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After Postwar Japan and U.S Relationship
Using the semiconductor industry as an example, explain how japan’s economic strategy and ideology, industrial policy, and economic structure resulted in trade friction with the U.S.?
Japan’s dual-use technological capabilities are an issue with strategic considerations. Foreignpolicy leaders in America understand the issues and know how to deal with them. Regrettably, their clarity of mission and capacity to respondto threats does not exist with regard to long-term economic threats from Japan. U.S therefore needs to examine the current changes in Japan’sindustrial policies. This means that the United States will have to take great steps with its capacity to handle economic threats. Since an economic policy is central to the sustainability of a nation’s strength, it is therefore important for Americans to take the same degree of precision (Ellis, 47). This will help in analysis of foreign economic threats. Additionally, American miscalculations on foreign economic threat with regards to Japan are derived from political and ideological biases of its leaders. This can be seen from the perspective of government intervention in the business of the economy. This is what is considered as the issue of industrial policy.
The economic threats that are underway in Japan suggest that their economic position islikely to strengthen as their recent economic policy changes. Japan’s economic development model perceives government intervention in policy making ensuring sufficient human investment. This allows the creation of competitive environment for private companies. At the same time it maintains an open economy for international trade. This further maintains macroeconomic stability for the country in relation to competing countries. Japan has since been conscious in its policies. It has successful practitioners of developmental economics. It has also been to task of coaching the Asian community about the virtues of industrial policy. Japan’s industrial policy refers to the country’s official measures to direct economic resources into specific sectors. It includes channeling of economic activitiesthat are considered important for the growth of the economy.
Japan’s economic strategy and ideology, emphasizes on manufacturing. This is because the field of manufacture contributes positivelyto economic growth. Thus manufacturing jobs pay more and the exports here earn more. Services and specialized technologies including the field of communications are linked to manufacturing, this is essential to an independent national security. Economic strain between the two countries results from Japan’s action of abandoning the constraints of its overly managed economy. Japan is moving forward to look for more open, market-oriented strategy and thus the development of semiconductor industry. It is clear that for the past 8 years, Japan’s global competitive position in the field of manufacturing has slipped for a number of reasons. Japan’s manufacturing has slipped because of the reduced productivity growth and declining price competitiveness. All this is as a result of technological advancement that cannot compensate for Japan’s high wage disadvantages.
Despite their competitive manufacturing, Japan will experience a significant surge in its economic growth because of the recent tsunami. Their growth since 1996 was as a result of several economic factors such as changes in regulations, overseas direct investment, exchange rate adjustments,industrial restructuring, capital investment and most importantlyemployment gains that were centered on mediumsize and small firms. The firms account for 70 percent of economic activity in Japan. Their competitive industries have since been strong in international markets. Japan is growing to a larger percentage its dependency on foreign markets in manufacturing. Japan is a strong competitor of the U.S since it is basing its strategy on Asian markets. Ithas put aside aid and financing resources that to up projects and thus it has remained strong in manufacturing and technology applications. This has resulted into a weak tie with the U.S. Japanese overdependence on the U.S. market for exports is ending and thus developing the friction between the countries. Japan is therefore emerging as a more independent focused actor on the global economic market.
Evaluate the techniques the U.S. Used to try to manage trade friction with Japan, comparing the “SII” case and the framework talks. Do you think the U.S. handled these skillfully and succeeded?
Americans have emphasized political fragmentation. They are using Darwinian view of the worldto undervalue the role of institutions in economic policy formation. U.S is assuming that the market allocates resources effic.............
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