Industry Growth and Foreign Trade -A Study of Japan's Steel Industry-

Japan has demonstrated the rapid economic growth since the late nineteenth century.It may be difficult to deny the important role played by foreign trade in her economic growth process.For she has lacked important raw materials for manufacturing, the leading sector in her economic development, and she has had to import them in exchange for the export in their fabricated form.But the inter-relationship between economic growth and trade seems to leave much to be analyzed.Firstly it should be noted that Japan has not experienced a balanced economic growth in the sense of the uniform rate of growth in all industries and constant pattern of trade, but she has experienced drastic changes both in her industrial structure and in the commodity composition of her exports and imports.In the start of her development she exported raw silk and tea in exchange for textiles.Manufacturing production started in textiles to substitute for imports and the share of capital goods and textile materials increased in her total imports.Since the turn of the century, textiles, especially cotton textiles, grew up to be her main export item, while the domestic products of heavy manufactures, metals, machinery and chemicals, rapidly took place of imports of those commodities.This was accelerated in the nineteenthirties and until World War ll the import substitution in heavy manufactures was almost completed and some of them was even to be exported to the neighbourhood countries.After the recovery from the destruction due to Wor]d War II, the heavy manufactures have led the rapid growth of Japan's economy and her exports to the world market.Their share in manufactures exceeded a half of production in 1960 and of exports in 1962.Metal ores and mineral fuels have become two main items of Japan's imports.Changes in industrial structure and trade pattern have been inter-related with each other.The shifts both from the primary products to light manufactures and from light manufactures to heavy manufactures occurred first in imports and then in production followed by the similar shifts in exports.There underlies the growth of each manufacturing industry from import to import-substituting production and finally to export promotion.This pattern of industry growth was given a poetic expression " Ganko-keitai-teki Hatten "