japanese term for moneylender, orloan shark. It is a contraction of the Japanese words forsalarymanand cash. Around 14 million people, or 10% of the Japanese population, have borrowed from asarakin. In total, there are about 10,000 firms (down from 30,000 a decade ago); however, the top seven firms make up 70% of the market. The value of outstanding loans totals $100 billion. The biggestsarakinare publicly traded and often allied withbig banks.[185]The first "Western-style"department store in JapanwasMitsukoshi, founded in 1904, which has its root as akimonostore called Echigoya from 1673. When the roots are considered, however,Matsuzakayahas an even longer history, dated from 1611. The kimono store changed to a department store in 1910. In 1924, Matsuzakaya store inGinzaallowed street shoes to be worn indoors, something innovative at the time.[186]These former kimono shop department stores dominated the market in its earlier history. They sold, or rather displayed, luxurious products, which contributed for their sophisticated atmospheres. Another origin of Japanese department store is that from railway company. There have been manyprivate railwayoperators in the nation, and from the 1920s, they started to build department stores directly linked to their lines'termini.SeibuandHankyuare the typical examples of this type. From the 1980s onwards, Japanese department stores face fierce competition from supermarkets and convenience stores, gradually losing their presences. Still,deptoare bastions of several aspects of cultural conservatism in the country. Gift certificates for prestigious department stores are frequently given as formal presents in Japan. Department stores in Japan generally offer a wide range of services and can includeforeign exchange, travel reservations, ticket sales for local concerts and other events.Keiretsu[edit]Main article:KeiretsuAkeiretsu(?, lit.systemorseries)is a set of companies with interlocking business relationships and shareholdings. It is a type ofbusiness group. The prototypicalkeiretsuappeared in Japan during the "economic miracle" following World War II. Before Japan's surrender, Japanese industry was controlled by large family-controlledvertical monopoliescalledzaibatsu. TheAlliesdismantled thezaibatsuin the late 1940s, but the companies formed from the dismantling of thezaibatsuwere reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally integrated alliances across many industries. Where possible,keiretsucompanies would also supply one another, making the alliances vertically integrated as well. In this period, official government policy promoted the creation of robust trade corporations that could withstand pressures from intensified world trade competition.[187]The majorkeiretsuwere each centered on one bank, which lent money to thekeiretsu'smember companies and held equity positions in the companies. Each central bank had great control over the companies in thekeiretsuand acted as a monitoring entity and as an emergency bail-out entity. One effect of this structure was to minimize the presence ofhostile takeoversin Japan, because no entities could challenge the power of the banks.There are two types ofkeiretsu: vertical and horizontal. Verticalkeiretsuillustrates the organization and relationships within a company (for example all factors of production of a certain product are connected), while a horizontalkeiretsushows relationships between entities and industries, normally centered on a bank and trading company. Both are complexly woven together and self-sustain each other.The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the keiretsu:Sumitomo BankandMitsuiBank, for instance, becameSumitomo Mitsui Banking Corporationin 2001, whileSanwa Bank(the banker for the Hankyu-Toho Group) became part ofBank of Tokyo-Mitsubishi UFJ. Additionally, many companies from outside the keiretsu system, such asSony, began outperforming their counterparts within the system.Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While the keiretsu still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growingcorporate acquisitionindustry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as risingderivative litigationby more independent shareholders.Other economic indicators[edit]

Current account balance 2006[188]Net international investment position:266,223 \ billion[189](1st)[190]Industrial Production Growth Rate:7.5% (2010 est.)Investment (gross fixed):20.3% of GDP (2010 est.)Household income or consumption by percentage share: Lowest 10%:4.8% Highest 10%:21.7% (1993)Agriculture Products:rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fishExports Commodities:machinery and equipment, motor vehicles, semiconductors, chemicalsImports Commodities:machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)Exchange rates:Japanese Yen per US$1 88.67 (2010), 93.57 (2009), 103.58 (2008), 117.99 (2007), 116.18 (2006), 109.69 (2005), 115.93 (2003), 125.39 (2002), 121.53 (2001), 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)Electricity: Electricity consumption:925.5 billionkWh(2008) Electricity production:957.9 billion kWh (2008 est.) Electricity exports:0 kWh (2008) Electricity imports:0 kWh (2008)Electricity Production by source: Fossil Fuel:69.7% Hydro:7.3% Nuclear:22.5% Other:0.5% (2008)Electricity Standards: 100voltsat 50Hz from the Oi River (inShizuoka) Northward; 100voltsat 60Hz SouthwardOil: production:132,700bbl/d (21,100m3/d) (2009) (46th) consumption:4,363,000bbl/d (693,700m3/d) (2009) (3rd) exports:380,900 barrels per day (60,560m3/d) (2008) (64th) imports:5,033,000 barrels per day (800,200m3/d) (2008) (2nd) net imports:4,620,000 barrels per day (735,000m3/d) (2008 est.) proved reserves:44,120,000bbl (7,015,000m3) (1 January 2010 est.)

Economy of Pakistan Currency1Pakistani Rupee(PKR)Rs.1 = 100Paisas

Fiscal year1 July 30 June

Trade organizationsECO,SAFTA,ASEAN,WIPO andWTO

Statistics

GDP$250 billion (nominal, 2014)[1]$928 billion (PPP, 2015)[2]

GDP rank26th (PPP)42nd (nominal)

GDP growth4.24%(2014)[3]

GDP per capita$1,513 (nominal)[4]$4,886.27(PPP;135th; 2015)[2]

GDP by sectoragriculture: 25.1%, industry: 21.3%, services: 53.6% (2014 est.)

Inflation(CPI)2.1% (April 2015)[5]

Population belowpoverty line12.4% (2014)[6]

Labour force31 million (201213)[7]

Labour force by occupationagriculture: 43%,construction: 15.2%,manufacturing: 13.3%,wholesaleandretail: 9.2%,transportandcommunication: 7.3% (201213)[7]

Unemployment6.6% (2013 est.)[8]

Main industriestextilesandapparel,food processing,pharmaceuticals, construction, chemicals,cement,mining, machinery,steel,engineering, softwareand hardware, automobiles,motorcycleand auto parts,electronics,paper products,fertilizer,shrimp, defense products, shipbuilding

Ease-of-doing-business rank104th (2015)[9]

External

ExportsTotal $30.414 billion (2013-14 est.), Goods $25.157 billion, Services $5.256 billion[10]

Export goodsLinens(10%)CottonandYarn(9.2%)Rice(7.9%)Non-Knit Men's Suits (4.3%)Refined Petroleum (3.2%)Cement (2.3%)[11]

Main export partnersUnited States13.3%China10.9%United Arab Emirates8.6%Afghanistan8.5%Germany5.1%[12]

Imports$41.668 billion (2013-14 est.)[13]

Import goodsFood $4.15 billionMachinery $5.05 billionTransport Vehicles $1.66 billionTextile $2.29 billionFertilizers and other chemicals $6.86 billionRaw metal $2.7 billionRefined Petroleum $9.02 billionCrude Petroleum=$5.75 billion

Main import partnersChina17%United Arab Emirates15%Kuwait8.8% (2012 est.)Saudi Arabia8.5%Malaysia4.8%[14]

Public finances

Public debt61.8% of GDP (2014-15)[15]

Revenues14.8% of GDP, Pkr 4.119 trillion or $40 billion[16]

Expenses19.5% of GDP, Pkr 5.412 trillion or $54 billion

Credit ratingStandard & Poor's:[17]B- (Domestic)B- (Foreign)B- (T&C Assessment)Outlook: Positive[18]Moody's:B3[19]Outlook: Stable

Foreign reserves$17.7 billion (April 2015)

Theeconomy of Pakistanis the26th largestin the world in terms ofpurchasing power parity(PPP), and42nd largestin terms of nominalGross Domestic Product. As Pakistan has a population of over 186 million (the world's6th-largest), thusGDP per capitais $3,149 ranking140th in the world. Pakistan is a developing country[21][22][23]and is one of theNext Eleven, the eleven countries that, along with theBRICs, have a potential to become one of the world's large economies in the 21st century.[24]However, after decades of war and social instability, as of 2013, serious deficiencies in basic services such as railway transportation and electric power generation had developed.[25]The economy is semi-industrialized, with centres of growth along the Indus River.[26][27][28]Primary export commodities include textiles, leather goods, sports goods, chemicals and carpets and Rugs.[29]Growth poles of Pakistan's economy are situated along theIndus River;[27][30]the diversified economies ofKarachiand major urban centers in thePunjab, coexisting with lesser developed areas in other parts of the country.[27]The economy has suffered in the past from internal political disputes, a fast-growing population, mixed levels of foreign investment.[25]Foreign exchange reservesare bolstered by steady worker remittances, but a growing current account deficit driven by a widening trade gap as import growth outstrips export expansion could draw down reserves and dampen GDP growth in the medium term.[31]Pakistan is currently undergoing processeconomic liberalizationwith includes privatization of all government corporations, aimed to attractforeign investmentand decrease budget deficit.[32]In 2014, foreign currency reserves crossed$15 billion which has led to stable outlook on the long-term rating byStandard & Poor's

Economic comparison of Pakistan 19992008

A view of I. I. Chundrigar Road, the financial district ofKarachiin Pakistan

Main Industries by Region - Pakistan. Source:[45]

Pakistan & its two largest City economies. Source:[46]Indicator19992007200820092015

GDP$75 billion$160 billion$170 billion$185 billion$272.136 billion

GDP Purchasing Power Parity (PPP)$270 billion$475.5 billion$504 billion$545.6 billion$928.43 billion (PPP,2015)

GDP per Capita Income$450$925$1085$1250$1313

Revenue collectionRs. 305 billionRs. 708 billionRs. 990 billionRs. 1.05 trillionRs 2.65 trillion

Foreign reserves$1.96 billion$16.4 billion$8.89 billion$17.21 billion$17.7 billion

Exports$8.5 billion$18.5 billion$19.22 billion$18.45 billion$30.414 billion (2013-14 est.)

Textile Exports$5.5 billion$11.2 billion

KHI stock exchange (100-Index)$5 billion at 700 points$75 billion at 14,000 points$46 billion at 9,300 points$26.5 billion at 9,000 points

Foreign Direct Investment$1 billion$8.4 billion$5.19 billion$4.6 billion$0.803 billion[25]

External Debt & Liabilities$39 billion$40.17 billion$45.9 billion$50.1 billion$56 billion

Poverty level60%43%37%29%17%

Literacy rate45%53%59%61%58%[26]

Development programsRs. 80 billionRs. 520 billionRs. 549.7 billionRs. 621 billionRs758 billion

Agriculture[edit]Main article:Agriculture in Pakistan

Agriculture by Province

Mango Orchard inMultan, PakistanThe most important crops are wheat,sugarcane, cotton, and rice, which together account for more than 75% of the value of total crop output. Pakistan's largest food crop is wheat. In 2005, Pakistan produced 21,591,400 metric tons of wheat, more than all of Africa (20,304,585 metric tons) and nearly as much as all of South America (24,557,784 metric tons), according to theFAO.[66]The country is expected to harvest 47 to 64 million tons of wheat in 2015. Pakistan has also cut the use of dangerous pesticides dramatically.[67]Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports vegetable oil, wheat, pulses and consumer foods. The country is Asia's largestcamelmarket, second-largestapricotandgheemarket and third-largest cotton, onion and milk market. The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many AGRICULTURAL COMMODITIESand expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but has since declined to about 4%. Agricultural reforms, including increased wheat and oilseed production, play a central role in the government's economic reform package.Majority of the population, directly or indirectly, dependent on this sector. It contributes about 24 percent of Gross Domestic Product (GDP) and accounts for half of employed labor force and is the largest source of foreign exchange earnings.[68]Pakistan's Top Ten commodities by export value in 2011 were:[69]CommodityValue [1000 USD]

Wheat674424

Cotton lint359341

Flour of Wheat352014

Tangerines, mandarins, clem.120893

Potatoes102185

Cattle meat71729

Maize70028

Cotton Waste65707

Dates64081

Vegetables fresh nes53136

Pakistan's principal natural resources arearable landand water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Pakistan agriculture also benefits from year round warmth. Agriculture accounts for about 23% of GDP and employs about 44% of the labor force.Zarai Taraqiati Bank Limitedis the largest financial institution geared towards the development of agriculture sector through provision of financial services and technical expertise.Pakistan is one of the world's largest producers of the following commodities according toFAOSTAT, the statistical arm of theFood and Agriculture Organizationof The United Nations, given here with the 2008 ranking:NameGlobal rank

Apricot3rd

Buffalo Milk2nd

Chickpea3rd

Cotton, lint4th

Cotton, Seed3rd

Dates5th

Mango6th

Onion, dry4th

Oranges11th

Rice, paddy11th

Sugarcane5th

Tangerines9th

Wheat10th

Major Imports of Pakistan

1. Machinery.2. Petroleum.3. Chemicals.4. Vehicles and spare parts.5. Edible Oil.6. Wheat.7. Tea.8. Fertilizers.9. Plastic material.10. Paper Board11. Iron ore and steel.12. Pharmaceutical products.Imports of PakistanPakistans imports are also highly concentrated in few items namely, machinery, petroleum and petroleum products, chemicals, transport equipment, edible oil, iron and steel, fertilizer and tea. These imports accounted for 73% of total imports during 2006-07. Among these categories machinery, petroleum/petroleum products and chemicals accounted for 53.4% of total imports.Direction of Imports of PakistanPakistans imports are highly concentrated in few countries. Over 40 percent of them continue to originate from just seven countries namely, the USA, Japan, Kuwait, Saudi Arabia, Germany, UK and Malaysia. Saudi Arabia is emerging as major supplier to Pakistan followed by the USA and Japan. The shares of USA and Japan, with some fluctuations, exhibited a declining trend because of the shift in the import of machinery/capital goods and raw materials to other sources. On the other hand, the share of Pakistans imports from Saudi Arabia has been rising due to higher imports of POL products. Malaysia share has shown rising, as well as, falling trends over the years mainly on account of fluctuations in palm Major Exports of Pakistan

1. Raw cotton, Textile products and Cotton yarn.2. Rice.3. Leather and leather products.4. Carpets and rugs, Tents.5. Synthetic textiles.6. Surgical instruments.7. Sports goods.8. Readymade garments.9. Vegetable, fruit and fish.10. Engineering goods.11. Chemicals and Pharmaceutical products.Exports of PakistanExports were targeted at $18.6 billion or 12.9 percent higher than last year. Export of food group declined by 3.5 percent. This declined is caused by a 2.6 percent and 14.3 percent decline in exports of rice and fruits. Export of rice declined due to lesser production caused by adverse weather condition which kept the domestic price higher. It was more profitable to sell within the country than to export. Exports of textile manufactures grew by 0.2 percent. Prominent among these are export of knitwear 13.9 percent, readymade garments 6.8 percent, made up articles 8.9 percent, cotton yarn 4.6 percent and towels 2.6 percent. Exports of other textile materials registered a high double digit growth of 17.2 percent. Export of raw cotton, cotton cloth and bed wear on the other hand registered a decline.Direction of Exports of PakistanAlthough Pakistan trade with a large number of countries its exports are however highly concentrated in few countries including USA, Germany, Japan, UK, Hong Kong, Dubai and Saudi Arabia which account for one-half of its exports. The United States is largest export market for Pakistan, accounting for 28.4 percent of its exports followed by UK and Germany. Japan is fast vanishing as export market for Pakistan as its share in total exports has been on decline for one decade, reaching less than one percent from 5.7 percent a decade ago.Pakistan needs to diversify its exports not only in terms of commodities but also in terms of markets. Heavy concentration of exports in few commodities and few markets can lead to export instability. Other issues which need to be addressed include low value added and poor quality, obsolete use of machinery and technology, higher wastage of inputs adding to the cost of production, low labor productivity, little spending on research and development, export houses lacking capacity to meet bulk orders, inability to meet requirements of consumers I terms of fashion and design, non-adherence to contracted quality and delivery schedule, lack of marketing techniques etcPak-Japan trade relations

In the economic field Japan continues to be a major trade partner of PakistanBy Dr.Muhammad Ayoob Shaikh&Mr. Hakim Ali KanasroFeb-11 - 17, 2002After inception of Pakistan in August 1947, Japan established a liaison office in Karachi in December 1950. And on April 28, 1952, when the San Francisco Peace Treaty came into effect, Japan and Pakistan established diplomatic relations, and since then both countries have enjoyed friendly relations for fifty two years. Bilateral economic relationship including trade between Japan and Pakistan has been steadily promoted. Commerce treaty in 1960, which mutually grants the most, favored treatment on trade and entry of nationals etc.In the economic field Japan continues to be a major trade partner of Pakistan. In the development cooperation field, Japan has contributed to the economic development of Pakistan as a major bilateral development cooperation partner.After the 2nd world war, more than 50% of Japan's industry was in ruins. The cotton spinning and textile industries were very important factors in the revival and reconstruction of Japan's nation. At that time Pakistan extended a helping hand to Japan, by exporting raw cotton, an indispensable material for the spinning industry and by importing cotton textiles from Japan under the open General License System, even though the world market was plagued by shortage of many materials. Even in the early fifties Japan was still short of foodstuffs and Pakistan had supplied rice to Japan.Pak-Japan have different natural resource endowments, they should specialize in the production of the goods and services in which they have higher natural resources endowments and should involve in bilateral trade. In this way production and consumption level will be higher and social and economic well being of both the countries. Because Japan is an industrialized country, deficient in natural resources and raw materials, which rely heavily on its value added exports to pay for these imports. Pakistan stands in the category of developing countries, deficient in technology and endowed with natural resources of fertile agricultural land and raw materials. The natural resource endowments and economic backgrounds of both the countries make a very strong case to develop these economies through international trade and investment.Pakistan exported raw cotton to Japan and it processed the cotton into yarn and cloth and then exported these back to Pakistan. This pattern shifted later on as Japan began to export spinning machinery to Pakistan, and currently textile yarn and fabrics the largest component of Pakistani exports to Japan. From Pakistan's perspective Japan is one of the most important-trading partner. During 1990-91 to 1999-2000 Pakistan's major export went to seven countries namely, USA, Germany, Japan, U.K., Hong Kong, Dubai and Saudi Arabia. Among these countries, the share of Pakistan's exports to USA has been increasing persistently while that of Japan exhibited a continuous decrease mainly due to the protracted recession in the Japanese economy.The share of exports to Germany, UK, Hong Kong, Dubai and Saudi Arabia remained almost stagnant with minor fluctuations. The country wise annual share in export since l990-91 to 1999-2000 is given in the Table-1.It is evident from above Table-1 that Pakistan is trading with number of countries but its exports are highly concentrated in few countries. Nearly above one-half of Pakistan's exports during the period from 1990-91 to 1999-2000 went to above seven countries. Among these countries, the share of Pakistan's exports to USA has been increasing continuously and share of Pakistan exports to Japan shows persistently decrease. It is also clear from the above table that the Pakistan exports to Japan also declined by 62.65% in the year 1999-2000 in comparison of 1990-91. Pakistan exports to Japan had a rising trend up to the year 1993-94 but started declining mainly due to the antidumping duties of Japanese government on textile imports from Pakistan in 1995 and partially because of the rising trade between Japan and ASEAN countries.In the same way Pakistan is trading with large number of countries but its imports are highly concentrated in few countries. Nearly below one-half of Pakistan's imports during the period from 1990-91 to 1999-2000 originated from seven countries namely, USA, Japan, Kuwait, Saudi Arabia, Germany, UK and Malaysia. By and large, the shares of imports originating from these countries have remained almost unchanged during the 1990s with the exception of Germany, which depicts a decreasing trend. The imports from Japan were also on the increase since 1992-93 and started declining from 1993-94 to 1999-2000. The shares of imports from Kuwait and Saudi Arabia in 1999- 2000 have increased. The probable reasons for Japan decreasing trend in imports may be the joint venture between Pakistan and Japan in the automobile sector and the discouragement of Pakistani government for these imports to develop the home industry and conserve theFOREIGN EXCHANGEreserves.Pakistan's imports are highly concentrated in few items namely, machinery, petroleum and petroleum products, chemicals, transport equipments, edible oil, iron and steel, fertilizer and tea. These eight categories of imports, on average, accounted for about 75 per cent of total imports in the decade of the 1990s. Among these categories, machinery, petroleum & petroleum products and chemicals accounted for almost 54% of total imports. Our country is trading with large number of countries but its imports are highly concentrated in few countries. Nearly below one-half of Pakistan's imports during the decade of the 1990s originated from seven countries namely, USA, Japan, Kuwait, Saudi Arabia, Germany, UK and Malaysia. The evidence is given in the table-2.It is evident from the table-2 that Japan's average share was 10.63% and USA average share was 9.78% in this way they dominates the other countries in terms of percentage share of Pakistani imports. The shares of imports from Kuwait and Saudi Arabia in 1999-2000 have increased because both countries were witnessed on account of higher Pakistan oilfields limited (POL) imports from both these countries.It is also evident from the table-2 that Japan stood at first place in terms of percentage share of Pakistani imports during the period 1990-91 to 1995-96. But on average the percentage shares of Pakistani imports from Japan was more as compared to other countries and also its share declined after 1996-97.Japan is the second largest trade partner for Pakistan following the United States. The export from Pakistan to Japan has increased from Rs.11.448 billion to Rs.13.850 billion in the year 1990-91 to 1999-2000. Import from Japan to Pakistan also increased by Rs.22.161 billion to Rs.33.681 billion in the above same period. Deficit in the balance of trade has also increased from Rs.10.713 billion to Rs.19.813 billion during the period from 1990-91 to 1999-2000.Pakistan has average exported to Japan Rs.15.228 billion and imported from Japan average Rs.34.679 billion and balance of payment in deficit was averagely Rs.19.450 billion during the period from l990-91 to 1999-2000. As evidence is given in table-3It is clear from the table-3 that the overall Pak-Japan balance of trade position in the decade of 90s remained under pressure.Debt Service payment on Japan's loanThe large accumulated amount of Japan loans has increased the liability of debt service payments many fold. The evidence is given in the table- 4Table-4 shows that debt service payment on Japan loan increased till to the year 1997-98 after that the principal and interest both declined because of debt rescheduling.Workers remittances from JapanThe earnings of Pakistani nationals, which they earned in Japan and sent it to Pakistan constitutes the worker's remittance from Japan. The table-5 shows the workers remittance and percentage share of worker remittance from Japan.It is evidence from the above table that the annual workers remittance decline year after year. Because annual workers remittance (AWR) was US$ 26.84 million in the year 1990-91 but it declined and reached to only US$ 1.58 million in the year 1999-2000. The government of Pakistan must check and watch whether this amount may come through Hundi business, if it is true then government must provide facilities to the peoples to deposit and take their money through bank. In this way government can show accurate .