What is the reason for Japan's economic strength after World War II?
A contributing factor to the growth of Japan's economy is said to have been the Cold War threat.
While many countries such as the United States and the former Soviet Union allotted a tremendous amount of money to their armaments after World War II, Japan under its peace constitution was able to concentrate its efforts on the economy.
One of the indices that measure the vitality of a country's trade economy is the so-called "degree of dependence on foreign trade."
This is the ratio of the total amount of trade (imports and exports) to the national income.
Japan's degree of dependence on foreign trade was 10% in 1955, and exceeded 20% in 1970.
It has been steady at 22% to 23% after 1985.
Among all the countries in the world, Japan was once unexcelled in economic growth, supported by competitive industrial production and strong exports.
Japan's rapid growth until the mid-80s greatly amazed the world.
As far as the Gross National Product is concerned, Japan's GNP was onlv 2.8% of the world's GNP in I960, but it grew rapidly to 10.1% in 1980.
Japan's economy showed steady growth till the late 80s.
Then a period of unprecedented asset and stock price inflation, called the "bubble economy' swept across the nation for about three years.
In 1991, when the "bubble" burst with the plunge of stock and land prices, Japan's economy started into a serious recession.