Foreword

THE TIDE of world events has stirred Asia into a ferment of change. Japan particularly is influenced by the currents of political and economic change sweeping the East. As the most advanced industrial country in Asia, she of necessity is undergoing major readjustment in economic relations, East and West.

With a growing population of 90 million people, crowded in a land area about the size of California, Japan is extraordinarily dependent upon foreign trade. To feed and clothe this population, she must import food and raw materials in vast quantity and then export goods to pay for her purchases abroad.

Fortunately for Japan, postwar developments have moved toward a strong recovery in world trade. At home she has enjoyed a substantial measure of prosperity in recent years, due in part to United States military expenditures and a boom in trade following the out-break of war in Korea.

To continue her essential economic growth, Japan must look abroad for new trade opportunities and sources of food and raw materials. And, naturally, she looks to the United States to increase the already large and mutually advantageous exchange between these two vigorously expanding economies.

Japan is the best single customer for United States farm products; the largest buyer abroad of our cotton, wheat, rice, and soybeans. In 1956, Japan received from exports to the United States only about half as much as she spent in the United States. Her much publicized sales of cotton textiles in the United States amounted to less than 2 percent of our total output. These sales netted Japan $84 million, compared with her purchase from the United States of $170 million of raw cotton.

This disparity in trade with the United States illustrates Japan’s problem of finding markets for her goods so that she can obtain the foreign exchange needed to buy food and raw materials for her growing population and industry.

Both the United States and Japan have much to gain from development of trade with one another. The great potential in this trade offers incentive to both countries to work for mutual understanding. On both sides reasonable accommodations must be made to meet the needs of the other party.

In his report on Japan’s postwar economy, Jerome B. Cohen directs attention to her great dependence on foreign trade and the opportunity which exists now for development of this trade with the United States.

He has written this book out of a wide range of experience and depth of knowledge gained from contact with Japan’s problems in government and in his professional activities as an economist. It has been my privilege to work with him on a number of occasions.

His authoritative analysis of Japan’s recovery from World War II, and emerging problems of the island economy in a fast-changing world, merits the attention of all who recognize the strategic importance of Japan in the East and in the world generally. Japan has provided a solid anchor in the fluid East. Her fortunes are matters of continuing concern for the United States as for Japan herself.

How Japan fares in coming years will have important bearing upon the prosperity of the United States and the world. It is to the interest of the United States, and to the community of nations, that Japan’s problems be understood and that a satisfactory solution be found. And this book sheds timely light on the nature of the problems and the challenge.

JOHN D. ROCKEFELLER 3RD