EASTERN TRADE

Evening Post, Volume CXVI, Issue 60, 12 March 1934, Page 10

EASTERN TRADE

AUSTRALIA AND JAPAN

THE YEN AS A FACTOR

-Trade potentialities between Australia and Japan are the subject of a comprehensive review by the Bank of Xew South Wales in its latest circular. The proposal of the Commonwealth Government to Bend a diplomatic delegation to the Far .hast is' commended, xieieience is made to the pussiuie marker ior Australian products due to the cnauging ways ol "tuu cnangeiess ±.ast." it is pointed .out ir tue cucuiar tnat the industrial developments in the Par liast are maiuug it imperative tor Australia to attempt co understand the attitude of these nations. iUost outstanding is the industrialisation ot Japan, 'ihis has been forced upon her by tlie inevitable logic of the lacts of material progress. Material progress is impossible unless a nation can develop a sound economic structure which win assure its people of two tactors—firstly, an adequate lood supply, and, secondly, the progressive realisation of high standards of living. Neither, of "these two elements could be assured to the population of Japan merely by developing more intensively her agricultural industries. In the future Japan will have to import increasing quantities' of foodstuffs for her population. To pay for these imports she must have commodities suitable for export. In the past, apart from raw silk, Japan had few commodities suitable for this purpose, so that the necessity for increasing her exporting products stimulated the development of her manufacturing industries. In addition to these economic needs, however, national pride has done much to foster commercial expansion. Industrial development is regarded as a national cause. It gives the 'Japanese not only a means-of satisfying their national pride in competition with the older manufacturing nations, but also the opportunity of becoming the manufacturing centre of the Far East. The circular remarks that "it is often alleged, that the remarkable power of Japanese industries to obtain and hold' widely-scattered markets of every kind has been due to the policy of the Government in deliberately depreciating the currency to enable the exploitation of foreign markets. "This charge cannot be upheld. The depreciation was a consequence of policies which had little connection with the expansion of manufacturing activities. Monetary and commercial policies have in fact been skilfully co-ordinated to encourage rapid development, and while the exchange advance has been a big facfor in recent development it has for the most part merely oiled the wheels. Japan's planned economy has enabled her to control and organise her industry for a successful advance on world markets. ' Stress is laid upon the abundance of cheap labour in Japan,. and the success attained in its efficient and skilful direction.' This industrialisation of Japan, it is held, "promises to bring great possibilities for the development of markets for Australian foodstuffs and raw materials." But the chances o£ development of these markets, it is pointed out, "may be seriously diminished by an exceedingly suspicious attitude towards the entry of Japanese goods into Australia, which would encourage Japanese buyers to turn elsewhere for their supplies. South Africa, South. America, and Canada could easily supply Japan with goods,.of the same type as Australia is able to offer." Any survey of future Australian trade policy must offer a prominent place to interchange of goods with the East.