Truth of the Japanese Economy (Vérité de l'économie japonaise)
Why is Hurricane Irene hitting the East Coast and New York now?
It is to tell Americans that the Second Coming of Christ Jesus has already started around 2010 as I discussed recently.
http://eereporter.blogspot.com/2011/08/having-eyes-see-ye-not.html
Truth of the Japanese Economy
Now, European countries and the U.S. are afraid of becoming another Japan.
In these 15 years, elite European and America economists have been simply laughing at the Japanese economy which has bee in deflation without an increase of GDP.
However, those elite European and America economists cannot understand what is the true cause of the 15-year long Japanese deflation. The answer is China. But, they cannot understand it while arguing some secondary matters such as money operation by the Bank of Japan.
As Japanese businesses decided to use Chinese labor force rather than domestic workers, everything started to go down in Japan: consumer prices, salaries and wages of workers, and even GDP. Japanese businesses saw intensification of global competition in early 1990's. So, they started to use cheap labor force in China instead of building new factories in Japan. Accordingly, prices of goods they offered to the world got lowered. Even cheap Chinese goods came to be ubiquitous in Japan. Along with this trend, products manufactured in Japan were forced to be sold at lower prices. Then, salaries and wages of Japanese workers working in Japan were frozen. An increase in wages was stopped. Japanese companies came to build branch offices and plants in China rather than expanding facilities in Japan to hire more Japanese workers, since labor costs in China was one tenth or one third of those in Japan. Or otherwise, they started to cut down labor costs in Japan, by reducing the number of full-time workers. They started to hire more and more part-time workers. Inevitably, the Japanese Government found that it could collect less income taxes than before. It led to deficit in the national finance. The Japanese Government was forced to issue a large amount of bonds.
This is the first part of truth of the Japanese economy European and American elite economists do not understand. If another world No.2 economy suddenly appears close to the incumbent world No.2 economy, something strange should happen to the latter. So, you must think that the so-called lost decade of Japan is not because the Japanese are foolish but Japanese businesses stopped using domestic labor force but started to use cheap labor force in China.
In fact. 20,000 Japanese businesses have moved their operation wholly or partially to China (and South Korea), hiring 10 million Chinese (and South Koreans) directly and indirectly. Without great infusion of Japanese money and technology, China today is still another Mexico or Egypt. (Even South Korean Samsung owes its success to Japanese engineers who moved from Japanese companies to the South Korean company.) Conversely, 30% of GDP in China is what has been transferred from Japan to China in these 15 years. So, this balance between Japan and China is resulted in the lost 15 years and deflation in Japan.
Put simply, Japan has fostered Chinese economy while undergoing deflation and financial deficit. But why? Is it only for global economic competition intensified in early 1990's due to development of the IT technology? Yes, the deep truth lies in the situation.
In order to explain the true state of countries in terms of their GDPs and their national land capacity, I made the following figure a year ago or so when I presented it in this blog:
You can easily see that Japan is very unique. Japan has the highest index obtained by multiplying GDP by population density. Japan has to decrease GDP or population to keep decent civilized life of the people. So, Japan has virtually transferred part of its GDP to China. And, Japanese businesses hiring so many Chinese workers have come to have a natural influence on the Japanese society, taking away from Japanese parents incentives to have more children. That is why deflation is going on, GDP has not increased, and the society is heading for aging of population in Japan. It is not due to poor monetary manipulation by the Bank of Japan as European and American elite economists discussed.
As I once wrote Japan has only the land size almost equal to that of California. And, plain areas account for only 30% in the Japanese land. In this limited area, Japan's GDP, namely roughly a half of American GDP, is produced every year. It is crazy. It will destroy the nature and environment. It will damage the spiritual base of the Japanese people. Japan had to stop developping its land, at least, with momentum and power it showed in 1980's and early 1990's. So, Japanese makers had to build their plants in China or even in the U.S.
(to be continued...)
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Appendix.
The Nakajima Ki-84 Hayate ("Gale") of the Imperial Japanese Army Air Force in World War II:
Max. speed at 640km/h. Flying range: 2,500 km. The number of production: 3,500 between 1944 and 1945.
(Gangsters and comedians cannot fly a fighter.)
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