Courtesy Reuters

The Trade Expansion of Japan

WITHIN the past year the expansion of Japanese exports has become more and more of an international issue. Japan enjoys a competitive advantage not only from low wages, modern equipment, centralized organization and efficient management, but also, at least temporarily, from the steady depreciation of her currency. Under these conditions Japanese goods are capturing markets where a short time ago they attracted little attention. During 1933, when world trade was severely depressed, Japanese exports showed a gain in value of 34 percent over 1932 and of 74 percent over 1931.

The trend of Japan's export trade during the past three years is shown by the charts on the opposite page. Chart I, showing export values by months in terms of Japanese currency, obviously does not give an accurate picture of the actual increase in the quantity of exports, because with the depreciation of the yen prices have been rising. Japan suspended the gold standard in December, 1931, and by the end of 1933 domestic prices in that country stood at approximately 15 percent above the 1931 average.

Changes in the price level make it exceedingly difficult to measure the real gain in the export business of Japan. Reducing the currency values of exports to a gold basis only complicates the problem. When this is done for Japanese exports, the figures for 1933 are 4.2 percent less than those for 1932, and such a result is clearly inconsistent with the facts.

A better picture of what the Japanese have been doing may perhaps be obtained from Chart II, showing the cargo tonnage of their exports. The total tonnage of products as different as silk, crab meat, buttons, electric light bulbs and floor coverings is not a satisfactory measure of a country's trade; but such data are useful for checking purposes when figures of value begin to lose their original meaning. The Japanese export tonnage figures for 1933 show a gain in round numbers of 20 percent over 1932 and of 30 percent over 1931. Some of these "cargo tons" are measures of weight (2,240 pounds) and some are measures of

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