This post is a follow-up to this posting:
In that post, I was talking about that there was a time in the 1980s when Japan’s GNP was 60% of the United States and people were talking about Japan’s economy outgrowing the United States by the year 2000, 2010 or 2020. Now…..we know that did not happen. The following chart, measuring GDP (Gross Domestic Product) shows this change of fortune rather dramatically:
In 1995, Japan’s GDP was $5.449 Trillion while the United States was $7.664 Trillion. Japan’s GDP was 71% of the United States and it looked to be closing. Now, in 2017 it was 25% of the United States ($4.872 versus $19.391). This is a hell of a change in fortune. Not near as bad as the collapse as the Soviet Union, but pretty damn significant in the larger picture.
Let us look how this developed over time (figures are from the World Bank):
Year Japan GDP U.S. GDP Percent
1960 .044307 .5433 8%
1965 .09095 .7437 12%
1970 .212609 1.076 20%
1975 .521542 1.689 31%
1980 1.105 2.863 39%
1985 1.399 4.347 32%
1990 3.133 5.98 52%
1995 5.449 7.664 71%
2000 4.888 10.285 48%
2005 4.755 13.094 36%
2010 5.7 14.964 38%
2015 4.395 18.121 24%
That is a trip. If the percentages were graphed out, it might start looking like a bell curve. I don’t have the depth of knowledge on the Japanese economy to pontificate as to why this developed this way.
So, we have seen a political and military challenge after World War II from the Soviet Union. They went from claiming that “We will bury you” (1956) to dissolving (1991). We have seen an economic challenge from our ally Japan, and it certainly impacted our car industry and consumer electronics. This has gone in only two decades from a point where the economic growth trajectory lines of Japan seemed to be on track to surpassing the United States to a point now where Japan’s economy is a quarter of our economy. And…..it still does not appear to be growing much. It makes you wonder about the next political, military or economic challenge…..and how that will play out.