Tuesday, January 31, 2012

Gloom, Doom and a "Fallen Giant"

This month, Western Japan-experts have been out in full force, debating Japan's perception of itself. The debate was set off by an article in the New York Times, written by Eamonn Fingleton. Titled "The Myth of Japan's Failure", the piece refutes a widely held dim view of the country and its economy and insists that a 'number of facts and figures that don’t quite square with Japan’s image as the laughingstock of the business pages'.

What are these facts and figures? - Average life expectancy, internet infrastructure, exchange rates, unemployment rates, construction of skyscrapers, current account surpluses, and consumption patterns. Everything seems to point that, far from the gloom and doom scenario's painted by Western analysts, Japan is doing rather well. Fingleton's most interesting point, however, was that the Japanese actually benefit from the negative press because it is 'the perfect excuse in politely waving away solicitations from American universities and other needy nonprofits. Ditto for the Ministry of Foreign Affairs in tempering expectations of foreign aid recipients.'

And while everybody is sympathising with the "fallen giant", Japan continues to build an ever more sophisticated industrial base. Japan's exports to China alone run more than $120 billion a year; Competence of the German's, Korean's and Taiwanese depends of machines and manufacturing tech acquired from Japan.

The article presents an interesting, contrarian view which is perhaps aimed at goading an American audience into action. An Asian audience - especially the Chinese -  may see things differently. At the end of the day, the fact remains that the iPhone and CRH bullets may have seriously dented the Japanese self-image of being top-cats in the manufacturing sector.



1. Eamonn Fingleton (2012): "The Myth of Japan's Failure", NYT 6 Jan., 2012, URL - http://www.nytimes.com/2012/01/08/opinion/sunday/the-true-story-of-japans-economic-success.html?_r=2&ref=general&src=me&pagewanted=all

2. Rejoiner by Krugman, Paul (2012): "Japan, Reconsidered" NYT 9 Jan., 2012, URL - http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsidered-2/

3. Rejoiner to Krugman's rejoiner :) - Eamonn Fingleton (2012): A Reply to Paul Krugman, January 19, 2012, URL - http://www.fingleton.net/a-reply-to-paul-krugman-2/#more-1465

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