The History of the Japanese Economy (the premodern Background, the prewar Economy, the postwar Economy).

Economic history

The economic history of Japan is one of the most studied for its spectacular growth after the Meiji Revolution to be the first non European Power and after the Second World War when the island nation rose to become the world's second largest economy.

First contacts with Europe (16th century)

Renaissance Europeans were quite admiring of Japan when they reached the country in the 16th century. Japan was considered as a country immensely rich in precious metals, mainly owing to Marco Polo's accounts of gilded temples and palaces, but also due to the relative abundance of surface ores characteristic of a volcanic country, before large-scale deep-mining became possible in Industrial times. Japan was to become a major exporter of copper and silver during the period.

Japan was also perceived as a sophisticated feudal society with a high culture and a strong pre-industrial technology. It was densely populated and urbanized. It had Buddhist “universities” larger than any learning institution in the West, such as Salamanca or Coimbra.Fact|date=January 2007 Prominent European observers of the time seemed to agree that the Japanese "excel not only all the other Oriental peoples, they surpass the Europeans as well" (Alessandro Valignano, 1584, "Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales).

Early European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing. This stems from the fact that Japan itself is rather poor in natural resources found commonly in Europe, especially iron. Thus, the Japanese were famously frugal with their consumable resources; what little they had they used with expert skill. Her copper and steel were the best in the world, her weapons the sharpest, her paper industries were unequaled.

The cargo of the first Portuguese ships (usually about 4 smaller-sized ships every year) arriving in Japan almost entirely consisted of Chinese goods (silk, porcelain). The Japanese were very much looking forward to acquiring such goods, but had been prohibited from any contacts with the Emperor of China, as a punishment for Wakō pirate raids. The Portuguese (who were called "Nanban", lit. Southern Barbarians) therefore found the opportunity to act as intermediaries in Asian trade.

Edo period

The beginning of the Edo period coincides with the last decades of the Nanban trade period, during which intense interaction with European powers, on the economic and religious plane, took place. It is at the beginning of the Edo period that Japan built her first ocean-going Western-style warships, such as the "San Juan Bautista", a 500-ton galleon-type ship that transported a Japanese embassy headed by Hasekura Tsunenaga to the Americas, which then continued to Europe. Also during that period, the "bakufu" commissioned around 350 Red Seal Ships, three-masted and armed trade ships, for intra-Asian commerce. Japanese adventurers, such as Yamada Nagamasa, were active throughout Asia.

In order to eradicate the influence of Christianization, Japan entered in a period of isolation called sakoku, during which its economy enjoyed stability and mild progress.

Economic development during the Edo period included urbanization, increased shipping of commodities, a significant expansion of domestic and, initially, foreign commerce, and a diffusion of trade and handicraft industries. The construction trades flourished, along with banking facilities and merchant associations. Increasingly, "han" authorities oversaw the rising agricultural production and the spread of rural handicrafts.

By the mid-eighteenth century, Edo had a population of more than 1 million and Osaka and Kyoto each had more than 400,000 inhabitants. Many other castle towns grew as well. Osaka and Kyoto became busy trading and handicraft production centers, while Edo was the center for the supply of food and essential urban consumer goods.

Rice was the base of the economy, as the daimyo collected the taxes from the peasants in the form of rice. Taxes were high, about 40% of the harvest. The rice was sold at the "fudasashi" market in Edo. To raise money, the daimyo used forward contracts to sell rice that was not even harvested yet. These contracts were similar to modern futures trading.

During the period, Japan progressively studied Western sciences and techniques (called "rangaku", literally "Dutch studies") through the information and books received through the Dutch traders in Dejima. The main areas that were studied included geography, medicine, natural sciences, astronomy, art, languages, physical sciences such as the study of electrical phenomena, and mechanical sciences as exemplified by the development of Japanese clockwatches, or wadokei, inspired from Western techniques.

From the Meiji Restoration to World War II

Since the mid-nineteenth century, when the Tokugawa government first opened the country to Western commerce and influence, Japan has gone through two periods of economic development. The first began in earnest in 1868 and extended through World War II; the second began in 1945 and continued into mid-1980s.

In the Meiji period (1868-1912), leaders inaugurated a new Western-based education system for all young people, sent thousands of students to the United States and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages in Japan (O-yatoi gaikokujin). The government also built railroads, improved roads, and inaugurated a land reform program to prepare the country for further development.

To promote industrialization, the government decided that, while it should help private business to allocate resources and to plan, the private sector was best equipped to stimulate economic growth. The greatest role of government was to help provide the economic conditions in which business could flourish. In short, government was to be the guide and business the producer. In the early Meiji period, the government built factories and shipyards that were sold to entrepreneurs at a fraction of their value. Many of these businesses grew rapidly into the larger conglomerates. Government emerged as chief promoter of private enterprise, enacting a series of probusiness policies.

In the mid 1930s, the Japanese nominal wage rates were 10 times less than the one of the U.S (based on mid-1930s exchange rates), while the price level is estimated to have been about 44% the one of the U.S.

Post-war economic history

From the 1960s to the 1980s, overall real economic growth has been called a "miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s. Growth slowed markedly in the late 1990s, largely due to the Bank of Japan's failure to cut interest rates quickly enough to counter after-effects of over-investment during the late 1980s. Because the Bank of Japan failed to cut rates quickly enough, Japan entered a liquidity trap. To keep its economy afloat, Japan ran massive budget deficits to finance large public works programs. By 1998, Japan's public works projects still could not stimulate demand enough to end the economy's stagnation. In desperation, the Japanese government undertook "structural reform" policies intended to wring speculative excesses from the stock and real estate markets. Unfortunately, these policies led Japan into deflation on numerous occasions between 1999 and 2004. In his 1998 paper, Japan's Trap, Princeton economics professor Paul Krugman argued that based on a number of models, Japan had a new option. Krugman's plan called for a rise in inflation expectations to, in effect, cut long-term interest rates and promote spending. Japan used another technique, somewhat based on Krugman's, called Quantitative easing. As opposed to flooding the money supply with newly printed money, the Bank of Japan expanded the money supply internally to raise expectations of inflation. Initially, the policy failed to induce any growth, but it eventually began to effect inflationary expectations. By late 2005, the economy finally began what seems to be a sustained recovery. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US and European Union during the same period. Unlike previous recovery trends, domestic consumption has been the dominant factor of growth.

19. The Japanese Economy: Manufacturing and Services, Science and Technology).

Japanese manufacturing is very diversified, with a variety of advanced industries that are highly successful.

Industry is concentrated in several regions, in the following order of importance: the Kantō region surrounding Tokyo, especially the prefectures of Chiba, Kanagawa, Saitama and Tokyo (the Keihin industrial region); the Tōkai region, including Aichi, Gifu, Mie, and Shizuoka prefectures (the Chukyo-Tokai industrial region); Kinki (Kansai), including Osaka, Kyoto, Kobe, (the Hanshin industrial region); the southwestern part of Honshū and northern Shikoku around the Seto Inland Sea (the Setouchi industrial region); and the northern part of Kyūshū (Kitakyūshū). In addition, a long narrow belt of industrial centers is found between Tokyo and Fukuoka, established by particular industries, that have developed as mill towns.

The fields in which Japan enjoys high technological development include consumer electronics, automobile manufacturing, semiconductor manufacturing, optical fibers, optoelectronics, optical media, facsimile and copy machines, and fermentation processes in food and biochemistry.

Japan's service sector accounts for about three-quarters of its total economic output. Banking, insurance, real estate, retailing, transportation, and telecommunications are all major industries such as Mitsubishi UFJ, Mizuho, NTT, TEPCO, Nomura, Mitsubishi Estate, Tokio Marine, Mitsui Sumitomo, JR East, Seven & I, and Japan Airlines counting as one of the largest companies in the world. The Koizumi government set Japan Post, one of the country's largest providers of savings and insurance services for privatization by 2014. The six major keiretsus are the Mitsubishi, Sumitomo, Fuyo, Mitsui, Dai-Ichi Kangyo and Sanwa Groups. Japan is home to 326 companies from the Forbes Global 2000 or 16.3% (as of 2006).

Presently, science and technology in Japan is mostly focused and prominent in consumer electronics, robotics and the automotive industry.

Japan is well known for its automotive and electronics industries throughout the world, and Japanese electronic products account for a large share in the world market, compared to a majority of other countries. Japan is one of the leading nations in the fields of scientific research, technology, machinery and medical research with the world's third largest budget for research and development. Japan has also made headway into aerospace research and space exploration. The Japan Aerospace Exploration Agency (JAXA) conducts space and planetary research, aviation research, and development of rockets and satellites. Since 1973, nuclear energy has been a national strategic priority in Japan, as the nation is heavily dependent on imported fuel, with fuel imports accounting for 61% of energy production. In 2008, after the opening of 7 brand new nuclear reactors in Japan (3 on Honshū, and 1 each on Hokkaidō, Kyūshū, Shikoku, and Tanegashima) Japan became the third largest nuclear power user in the world with 55 nuclear reactors. These provide 34.5% of Japan's electricity.

Following an earthquake, tsunami, and the failure of cooling systems at the Fukushima I Nuclear Power Plant on March 11, 2011, a nuclear emergency was declared. This was the first time a nuclear emergency had been declared in Japan, and 140,000 residents within 20 km of the plant were evacuated. The amount of radiation released is unclear, and the crisis is still ongoing.

20. Banking and finance. The Appreciation of the Yen, Japanese Yen, Dollar, Euro: similarities and differences.

The yen (円 en ?) or en is the currency of Japan. It is the third most-traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling. The ISO 4217 codes for the yen are JPY and 392. The Latinised symbol is ¥ while in Japanese it is also written with the kanji 円. While not a usage specific to currency, large quantities of yen are often counted in multiples of 10,000 (man, 万) in the same way as values in the United States are often quoted or rounded off to hundreds or thousands.

Etymology

In standard Japanese, the yen is pronounced "en" but the spelling and pronunciation of "yen" is standard in English, due to a historical Portuguese transliteration. The inclusion of the letter y is based on romanization of an obsolete writing of the word which included the kana ゑ (ye/we), examples of which can also be found in such words as Yebisu, Iyeyasu, and Yedo (it was still pronounced, however, as e). Like the spellings of names of people outside Japan, the romanization of yen has become a permanent feature.

History

The yen was introduced by the Meiji government in 1870 as a system resembling those in Europe. The yen replaced the complex monetary system of the Edo period, based on the mon. The New Currency Act of 1871 stipulated the adoption of the decimal accounting system of yen (1, 圓), sen (1⁄100, 錢), and rin (1⁄1000, 厘), with the coins being round and cast as in the West. The yen was legally defined as 0.78 troy ounces (24.26 g) of pure silver, or 1.5 grams of pure gold. The same amount of silver is worth about 1181 modern yen, while the same amount of gold is worth about 3572 yen. The Act also moved Japan onto the gold standard. (The sen and the rin were eventually taken out of circulation at the end of 1953.)

Fixed value of the yen to the US dollar

The yen lost most of its value during and after World War II. After a period of instability, in 1949, the value of the yen was fixed at ¥360 per US$1 through a United States plan, which was part of the Bretton Woods System, to stabilize prices in the Japanese economy. That exchange rate was maintained until 1971, when the United States abandoned the gold standard, which had been a key element of the Bretton Woods System, and imposed a 10 percent surcharge on imports, setting in motion changes that eventually led to floating exchange rates in 1973.

An undervalued yen

By 1971 the yen had become undervalued. Japanese exports were costing too little in international markets, and imports from abroad were costing the Japanese too much. This undervaluation was reflected in the current account balance, which had risen from the deficits of the early 1960s to a then-large surplus of U.S. $5.8 billion in 1971. The belief that the yen, and several other major currencies, were undervalued motivated the United States' actions in 1971.

Following the United States' measures to devalue the dollar in the summer of 1971, the Japanese government agreed to a new, fixed exchange rate as part of the Smithsonian Agreement, signed at the end of the year. This agreement set the exchange rate at ¥308 per US$1. However, the new fixed rates of the Smithsonian Agreement were difficult to maintain in the face of supply and demand pressures in the foreign-exchange market. In early 1973, the rates were abandoned, and the major nations of the world allowed their currencies to float.

In the 1970s, Japanese government and business people were very concerned that a rise in the value of the yen would hurt export growth by making Japanese products less competitive and would damage the industrial base. The government therefore continued to intervene heavily in foreign-exchange marketing (buying or selling dollars), even after the 1973 decision to allow the yen to float.

Despite intervention, market pressures caused the yen to continue climbing in value, peaking temporarily at an average of ¥271 per US$1 in 1973 before the impact of the 1973 oil crisis was felt. The increased costs of imported oil caused the yen to depreciate to a range of ¥290 to ¥300 between 1974 and 1976. The re-emergence of trade surpluses drove the yen back up to ¥211 in 1978. This currency strengthening was again reversed by the second oil shock in 1979, with the yen dropping to ¥227 by 1980.

The yen in the early 1980s

During the first half of the 1980s, the yen failed to rise in value even though current account surpluses returned and grew quickly. From ¥221 in 1981, the average value of the yen actually dropped to ¥239 in 1985. The rise in the current account surplus generated stronger demand for yen in foreign-exchange markets, but this trade-related demand for yen was offset by other factors. A wide differential in interest rates, with United States interest rates much higher than those in Japan, and the continuing moves to deregulate the international flow of capital, led to a large net outflow of capital from Japan. This capital flow increased the supply of yen in foreign-exchange markets, as Japanese investors changed their yen for other currencies (mainly dollars) to invest overseas. This kept the yen weak relative to the dollar and fostered the rapid rise in the Japanese trade surplus that took place in the 1980s.

The effect of the Plaza Accord

In 1985 a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$1 in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar. After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$1 in December 1992. In April 1995, the yen hit a peak of under 80 yen per dollar, temporarily making Japan's economy nearly the size of the US.

Post-bubble years

The yen declined during the Japanese asset price bubble and continued to do so afterwards, reaching a low of ¥134 to US$1 in February 2002. The Bank of Japan's policy of zero interest rates has discouraged yen investments, with the carry trade of investors borrowing yen and investing in better-paying currencies (thus further pushing down the yen) estimated to be as large as $1 trillion. In February 2007, The Economist estimated that the yen is 15% undervalued against the dollar and as much as 40% undervalued against the euro.

Coins

Coins were introduced in 1870. There were silver 5, 10, 20 and 50 sen and 1 yen, and gold 2, 5, 10 and 20 yen. Gold 1 yen were introduced in 1871, followed by copper 1 rin, ½, 1 and 2 sen in 1873.

Cupronickel 5 sen coins were introduced in 1889. In 1897, the silver 1 yen coin was demonetized and the sizes of the gold coins were reduced by 50%, with 5, 10 and 20 yen coins issued. In 1920, cupro-nickel 10 sen coins were introduced.

Production of silver coins ceased in 1938, after which a variety of base metals were used to produced 1, 5 and 10 sen coins during the Second World War. Clay 5 and 10 sen coins were produced in 1945 but not issued for circulation.

After the war, brass 50 sen, 1 and 5 yen were introduced between 1946 and 1948. In 1949, the current type of holed 5 yen was introduced, followed by bronze 10 yen (of the type still in circulation) in 1951.

Japanese 10 yen coin ( obverse) showing Phoenix Hall of Byōdō-in

Coins in denominations of less than 1 yen became invalid on December 31, 1953, following enforcement of the Small Currency Disposition and Fractional Rounding in Payments Act (小額通貨の整理及び支払金の端数計算に関する法律 Shōgaku tsūka no seiri oyobi shiharaikin no hasūkeisan ni kan suru hōritsu ?).

In 1955, the current type of aluminium 1 yen was introduced, along with unholed, nickel 50 yen. In 1957, silver 100 yen pieces were introduced. These were replaced in 1967 by the current, cupro-nickel type, along with the holed 50 yen coin. In 1982, the first 500 yen coins were introduced.

The date is on the reverse of all coins, and, in most cases, the name 日本国, Nihonkoku (Japan) and the value in kanji is on the obverse, except for the 5-yen where Nihonkoku is on the reverse.

500 yen coins are probably the highest valued coins to be used regularly in the world (with rates in the neighbourhood of US$4.10, €3.05, and £2.10). The United States' largest-valued commonly-used coin (25¢) is worth around 26 yen; the Eurozone's largest (€2) is worth ¥279, and the United Kingdom's largest (£2) is worth ¥402 (as of March 2005). The Swiss 5-franc coin is currently (as of April 2007) worth about ¥495. No doubt because of this high face value, the 500 yen has been a favourite target for counterfeiters. It was counterfeited to such an extent that in 2000 a new series of coins was issued with various security features. In spite of these changes, however, counterfeiting continues.

On various occasions, commemorative coins are minted using gold and silver with various face values, up to 100,000 yen. Even though they can be used, they are treated as collectibles.

Instead of displaying the A.D. year of mintage like most nations' coins, yen coins instead display the year of the current emperor's reign. For example, a coin minted in 2006 would bear the date Heisei 18 (the 18th year of Emperor Akihito's reign).

21. The Japanese Economy: Foreign Trade.

Japan’s foreign economic relations

Japan’s international economic relations are more important than ever. A major player in the global economic and financial system, Japan is strongly influenced by investment, trade and issues of international economic diplomacy.

Trade is the foundation of Japan’s international economic relations. Imports supply the oil, iron ore and food grains essential to Japan’s industrial production and household consumption. A plunge in Japanese exports was a major cause of the Japanese recession, and Japan’s recovery has been almost entirely due to recovery of rapid export growth.

For the most part, the increase in Japan’s export rate has been caused by the renewed growth and increased demand of East Asian economies, especially China. In 2009, 17 per cent of Japan’s total trade was with China. This surpassed Japan’s total trade with the United States (14 per cent). At the same time, these figures should be interpreted with caution. Japanese outsourcing and development of production networks in East Asia has made the use of bilateral trade flow measures less and less meaningful.

Another critical element of Japanese international economic engagement is foreign direct investment by Japanese corporations. Japanese corporate foreign direct investment is often directly tied to exports and imports. Japanese FDI outflows more than doubled between 2005 and 2008, dropped significantly in 2009, but are picking up once again. There are many factors at work: outsourcing, production networks, mergers and acquisitions, corporate reinvested earnings. As a colleague quipped, ‘Japanese manufacturing is alive and well, it’s just not located in Japan.’ Japan’s FDI is diversified both geographically and by sector. Some 48 per cent of Japan’s reported FDI stock of ¥68.2 trillion ($758 billion) at the end of 2009 was in manufacturing.

Investment in Asia accounts for 24 per cent of Japan’s total FDI, and investment in China accounts for 7.4 per cent. Nonetheless, the United States remains the largest market for Japanese foreign direct investors. It accounts for 31 per cent of total Japanese foreign direct investment. With Japan’s domestic market growth limited and labor expensive, Japanese firms will continue to invest abroad vigorously, particularly in dynamic Asia. In addition, with a stronger yen and large cash balances, purchases of foreign companies will continue to grow.

At the same time, Japanese companies who invest abroad will remain vulnerable because of traditional management mindsets, a weak command of foreign languages, and limited understanding of foreign markets and the cultures they embody.

Japan’s ‘new growth strategy’ and regional tactics

The DPJ’s strategy to foster Japan’s international economic relations is part of its a ‘new growth strategy’ announced in June. The plan appropriately emphasises East Asia, focusing on trade integration, two-way FDI, and tourism into Japan. The ‘new growth strategy’ builds upon existing market-driven economic integration within Asia, which is already quite deep.

In the near term, the ‘new growth strategy’ envisages expansion and multilateralisation of Japan’s bilateral Economic Partnership Agreements (EPAs). This is a logical move. Unfortunately Japan’s trade negotiations continue to be constrained by the strong protection extended to its deeply inefficient agricultural sector. Until agriculture is reformed and import obstacles removed, Japan cannot succeed with trade negotiations in bilateral, regional, or global forums.

Partly for this reason, when Japan hosts the annual APEC (Asia-Pacific Economic Cooperation) ministerial and summit meetings in November 2010, any push for a Free Trade Area of the Asia-Pacific (FTAAP) is for appearances only. Such an agreement has been on the APEC agenda for several years, but is unlikely to be negotiated and agreed on in the foreseeable future due to continuing protectionism within the region. Japan must take its fair share of responsibility for this. More fundamentally, such regional agreements are second-best to a WTO – based global approach; unfortunately the Doha Round seems virtually moribund.

On the broader issue of East Asian regionalism, Japan has proposed an East Asian Community but the specifics are not yet defined. In this respect, Japan is moving in the right direction. As it currently stands, East Asian regionalism is a bottom-up process, with only limited regional governmental institution-building. So an attempt build a region-wide community based around economic cooperation is good rhetoric; it appeals to the national interests of all East Asian economies.

But such cooperation is easier to propose than to implement.

For a start, encouraging cooperating in the area of trade is easier than cooperation in finance and exchange rate determination, and even in this area, cooperation is hard to make effective. There are underlying tensions in East Asia that stem from individual national security interests. In addition, any East Asian Community needs to somehow include the United States. But because of the strategic ambitions of some East Asian nations, the formal integration of the United States into a regional framework will prove problematic.

22. The Japanese Economy: Transport and communications in Japan.

Rail transportation

In Japan, railways are a major means of passenger transportation, especially for mass and high-speed transport between major cities and for commuter transport in metropolitan areas. Seven Japan Railways Group companies, once state-owned until 1987, cover most parts of Japan. There also are railway services operated by private rail companies, regional governments, and companies funded by both regional governments and private companies. Japanese trains are also famous for always being on time. Five stations (Shinjuku Station, Ikebukuro Station, Shibuya Station, Umeda Station, and Yokohama Station) serve more than 2 million passengers each on an average day, making Japan the most railway using nation per capita (see Rail usage statistics by country).[

Total railways of 23,670.7 km include entirely electrified 2,893.1 km of 1,435 mm (4 ft 8 1⁄2 in) standard gauge and 89.8 km of 1,372 mm (4 ft 6 in) narrow gauge, all of which is electrified. About the half of 20,656.8 km 1,067 mm (3 ft 6 in) gauge and 40 km of 762 mm (2 ft 6 in) gauge track are electrified.

Fukuoka, Kobe, Kyoto, Nagoya, Osaka, Sapporo, Sendai, Tokyo and Yokohama have subway systems.

Most Japanese people traveled on foot until the later part of the 19th century. The first railway was built between Tokyo and Yokohama in 1872 and many more developed. Japan now has one of the worlds most developed transportation networks. Mass transportation is well developed in Japan, but the road system lags behind and is inadequate for the number of cars. Road construction is difficult because of the high areas of population and the limited amount of usable land. Shinkansen are the high speed trains in Japan and they are known as bullet trains. About 250 Shinkansen trains operate daily. The fastest shinkansen trains are the N700 series Nozomi, which operate at a maximum speed of 300 km/h. Shinkansen trains are known to be very punctual. A train is recorded as late if it does not arrive at the specified time. In 2003, the average delay per train on the Tokaido Shinkansen was 6 seconds.

Road passenger and freight transport expanded considerably during the 1980s as private ownership of motor vehicles greatly increased along with the quality and extent of the nation's roads. Bus companies including the JR Bus companies operates long-distance bus service on the nation's expanding expressway network. In addition to relatively low fares and deluxe seating, the buses are well utilized because they continue service during the night, when air and train service is limited.

The cargo sector grew rapidly in the 1980s, recording 274.2 billion tonne-kilometres in 1990. The freight handled by motor vehicles, mainly trucks, in 1990, was over 6 billion tonnes, accounting for 90 percent of domestic freight tonnage and about 50 percent of tonne-kilometres.

Recent large infrastructure projects were the construction of the Great Seto Bridge and the Tokyo Bay Aqua-Line (opened 1997).

Japan currently has 97 airports. The main international gateways are Narita International Airport (Tokyo area), Kansai International Airport (Osaka/Kobe/Kyoto area), and Chūbu Centrair International Airport (Nagoya area). The main domestic hub is Tokyo International Airport (Haneda Airport), Asia's busiest airport and the world's 4th busiest airport; other major traffic hubs include Osaka International Airport, New Chitose Airport outside Sapporo, and Fukuoka Airport. 14 heliports are estimated to exist (1999).

The two main airlines are Japan Airlines and All Nippon Airways. Other passenger carriers include Skymark Airlines, Skynet Asia Airways, Air Do, Star Flyer and Fuji Dream Airlines. United Airlines and Delta Air Lines, formerly Northwest Airlines, are major international operators from Narita Airport.

Tokyo International Airport is currently undergoing construction of a new runaway, due to open in October 2010. With this opening it will open a new international terminal along with an increase to 407,000 departures and landings.

Domestic air travel in Japan has historically been highly regulated. From 1972, the three major domestic airlines (JAL, ANA, and JAS) were allocated certain routes, with JAL and ANA sharing trunk routes, and ANA and JAS sharing local feeder routes. JAL also had a flag-carrier monopoly on international routes until 1986. Airfares were set by the government until 2000, although carriers had freedom to adjust the standard fares starting in 1995 (when discounts of up to 50% were permitted). Today, fares can be set by carriers, but the government retains the ability to veto fares that are impermissibly high.

Many airports are less busy than 'wildly overoptimistic' initial forecasts

Marine transport

There are 1770 km of Waterways in Japan; seagoing craft ply all coastal inland seas.

The twenty-two major seaports designated as special important ports by Ministry of Land, Infrastructure and Transport include Chiba, Fushiki/Toyama, Himeji, Hiroshima, Kawasaki, Kitakyūshū, Kobe, Kudamatsu, Muroran, Nagoya, Niigata, Osaka, Sakai/Senpoku, Sendai/Shiogama, Shimizu, Shimonoseki, Tokyo, Tomakomai, Wakayama, Yokkaichi, and Yokohama.

Japan has 662 ships of with a volume of 1,000 gross register tons (GRT) or over, totaling 13,039,488 gross register tons (GRT) or 18,024,969 metric tons deadweight (DWT). There are 146 bulk ships, 49 cargo ships, 13 chemical tankers, 16 combination bulk, 4 with combination of ore and oil, 25 container, 45 liquefied gas, 9 passenger, 2 passenger and cargo combination ships, 214 petroleum tankers, 22 refrigerated cargo, 48 roll-on/roll-off ships, 9 short-sea passenger, and 60 vehicle carriers (1999 est.).

Ferries connect Hokkaidō to Honshū, and Okinawa Island to Kyūshū and Honshū. They also connect other smaller islands and the main islands. The scheduled international passenger routes are to China, Russia, South Korea and Taiwan. Coastal and cross-channel ferries on the main islands decreased in routes and frequencies following the development of bridges and expressways but some are still operating (as of 2007).

Mass Media in Japan

Physically, the mass media in Japan are quite similar to those in any developed nation, although perhaps somewhat more advanced. In organizational structure, however, Japanese media are unique. Individual elements of the Japanese media mix may resemble counterparts in other nations, but the combination is purely Japanese.

The primary characteristics of Japanese mass media are the influence of the national daily newspapers and the Japan Broadcasting Corporation (Nihon Hoso Kyokai, or NHK) and the relative lack of localism.

Japanese media are dominated by five national daily newspapers. The Asahi, Mainichi, Nihon Keizai, Sankei and Yomiuri Shimbun (newspaper) all publish both a morning and an evening edition, with total circulation of more than 40 million copies per day . Of the world's ten highest daily circulation newspapers, the top three are Japanese, with the fourth highest having a circulation of just over one-third of the circulation of the Yomiuri Shimbun (The United States is not represented in this list) . It is not surprising that Japan has the highest ratio of newspapers to people in the world, with 578 copies per day for every 1000 people

Local newspapers are smaller than the nationals, and many are published only once or twice a week, even in cities with populations above 100,000. However, the national newspapers all have regional sections.

The national daily newspapers are also involved in other media. All of the commercial television networks are either affiliated with or owned by a national newspaper. They are also heavily involved in radio broadcasting, although their presence is less influential.

Japanese book and magazine readership are also quite impressive. In addition, Japan has a thriving comic book, or manga, industry. Japanese comic books are for all ages and all types of people. One can see people reading manga in restaurants, coffee shops, trains, buses, even schools and offices. Sales of manga for 1984 totaled 297 billion yen (US$ 1.2 billion), al

23. Japan: A Well-Educated Society, History of Japanese Education.

A Well-Educated Society

Education in Japan is based upon what is referred to as the 6. 3. 3. 4 system-namely six year of primary education, three years of junior high school and three years of senior high school, followed by four years of university. Children receive compulsory education until the end of junior high school. The percentage of students continuing on to senior high school is as much as 96 per cent. In fact, there is a feeling that having graduated from senior high school is a foregone (предрешённый вывод, заранее известное решение) conclusion. With 43 per cent of high school graduates going on to university, Japan occupies a very high place in the world as a well-educated society.

To aim for a top-ranking university one must aim for a top-ranking senior high school. To enter one of these, one aims for a first-class junior high school and primary school, in turn-the competition on entrance examinations for such schools is becoming increasingly fierce (жестокий), to such an extent that there are even children of kindergarten age attending preparatory schools.

It is not just the children themselves who are keen to take entrance examinations for well-known primary schools. Rather than studying for entrance examinations, children would prefer to be enjoying themselves. However, the parents of the children perhaps feel that having the children enter good primary schools is a sure guarantee of a future place in a well-known university. The reason for this is that a majority of well-known primary schools are private schools connected to distinguished universities. The situation is so serious, in fact, that there are even parents who prepare themselves for 'parental interviews’, which take place at the time of primary school entrance examinations.

These circumstances are a direct result of Japan being a society which places great importance upon academic background-as absurd as anyone may think, the situation being inextricably (неразрывно) tied up with the competitive world of entrance examinations is the existing state of affairs.

Historical Background

Japan has had relations with other cultures since the dawn of its history. Foreign civilizations have often provided new ideas for the development of Japan's own culture. Chinese teachings and ideas, for example, flowed into Japan from the sixth to the ninth century. Along with the introduction of Buddhism came the Chinese system of writing and its literary tradition, and Confucianism.

By the ninth century, Kyoto, the imperial capital, had five institutions of higher learning, and during the remainder of the Heian period, other schools were established by the nobility and the imperial court. During the medieval period (1185-1600), Zen Buddhist monasteries were especially important centers of learning, and the Ashikaga School (Ashikaga Gakko) flourished in the fifteenth century as a center of higher learning.

In the sixteenth and early seventeenth centuries, Japan experienced intense contact with the major European powers. Jesuit missionaries, who accompanied Portuguese traders, proselytized Christianity and opened a number of religious schools. Japanese students thus began to study Latin and Western music, as well as their own language.

By 1603 Japan had been reunified by the Tokugawa regime (1600- 1867), and by 1640 foreigners had been ordered out of Japan, Christianity banned, and virtually all foreign contact prohibited. The nation then entered a period of isolation and relative domestic tranquillity, which was to last 200 years. When the Tokugawa period began, few common people in Japan could read or write. By the period's end, learning had become widespread. Tokugawa education left a valuable legacy: an increasingly literate populace, a meritocratic ideology, and an emphasis on discipline and competent performance. Under subsequent Meiji leadership, this foundation would facilitate Japan's rapid transition from feudal country to modern nation

During the Tokugawa period, the role of many of the bushi, or samurai, changed from warrior to administrator, and as a consequence, their formal education and their literacy increased proportionally. Samurai curricula stressed morality and included both military and literary studies. Confucian classics were memorized, and reading and recitating them were common methods of study. Arithmetic and calligraphy were also studied. Most samurai attended schools sponsored by their han (domains), and by the time of the Meiji Restoration of 1868, more than 200 of the 276 han had established schools. Some samurai and even commoners also attended private academies, which often specialized in particular Japanese subjects or in Western medicine, modern military science, gunnery, or Rangaku (Dutch studies), as European studies were called (see Intellectual Trends; The Emergence of Modern Japan, 1868-1919 , ch. 1).

Education of commoners was generally practically oriented, providing basic training in reading, writing, and arithmetic, emphasizing calligraphy and use of the abacus. Much of this education was conducted in so-called temple schools (terakoya), derived from earlier Buddhist schools. These schools were no longer religious institutions, nor were they, by 1867, predominantly located in temples. By the end of the Tokugawa period, there may have been more than 14,000 such schools. Teaching techniques included reading from various textbooks, memorizing, and repeatedly copying Chinese characters and Japanese script.

After 1868 new leadership set Japan on a rapid course of modernization. Realizing from the outset that education was fundamental to nation building and modernization, the Meiji leaders established a public education system to help Japan catch up with the West. Missions were sent abroad to study the education systems of leading Western countries. These missions and other observers returned with the ideas of decentralization, local school boards, and teacher autonomy. Such ideas and ambitious initial plans, however, proved very difficult to carry out. After some trial and error, a new national education system emerged. As an indication of its success, elementary school enrollments climbed from about 40 or 50 percent of the school-age population in the 1870s to more than 90 percent by 1900.

By the 1890s, after earlier intensive preoccupation with Western, particularly United States, educational ideas, a much more conservative and traditional orientation evolved: the education system became more reflective of Japanese values. Confucian precepts were stressed, especially those concerning the hierarchical nature of human relations, service to the new state, the pursuit of learning, and morality. These ideals, embodied in the 1890 Imperial Rescript on Education, along with highly centralized government control over education, largely guided Japanese education until the end of World War II.

In the early twentieth century, education at the primary level was egalitarian and virtually universal, but at higher levels it was multitracked, highly selective, and elitist. College education was largely limited to the few national universities, where German influences were strong. Three of the imperial universities admitted women, and there were a number of women's colleges, some quite prestigious, but women had relatively few opportunities to enter higher education. During this period, a number of universities were founded by Christian missionaries, who also took an active role in expanding educational opportunities for women, particularly at the secondary level.

After 1919 several of the private universities received official status and were granted government recognition for programs they had conducted, in many cases, since the 1880s. In the 1920s, the tradition of liberal education briefly reappeared, particularly at the kindergarten level, where the Montessori method attracted a following. In the 1930s, education was subject to strong military and nationalistic influences.

By 1945 the Japanese education system had been devastated, and with the defeat came the discredit of much prewar thought. A new wave of foreign ideas was introduced during the postwar period of military occupation (see World War II and the Occupation, 1941-52 , ch. 1).

Occupation policy makers and the United States Education Mission, set up in 1946, made a number of changes aimed at democratizing Japanese education: instituting the six-three-three grade structure (six years of elementary school, three of lower- secondary school, and three of upper-secondary school) and extending compulsory schooling to nine years. They replaced the prewar system of higher-secondary schools with comprehensive upper- secondary schools (high schools). Curricula and textbooks were revised, the nationalistic morals course was abolished and replaced with social studies, locally elected school boards were introduced, and teachers unions established (see Contemporary Setting , this ch.).

With the abolition of the elitist higher education system and an increase in the number of higher education institutions, the opportunities for higher learning grew. Expansion was accomplished initially by granting university or junior college status to a number of technical institutes, normal schools, and advanced secondary schools.

After the restoration of full national sovereignty in 1952, Japan immediately began to modify some of the changes in education, to reflect Japanese ideas about education and educational administration. The postwar Ministry of Education regained a great deal of power. School boards were appointed, instead of elected. A course in moral education was reinstituted in modified form, despite substantial initial concern that it would lead to a renewal of heightened nationalism.

By the 1960s, postwar recovery and accelerating economic growth brought new demands to expand higher education. But as the expectations grew that the quality of higher education would improve, the costs of higher education also increased. In general, the 1960s was a time of great turbulence in higher education. Late in the decade especially, universities in Japan were rocked by violent student riots that disrupted many campuses. Campus unrest was the confluence of a number of factors, including the anti- Vietnam War movement in Japan, ideological differences between various Japanese student groups, disputes over campus issues, such as discipline; student strikes, and even general dissatisfaction with the university system itself.

The government responded with the University Control Law in 1969 and, in the early 1970s, with further education reforms. New laws governed the founding of new universities and teachers' compensation, and public school curricula were revised. Private education institutions began to receive public aid, and a nationwide standardized university entrance examination was added for the national universities. Also during this period, strong disagreement developed between the government and teachers groups.

Despite the numerous educational changes that have occurred in Japan since 1868, and especially since 1945, the education system still reflects long-standing cultural and philosophical ideas: that learning and education are esteemed and to be pursued seriously, and that moral and character development are integral to education. The meritocratic legacy of the Meiji period has endured, as has the centralized education structure. Interest remains in adapting foreign ideas and methods to Japanese traditions and in improving the system generally.

24. Education in Japan: The “Nesting” of Children. Different stages of Japanese education. Costs and benefits of the system.

The 'Nesting' of Children

The number of children who, school over, make their way directly to tutoring school, then, once they reach home, retreat to their rooms to watch television and play video games, is on the increase. This phenomenon is referred to as the 'nesting' of Japanese children.

Psychologists say that children have 'develop-mental tasks-behavior’ to be learned appropriate to their age. And two of the 'tasks' put forward: children of primary school age learning how to get on with friends, and learning about the different behavioral patterns of boys and girls.

Children of various age groups used to play together in open spaces. There would always be one child who was the leader and the children would create their own kind of society. However, these days, it is difficult to find the leader in a group of playing children.

PRIMARY EDUCATION

Compulsory education begins in Japan for all children after they have turned six years of age. A majority of children also attend kindergarten (yochien -幼稚園【ようちえん】kindergarten). Approximately 80 percent of students at the kindergarten level are enrolled at private institutions, a number of which are selective. These selective kindergartens better the odds (вероятность, возможность, шанс) for parents wishing to have their children gain access to highly selective schools at subsequent levels of the education ladder. There are even pre-kindergarten classes available to help children prepare for the admissions tests.

Primary school (shogakko -小学校 【しょうがっこう】 primary school, elementary school) is six years in length (grades 1-6) and is for children between the age of six and 12. The vast majority of schools at this level are public (2003: 98.4%), but there is considerable competition to enter one of the small number of prestigious private schools, usually affiliated with a private university foundation, where entry virtually guarantees entry to affiliated schools all the way up to university.

There are no tuition charges for children attending public schools. At the end of primary school a certificate of completion is awarded. Attendance at primary school is almost universal (99.98%). Students who complete the primary cycle are automatically accepted into lower secondary school.

Curriculum: Japanese language (reading, writing, literature), mathematics, science (grades 3 to 6), social studies (grades 3 to 6), arts, music, physical education, moral education, home-making (grades 5 and 6), life environment studies (grades 1 and 2), special activities (includes periods for class activities and club activities) and periods for integrated studies to combine skills learned in different subject areas (grades 3 to 6).

Leaving Certificate: Shoggako Sotsugyo Shosho (Elementary School Certificate of Graduation). 卒業 【そつぎょう】 graduation, 証書 【しょうしょ】 bond,deed, certificate

SECONDARY EDUCATION

Secondary education is divided into two three-year cycles: lower and upper secondary. Lower secondary school is compulsory and enrollment is almost universal (99.98 percent). Although upper secondary school is not compulsory, 97.3 percent of lower secondary school students go on to enroll at upper secondary school. A number of private schools offer six years of continuous education, covering the lower and higher secondary cycles.

Lower Secondary School (Chugakko) 中学校【ちゅうがっこう】 junior high school.

The lower secondary stage (grades 7 - 10) of the education cycle, from 12 to 15 years of age, is a very important phase in the educational process for Japanese students. Results at lower secondary school can determine whether or not the student gains access to a good upper secondary school and by extension to a good university and career.

As at the primary level, the vast majority of lower secondary schools (97 percent) are public and tuition free. Private schools require students to pass an entrance examination. Entrance to public lower secondary schools is by allocation (распределение) of the local education board, except at national public schools — of which there were just 76 in 2003 — where entrance is by examination.

In the second and third year of the lower secondary cycle, attendance at Juku (塾【じゅく), or cram schools, is common as students prepare for the competitive upper secondary school examinations. Students completing the lower secondary cycle are awarded a graduation certificate and are eligible to take admissions examinations for upper secondary school.

Curriculum: Japanese (1st year 140*, 2nd & 3rd 105*), social studies (1st & 2nd year 105, 3rd 85), mathematics (105), science (105), music (1st year 45, 2nd & 3rd 35), fine arts (1st year 45, 2nd & 3rd 35), health and physical education (90), industrial arts and homemaking (1st & 2nd year 70, 3rd 35), moral education (35), special activities (35 — includes class activities, pupils’ councils, club activities and ‘school events’), elective subjects (1st year 0-30, 2nd 50-105, 3rd 105-165), foreign languages (105 — English and Chinese are most popular), and periods of integrated study (70-130).

*Number of yearly periods per grade (each period lasts 50 minutes).

Leaving Certificate: Chugakko Sotsugyo Shomeisho (証明書 【しょうめいしょ】 (n) certificate (of proof)) (Lower Secondary School Certificate of Graduation).

Upper Secondary Education (Kotogakko) 高等学校【こうとうがっこう】senior high school

Upper secondary education is divided into two basic streams: academic and vocational/technical. Since 1994, a small but growing number of schools have begun offering integrated programs that combine both academic and vocational classes. In 2003, 73 percent of students were enrolled in general academic courses, 24 percent were enrolled in specialized (vocational) courses and 3 percent in integrated courses. Since 1993, a small but growing number of schools have been offering credit-based courses as opposed to the school year-based system. This new type of school is designed to offer students the opportunity to study part-time or by correspondence as their needs dictate. Entrance to upper secondary school is based on competitive examinations and the strength of lower secondary school reports.

In 2003 there was a 70/30 split in the number of enrollments at public and private schools. Private schools at the upper secondary level are generally considered to be better at preparing students for university entrance examinations, hence the higher proportion of students attending private schools at this stage than at the lower secondary level. Although public upper secondary school is not free, the fees are considerably cheaper than in the private sector.

Admission to the academic stream is generally more competitive than to the vocational/technical stream. Schools in the upper secondary sector are ranked on a national basis according to the number of their students who are accepted to prestigious universities such as the University of Tokyo. There are elite and highly selective schools in both the public and private sector. As noted above, entry to the best upper secondary schools is increasingly dependent on the lower secondary school that students attend.

In order to complete an upper secondary school full-time course, a student must earn 80 credits or more, one credit consisting of 35 class hours (one class lasts 50 minutes). Students in a specialized course must earn 30 or more credits in vocational or specialized subjects.

As at the lower secondary level, a majority of students take extra classes at juku (cram schools) to prepare for the all-important university entrance examinations. Many students who fail the university entrance examination on their first attempt spend a full year at full-time cram schools known as yobiko to improve their chances on the re-sits (see below in the Admission to Higher Education section for more).

Academic Upper Secondary School

Duration of Program: Three years (minimum 80 credits)

Curriculum: Japanese language I & II (18 credits), plus Japanese classics (8 credits); world history (2 to 4 credits); Japanese history or geography (2 to 4 credits); civics — contemporary society or ethics, politics and economics (4 credits); mathematics (16 credits); two sciences (4 to 8 credits); physical education (7-9 credits) and health (2 credits); music, fine arts, crafts or calligraphy (2 credits); a foreign language (8 to 16 credits); and a home economics subject (4 credits).

Leaving Certificate: Kotogakko Sotsugyo Shomeisho (Certificate of Secondary Education). All students who hold the certificate are eligible to take the university entrance examination, known as the Examination of the National Center for University Entrance.

Technical/Vocational Upper Secondary Schools

Students who enter the vocational stream are required to choose an area of specialization in which they must take subjects worth 30 credit points. They are also required to take a number of general education subjects to bring their number of credits to 80 over three years of study. Subjects studied tend to be fairly specialized and the training provided is quite job specific. Students are admitted either on the basis of a recommendation from their lower secondary school, or through an entrance examination.

Duration of Program: Three years (minimum 80 credits)

Curriculum: Students must choose a field of specialization from seven major areas: agriculture (11.5%*), industry (35.7%*), business (32% *), fisheries (1.2%*), home economics (6.6%*), nursing (1.6%*), welfare (0.4%*), and other (11.5%*). General education subjects: Japanese, a foreign language, mathematics, science, social science, art and physical education).

* Percentage of students in the vo-tech stream specializing in this field.

Leaving Certificate: Kotogakko Sotsugyo Shosho ( Certificate of Secondary Education). This is the same qualification earned by students in the academic stream, and no distinction is made on the certificate. As in the academic stream, holders of the certificate are eligible to take the national university entrance examination; however, for university admissions students from the vocational stream are at a significant disadvantage as the entrance examination is based on the content of academic courses.

Other Upper Secondary Level Programs

In addition to three-year vocational upper secondary schools, secondary-level educational opportunities are also offered at colleges of technology and specialized training colleges (described below in Non-University Higher Education section).

HIGHER EDUCATION

Higher education in Japan is provided at universities (daigaku), junior colleges (tanki daigaku), colleges of technology (koto senmon gakko) and special training schools and colleges (senshu gakko). Of these four types of institution, only universities and junior colleges are strictly postsecondary providers.

With 77.1 percent of all tertiary-level enrollments, the private sector in Japan plays a key role in postsecondary education. At the university level there are a wide variety of institutions, from the very large to the very small, and from the very specialized to the multi-faculty, multi-campus university.

In 2004, there were a total of 709 universities in Japan, comprising 87 national universities, 80 local public universities and 542 private universities. There has been a significant year-on-year drop in the number of universities at the public level in the last two years as the government begins to enact reforms prompted by the declining number of high school graduates. Although Japan’s population is stable, the proportion of college-age children is declining, with the number of high school students dropping from more than five million in 1985 to under four million in 2002.

In April 2003, a three-year plan of mergers began and at least 35 of Japan’s 100 national universities have merged or are in the process of doing so. Between 2003 and 2004, the number of national universities dropped to 87 from 100. No merger plans have been announced by Japan’s private universities, which are relatively autonomous of the ministry. The number of private universities continues to grow at a rate of approximately 16 a year.

While total enrollments at national universities have been climbing in recent years, there is a definite prospect of declines, as there is at private universities. It is the largely private junior college sector, however, that appears to be bearing the brunt of the declining numbers of college-age students. Between 1998 and 2004 the number of junior colleges dropped from 585 to 508 (-13.6%), while enrollments over the same period have plummeted from 416,825 to 233,749 (-44%). As universities continue to search for students to fill classrooms, they are increasingly accepting transfer credits from junior colleges, something that would not have even been considered ten years ago. Many junior colleges provide specialized training and certification, yet increasing numbers of employers in specialized fields now prefer to hire people with university degrees, which is further decreasing the appeal of a junior college education.

The ministry’s program of university mergers is part of a larger overhaul of the higher-education system, which includes plans to make national universities more self-supporting financially and more autonomous in their decision making. The cornerstone of these reforms is an authorization for national universities to incorporate as public corporations with a board of trustees, independent of the ministry. This has implications for faculty hiring and firing practices, curriculum content and research capabilities.

National universities have traditionally been supervised by the ministry and largely financed from the national budget. Local public universities are generally funded from prefectural budgets. Private institutions derive the majority of their income from tuition and student fees, but also make up to 20 percent of their budget from the ministry. Under the reforms universities that fail to meet government-imposed enrollment targets will lose ministry subsidies. If imposed, the financial penalties may prove to be the final nail in the coffin of many private universities, already buckling under the strain of decreasing enrollments.

Each of Japan’s 47 prefectures has at least one national university, which generally offers a wide variety of programs at undergraduate, graduate and postgraduate level. Local public universities offer mainly undergraduate programs.