In the sixteenth century, Europeans quite admired Japan when they came to this country.
Japan is considered an extremely rich country in precious metals, in part also due to the relative abundance of surface ore typical of a volcanic country. Japan became a major exporter of copper and silver during this period.
1.3.1. Edo Period (1603 - 1868)
Economic development during the Edo period included urbanization, increased freight transport, and considerable expansion within the country. Trade and handicraft industries gradually became popular. The construction trades flourished, along with banking facilities and merchant associations. In the mid-18th century, Edo had a population of over one million. Osaka and Kyoto each have more than 400,000 residents. Many other cities also developed. Osaka and
supply of food and essential urban consumables. Rice was the basis of the economy, as the lords collected taxes from the peasants in the form of rice. In the early Edo period, Japan built the first imperial sea-going Western-style battleships, such as the San Juan Bautista, a large, multi-deck, 500-ton sailing ship used for Japanese emissaries (led by Hasekura Tsunenaga) to the Americas and then on to Europe. During this period, Japan gradually studied Western science and technology through information and books received from Dutch merchants. The main areas of study include geography, medicine, natural sciences, astronomy, art, languages, and physical sciences such as the study of electrical phenomena and mechanical sciences.
1.3.2. Period 1870 – 1890
In 1868, after the Boshin War, Emperor Meiji carried out the Meiji Restoration, ushering in the era of national modernization. The new government considers industry as one of the pillars of a modern country, so it has set out many policies to develop the industry. The government embarked on the industrialization of the country through the "Industrial Promotion Policy".
Specifically, the government carried out the construction of a national banking system, issued the Yen to replace the complicated monetary system of the Tokugawa period, developed mining and heavy industry, and built infrastructure (railway, road), promoting light industry. In order to protect the nascent industry against the competition of foreign goods, the government encourages the establishment of trade associations by industry and locality to provide technical guidance and introduce experts to enterprises. For the modern industrial sector, the government subsidizes them by providing long-term loans at low-interest rates. In 1898, Japan built ships with a tonnage of over 6,000 tons.
1.3.3. Period 1900 – 1919
In 1900, Japan completed the period of import substitution of textiles and began to export this item. Later, other light industrial goods also joined the list of exports. Japan has transitioned to an export-oriented stage of industrialization of primary goods while deepening import substitution for primary goods. Immediately after regaining limited independence over tariffs in 1902 and full independence in 1911, the government directly protected its industries by raising import duties.
1.3.4. Period 1920 – 1937
In the early 1920s, Japan's industrialization entered the phase of import substitution for secondary goods. State capitalism flourished. The industrial structure of this period was considered "artificial" due to strong government intervention. The government further strengthens the protection of domestic industries, continues to subsidize and introduce the world's advanced technologies to the chemical and heavy industries. Thanks to these policies, the concentration of production increased rapidly, especially evident in the growth of the Zaibatsu.
Just before World War II, Japan's heavy industry employed up to 40% of the total employment and contributed 50% of the country's industrial output. Japan developed the most advanced technologies at that time in the fields of shipbuilding and aircraft manufacturing.
1.3.5. Economic Recovery Period
Japan's economic recovery period after World War II lasted from 1945 to 1953. Due to the war, production was interrupted, unemployment increased, aggregate demand exceeded aggregate supply, causing inflation to accelerate fast. Although the famine was prevented through emergency distribution by the military, poor and inadequate food caused malnutrition and poisoning in many places. To restore and stabilize the economy, the government had to implement food distribution, administrative control over prices, fight speculation, "freeze" bank deposits, exchange money, issue bonds government, focus on restoring and developing a number of priority industries such as coal, steel, fertilizer, and electricity.
1.3.6. Period 1955 – 1973
The period of nearly 20 years from 1955 to 1973 was the period when the Japanese economy had a very high growth rate.
Figure 3.1. Comparison of the growth rate of Japan's GNP per capita over time
Source: Data from Japan Economic Planning Bureau (1998) It was during this period that the Japanese economy caught up with the advanced economies of the world. If in 1950 Japan's GNP was smaller than that of any Western country and only a few percent of that of the United States, by 1960 it had surpassed Canada, by the mid-1960s it had surpassed Britain and France, in 1968 overtakes West Germany. In 1973, Japan's GNP was one-third that of the United States and the second-largest in the world (Japan Economic Planning Bureau, 1998).
1.3.7. Transition Period
This period is characterized by unstable GDP growth and is generally less than half of the period of rapid growth. A series of economic crises occurred in 1973 – 1975, 1981 – 1982 and 1985 – 1986. The first two crises were primarily caused by oil shocks. The third crisis was caused by the appreciation of the Japanese Yen after the Plaza Accord. As a country that depends almost entirely on imported oil (with oil prices skyrocketing) and foreign demand (which also has a crisis in the foreign market), the 1973-1975 crisis made Japan's economy fall into a state of stagflation (a phenomenon in which the economy stagnates while inflation is high). The magnitude of the crisis (based on real GDP growth and industrial output) in Japan was the most
severe among the industrialized countries and even more severe than during the Great Depression. Industries that use a lot of energy such as shipbuilding, steelmaking, petrochemicals, textiles, and metalworking are in severe crisis.
1.3.8. Economic Bubble Period
Japan's economic bubble period lasted four years and three months, from December 1986 to February 1991. Japan's economy during this period had such features as the high Yen relative to the US Dollar, the speed of high real GDP growth, high inflation rate, low unemployment rate, high asset prices (real estate and financial assets), strong consumption. In 1989, Japan increased the consumption tax rate. The same year Iraq invaded Kuwait which led to the Gulf War, which sent oil prices skyrocketing. In October 1990, the Bank of Japan implemented a tight monetary policy. The economic bubble burst in 1991 and the asset price bubble burst in 1992.
After the economic bubble burst in the early 1990s, the Japanese economy entered a period of prolonged stagnation. The average annual real GDP growth rate of the period 1991-2000 was only 0.5% - much lower than in previous periods.
Figure 3.2. Disinflation and deflation during prolonged periods of economic stagnation
Source: Data from the Website of the Prime Minister's Office of Japan 1.3.9. The Phase of Recovery and Moderate Growth (2000 - 2005)
After a difficult decade for the country, Japan has entered a new decade and also the beginning of a new millennium, although the Japanese economy at this time is still in a state of a prolonged recession. The main difficulties of this period were bad debts and the crisis in the Japanese development model. In 2001, Japanese Prime Minister Koizumi immediately proceeded to settle these bad debts by various means. Some of the measures used by the Japanese government can be mentioned, such as debt forgiveness, mergers and acquisitions of banks and financial institutions that do business at a loss.
1.3.10. Severe Recession Period (2006 – 2010)
During this period, the core inflation rate in Japan increased to 1.2%, which is also the strongest increase since 1998. There are many companies that have fallen into bankruptcy due to
the price of raw materials and Rising energy, high currency rates, and changes in building codes and standards that have frozen activity in the sector. In early March 2006, the Japanese government's ten-year debt bond has grown and still pays only 1.65% a year while the same bond for the US government pays up to 4.75%. (ANB Vietnam, 2020).
1.3.11. Recovery Period (2010 to Present)
Thanks to efforts to implement anti-crisis measures, in April 2009, the Japanese economy began to see an end to the recession. Production and export activities are resumed, especially the success and role of the electronics and automobile industries. Japan receives foreign orders for components and spare parts. Japan's economic recovery has been clearly reflected in the growth of the Japanese stock market. Accordingly, at the beginning of 2018, the stock price reached 24,000 yen (National Institute for Finance, 2019), this is also the first time in about 26 years that the Japanese stock price has risen to such a high level. This proves to be a clear sign of escaping deflation.