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Japan, South Korea,

Taiwan
A Trade Relation

Presented by:
Ø Saloni Mohta

CALCUTTA BUSINESS SCHOOL


Ø Rohit Krishna
Ø Saptarshi Ray
Ø Yuvraj Mathur
A BRIEF
HISTORY
AND
INTRODUCTION
JAPAN
Exponential growth from 1960s to
1980s
§ Merchandise exports started in 1960 with $4.1 billion

§ After that it grew at an average annual rate of 16.9% in the


1960s

§ In the 1970s it grew by average annual rate of 21%.

§ In 1965, Japan's nominal GDP was estimated at just over


$91 billion.

§ By 1980, the nominal GDP had soared to a record $1.065


trillion
Japan
Import Scenario
Chart Title
§ It imported about 85% of
its total energy needs
10 (including all of its
9
8
petroleum and 89% of its
7 coal) and nearly all of its
6 iron, copper, lead, and
5
4 nickel.
3
2
1
§ It also imported food
0 materials.
Ø IN 1970 Quality of product of Japan became excellent.

Ø It was cheaper than USA goods.

Ø It increased demand of Japanese goods.

Ø Japanese steel, ships, watches, television, receivers,


automobiles,
semiconductors captured the USA market.

Ø textiles occupied more than 30 percent of Japanese exports in


1960

Ø Iron and steel products, which had grown rapidly in the 1960s
to become nearly 15 percent of exports by 1970.

Ø exports of motor vehicles rose from under 2 percent to over 18


percent of the total.
SOUTH KOREA
Exponential growth from 1960s to
1980s
Gross National Product increased from US$3.3 billion
in 1962 to US$204 billion in 1989
Per capita annual income grew from US$87 in 1962 to
US$4,830 in 1989
Manufacturing sector grew from 14.3 percent of the
GNP in 1962 to 30.3 percent in 1987
Commodity trade volume rose from US$480 million in
1962 to a projected US$127.9 billion in 1990
ratio of domestic savings to GNP grew from 3.3
percent in 1962 to 35.8 percent in 1989
SOUTH KOREA
Why this rapid growth?

1960s adoption of an outward-looking strategy


§ poor natural resource endowment
§ low savings rate
§ tiny domestic market
economic growth through labor-intensive
manufactured exports
inflow of foreign capital
rural sector relatively underdeveloped
TAIWAN
Exponential growth from 1960s to
1980s
Between 1952 and 1982, economic growth was on average
8.7%
Gross national product grew by 360% between 1965 and
1986
percentage of global exports was over 2% in 1986
global industrial production output grew a further 680%
between 1965 and 1986
49% exports to US in 1984
Trade increased more than 5-fold in the 1960s, nearly 10-
fold in the 1970s, and doubled again in the 1980s
TAIWAN
Global market access by Japanese companies and
American importers
No MNCs or huge conglomerates
Most development due to flexibility of familiar
companies
Contribution of the State
labor-intensive manufactures to expansion of heavy
industry and infrastructure to advanced electronics
Mainly export-oriented hence vulnerable to
downturns in the world economy
SOUTH KOREA AFTER
1980
v STABILITY

§ 1990’s

§ 2000’s
GOVERNMENT ROLE

§Industrial Policies

§Revenues and Expenditure

§Export and Import policies


INDUSTRY
§Energy
§Service Industry

§Tourism

LABOUR FORCE
§Labor movements in 1980s.
§Recent Trends

SCIENCE &
TECHNOLOGY
§Historical Development
§High Technology
TAIWAN
ECONOMIC DEVELOPMENT
Handed Over To Kuomintang (KMT)

Average Annual Economic Growth Rate 9.21%

Taiwan’s Industries Maintained Average Annual Growth


Rate Of 14%

Growth declined from 14% to 7.52%

Annual growth rate rose to 16.5%

Foreign trade’s importance in Taiwan’s Economic


Development
CURRENT STATUS

One of the fastest growing economies

January 2002, Taiwan joined the World Trade


Organization (WTO)

Exports increased by 6.29% to 130.6$

Imports grew by 4.94% to hit $112.5 Billion


Exports to US totaled $26.8 billion in 2002,
resulting trade surplus of $8.63 BILLION

Association of South East Asian Nations(ASEAN)

Exports to ASEAN countries accounted for 12.2%


of Taiwan’s total exports

Taiwan’s import was $112.5 billion, 4.94% more


than the preceding year
TRADE RELATION WITH JAPAN

Vertical division of labor of product

Horizontal Division

East Asia Businessman’s conference

Foundry System
TAIWAN
Future Plans
Foreign trade, behind rapid growth during the
last 40 years.

Remains export oriented

Faces challenges from thriving Chinese


Economy.
JAPAN
Scenario after 1980
Ø From 1980,the growth of Japan started climbing down.

Ø From 1981 to 1988, however, export growth averaged


11.3% per year, about one-half the level of the 1970s.

Ø Import growth lagged far behind exports, at an average


annual rate of only 2.9% from 1981 to 1988.

Ø The country imported, for example, 50% of its caloric


intake of food and about 30% of the total value of food
consumed in the late 1980s.
JAPAN
REASON FOR DECLINE
§ Japan could not get rid of oil shortage.

§ OPEC countries increased price of oil from


1.7$/Barrel to 11$/Barrel.

§ In the first half of 1990s,Inflation rate in the


world became higher.
JAPAN-USA RELATIONSHIP
§JAPAN Economy depends on the US Economy.

In 1990 their combined gross national product (GNP) totaled


§

about one third of the world's GNP.

§Japan received about 11 percent of United States and the


United States bought about 34 percent of Japan's exports.

Japan had US$148 billion in direct investment in the United


§

States in 1991, while the United States had more than


US$17 billion invested in Japan.

§Japan army is under control of US Army.


TRADE RELATION BETWEEN INDIA & JAPAN
§ Japan has now turned up as the
third-largest FDI facilitator in to
India.

§ India Japan Trade Relations have


helped India to bring in US$ 2,153
million into its domestic market.

Air Service, Culture and heritage, Economic ties, Commerce, Avoidance


§

of Double Taxation, Cooperation in the field of Science and Technology,


Students exchange programme.
TRADE RELATION OF JAPAN WITH SOUTH KOREA

Of the total direct investment in South Korea from


1962 to 1986, which amounted to US$3.631 billion,
Japan accounted for 52.2 percent .

Japanese product occupies the major portion of


South Korean Market.

From 1997 Japan also entered in the cultural


market of South Korea.
CURRENT SCENARIO
Japan started to implement
nanotechnology.

They implemented 6 sigma.

They started miniaturization.

Japan becomes second largest economy


FUTURE PROSPECT

EXPANSION OF NANO TECHNOLOGY.

LOOKING FOR ALTERNATIVE ENERGY.

IMPROVING COMMUNICATION SKILL


Thank You