Short-term, Japan’s key position in the global manufacturing supply chain is under threat from the disastrous earthquake. Longer-term, the challenge comes from rising competition from east Asia’s emerging economies.
The chart of this week (below the break) shows the importance and the growth of the export of components in East Asia. Japan is the second largest exporter of intermediate goods in east Asia after China – and it is still the first for the export of precision machineries components. But with the value of its exports rising much more slowly than in the rest of the region, Japan is losing export share.
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