In recent decades the Japanese economy has expanded rapidly. The industrial base of Japan has shifted from light industries to heavy industries, chemicals, and electronics, which together constitute at least two-thirds of the total value of yearly exports. In 2004, the annual gross national product of Japan was US$4,734 billion (World Bank figure), one of the largest in the world, yielding a per capita income of US$38,630. The national budget for 1993 included revenues of US$893 billion and expenditures of US$896 billion.
Before and during World War II much of the Japanese economy was controlled by about a dozen wealthy families, collectively called the zaibatsu (“wealth cliques”). The greatest of these families were the Mitsui, Iwasaki (operating under the company name Mitsubishi), Sumitomo, and Yasuda; they controlled most of the coal, iron, pulp, and aluminium industries.
In 1945 and 1946 family ownership of these immense trusts was dissolved by the Allied occupation authorities. The business organizations remained intact, however, and have since acquired even greater economic power by expanding into shipping, banking, and other industries. Following the bursting of the so-called “bubble economy” in the early 1990s, Japan entered a prolonged period of relative economic stagnation. Chief causes were heavy corporate debts (partly concealed by Japanese accounting practices), aggravated by a collapse in property prices and a slump in share values. These factors combined to devalue the assets of both companies and individuals, leading to low consumer confidence, poor sales, and very cautious investment. Japan was not directly affected by the Asian economic crisis of the mid-1990s, as its own crisis was already under way, with many banks and companies technically insolvent. Politicians and bureaucrats attempted to tackle Japan’s various interlocking economic problems with various methods, including market-opening reforms and public spending boosts, but with little effect. By the end of the decade, the Japanese economic model once held up as an example to the world had clearly run its course and was badly in need of complete restructuring. "Japan" © Emmanuel BUCHOT, Encarta, Wikipedia
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