CFI Data on Japan

Japan was the third-largest economy in the world by nominal GDP in 2018. Japan is a member of the G7. It is a leader in high-tech products, particularly in optical instruments and robotics. GDP per capita is $39,287 USD. While not rich in minerals, Japan has a highly educated labour force, and is ranked third on the Human Capital Index. Services is the largest sector (around 70 percent of GDP in 2017), followed by manufacturing (20 percent). In 2017, its largest export sectors were machinery (21.6 percent), services (20 percent), vehicles (18.9 percent), and electronics (13.4 percent). The largest individual exports were industrial machinery (15 percent), ICT services (11.3 percent), and cars (11 percent). Its main export partners are China (19.4 percent) and the USA (18 percent). Its leading import goods are crude oil (9.45 percent), petroleum gasses (5.86 percent), and coal (3.29 percent). Japan began to modernise its economy in the Meiji period and by World War 2 had industrialised its economy through the development of infrastructure and manufacturing. After the war, Japan enjoyed rapid economic growth by prioritising exports, a model since copied around the world. The "economic miracle" was facilitated through government-industry cooperation, the keiretsu commercial networks, a strong work ethic, domestic investment, economies of scale, a focus on quality, technological mastery, and initial US aid. Land reform and improved education also played an important role. From the 1980s, labour intensive industries were relocated offshore while Japanese companies focused on high-tech industries. An appreciation of the yen after the 1985 Plaza accords with the US, led to rapid outward FDI by Japanese companies and a property bubble in Japan. In 1991, the asset bubble collapsed, and the economy went into recession. Despite low interest rates and large government spending, the economy has been unable to replicate the high growth of previous periods. With low immigration and an ageing population, Japan has transformed itself into the world leader in industrial robots.