These are important considerations for international economic development and for Japan’s further economic expansion. Japan’s overseas trade and direct investment is so comprehensive that economic success or failure abroad affects life in Japan. Direct investment especially involves setting up factories abroad, hiring local workers, and producing goods overseas. Success hinges on local workers’ skill levels. The effectiveness of applying Japanese methods to form overseas workers’ skill has thus become a pressing issue.
The biggest trade problem facing Japan is the enormous trade deficits that other countries have with it because of insufficient purchasing power to buy Japanese goods. It is not only the United States that has a trade deficit with Japan. Among the members of the Association of Southeast Asian Nation (ASEAN), for example, most of Thailand‘s trade deficit is with Japan., and its ratio to GNP is far higher than that of the United States. However, that the popular belief in Japan’s dependent exports is mistaken; exports account for only 10 percent of GNP in Japan, compared with between 20 and 3 0 percent in the countries of Western Europe and ASEAN.
The elimination of trade deficits calls for basic improvement in a country’s economy. Japan’s chief contribution in this respect is direct investment. But when direct investment is too successful, it results in over presence, causing tension and other problems stemming from a perceived threat to sovereignty. This makes economic cooperation, which classifies skill formation as technical cooperation, significant.