Despite flotillas of Toyotas, Datsuns, Hondas, Japan sees $12 billion payments deficit in '81
Those gleaming Japanese cars that roll off ships into the US constitute a problem that looks very different in Tokyo than it does in Washington or Detroit.
"Japan," says Akio Morita, chairman of the Sony Corporation, "is smaller than California, more than 80 percent mountainous, with few natural resources."
Mr. Morita makes TV sets, not cars. But the point he makes is echoed by Japanese leaders in and out of government.
Japan, they stress, imports all of its oil and most of the other raw materials that end up in a glittering array of products that the industrious Japanese market throughout the world.
"It is absolutely necessary," says Joji Arai, manager of the Japanese Productivity Center in the US, "for Japan to keep revitalizing its industry."
Otherwise, he adds, Japan could not sell enough of its own goods abroad to pay for the food -- an enormous amount comes from American farms -- fuel, and other things needed to feed, clothe, and warm 110 million people. Even so -- and this may surprise many Americans --that never-ending stream of Japanese exports does not pay all of the nation's foreign bills.
Measured in terms of merchandise trade, Japan boasts a surplus, while the United States runs a steep deficit. But broaden the measurement to include services (insurance, freight, and the like), plus capital transfers, and Japan's overall balance of payments slides into the red.
This year, for example, Japan's balance of payments may be $12 billion in the hole. The United States is expected to slow a surplus, despite its huge imports of oil.
Japan, in other words, spends more money abroad than it takes in. The US right now is balancing its books. Other items:
* The US government's budget deficit, as a percentage of total federal spending, is about 9 percent. Japan's is 30 percent.
"If US deficit spending were running at a comparable rate," says the trade letter News From Japan, "it would amount to some $200 billion," not the $60 billion or so expected in fiscal 1981.
* In the US, the budget deficit as a percentage of gross national product (the nation's total ouput of goods and services) is 1 percent. In Japan, it is 6 percent.
Only through a huge volume of top-quality exports, its leaders stress, can Japan hope to narrow its payments gap, especially at the price of Persian Gulf oil climbs.
To American, the Japanese auto industry may seem like a giant monolith, spawning cars under various names. In fact, Toyota, Nissan (Datsun), Honda, and others are intensely competitive, at home and abroad.
Successful Japanese firms, says Sony's Morita, "are survivors. The know how to compete."
All this makes it hard for the Japanese establishment, both government and industry, to accede to President Reagan's broad hints that Japan voluntarily should scale back the number of cars it ships to the US.
A figure commonly talked about is 1.6 million units a year, down 300,000 from 1980's 1.9 million cars. US automakers would welcome deeper cuts.
Such a solution might take Mr. Reagan off the hook and leave him ostensibly loyal to the principle of free trade. But a cutback would hurt Japan, not to mention American consumers, who would pay higher prices for cars.
US trade officials retort that free trade is a two-way street and that Japan's market is far from open to American exporters in such fields as citrus fruit, tobacco, meat, and bidding on government contracts.
Where cars are concerned, Japanese and US makers are competing, not only to present buyers, but for customers of the future.
"Quality," says Joji Arai, "is what determines the consumer's approach."