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The Hollowing-Out of Japan’s Economy: Myths, Facts and Countermeasures

The skyrocketing cost of importing energy combined with an uncertain electricity supply, a maze of regulations, a contracting domestic market, and the appreciation of the yen have led the Japanese economy to be in peril of deindustrialization. The hollowing-out of the Japanese industrial base as companies seek new business opportunities through overseas manufacturing has become an issue of pressing concern in the Japanese national debate.

On February 20, the Center for Northeast Asian Policy Studies at Brookings hosted a discussion to address the future of the Japanese economy, whether it will become a high-end manufacturing economy or a post-industrial economy based around services and repatriated income from overseas investment. Presentations examined the extent to which fears of deindustrialization are warranted, the extent of internationalization of Japanese manufacturing activities, and assess possible countermeasures in the areas of deregulation, promotion of inward investment, and the encouragement of innovation.


Introduction and Moderator

Panel 2: Countermeasures and the Future of the Japanese Economy


Jun Saito

Senior Research Fellow - Japan Center for Economic Research

Visiting Professor - International Christian University


Shujiro Urata

Professor, Graduate School of Asia-Pacific Studies - Waseda University

Panel 1: The Hollowing-Out Debate: Domestic Constraints, Overseas Relocation


Charles Ernst

Chief Engineer - Honda North America Engineering Center


Tsunehiko Yanagihara

Senior Vice President & General Manager - Mitsubishi International Corp., Washington D.C. Office

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