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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (2512)	8/15/2000 5:45:24 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 3536

prospect.org "The manufacturing achievements of these European countries, however, pale in comparison to Japan's. Amid all the triumphalist talk in recent years about America's supposed besting of the Japanese economic challenge, Americans have lost sight of a basic fact: The Japanese yen has generally risen in recent years. Measured against its level at the end of 1989, the yen has gained more than 36 percent against the U.S. dollar. Thanks in large measure to this rise, Japanese wages are now the world's highest. In fact, unbelievable as it may seem to those who accept the American press's presentation of Japan as an economic basket case, wages in Japan now run nearly 40 percent higher than in the United States. Yet today, after a decade of banking problems and much else, Japanese exporters are in line to generate a surplus of about $85 billion with the United States alone in 2000. Why does the United States buy so much from a nation where labor is so expensive? Because America literally cannot make the products for itself--they are too advanced. While Americans associate Japan with assembling consumer goods like television sets and cars, an estimated 70 percent of what the United States imports from Japan these days consists of highly sophisticated producers' goods such as high-tech components, advanced materials, and complex capital equipment. The manufacture of such products is not only highly capital-intensive but also highly know-how intensive--so much so that it is generally much more difficult to enter than most areas of the vaunted postindustrial economy on which the United States is betting its future. Unseen by the American consumer, Japan is the world's main--and in many cases, only--source of the key machines without which the American economy would literally grind to a halt. Many of the most advanced presses used to stamp out car bodies in Detroit, for instance, are made in Japan. So too are the sophisticated robots used to paint cars. Meanwhile, behind the scenes in American television studios, most of the cameras and other highly advanced broadcasting equipment are Japanese-made. Ditto for the huge printing machines used by publishers like The Washington Post. The United States is also heavily dependent on Japan for key components in all sorts of consumer products. Often Japan's contribution consists of supplying enabling components without which whole classes of products would simply not exist. Consider laser diodes. Unless you're an engineer, you've likely never heard of these tiny devices, but they are the key technology in CD players, CD-ROMs, and DVD machines, and are essential also in everything from fiber-optic communications to laser printers. The Sony Corporation, based in Tokyo, alone produces about 50 percent of the world's laser diodes--all the rest come from other Japanese manufacturers. Even the American aerospace industry is becoming increasingly dependent on Japan. The Japanese are vital sources of such crucial aerospace requirements as carbon fiber and refined titanium. They also dominate the manufacture of a host of key components such as liquid crystal displays and charge-coupled devices. (Although charge-coupled devices are not familiar to the nonengineer, they perform a variety of vital tasks, including such national security-sensitive functions as guiding American cruise missiles down enemy ventilation shafts.) Boeing acknowledges that 20 percent of the components in its most advanced passenger jet, the 777, are sourced from Japanese suppliers. When account is taken of Japanese-made subcomponents used by Boeing's American and European suppliers, ultra-high-wage Japan probably accounts for more than 30 percent of the manufactured content in the 777".