Earlier this year, Eamonn Fingleton (right), an economics writer based in Tokyo since the 1980s, got a lot of attention with a guest post in this space arguing that the image of Japan as an economic basket case was grossly at odds with the country's actual economic performance. For instance:>>[A]nyone who visits Japan these days is struck by the obvious affluence even among average citizens. The cars on the roads, for instance, are generally much larger and better equipped than in the 1980s (indeed state of the art navigation devices, for instance, are more or less standard on many models). Overseas vacation travel has more than doubled since the 1980s. The Japanese boast the world's most advanced cell phones, and the biggest and best high-definition television screens. Japan's already long life expectancy has increased by nearly two years. Its Internet connections are some of the world's fastest -- something like ten times faster on average than American speeds. [JF note: I can attest to all these points.]One more example, from the Asian Development Bank rather than Fingleton. Everyone sees "made in China" on an iPad or iPhone and naturally thinks the products reflect China's growing technological dominance and its eclipse of Japan. And in the trade statistics, the value of an iPhone or iPad is counted as an export "from China" to the United States. But in reality, nearly all of the value of what's being exported consists of components from Japan (also Germany, South Korea, etc) merely reassembled in China. For an iPhone, Japanese companies account for ten times as much value as Chinese companies do. Details here.
True, not all of Japan's indicators are equally impressive. The Tokyo stock market, for instance, has never recovered from its 1990s slump. Neither has the real estate market....
On the negative side, there is also the fact that Japan's economic growth rate, as least as calculated officially, has averaged little more than 1 percent a year in the last two decades. For those who propound the "stagnation" story, this is their strongest card. But it does not accord with the common observation -- undeniable to those who have known the country since the 1980s -- that the Japanese people have enjoyed one of the biggest improvements in living standards of any major First World nation in the interim.<<
Fingleton wrote his guest-post item shortly before the devastating earthquake / tsunami / meltdown sequence that has pummeled Japan so terribly. But the points about economic fundamentals remain, and are at odds with the conventional "oh, Japan, didn't we used to care about them?" attitude in the West.
Fingleton is sure enough of his outlook to have made a public offer of a $10,000 donation to a charity, preferably one for Japanese earthquake victims, if proponents of the contrary view join him in a public debate. You can see his offer and accompanying manifesto at his site. Worth considering.
Below, a study aid: a WSJ chart, from Asian Development Bank data, on the "value flow" in an imported iPhone.
