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Japan’s Economy A. Japan’s place in the world economic market: B. Brief Economic History: Postwar Development: The economy of Japan is a thriving complex of industry, commerce, finance, agriculture, and all the other elements of a modern economic structure. The nation's economy is in an advanced stage of industrialization, served by a massive flow of information and highly developed transportation networks. One feature of Japan's economy is the major contribution of manufacturing and services, such as transport, wholesale and retail commerce, and banking, to the country's net domestic product, in which such primary industries as agriculture and fisheries now have a minor share. Another feature is the relative importance of international trade to Japan's economy. Japan is an island country, poorly endowed with natural resources and supporting a population of over 120 million in a relatively small area. Yet despite these limiting conditions and the devastation of its manufacturing base during World War II, Japan has managed not only to rebuild its economy but to become one of the leading industrial nations in the world. At the same time, however, this process of rapid industrial expansion, along with changes in domestic and international economic conditions over the past few years, has created various economic problems that the nation must now face. Postwar recovery: For some years following Japan's defeat in World War II, the nation's economy was almost totally paralyzed from wartime destruction, with severe food shortages, runaway inflation, and rampant black-marketeering. The nation had lost all of its overseas territories, and its population had soared beyond the 80-million mark with the addition of some 6 million repatriates from abroad. Factories had been burnt down in air raids. Domestic demand dropped with the halt of military procurements, and overseas trade was restricted by the Occupation forces. But the Japanese people set about rebuilding their war-devastated economy, initially assisted by rehabilitation aid from the United States. By 1951, the gross national product had recovered to the 1934-36 level. Population growth inhibited the recovery of the nation's per capita income, but by 1954 this indicator also had regained its 1934-36 level in real terms. Demobilized military personnel and returning civilians joined the labor force, providing an ample supply of workers for economic reconstruction in the early postwar period.
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