Why Japan Didn’t Follow China’s Export Playbook
We think of China as this great exporter because it’s so big. When China exports a little bit of its production, that’s a huge amount to someone else. One structural factor that’s been against Japan is that in previous decades, Japan was a larger percent of the global economy and companies could be very comfortable just selling into the domestic market and so they got lazy and comfortable. If you look at the 1960s, ‘7s, and even 80s, you could sell to America, maybe you could sell to Europe, but like where else was there to sell to? India wasn’t a big market. Latin America wasn’t a big market. The only markets in the world were basically like America, Europe, which was a bit closed off at the time, and like Japanese domestic
Japan once shaped the global economy—so why did its momentum slow?
Economist and writer Noah Smith explains how Japan’s early success became its greatest weakness.
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