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Chapter 18 Foreign Trade, Balance of Payments and International Cooperation
This chapter covers statistics concerning foreign trade, the balance of payments and international cooperation.
Data were derived taken from the "Japan Exports & Imports" and the "Summary Report on Trade of Japan" issued by the Japan Tariff Association based on trade statistics compiled by the Ministry of Finance.
(1) Classification by country
Classification by country is based on the final destination (country or place) of exports and the country (or place) of origin. When the country (or place) of origin cannot be identified, the country (place) of shipment is used. Ninety-one countries are listed on the statistical table.
The point of time of entry is the day of departure of a loaded ship or an airplane from a port or from an airport for exports. As for imports, it is the day when an import permit is issued or the day when its import is approved. The FOB (free on board) price is used for exports, whereas the CIF (cost, insurance and freight) price is used for imports.
The statistics does not include a cargo priced 200 thousand yen or less, travelers' goods, goods used for shows, freight related to the foreign forces stationed in Japan and the UN forces, freight related to a trade fare for a temporary display and containers repeatedly used. Main commodity categories and item categories are based on with the "Commodity Classification Standard Table for Foreign Trade." This table has been prepared in reference to the "Statistical Classification for Export and Import" (issued by the Ministry of Finance in 1987), which is based on the Harmonized Commodity Description and Coding System (HS), the Standard International Trade Classification (SITC) and the Japan Standard Commodity Classification.
(2) Trade index
The Ministry of Finance computes the price index and quantity index concerning import/export every month. The index is revised every five years. Currently, the 2000 base index is in use. The commodities used in computation include both exported good and imported good. The customs clearance price is used and computed in the Fisher formula using FOB price for exports and CIF price for imports.
Trade of technology
The amount of technology trades corresponds to the rental of patents, etc. in service income and expenditure in the balance of payments statistics. Its data come from the "Balance of Payments Monthly" issued by the Bank of Japan.
The number of technical applications is the number of permits or authorization prior to November 1979, whereas it is the number of notifications filed since November 1979. The sources of data are the "Annual Report on the Technology of Foreign Technology" and the "Analysis of Trends in the Introduction of Foreign Technology" issued by the Science and Technology Agency (currently the Ministry of Education, Culture, Sports, Science and Technology).
Foreign exchange market
The Japanese government had adopted a system of fixed rate of exchange for its yen at 360 yen for one US dollar since 1949 until August 1973, when the system was changed to the present floating system.
Foreign exchange reserves
Foreign exchange reserves consist of gold, foreign currency, reserve position of the IMF and Special Drawing Rights (SDR) of the International Monetary Fund (IMF). The Ministry of Finance issues the amount of foreign exchange reserves every month. The source of data in this section is the "Foreign Exchange Reserves and etc." issued by the Ministry of Finance.
Balance of payments
Statistics on the balance of payments had been compiled in compliance with an IMF system until 1966 in replacement of old foreign exchange statistics. In January 1996, the items on the balance of payments were extensively revised based on the "Fifth Edition of the Balance of Payments Manual" revised by the IMF.
Statistics are derived from the "Financial and Economic Statistics Monthly" and "Balance of Payments Monthly" issued by the Bank of Japan.
(1) Current account balance
The international trade of goods is computed at the FOB price in the trade balance. The items included are general products, goods for processing, goods procured at ports to be used as transport facilities, and non-monetary gold.
Receipts and payments in transportation, traveling and other services are included in the service balance. The receipts and payments of employees' earning and investment income among residents/non-residents are included in the income balance. Receipts and payments of interest and dividends related to external financial assets and liabilities among residents and non-residents are listed in the investment balance. The transfer balance is a per contra account to record gratuitous trade (one-sided grant/receipt of economic values) of real assets or financial resources in the international balance of payments according to the principle of double entry bookkeeping. All transfers excluding capital transfer are listed in the current transfer. That is, it includes the donation of goods, services and money between individuals or governments and contributions to international organizations.
(2) Capital balance
The capital balance contains the receipts and payments of assets or liabilities between resident and non-resident. It is classified into investment balance and other capital balance. The investment balance includes the transactions of financial assets and liabilities between resident and non-resident. It consists of direct investment, security investment, derivatives and other investments. Other capital balance includes all transactions concerning the receipts and payments of capital transfer and the acquisition and disposal of non-productive and non-financial assets.
The flow of funds in economic cooperation to developing countries is categorized into official development assistance (ODA), other government funds or private funds. Statistics are derived from the "White Paper on ODA - Official development assistance" and the "Annual Report of the Japan International Cooperation Agency" issued by the Japan International Cooperation Agency.
Overseas assistance is defined as official development assistance when it satisfies the following three requirements: First, it is extended by the government or a government-affiliated organization. Second, its primary purpose is to contribute to economic development and the improvement of welfare in developing countries. Third, with respect to monetary cooperation, its ratio of grant aid is 25% or more. It can be divided into bilateral grants, bilateral loans and financial subscriptions and contributions to international organizations.
The funds that are not categorized under official development assistance are included in other government funds. They include assistance extended for the promotion of exports and the transactions of securities issued in the market by the International Bank for Reconstruction and Development (World Bank). Private funds refer to transactions by private persons and primarily consist of export credit and direct investment.
The Japan Foundation
The budget of the Japan Foundation is included in statistics on international cultural exchanges. Main cultural exchange projects are cooperation projects in various fields - studies on Japan, human interchanges, holding programs of a gathering and entertainment, etc., interchanges in Asia, and cultural exchange facilities. Statistics are derived from "The Japan Foundation" issued by the Japan Foundation.