ABSTRACT
The People’s Republic of China is the most popular country for direct investment, with 234 Japanese electronics factories due to its robust economy and abundant labor resources. Japanese firms continued to invest abroad, though the number of cases fell in 1996 to 2501, with a value of 540.9 billion Yen. With the end of the Cold War and the collapse of the Japanese “Bubble Economy” in 1989, competition from other Asian countries exploded, while Japanese companies consolidated operations and cut back on expenses that included technology costs. The currency crisis in Southeast Asia raised serious questions about the government-led type of economy that directed Japan’s early development success. Industrial policy changes required for a more developed economy in the face of greater regional and global competition have been slow to come. The economic policy of Japan is moving towards deregulation, since over-regulation is considered one of the many key structural problems confronting Japanese social systems.
