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Minerals
With few exceptions, Japan’s mineral reserves are small, and the quality of those mined is often poor. Coal, iron ore, zinc, lead, copper, sulfur, gold, and silver are among the most abundant minerals (in relative terms), with lesser quantities of tungsten, chromite, and manganese. Japan also has large deposits of limestone. There is an almost complete lack of nickel, cobalt, bauxite (the ore of aluminum), nitrates, rock salt, potash, phosphates, and crude petroleum and natural gas.
Coal reserves are concentrated in Hokkaido and Kyushu. Oil deposits are meagre, domestic oil production accounting for a negligible fraction of Japan’s oil consumption. The main oil- and gas-bearing belt extends from northern Honshu on the Sea of Japan to the Ishikari-Yūfutsu lowlands in Hokkaido. Natural gas reserves also have been found in eastern Chiba prefecture and offshore east of Tōhoku. Japanese iron ore is of poor quality and is obtained mostly from northern and western Honshu. Reserves of copper, once Japan’s most important metallic ore, are nearly depleted; lead and zinc are often found in conjunction with copper.
Mining and quarrying
Mining is an unimportant and declining branch of the economy. The extractive industry is characterized by small and relatively inefficient mines that do not lend themselves to the application of modern, large-scale mining methods. With the exception of gold extraction, mining for metallic ores plummeted in the early 21st century. Mining for iron and copper essentially ceased after 2000, and Japan now imports virtually all its needs for those two ores. Other metallic ores of economic significance include silver, lead, and zinc. Limestone quarrying is widespread throughout the Japanese archipelago.
Coal, the most important mineral mined throughout most of Japan’s industrial period, is now extracted as a marginal operation. The coal industry suffers from uneconomic production, competition from cheaper foreign coal, and the general use of oil since World War II. Most of the remaining production is in Hokkaido. Virtually the whole of the country’s output of petroleum and natural gas comes from Niigata prefecture. Natural gas also is produced in Chiba and Fukushima prefectures.
Power
The rate of Japan’s consumption of energy leveled off in the mid-1990s, after having increased steadily for decades. Per capita consumption of electricity is comparable to that for most industrialized countries, but that for oil and natural gas is considerably lower. The largest single source of energy is oil; almost the entire demand is satisfied through imports, an important share of which comes from fields developed by Japanese companies. Coal, largely imported, constitutes a much smaller proportion of overall consumption. Gas production is greatest for natural gas and liquefied natural gas and in terms of energy output is comparable to that for coal.
Most of Japan’s total electric power is generated by thermal plants. For decades oil was the most important fuel source, but generation by coal-fired plants has increased significantly as part of the effort to reduce Japan’s dependency on foreign oil. Also of growing importance are power stations burning liquefied natural gas, especially as a means of reducing levels of greenhouse gases and other pollutants emitted.
Since the 1970s the government has promoted an energy policy that favors the development of nuclear power generation as a nonpolluting, domestically produced energy source. This program raised the contribution of nuclear power to approximately one-third of the country’s total installed electric-generating capacity. Several dozen nuclear plants are now in operation throughout the country.
As a result of Japan’s mountainous terrain, the country’s ample hydroelectric potential is distributed unevenly. In addition, many hydroelectric power plants cannot operate at full capacity for more than a few months of the year, because of seasonal variations in precipitation and the difficulty of constructing adequate storage facilities. Hydroelectric development is largely concentrated in central Honshu (along the Shinano, Tenryū, Tone, and Kiso rivers), in Tōhoku, and in some parts of Kyushu. This pattern of distribution ensures that Japan’s hydroelectric capabilities are well located in relation to the important industrial areas. Although there is still undeveloped potential, the best sites already have been utilized for large plants, and further additions to capacity have consisted of smaller-scale operations. In addition, a number of pumped storage plants have been constructed, in which water is pumped up to a reservoir above the hydroelectric facility during off-peak hours to be released for power generation during periods of peak demand.
Manufacturing
The most notable feature of Japan’s economic growth since World War II is the rapid development of manufacturing, with progress in quantitative growth, quality, variety, and efficiency. Emphasis has shifted from light to heavy industries and to a higher degree of processing. Thus, some of the older industries, including lumber and wood processing and the manufacture of textiles and foodstuffs, have declined considerably in relative importance.
Japan is one of the world’s principal shipbuilders and automakers and is a major producer of such basic products as crude steel, synthetic rubber, aluminum, sulfuric acid, plastics, cement, pulp and paper, a variety of chemicals and petrochemicals, and textiles. It has some of the world’s largest and most-advanced industrial plants. In the late 20th century the most spectacular growth was in the production of motor vehicles, iron and steel, machinery (including robots), and precision equipment (notably cameras). Subsequently the country became noted for advanced electronic products, including computers and microelectronics, telecommunications equipment, and consumer goods.
A principal reason for Japan’s postwar industrial performance was the high level and rapid growth of capital investment, especially in the 1960s and ’70s. A boom in equipment investment provided the iron-and-steel and machine-building industries with a rapidly growing home market, allowed for a spectacular increase in productive capacity and in the scale of operations, and led to a rapid replacement of old machinery. This in turn resulted in considerable improvement in productivity throughout the economy and enabled manufacturing industries to grow, despite an acute shortage of skilled labor and rising wages. The extensive use of technological innovations and the implementation of superior production systems gave many sectors of Japanese manufacturing a formidable advantage over their rivals, and as a result the country’s exports soared. Another strategy, which was pursued in part to reduce trade friction with foreign competitors and also to cut costs as the yen appreciated in value, was to set up overseas facilities in parts of Asia, North America, and Europe. This approach was carried out with particular success by manufacturers of automobiles and advanced electronic products.
The existence of close-knit corporate groups, in what is called the keiretsu system, has played an important role in the successful structural adjustments Japanese industry made to changing economic circumstances. Through extensive crossholding of company stocks, keiretsu groups collaborated on long-range strategies aimed at garnering market share without regard to short-term profit and managed the risks of manufacturing, distribution, and sales. Such actions were made possible by the gradual relaxation and increasingly flexible interpretation of the country’s antimonopoly laws enacted after World War II that had broken up the old zaibatsu conglomerates. However, the system has weakened over time, as changes in the financial environment made Japanese industry more willing to enter tie-ups, mergers, and takeovers that cross traditional keiretsu boundaries.