JAPAN'S ADVANTAGE

Evening Post, Volume CXV, Issue 144, 21 June 1933, Page 12

JAPAN'S ADVANTAGE

LOW MANUFACTURING COSTS The British Department of Overseas Trade in a recent report cm Japanese competition in the textile export trade remarked that "a deadly combination o£ low wages, good workmanship, and favourable exchange. . . ..Without high standard of efficiency, combined with surprisingly low costs, Japan would not have achieved the remarkable expansion of her trade in piece-goods ■in 1932." The "Textile Mercury" of Manchester supplements the above report by comments made upon that prepared by the joint committee of British Cotton Trade organisations in which reference is made to.) the depreciation of the yen. Incidentally the par value of the yen is about 2s; today it is down to Is 3d. It is conceded that the depreciation of the yen explains the great expansion of Japanese, exports last year, but the joint committee recognises that the full advantages of a depreciated , currency cannot be retained indefinitely without -the accompanying disadvantages. •'■■■' ■ ' - I .WIDESPREAD MARKETS. Depreciation of the. yen favoured Japan in 1932, but the greatest expansion in her expoits was in. 1929.. In. the intervening years her figures were "flown.. Her cotton trade with, China and Hong.Kong ae-eounted-tfor 46 per ,;cent. of her exports in 1928, T>ut" in 1932 had fallen to 15.5 per cent. Against this Japan has "made tremendous strides in British India, Straits, Settlements, Dutch East Indies, the Argentine, Egypt, South Africa, and Australia. India's share increased last year, compared with 1928, from 25 per. cent, to 32 per cent., and Egypt took 118 million square yard 6 more from Japan last year than in 1928. Even when the exchange factor has been disposed of, the joint committee shows that Japan will be left -with the.advantages in costs* of production which she possessed before her departure from the gold standard. Up to 1930 a large part of Japan's improvement in costs arose from bringing her industry up to European, standards of efficiency.. Any further advantage she may gain from new inventions or improved methods* will be equally open to her competitors. The. sole advantage left, therefore, is that of labour costs. The experience of European nations has been that as industrialisation proceeds, wages and standards of living rise, and, the report says, that it is probable that the same process will be. followed in Japan. INCREASED PRODUCTION. Production of cloth per .operative in Japan has more than doubled. This, says the joint committee, cannot be explained by a tendency to spin finer, counts. It is understood that' the increase in the number of. Ipoms per operative is partly due to the greater uee of- automatic and semi-automatic machinery. Since 1926, not only has the production per. opeartive increased, but the -actual. earnings of operatives has been reduced, so that the effect on labour costs is twofold. •• - The report adds:—"The strength of the ■spinning section during the past two years of depression 'has enabled it, through the Japan Cotton - Spinners' Association, to curtail production and so to maintain its profits. So far no firm'has broken away from the agreements. Membership of the Japan Cotton Spinners' Association gives considerable advantages, particularly in raw cotton' buying. Under the terms ot the short-time agreement members, are not ' obliged to -curtail the- working of spindles supplying yarn for-their ■ own looms. They can thus maintain-full-time running in their own weaving sheds and so reduce still further the supply of yarn available for other weavers." DEMAND FOR WOOL. Japan's demand for wool has' steadily increased. At present the quantity of; clean Bcoured wool used per capita m Japan, where the population . now exceeds 90 000 000, is about l%lb, but the prospects are such that it will soon increase to 31b per capita. Of the raw wool purchased by Japan, about 90 per cent, .is from Australia and New Zealand, and the tendency is for that quantity to increase. In spite of the present depression, Japan will buy, and importations will increase. There is no question of Japans being one of the largest users of wool. As such she is proving to Australian and New Zealand woolgrowers that she is one ot the strongest pricC-fetchers for them. Japan uses all the wools she imports within her limits, arid manufactures them into woollen and worsted clothes for her people. She has no time to spare yet ior tne cultivation of markets abroad for the export of her woollen clothes as some countries in Europe are-doing. But Japan's is a very young industry. In these circumstances it is considered by observers ot the markets that there is gr,eat room for the expansion of,wool and woollen industries in Japan.