Introduction

One of the most obvious characteristics of the post-war Australian economy is the way it has drawn closer to Japan. The links between Japan and Australia now encompass trading, tourism, direct investment, ¹ and financial ties. Between 1957 and 1970, Japan replaced the United Kingdom as Australia’s most important export market and two-way trading partner. During this time, Australia emerged as a major supplier of agricultural products and raw materials needed by Japanese industry – such as iron ore, coal, bauxite, and alumina (Australia-Japan Economic Institute 1979). Conversely, consumer electronics, machinery, and chemicals have all found their way here from Japan in large numbers. Penetration of the Australian market has not been without its difficulties, but it has been extremely successful. Despite tariffs and government-imposed quotas, Japanese cars – imported and locally built – in 1985 accounted for about 80 per cent of the Australian car market. Hardly an area of manufactured goods in Australia has not been exploited by the Japanese. Australia’s imports of Japanese consumer items, transport, and capital equipment have grown so much that in 1984 Japan overtook the United States as Australia’s most important source of imports. In exchange, and largely carried on Japanese ships, go Australia’s agricultural produce and raw materials. Australia’s economy now has a reliance on Japan second to none (Edgington 1984a).