JAPAN AND TRADE

New Zealand Herald, Volume LXXIII, Issue 22434, 2 June 1936, Page 6

JAPAN AND TRADE

INCREASED EXPORTS

"LITTLE GAIN SINCE VVAR» PLACE IN WORLD MARKETS BY P. MARTIN SMITH, M.a., i&WjSf For some time past there has be considerable concern on %the narf i . • , of some countries at the increase of th Japanese export trade, and this co^ cern has been greatest in countries lifc" Great Britain, whose export trade j! textiles has been seriously challenge As recently as March 14 a member 0 f the Manchester trade mission in Aug. tralia is reported to have stated that unless present developments w ere i arrested the whole trade in export 0 f textiles from England to Australia would pass to Japan. Before any drastic action is taken about such a position it is very neces. sary that a careful, investigation of the facts should be made, both with re. spect to how. any action will affect not only Britain and Australia, but Japan. I say Japan because I hav« in mind the action that was taken by Britain some time ago with regard to the importation of Japanese cotton goods into India. > The Manchester interests were string enough to have an embargo placed ob the importation of Japanese cotton goods into India. Japan retorted by refusing to purchase raw cotton frcm India, and it then became genera!!# ■ realised that Japan, had for a long time been importing from India raw cotton greatly in excess of the value of her exports to India. And the Man. Chester interests did not want Indian raw cotton, as they preferred to get their supplies of raw cottoa from the United States and Egypt. Japan's Bargaining Power Finally an agreement jvas reached whereby the maximum exports of Japanese cotton tissues w;(s fixed at 400,000,000 square yards of various cloth, providing that Japan hadj daring the previous season, take'i 1,500,000 * bales of raw cotton. At the same time the Indian import duty was decre;ised to 50 per cent, with a 25 per cent preference for British goods,. Thus it can be seen that Japan has bargaining power and always, will have so long as she is a large importer of raw materials. It must be remembered, too, that the main export trade of Japan, with the exception of silk goods, :in which her export has, of recent years, considerably declined, and in which she does not crone into direct competition with any other country, is almost entirely dependent on the importation of raw materials, so that increase in export trade means a corresponding increase in. import. Japan As An Exporter, There has been a tendency to riagnify Japan's place in the export trade of the world, due no doubt to the rapidity with which she has opened markets all over the world. In actual fact her share in world export trade in gold values was 3.13 per cent in 1933 and her share of import trade in the same year was 3.04 per cent. The corresponding figures for 1929 were 2.93 Eer cent and 3.13 per cent, so it can e seen that her actual increase has not been so sensational. As a nutter of fact, Japan s exports have gained very little since the war, and her present export figures are below tie fest figures that were reached in 1925. "it is not correct to think that Slum's export trade can be built up only i it the expense of western countries. Her ability to export at low prices has built up markets in Africa, India and other countries where only low-priced articles could possibly find a market, so that in many cases she does not really come into competition for these markets with anyone. As long as the standard c» living is as low as it is in these parts, then there is no market for high-priced western goods and Japan is conferring a real benefit on these people in them something they have so far had no opportunity of enjoying. In India, for example, Britain had a market of about 1,000,000 pairs of rubber shoes a year, and could sell no more at the price. Japan was able to bring these goods within the reach of the population, and was able to increase the sales to 7,000,U(X). Effect on Living Standard Another point that is of importance to the primary producing countries u that, not only do Japan's, imports - m* crease proportionately with her exports, but industrialisation itself brings changes in living standards, clothing, diet and so on, that inevitably affect her imports. Thus, a raising of her hr* ing standard will call forth a greater demand for wheat, meat, butter, thut will inevitably benefit the countries producing these commodities, and thus, in the long run, benefit the world. It is undeniable, of course, that some countries are being hit by Japanese exports, and in general, these are not the countries that are reaping the benefit from Japan's increased importations. The problem, therefore, is one of making readjustments that will cause the least upset and international friction. In facing this problem it « essential that all the facts should w considered, and any appeal to ram or international prejudices should be carefully avoided. , Some of the suggestions that ns™ been made for solving the problem include the division of markets by international agreement, the regulation o export prices, rationalisation of protiuction according to type and quality, the specialisation of industry with imJ* vidual countries. It is not proposed to go into the merits of any of these pro* posals here, but it is essential that * close study of the facts should be nj a to see "the practicability of the schemes. Composition of Exports Jt is of interest to note the chango in the composition of Japanese ex P° r , during recent years. In 1914 stuffs formed 10.8 per cent of "'"P 3 , eso exports, while in 1934 they torme 7.9 per cent. The figures for_the sari years for raw materials are 7.7 per c® , and 4.4 per cent. For semi-manufactui goods the figures are 51.S per cent 23 per cent. For finished goods figures are 28.4 per cent and F cent. Thus it will be seen that duri g these years there was a marked c ' ecre ' in the export of foodstuffs,- ra\* terials and semi-manufactured g°° ' while the increase in the export or ished goods was about 11S P 01 " J*,' This big increase in the export or ished goods is largely due to the c ing to fruition of previous capita vestments and increase in teclin skill on the part of the people. The most striking advance, of coi ' has been the textile industry an . comparison of the figures lor , Britain and Japan may be of ,117 ill 1927 Great Britain exported ■ million square yards of cotton tes , and in 1934, 1993 million square In 1927 Japan exported 1304 '■ square yards of cotton, and 111 ... 2577 million square yards, thus - ing her to first place among the j textile exporting countries of cue , The greatest increase in ports has been to India, the * lands East Indies, Malaya £» \ Japan supplies bare.-* 1 per ce imports of Great Britain °i u5 . and 6 per cent of the impoi , s , jjt tralia, whereas she is an «»P , huver from each of these tar