ABSTRACT
The first of the major themes in this study is that the growth and spread of Japanese direct investment overseas are both inextricably linked to the historical development of the domestic Japanese economy. Thus it is necessary to consider the changing industrial structure of the Japanese economy, and the changing pattern of Japan's foreign trade, in order to appreciate the quite distinct phases of overseas investment over the past thirty years. The second major theme is the economic interdependence between the three major trading blocs. Thus consideration must also be given to dislocations in US-Japan relations, as these may have repercussions for Japan's relations with the European Community (and hence the United Kingdom). In this chapter, the development of industrial policy in Japan is traced, particularly since the end of the Second World War - or the Pacific War as it is known in Japan. An analysis is provided of how the pattern of trade has changed over the years, both in terms of the products and commodities traded, and in terms of the countries with which trade takes place. The growth of overseas investment is recorded since the end of the Pacific War, and the changing geographical location of this investment is noted. Finally, investment by foreign firms within Japan is considered, together with the role of Japan in the contemporary world economy.
