M-RCBG Faculty Working Paper No. 2012-18
Challenges for Japan and the United States During the Next Two Decades
When the Kansai Keizai Doyukai and Harvard held their first meeting in 1992, Japan had just been shaken by the bursting of the bubble that stymied Japanese economic growth. Even so, when our dialogues began, Americans were still concerned about Japanese economic competition that was challenging the pillars of the U.S. industrial economy, from sectors such as electronics and autos. Today, America's intense concern about Japanese competition has disappeared and been replaced by concern about Chinese competition. Americans, aside from the cultural sphere, have reduced their interest in Japan. When our meetings began, the Soviet Union and the Soviet empire had just collapsed, and some questioned whether it was even necessary to continue the U.S.-Japanese alliance. In the mid-1990s, however, the United States and Japan reaffirmed their alliance. In 1992, China was just emerging from the sanctions imposed after the Tiananmen Incident of June 1989 and its negative growth rate in 1990; at the time, its economy was roughly one-fifth that of Japan's and one-tenth that of the United States.