1)Bringing Out Japan's Hidden Strength to Meet Further Challenges of Globalization
2010 Jul/Aug
COVER STORY:White Paper on International Economy & Trade 2010
By Policy Planning & Research Division, Trade Policy Bureau, Ministry of Economy, Trade & Industry (METI)
The Ministry of Economy, Trade & Industry (METI) has been publishing its White Paper on International Economy and Trade each summer since putting out the first edition on August 15, 1949. This year's issue, the 62nd in the annual series, analyzes the current state of the world economy and the direction of its structural changes, illustrates Japan's relationship with the Asian economy, which is expected to develop into the "world's consumer market" besides "the world's factory," and dwells on means for Japan to take on further challenges of globalization. 1. Present & Future of Changing Global Economy Problems involving subprime mortgage loans that surfaced in 2007 triggered a global financial crisis after the collapse of major US investment bank Lehman Brothers in the autumn of 2008. The crisis originating in the United States occurred amid (1) the influx of a huge amount of money that had created an economic environment driving people to consume freely and (2) the financial globalization and the rapid expansion of credit leverage at financial institutions. The crisis impacted even Japan and other countries away from its epicenter. The world economy has tided over the crisis and is now generally heading for recovery after countries implemented massive fiscal and monetary policy measures in collaboration with one another through the G-20 and other international frameworks. At the same time, however, the critical situation the world economy faced after the Lehman shock has uncovered a host of problems inherent in the global economic system. The white paper summarizes the present state of the world economy and challenges it faces, and discusses ways and means to correct the global imbalances, make the international financial system sound and prevent protectionism in the world trade system, all crucial issues confronting the world economy. (1) Present & Outlook of World Economy Upon the onset of the global economic crisis, the world economy plunged into the most serious recession for many years, shrinking 0.6% in GDP terms in 2009 for the first negative growth in 60 years. The large-scale fiscal and monetary measures taken by countries helped the world economy bottom out that year. The International Monetary Fund (IMF) estimates that the world's GDP will grow 4.2% in 2010. There still exist, however, various risks in the world economy, notable among them being the Greek financial crisis. Other risks include delayed recovery of... <<BACK

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