Ezra F. Vogel

Future historians may well mark the mid-1980s as the time when Japan surpassed the United States to become the world's dominant economic power. Japan achieved superior industrial competitiveness several years earlier, but by the mid-1980s its high-technology exports to the United States far exceeded imports, and annual trade surpluses approached $50 billion a year. Meanwhile, America's trade deficits mushroomed to $150 billion a year. By late 1985, Japan's international lending already exceeded $640 billion, about ten percent more than America's, and it is growing rapidly. By 1986 the United States became the world's largest debtor nation and Japan surpassed the United States and Saudi Arabia to become the world's largest creditor.