Japanese trade goes red; 1st time in 30 years
Source: Agencies/Shanghai Daily |
January 26, 2012, Thursday
|
Print Edition
Print Edition
THE devastating March tsunami and shift of manufacturing overseas plunged Japan's trade account into the red for the first time since 1980, the government said yesterday in a report that prompted experts to say that the years of Japan running massive trade surpluses are likely over.
The 2.49 trillion yen (US$32 billion) deficit for 2011 reflected a surge in energy imports to cover shortfalls caused by the disaster and a 2.7 percent decline in the value of Japan's exports to US$843 billion, according to the Ministry of Finance figures.
Manufacturers have moved some production overseas to avoid the damage inflicted by the strong yen. Some economists say the trade balance will be in the black again within two years, but the era of very large surpluses that allowed Japan to build a huge pile of foreign reserves has ended.
"It reflects fundamental changes in Japan's economy, particularly among manufacturers," said Hideki Matsumura, senior economist at Japan Research Institute. "Japan is losing its competitiveness to produce domestically."
"It's gotten difficult for manufacturers to export, so they've moved production abroad so that products sold outside the country are made outside the country," he said.
The yen's surge to record levels against the dollar and euro has made Japanese exports more expensive and also eroded the value of foreign earned income when brought home. Recently, manufacturers such as Nissan and Panasonic have shifted some output to factories abroad. Japan also faces intense competition from South Korea and Singapore, where labor and production costs are lower.
Japanese manufacturers have been battered over the past year. The tsunami disrupted manufacturing. Weakness in the US economy and Europe's debt problems and flooding in Thailand, where many Japanese automakers have assembly lines, also contributed.
"The impact of the supply chain problem and the temporary effect of the earthquake will fade. We may see Japan's trade balance recover to a small trade surplus, but it won't return to the pre-crisis level," said Masayuki Kichikawa, chief Japan economist at BofA Merrill Lynch in Tokyo.
"The big surpluses are gone. Japan's trade balance should be almost balanced or at best a small surplus."
The 2.49 trillion yen (US$32 billion) deficit for 2011 reflected a surge in energy imports to cover shortfalls caused by the disaster and a 2.7 percent decline in the value of Japan's exports to US$843 billion, according to the Ministry of Finance figures.
Manufacturers have moved some production overseas to avoid the damage inflicted by the strong yen. Some economists say the trade balance will be in the black again within two years, but the era of very large surpluses that allowed Japan to build a huge pile of foreign reserves has ended.
"It reflects fundamental changes in Japan's economy, particularly among manufacturers," said Hideki Matsumura, senior economist at Japan Research Institute. "Japan is losing its competitiveness to produce domestically."
"It's gotten difficult for manufacturers to export, so they've moved production abroad so that products sold outside the country are made outside the country," he said.
The yen's surge to record levels against the dollar and euro has made Japanese exports more expensive and also eroded the value of foreign earned income when brought home. Recently, manufacturers such as Nissan and Panasonic have shifted some output to factories abroad. Japan also faces intense competition from South Korea and Singapore, where labor and production costs are lower.
Japanese manufacturers have been battered over the past year. The tsunami disrupted manufacturing. Weakness in the US economy and Europe's debt problems and flooding in Thailand, where many Japanese automakers have assembly lines, also contributed.
"The impact of the supply chain problem and the temporary effect of the earthquake will fade. We may see Japan's trade balance recover to a small trade surplus, but it won't return to the pre-crisis level," said Masayuki Kichikawa, chief Japan economist at BofA Merrill Lynch in Tokyo.
"The big surpluses are gone. Japan's trade balance should be almost balanced or at best a small surplus."
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
