New Economics for Japan
Now the annual conferences of IMF and the World Bank are held in Tokyo.
The amount of total assets possessed by Japanese individuals has reached about $20 trillion.
But most of this money is in domestic bank accounts. And Japanese banks buy government bonds in large quantity.
Even it is suspected that the Japanese Government does not especially recommend Japanese individuals to invest into foreign markets. Japanese money should be kept in Japan to sustain the government budget. Maybe they thin so.
Due to deflation, continuing more than a decade, the Japanese Government has experienced a plunge in tax revenues for many years. The total amount of accumulated financial deficits of Japan gets 200% in a ratio over its GDP, which is the largest or the worst in the world. Therefore to compensate the budget deficit, the Japanese Government issued so many bonds year after year.
Now the amount of outstanding Japanese government bonds has reached $9 trillion. By comparison, the amount of outstanding US government bonds has reached $14 trillion.
On the other hand, the total accumulated amount of direct investment from Japan to China was $45 billion from 2001 to 2010. It accounted for about 7% of the total direct foreign investment into China. However, there is also a huge amount of transfer of technology and know-hows from Japan to China. Japan has helped Chinese economic growth as one of major players or as the key contributor.
Japanese deflation has progressed in parallel with an increase of Japanese involvement in Chinese industry and economy. Japanese makers built plants and factories to make the best use of cheap labor force in China. It is estimated that 6,000 Japanese makers are in operation in China while total 15,000 Japanese businesses have offices and plants in China. Accordingly, the wage level of Japanese workers in Japan has been heavily influenced. With intensification of global economy, Japanese workers have to face competition with less salaries. As a result, tax revenues of the Japanese Government has continued to decline.
But, Japanese businesses are not losing in this global competition in economy and industry. They are securing reasonable profits, making products with less costs and less wages. So, corporate executives and other middle-class workers have received reasonable payments. It resulted in $20 trillion of total assets possessed by Japanese individuals.
In fact, though the Japanese society has suffered deflation for 15 years, the number of wealthy people is increasing in Japan.
What's more, compare with euro and the US dollar, the Japanese yen is appreciated higher; the yen is now the strongest currency in the world. It is partly because of financial crises the US and the EU are now struggling with. It is also partly because of stable transactions of the Japanese Government bond in the Japanese financial market.
But, the Japanese Government has recently decided to take a concrete measure to deal with the huge budget deficit by increasing the consumption tax rate from 5% to 10% in several years.
But, any conventional financial measures do not look like working well in this scale of economy of Japan which is virtually and substantially the second largest in the world. (Chinese economy does not possess quality necessary to be evaluated on equal terms with Japan and the US.)
So, a new theory is needed to handle the financial problem of Japan.
The point at issue is that such creative work looks so costly even with $20 trillion of individual assets all the Japanese have. But Japan has to devise one.
Incidentally, Japan has no Nobel laureates in economics so far, though 16 Japanese natural scientists have won the Nobel prize.
*** *** *** ***
Mar 10:9 What therefore God hath joined together, let not man put asunder.
Mar 10:10 And in the house his disciples asked him again of the same matter.
Mar 10:11 And he saith unto them, Whosoever shall put away his wife, and marry another, committeth adultery against her.
Mar 10:12 And if a woman shall put away her husband, and be married to another, she committeth adultery.