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Statistical Handbook of Japan 2013

Chapter 1 Land and Climate (PDF:3,067KB)

Contents

1. Land

Japan is an island nation situated off the eastern seaboard of the Eurasian continent in the northern hemisphere. The islands form a crescent-shaped archipelago stretching from northeast to southwest parallel to the continental coastline with the Sea of Japan in between. The country is located between approximately 20 degrees to 45 degrees north latitude and stretches over 3,200 kilometers. It consists of the main islands of Hokkaido, Honshu, Shikoku, Kyushu and Okinawa, and more than 6,800 smaller islands of varying sizes. Its surface area totals approximately 380,000 square kilometers, a figure equivalent to 0.3 percent of the global land mass.

Since the Japanese archipelago is located in a zone of relatively young tectonic plate movement, it is particularly prone to various physiographical phenomena. Therefore, the number of earthquake occurrences is quite high there, and so is the proportion of active volcanoes. The land is full of undulations, with mountainous regions including hilly terrain accounting for about three-quarters of its total area. The mountains are generally steep and are intricately carved out by ravines. Hilly terrain extends between the mountainous regions and the plains.

 

Table 1.1 Surface Area of Japan

          

Table 1.2 Top 10 Countries According to Surface Area

 

Figure 1.1 Famous Mountains of the World

          

Table 1.3 Mountains

 

Table 1.4 Rivers

 

Table 1.5 Lakes

 

Forests account for the largest portion of the nation's surface area. There are approximately 250,000 square kilometers (which equates to 66 percent of the nation's surface area) of forests, followed by approximately 50,000 square kilometers of farmland (12 percent). Together, forests and farmland thus cover approximately 80 percent of the nation. There are approximately 20,000 square kilometers of building land (5 percent).

 

Table 1.6 Surface Area by Use

 

2. Climate

The Japanese archipelago has a temperate marine climate, with four distinct seasons, an annual average temperature of between 10 to 20 degrees centigrade, and annual precipitation of 1,000 to 2,500 millimeters. Japan typically experiences hot, humid summers and cold, dry winters. The topography of Honshu, however, features a series of major mountain ranges running from north to south. Because of this feature, the northwest monsoon in the winter brings humid conditions with heavy precipitation (snow) to Honshu's Sea of Japan side but comparatively dry weather with low precipitation to the Pacific Ocean side. In summer, the winds blow mainly from the southeast, giving rise to hot and humid weather. Another unique characteristic of Japan's climate is that it has two long spells of rainy seasons, one in early summer when southeast monsoon begins to blow, and the other in autumn when the winds cease. From summer to autumn, tropical cyclones generated in the tropical seas develop into typhoons and hit Japan, sometimes causing storm and flood damage.

 

Figure 1.2 Temperature and Precipitation

 

Table 1.7 Temperature and Precipitation

 

The Great East Japan Earthquake

1. Overview

At 2:46 p.m. on March 11, 2011, a strong earthquake of magnitude 9.0 occurred in the Pacific Ocean near the coast of northeastern Japan. The tsunami that followed was measured as high as 8.5 meters in Miyako, Iwate Prefecture. It devastated cities, towns, and villages along a broad swath of the Pacific coast of the Tohoku Region in northeastern Japan, causing vast human and material damage. In Tokyo, the intensity of the quake was measured at level 5-upper on the Japanese scale, but there was only minor damage. The magnitude of 9.0 made it the largest earthquake ever measured in Japan, and the fourth largest in the world since 1900.

 

2. Damage

The earthquakes and the huge tsunami that followed caused heavy casualties and enormous damage in the northeastern area and its vicinity, such as the Kanto Region. As of May 2013, the confirmed number of deaths had reached 15,883 persons, with 2,676 missing and 6,144 injured. There were 303,571 displaced persons living in evacuation centers nearby.

 

Damage

 

Devastated area (Main disaster zone)

 

Chapter 2 Population (PDF:3,067KB)

Contents

1. Total Population

Japan's total population in 2012 was 127.52 million. This ranked tenth in the world and made up 1.8 percent of the world's total. Japan's population density measured 343.4 persons per square kilometer in 2010, ranking seventh among countries with a population of 10 million or more.

 

Figure 2.1 Population Pyramid

 

Table 2.1 Countries with a Large Population

 

Figure 2.2 Population Density by Country

 

From the eighteenth century through the first half of the nineteenth century, Japan's population remained steady at about 30 million. Following the Meiji Restoration in 1868, it began expanding in tandem with the drive to build a modern nation-state. In 1926, it reached 60 million, and in 1967, it surpassed the 100 million mark. However, Japan's population growth has slowed in more recent years, with the annual pace of population growth averaging about one percent from the 1960s through the 1970s. Since the 1980s, it has declined sharply. Japan's 2005 total population was 127.77 million, declining from the previous year (127.79 million) for the first time after World War II. In 2012, it was 127.52 million, down by 284,000 from the year before.

 

Table 2.2 Trends in Population

 

2. Households

(1) Household Size and Household Composition

The Population Census shows that Japan had 51.84 million private households (excluding "institutional households" such as students in school dormitories) in 2010, going over 50 million for the first time since the Census began. Of that total, 56.3 percent were nuclear-family households, and 32.4 percent were one-person households.

 

Figure 2.3 Changes in Household Composition

 

Table 2.3 Households and Household Members

 

From the 1920s to the mid-1950s, the average number of household members remained at about five. However, due to the increase in one-person households and nuclear families since 1960s, the size of household was down significantly in 1970, to 3.41 members. The size of household members continued to decline to 2.42 in 2010. Although the Japanese population has shifted into decline, the number of households is expected to continue to increase for some years to come, as the size of the average household will shrink further. The number of households is projected to peak in 2019 and then decrease thereafter.

 

(2) Elderly Households

The number of elderly households (private households with household members 65 years of age or over) in 2010 was 19.34 million. They accounted for 37.3 percent of private households. There were 4.79 million one-person elderly households. Among these, there were 2.5 times as many women as men. There were 5.25 million aged-couple households.

 

Table 2.4 Trends in Elderly Households

 

3. Declining Birth Rate and Aging Population

The population pyramid of 1950 shows that Japan had a standard-shaped pyramid marked by a broad base. The shape of the pyramid, however, has changed dramatically as both the birth rate and death rate have declined. In 2012, aged population (65 years and over) was 30.79 million, constituting 24.1 percent of the total population and marking a record high. This percentage of elderly in the population is the highest in the world.

 

Figure 2.4 Changes in the Population Pyramid

 

The speed of aging of Japan's population is much faster than in advanced Western European countries or the U.S.A. Although aged population in Japan accounted for only 7.1 percent of the total population in 1970, 24 years later in 1994, it had almost doubled in scale to 14.1 percent. In other countries with an aged population, it took 61 years in Italy, 85 years in Sweden, and 115 years in France for the percentage of the elderly to increase from 7 percent to 14 percent of the population. These comparisons clearly highlight the rapid progress of demographic aging in Japan.

 

Figure 2.5 Proportion of Elderly Population by Country

 

Table 2.5 Age Structure of Population by Country

 

On the other hand, in 2012, the child population in Japan (0-14 years) amounted to 16.55 million, accounting for 13.0 percent of the total population, the lowest level on record since the survey began. In terms of their proportion of the total population, the aged have surpassed the child group since 1997. The production-age population (15-64 years) totaled 80.18 million. In share terms, it accounted for 62.9 percent of the entire population, continuing its decline since 1993. As a result, the ratio of the dependent population (the sum of aged and child population divided by the production-age population) was 59.0 percent.

 

4. Births and Deaths

Population growth in Japan had primarily been driven by natural increase, while social increase played only a minor part. In 2005, however, the natural change rate (per 1,000 population) turned negative for the first time since 1899; the figure was -1.7 in 2012.

During the second baby boom, the birth rate was at a level of 19 (per 1,000 population) between 1971 and 1973. Since the late 1970s, it has continued to drop. The rate for 2012 was 8.2.

 

Figure 2.6 Natural Population Change

 

Table 2.6 Vital Statistics

 

The decline in the birth rate may partly be attributable to the rising maternal age at childbirth. The average mothers' age at first childbirth rose from 25.6 in 1970 to 30.3 in 2012. The total fertility rate was on a downward trend after dipping below 2.00 in 1975. It marked a record low of 1.26 in 2005 and started to increase after that. The total fertility rate reached 1.41 in 2012.

 

Table 2.7 Changes of Mothers' Age at Childbirth

 

The death rate (per 1,000 population) was steady at 6.0 - 6.3 between 1975 and 1987. Since 1988, however, it has shown uptrend, reflecting the increased percentage of the elderly in the overall population. The death rate was 10.0 in 2012.

Average life expectancy in Japan climbed sharply after World War II, and is today at the highest level in the world. In 2012, life expectancy at birth was 86.4 years for women and 79.9 years for men.

 

Figure 2.7 Life Expectancy at Birth by Country

 

5. Marriages and Divorces

The annual number of marriages in Japan exceeded one million couples in the early 1970s, which, coupled with the marriage rate (per 1,000 population) hovering over 10.0, showed an apparent marriage boom. However, both the number and rate started declining thereafter. They rose again in the late 1980s but have, though fluctuating repeatedly. In 2012, 669,000 couples married, and the marriage rate was 5.3, the first increase in four years.

The mean age of first marriage was 30.8 for men and 29.2 for women in 2012, a rise by 2.4 years and 3.1 years, respectively, over the past twenty years. The declining marriage rate and rising marrying age in recent years as described above is one explanation for the dropping birth rate.

 

Figure 2.8 Changes in Marriage Rate and Divorce Rate

          

Table 2.8 Mean Age of First Marriage

 

In contrast, divorces have shown an upward trend since the late 1960s, hitting a peak of 290,000 in 2002. Subsequently, both the number of divorces and the divorce rate have been declining since 2003. In 2012, the number of divorces totaled 235,000, and the divorce rate (per 1,000 population) was 1.87, the same rate as that of the previous year.

 

6. Population Density and Regional Distribution

(1) Population Density

In 2010, Tokyo had the largest population of 13.16 million among Japan's 47 prefectures, followed in decreasing order by the prefectures of Kanagawa, Osaka, Aichi, and Saitama. These five prefectures each had a population of seven million or more, and together accounted for 35.7 percent of the total population.

The population density in Tokyo was the highest among Japan's prefectures, at 6,016 persons per square kilometer. This was almost 18 times the national average (343 persons per square kilometer).

In 2010, there were 12 cities in Japan with a population of one million or more. Their total population topped 28 million, a figure equivalent to 22.5 percent of the national total. The largest single city was the 23 wards (ku) of central Tokyo, with 8.95 million citizens. It was followed in decreasing order by Yokohama-shi (3.69 million), Osaka-shi (2.67 million), and Nagoya-shi (2.26 million).

 

Figure 2.9 Population Density by Prefecture

 

Table 2.9 Population of Major Cities

 

(2) Population Distribution

The percentage accounted for by the urban population started increasing in the late 1950s. In 2010, 51.0 percent of the total population was concentrated in the three major metropolitan areas, the Kanto major metropolitan area, the Chukyo major metropolitan area, and the Kinki major metropolitan area. Population density in the Kanto major metropolitan area was 2,631 persons per square kilometer. In the Chukyo major metropolitan area it was 1,288 persons per square kilometer, and in the Kinki major metropolitan area it was 1,484 persons per square kilometer.

 

Table 2.10 Population of Three Major Metropolitan Areas

 

Chapter 3 Economy (PDF:3,067KB)

Contents

1. Economic Development

After World War II, Japan underwent a period of restoration followed by high economic growth, eventually becoming the economy with the second largest GDP in the world in 1967.

During the 1960s, Japan's economy grew at a rapid pace of over 10 percent per annum. This rapid economic growth was supported by: (i) expansion of private investments in plant and equipment, backed by a high rate of personal savings; (ii) a large shift in the working population from primary to secondary industries, and "an abundant labor force supplied by a high rate of population growth"; and (iii) an increase in productivity brought about by adopting and improving foreign technologies.

 

Figure 3.1 Economic Growth Rates

 

From the late 1960s until the first half of the 1970s, new social problems emerged that reflected warps left by high economic growth. As a result, steps to tackle environmental pollution, urban issues and social security problems became the central targets of administrators, and countermeasures were taken accordingly.

In the 1970s, the sharp increase of Japan's exports of industrial products to the U.S.A. and Europe began to cause international friction. In 1971, the U.S.A. announced it would end the convertibility of the dollar into gold. In December 1971, Japan revalued the yen from 360 yen against the U.S. dollar, which had been maintained for 22 years, to 308 yen. In February 1973, Japan adopted a floating exchange-rate system.

In October 1973, the fourth Middle East War led to the first oil crisis, triggering high inflation. Accordingly, Japan recorded negative economic growth in 1974 for the first time in the post-war period. Following the second oil crisis in 1978, efforts were made to change Japan's industrial structure from "energy-dependent" to "energy-saving," enabling Japan to successfully overcome inflation.

In the 1980s, the trade imbalance with advanced industrial countries expanded because of the yen's appreciation. As part of administrative and financial reforms, Japan National Railways and Nippon Telegraph and Telephone Public Corporation were privatized. As a result, domestic demand-led economic growth was achieved.

 

2. Bubble Economy and Its Collapse

At the end of the 1980s, Japan's economy enjoyed favorable conditions, with stable wholesale prices and a low unemployment rate. Corporate profits were at their highest level in history, and corporate failures were at their lowest level, while investments in plant and equipment for manufacturing products, such as semiconductors, were very active. Stock and land prices continued to rise rapidly, and large-scale urban developments and resort facility developments in rural areas progressed at a very fast pace. However, excessive funds flowed into the stock and real estate markets, causing abnormal increases in capital asset values (forming an economic bubble).

 

Figure 3.2 National Wealth

 

At the end of 1980, Japan's net worth (national wealth) stood at 1,363 trillion yen, 5.6 times the GDP. It then increased, reaching 3,531 trillion yen, 8.0 times the GDP, at the end of 1990, owing to increasing land and stock prices. Since then, Japan's national wealth changed to decreasing by the collapse of the bubble economy. At the end of 2011, it was 2,996 trillion yen.

At the beginning of 1990, stock prices plummeted, followed by sharp declines in land prices. This marked the start of major economic recession (collapse of the bubble economy). Japan's financial and economic systems, which were excessively dependent on land, consequently approached collapse.

Massive bad debts were created in financial institutions' loan portfolios, as corporate borrowers suffered serious losses due to declining land prices. As a result, shareholders' equity in financial institutions shrank. In 1997, large banks began to fail. In 1998 and 1999, the government injected public money into the banking sector to stabilize the financial system.

 

Figure 3.3 Gross Domestic Product

 

The Japanese economy began to make a moderate recovery in February 1999. This, however, was only a temporary phenomenon, as investments in plant and equipment were weak and the economy was too dependent on foreign demand and information and communication technologies. With the global decline in IT demand from mid-2000, Japan's exports to Asia dropped, necessitating adjustments of excess inventory and production facilities. In line with this, the Japanese economy again entered into an economic downturn in 2001.

Following the simultaneous terrorist attacks in the U.S.A. in September 2001, further slowdown of the world economy became a matter of serious concern, resulting in greater uncertainty over the outlook for the Japanese economy. There were several causes for this long-term slump in the Japanese economy. Among them, the following two factors likely had the biggest impacts. First, Japanese banks were saddled with large nonperforming loans. A vicious circle developed, in which the long-term economic stagnation exacerbated the bad loan situation, while the bad loans hindered economic growth. Second, there was another vicious circle, in which the continuing economic slump led to pessimism about the future on the part of corporations and consumers, and their hesitation generated further recession.

Subsequently, the Japanese economy maintained a long-lasting recovery beginning in early 2002. However, the path has not always been smooth, given two "soft patches" (temporary softening in the market) and weakness in some parts of the economy.

The first soft patch was caused by slower export growth following economic slowdowns in the U.S.A. and the Asian region, both Japan's major export destinations, since late 2002. The second soft patch resulted from slower export growth owing to a surplus inventory of information-related producer goods in Japan as demand for IT-related goods declined worldwide since late 2004. During the phase of Japan's economic recovery from the beginning of 2002, there was a common trend where exports were showing signs of steady growth, reflecting a brisk recovery of the world economy, but then a soft patch set in and pushed exports down, resulting in sluggish growth in both production and personal spending. As exports picked up, the economy broke away from this slower period.

 

3. Recent Economic Trends

At the start of 2008, the Japanese economy was faced with a standstill in its path to recovery as private consumption and investments in plant and equipment fell flat and so did production. This occurred against the backdrop of soaring crude oil and raw material prices and repercussions from the American subprime mortgage loan problems that, since mid-2007, rapidly clouded future prospects for the world economy further. In addition, the bankruptcy of the major American securities firm Lehman Brothers in September 2008 (the "Lehman shock") led to a serious financial crisis in Europe and the U.S.A. Japan was also affected by the yen's rise and the sudden economic contraction in the U.S.A. and other countries. Declining exports contributed to a large drop in production and a sharp rise in unemployment. As the economy continued to recover with foreign demand and economic measures after April 2009, the government defined March 2009 as the trough of the economic cycle. On the other hand, in November 2009, the government summed up the price movements of goods and services to conclude that they were "in a state of moderate deflation."

 

Table 3.1 Gross Domestic Product (Expenditure approach)

 

Subsequently, the Japanese economy came to a standstill starting around October 2010. In early 2011, however, it began to rally. The Great East Japan Earthquake that took place on March 11, 2011, and the nuclear power plant accident it caused weakened the economic recovery.

In order to achieve an early end to deflation and break free of economic stagnation, in January 2013, the Government of Japan set forth its "three-arrows" strategy (also known as "Abenomics"). The first "arrow" is "aggressive monetary policy." In more detail, the Bank of Japan (BOJ) made it clear that it would set a consumer price index annual growth rate of two percent as a "price stabilization target." At the April Monetary Policy Meeting, the BOJ also decided to adopt "quantitative and qualitative monetary easing" to double the monetary base over two years. The second "arrow" is "flexible fiscal policy." In the sector of recovery from the Great East Japan Earthquake, a supplemental budget was established for fiscal 2012. Additionally, the budget for fiscal 2013 was passed with an emphasis on polices connected with the vitalization of the Japanese economy and security in national life. The third "arrow" is "growth strategy that promotes private investment." Japan is strongly committed to tackling stable growth strategy over the long term.

 

Figure 3.4 Economic Growth Rates (Quarterly changes)

 

4. Industrial Structure

Japan's industrial structure has undergone a major transformation over the half century since the end of World War II. The chronological changes in the industrial structure during this period by industry share of employed persons and GDP show that shares in the primary industry in particular have fallen dramatically since 1970, when Japan experienced a rapid economic growth. During the 1980s, the secondary industry's share of employed persons and GDP also began to decline gradually. On the other hand, the tertiary industry's shares of both employed persons and GDP have risen consistently.

In 1970, the primary industry accounted for 19.3 percent of employed persons, the secondary industry for 34.1 percent, and the tertiary industry for 46.6 percent. In 2010, the corresponding shares of these three sectors were 4.2 percent, 25.2 percent and 70.6 percent, respectively.

As for GDP by type of economic activity, in 1970, the primary, secondary and tertiary industries accounted for 5.9 percent, 43.1 percent and 50.9 percent, respectively. In 2010, these figures for the primary, secondary and tertiary industries were 1.2 percent, 25.2 percent and 73.6 percent, respectively.

 

Table 3.2 Changes in Industrial Structure

 

Figure 3.5 Gross Domestic Product by Type of Economic Activity

 

According to the 2012 Economic Census for Business Activity (preliminary tabulation), there were 5.47 million establishments (excluding businesses whose operational details are unknown, national government services, or local government services) in Japan, at which a total of 56.32 million persons were employed. The average number of persons engaged per establishment was 10.3. Establishments with less than 10 persons accounted for 78.6 percent of the total.

 

Figure 3.6 Shares of Establishments and Persons Engaged by Scale of Operation

 

The number of establishments by the major groupings of the Japan Standard Industrial Classification was the most numerous in the "wholesale and retail trade" category, numbering 1.42 million, followed by "accommodations, eating and drinking services" and "construction." In terms of the number of persons engaged, establishments in the "wholesale and retail trade" ranked first as they employed 11.98 million persons, followed by "manufacturing" and "medical, health care and welfare."

 

Table 3.3 Number of Establishments and Persons Engaged

 

Japan's domestic manufacturing industry has continued to shrink amidst ongoing economic globalization. Imports of textiles and consumer durable goods have increased at a rapid pace in recent years, and the share of imports from China, among other sources, has risen. Furthermore, the structure has surfaced where Japanese companies manufacture products in China and other Asian countries and import these products into Japan to push down domestic prices.

According to the Cabinet Office's "FY2012 Annual Survey of Corporate Behavior," the percentage of firms in manufacturing industries that perform production overseas was 67.7 percent in fiscal 2011. That figure has been at a similar level since fiscal 2007. As for why Japanese companies carry out production at overseas locations, the most common reason (45.8 percent) firms cited was in order to respond to product demand in those areas and their vicinities. The next most common reason (23.1 percent) was that labor costs are low.

 

Figure 3.7 Ratio of Overseas Production in the Manufacturing Sector

 

The percentage of production overseas (in terms of sales) for Japanese companies with foreign subsidiaries was 18.0 percent in fiscal 2011. That represented a year-on-year decrease of 0.1 percentage points. By category, the percentage of overseas production was the highest in transport equipment, which was 38.6 percent, followed by 26.7 percent in information and communication electronics equipment, and 24.8 percent in general-purpose machinery.

Other areas increasingly drawing the attention of Japanese manufacturing companies as capable operation locations are China, as well as India and Indonesia. Interest in the new markets of Mexico and Myanmar is also growing.

 

Chapter 4 Finance (PDF:3,067KB)

Contents

1. National and Local Government Finance

(1) National Government Finance

Japan's fiscal year starts in April, and ends in March of the following year. In setting the national budget, the government submits a proposed budget for the upcoming fiscal year to the Ordinary Session of the Diet, which begins in January. The proposal is then discussed, and an initial budget is approved usually before the fiscal year begins in April. In the event that the Diet does not approve the budget by the end of March, an interim budget comes into effect. The interim budget is effective from the beginning of April until such time when the proposed budget is approved. If it becomes necessary to amend the budget in the course of a fiscal year, the government submits a supplementary budget for Diet approval.

Japan's national budget consists of the general account, special accounts, and the budget for government-affiliated agencies. Using revenues from general sources such as taxes, the general account covers core national expenditures such as social security, public works, culture/education/science and national defense. Special accounts are accounts established for the national government to carry out projects with specific objectives, and are managed and administered independent of the general account. The number and particulars of special accounts change from year to year; for fiscal 2013, a total of 17 special accounts have been established, including the national debt consolidation fund, the grants of allocation tax and transferred tax and the Great East Japan Earthquake recovery fund. Government-affiliated agencies are entities established by special laws and are entirely funded by the government. Currently, the Japan Finance Corporation, the Okinawa Development Finance Corporation, Japan Bank of International Cooperation, and the Japan International Cooperation Agency (Loan Aid Section) are operated as government-affiliated agencies.

 

Table 4.1 Revenue and Expenditure of National Government Finance

 

In national government finance, expenditure has continued to surpass revenue. Since fiscal 2008 in particular, the worsening economy has decreased tax revenues, contributing to an increasing gap between revenue and expenditure. Since fiscal 2009, bonds issued exceeded tax revenues in most years, but in fiscal 2013, tax revenue exceeded borrowing (on an initial budget basis) for the first time in four years.

The size of the general account budget for fiscal 2013 was 92.61 trillion yen, an increase of 2.28 trillion yen (2.5 percent) from the initial budget of fiscal 2012. This is equivalent to 19.0 percent of the fiscal 2013 GDP, forecasted by the government at 487.7 trillion yen.

 

Table 4.2 Expenditure of General Account

 

In fiscal 2013, major expenditures from the initial general account budget include social security (31.4 percent), national debt service (24.0 percent), local allocation tax grants, etc. (17.7 percent), education and science (5.8 percent), public works (5.7 percent) and national defense (5.1 percent).

With regard to revenue sources for the fiscal 2013 initial general account budget, income tax, consumption tax and corporation tax account for 35.9 percent. Even with the addition of other taxes and stamp revenues, these revenue sources only amount to 46.5 percent of the total revenue.

 

Figure 4.1 Composition of Revenue and Expenditure of General Account Budget

 

(2) Local Government Finance

There are two budget categories in the local government finance: the ordinary accounts and the public business accounts. The former covers all kinds of expenses related to ordinary activities of the prefectural and municipal governments. The latter covers the budgets of independently accounted enterprises such as public enterprises (water supply and sewerage utilities, hospitals, etc.), the national health insurance accounts and the latter-stage elderly medical care accounts.

While expenditures such as national defense are administered solely by the national government, a large portion of expenditures that directly relate to the people's everyday lives are disbursed chiefly through local governments. In particular, a high proportion of the following expenditures are disbursed through local governments: public hygiene and sanitation expenses, which include areas such as medical service and waste disposal; school education expenses; expenses covering judicial, police and fire services; and public welfare expenses, which cover the development and management of welfare facilities for children, the elderly and the mentally and/or physically challenged.

The revenue composition of local governments usually remains almost the same each fiscal year, while their budget scale and structure vary from year to year. The largest portion of fiscal 2011 (net) revenues came from local taxes, accounting for 34.1 percent of the total. The second-largest source, 18.7 percent, was local allocation tax grants.

 

Table 4.3 Local Government Finance

 

(3) National and Local Government Finance

The net total indicates the actual amount of governmental expenditures after eliminating duplications such as the transfer of funds between different accounts in the national budget, the local allocation tax grants and other subsidies from the national government to local governments. In the initial budget for fiscal 2012, the gross total of national government expenditure was 487 trillion yen, the net total was 231 trillion yen after eliminating duplications. Furthermore, the local public finance program, which consists of the estimated sum of ordinary accounts for the following fiscal year for all local governments, amounted to 84 trillion yen. Therefore, after eliminating duplications between national and local accounts (34 trillion yen), the net total of both national and local government expenditures combined was 281 trillion yen.

 

Table 4.4 Expenditures of National and Local Governments

 

In fiscal 2011, the net total of national and local government expenditures was 272 trillion yen, approximately 60 percent of which, net of overlaps, were expenditures "directly related to people's lives." The national government disbursed 42 percent of this amount, while the local governments disbursed 58 percent.

 

Figure 4.2 Trends in Ratio of Net Total National and Local Expenditures by Function

 

A function-by-function breakdown of expenditures "directly related to people's lives" showed that social security expenditure accounted for the largest portion (32.7 percent), followed by public bonds (19.8 percent), education (11.7 percent), general administration (11.7 percent), and then land preservation and development (10.6 percent). Public bonds are issued to compensate for shortages of national and local revenues. Their issue volumes have increased mainly due to, for example, economic stimulus measures and decreasing tax revenues since 1992. A rising amount of public bond redemptions, among other factors, has resulted in public bonds making up a high percentage of government expenditures net of overlaps.

 

Figure 4.3 Trends in National Government Bond Issue

 

Japan's ratio of outstanding general government debt to GDP, a stock measure in a fiscal context, has been deteriorating rapidly due to its public bond issues over a series of years and is now the worst among major industrial countries.

 

Figure 4.4 Ratio of General Government Gross Debt to GDP

 

(4) Tax

Taxes consist of national tax (income tax, corporation tax, etc.), which is paid to the national government, and local tax, which is paid to the local government of the place of residence. The ratio of taxation burden, which is the ratio of national and local taxes to national income, was 18.3 percent in fiscal 1975. This ratio gradually increased thereafter, reaching 27.7 percent in fiscal 1989. Since then, however, the ratio has decreased due to the decline in tax revenue arising from the recession that ensued after the bubble economy ended, showing 21.2 percent in fiscal 2003. In fiscal 2013, it was 22.7 percent in terms of national and local taxes combined (13.0 percent for national tax and 9.6 percent for local tax). Japan's ratio is lower in comparison with other major industrial countries. Nevertheless, there is a possibility that the taxation burden will become heavier due to an increase in welfare and pension-related spending as the population ages.

 

Figure 4.5 Ratio of Taxation Burden to National Income by Country

 

2. Bank of Japan and Money Stock

As the central bank, the Bank of Japan (i) issues Bank of Japan notes, or the currency of Japan; (ii) manages and stores treasury funds and provide loans to the government; (iii) provides deposit and loan services to general financial institutions; and (iv) implements monetary policies by adjusting the level of money stock to promote sound development of the economy.

At the end of 2012, currency in circulation totaled 91.23 trillion yen (86.65 trillion yen in Bank of Japan notes and 4.58 trillion yen in coins), up 3.0 percent from the year before.

 

Table 4.5 Currency in Circulation

 

The Bank of Japan compiles and publishes statistics on the following indicators: (i) M1, or cash currency in circulation plus deposit money; (ii) M2, or cash currency in circulation plus deposits in banks, etc. in Japan; (iii) M3, or M1 plus quasi-money plus CDs (certificates of deposit); and (iv) broadly-defined liquidity, which covers a broad range of liquidity, including government securities. The average outstanding money stock as of December 2012 was 546 trillion yen in M1 and 828 trillion yen in M2.

 

Table 4.6 Money Stock

 

In January 2013, the Government and the Bank of Japan decided to strengthen policy coordination in order to overcome deflation and achieve sustainable economic growth with stable prices. In order to achieve price stability targets at the earliest possible time, in April 2013, the Bank of Japan changed the operating target for money market operations from the uncollateralized overnight call rate to a monetary base to facilitate quantitative easing. Japan's monetary base is the amount of currency supplied by the Bank of Japan. It is the combined total of banknotes in circulation, coins in circulation, and current account balances. Under the new policy of monetary easing, the monetary base was 155.28 trillion yen as of the end of April 2013 (26.2 percent higher than one year earlier). It was the second consecutive month with a record high.

 

Table 4.7 Financial Markets

 

3. Financial Institutions

In addition to the Bank of Japan, Japan's financial system is comprised of private and public financial institutions. Private financial institutions include those that accept deposits (banks, credit depositories, agricultural cooperatives, etc.) and those that do not (securities companies, insurance companies, etc.).

As to the latest number of offices, including the branches of financial institutions operated domestically, post offices handling postal savings had the largest network with 24,230 offices. This was followed by domestically licensed banks, including city banks and regional banks, with a combined total of 13,389 offices and branches. Securities companies operated at 2,139 offices including branches. In the course of the financial system reform, mergers and restructuring progressed among major banks, resulting in their being reorganized into three major financial groups. Regional banks and credit depositories operating in their respective regions have been making their efforts to expand operations base through corporate mergers, but there were no major mergers recently.

 

Table 4.8 Number of Financial Institutions

 

For a long time, the business role of each type of financial institution had been clearly divided and regulated by specialized systems. However, the deregulation and reform of financial systems produced dramatic changes, eventually causing significant alterations in the financial system. A rapid surge in asset prices from the mid-1980s and the following correction of asset prices in the 1990s created a massive expansion of loans and huge bad debts in their wake. In the financial crisis between 1997 and 1998, several large financial institutions went bankrupt. This prompted legislative enactments in 1998 that were intended to stabilize the financial system, which accelerated the implementation of measures to deal with bankrupt financial institutions, including temporary nationalization. As a result, the overdue task of addressing bad debts was finally laid to rest.

In order to lead a revival of the nation's economy by solving the bad debt problems of major banks, the government launched the Program for Financial Revival in October 2002, demanding that major banks reduce their ratio of bad debts from 8.4 percent in March 2002 to approximately half that level by March 2005. As a result, the ratio of the major banks' bad debts decreased to 2.9 percent in March 2005, meeting the government's target, and the bad debt problems have thus been settled. The ratio recorded in March 2013 was 1.8 percent.

 

4. Financial Assets

The Flow of Funds Accounts Statistics, which is a comprehensive set of records of financial transactions, assets and liabilities, indicates that financial assets in the domestic sectors totaled 6,118 trillion yen according to preliminary figures at the end of March 2013. Of these assets, those of the domestic nonfinancial sector were 3,014 trillion yen. The household sector (including the business funds of individual proprietorships) had assets of 1,571 trillion yen, in the forms of deposits, stocks and other financial assets. In Japan, the household sector holds more than 50 percent of its financial assets in cash or relatively secure forms of assets.

 

Table 4.9 Financial Assets and Liabilities of Japan

 

5. Stock Market

Stock prices in Japan rose sharply in the second half of the 1980s, spearheading the bubble economy. However, the stock market started to fall in 1990 ahead of land prices. At the end of 1989, the total market value of the first section of the Tokyo Stock Exchange was 591 trillion yen, but only three years later, at the end of 1992, it dropped by more than 50 percent to 281 trillion yen. The market recovered to reach 442 trillion yen at the end of 1999, later dipped again, and increased to 539 trillion yen at the end of 2006. The subprime mortgage problem surfaced after August 2007 and the September 2008 Lehman shock led to a fall in the total market value, which amounted to 251 trillion yen at the end of 2011. In 2012, the Japanese economy appeared to be entering a period of slowdown, but towards the end of the year, confidence inspired by the new Government's anti-deflationary economic and fiscal policies led to a correction of the high yen, and share prices soared. The Bank of Japan's policy changes announced in April 2013 were seen as an ingredient leading to the stock market's recovery, with the Nikkei Stock Average climbing to 13, 860.86 yen as of the end of April.

 

Figure 4.6 Trends in Stock Price Index and Total Market Value

 

At the end of March 2013, the total number of individual stockholders (individuals of Japanese nationality and domestic groups without corporate status) in possession of stocks listed on the Tokyo/Osaka/Nagoya/ Fukuoka/Sapporo Stock Exchanges totaled 46.0 million. In value terms, the ratio of stocks they possessed was 20.2 percent. The ratio of Japanese stocks held by foreign investors (total of corporations and individuals) was 28.0 percent in value terms, the highest ever recorded. Records also show that Internet trading remained on a strong growth path.

A survey conducted of 254 securities firms by the Japan Securities Dealers Association (JSDA) showed that 22.4 percent of those companies offered Internet trading at the end of March 2013. Internet trading thus accounted for 31.7 percent of the total value of stock brokerage transactions from the period of October 2012 to March 2013.

 

Table 4.10 Stock Prices

 

Chapter 5 Agriculture, Forestry and Fisheries (PDF:3,067KB)

Contents

1. Overview of Agriculture, Forestry and Fisheries

Over the course of Japan's economic growth, its agricultural, forestry and fishing industries employ fewer and fewer workers every year, and their GDP share has also dropped. The number of workers decreased from 14.39 million in 1960 (32.7 percent of the total workforce) to 2.38 million in 2010 (4.2 percent), and the GDP share of the industries fell from 12.8 percent in 1960 to 1.2 percent in 2010.

 

 Table 5.1 Agricultural, Forestry and Fisheries Output

 

2. Agriculture

(1) Agricultural Production

Japan's total agricultural output in 2011 was 8.25 trillion yen, up 1.5 percent from the previous year. Crops yielded 5.64 trillion yen, up 2.3 percent from the previous year. This was because of higher rice output due to rising prices, notwithstanding a decline in the output of vegetables, fruits and nuts due to falling prices.

 

Table 5.2 Agricultural Production

 

Table 5.3 Production Volumes of Meat, Milk and Eggs

 

(2) Farmers and Farmland

In 2010, the number of farm households engaged in commercial farming (which refers to households with cultivated land under management of 0.3 hectares and over, or with annual sales of agricultural products amounting to 500,000 yen and over) was 1.63 million. Of these commercial farm households, 27.7 percent were full-time farm households, 13.8 percent were part-time farm households with farming income exceeding non-farming income, and 58.6 percent were part-time farm households with non-farming income exceeding farming income.

Of the commercial farm household members, 2.61 million people were actually engaged in farming (commercial farmers) in 2010, of whom 61.6 percent were aged 65 years and over.

In 2011, the total income per commercial farm household was 4.63 million yen, down 0.6 percent from the previous year. Of that amount, 1.20 million yen was from farming income, 1.60 million yen from non-farming income, and 1.83 million yen from pension benefits and other sources.

 

Table 5.4 Commercial Farm Households and Commercial Farmers

 

Japan's cultivated acreage shrank year after year from 6.09 million hectares in 1961 to 4.55 million hectares in 2012. In the one-year period of 2012, there were 5,620 hectares of new cultivation but also a 17,400-hectare decrease. The most common cause for the decrease was cultivation abandonment, accounting for approximately 40 percent of all cases, followed by land-use conversion for residential and other lands, making up approximately 30 percent.

 

3. Forestry

Japan's forest land area is 25.08 million hectares (approximately 70 percent of its entire surface area). Of this, natural forests account for 55 percent while planted forests, most of which are conifer plantations, make up 45 percent. Meanwhile, Japan's forest growing stock is 4,901 million cubic meters, of which 3,192 million cubic meters are from planted forests.

Forests that were planted after World War II are now finally ready for use. The functions that forests play in soil conservation and the prevention of global warming need to be exercised in a sustainable manner by smoothly following the cycle of cutting, planting and tending planted forests.

 

Table 5.5 Forest Land Area and Forest Resources

 

Domestic wood supply (log conversion) totaled 19.7 million cubic meters in 2012, which is equivalent to 37.3 percent of the peak in 1967 (52.7 million cubic meters). In 2012, Japan's self-sufficiency rate for lumber was 27.9 percent. Currently, Japan depends mostly on imported lumber for pulp, woodchip and plywood material.

The slowdown in domestic lumber production activities has resulted in a decline in the number of workers engaged in forestry. In 2010, there were 69,000 workers engaged in forestry, a level that represented the same number recorded ten years before. However, approximately one out of six workers was aged 65 and over, highlighting the aging of the labor force.

 

Figure 5.1 Industrial Wood Supply and Self-Sufficiency Rate

 

4. Fisheries

(1) Fishery Production

In Japan, a country surrounded by ocean, the fishing industry has played an important role in supplying animal protein and bringing a healthy and rich diet to the population. Recently, however, there has been a progressing "shift away from fish," particularly among the younger generations. On the other hand, aging of fishing boats and fishery workforce is bringing concern that fishery resources in surrounding waters in Japan are not fully utilized.

Japan's fishery output has been on the decline since 1989. Its 2012 fishery production totaled 4.84 million tons. Of this, marine fishery and aquaculture production amounted to 4.77 million tons.

 

Figure 5.2 Production by Type of Fishery

 

Table 5.6 Production by Fishery Type and Species

 

(2) Fishery Workers

The number of workers in the marine fishery industry (the workers who engage in work at sea for 30 days or more yearly) has been decreasing constantly. In 2012, there was a 2.4 percent decrease from the previous year, bringing the count to 174,000 workers (excluding Iwate, Miyagi and Fukushima prefectures). Among male workers, the ratio of those aged 65 years and over was 36.4 percent, showing the progressive trend of an aging workforce.

 

Table 5.7 Number of Enterprises and Workers Engaged in the Marine Fishery/Aquaculture Industry

 

5. Self-Sufficiency in Food

Japan's food self-sufficiency rate, in terms of calories, was 39 percent in fiscal 2011, versus 73 percent in fiscal 1965. The principal cause for the major drop in the food self-sufficiency rate is the fact that a significant change in the diet of Japanese led to a lower consumption of rice, a crop in which Japan is self-sufficient, while there was an increase in consumption of livestock products and fats that domestic agricultural production alone cannot supply sufficiently.

In fiscal 2011, the self-sufficiency rate (on an item-specific weight basis) was 100 percent in rice, 11 percent in wheat, 9 percent in beans, 79 percent in vegetables, 38 percent in fruits, 54 percent in meat and 58 percent in seafood. Although completely self-sufficient in rice, the staple food of its people, Japan relied almost entirely on imports for wheat and bean supply.

 

Table 5.8 Supply of Cereal Grains

 

 

Figure 5.3 Self-Sufficiency Rates for Selected Categories of Agricultural Produce

 

Japan's present food self-sufficiency rate is the lowest among major industrialized countries, and Japan is thus the world's largest net importer of agricultural products since 1984.

 

Figure 5.4 Trends in Food Self-Sufficiency Rates of Major Countries

 

Chapter 6 Manufacturing and Construction (PDF:3,067KB)

Contents

1. Overview of the Manufacturing Sector

The proportion of added value produced in Japan's manufacturing sector to its nominal GDP has still been around 20 percent recently, the sector has a large ripple effect on other sectors.

In Japan, the September 2008 Lehman Brothers bankruptcy (the "Lehman Shock") led to a sharp drop in worldwide demand for the mainstays of Japan's manufacturing industries, namely, consumer durables such as automobiles and capital goods such as machine tools. Additionally, in 2011, the Great East Japan Earthquake, the historically high yen, and the slowing global economy contributed to sluggish domestic production. Anxiety about industrial hollowing out increased. A concern for the future is the declining competitiveness of Japanese manufacturing industries both in Japan and abroad.

 

Figure 6.1 Composition of Establishments, Persons Engaged and Value of Manufactured Goods Shipments by Sector

 

Table 6.1 Number of Establishments, Persons Engaged and Value of Manufactured Goods Shipments of the Manufacturing Industry

 

In 2011, there were 232,161 establishments (with four or more persons engaged) and a total of 7.45 million persons engaged in the manufacturing sector. These establishments shipped 285.0 trillion yen worth of manufactured products, with added value amounting to 91.4 trillion yen.

Based on the Indices on Mining and Manufacturing (2005 average = 100), the production index for 2012 was 91.9, down 0.3 percent from the previous year, while shipments stood at 92.5, an increase of 0.1 percent from the year before.

 

Table 6.2 Indices on Mining and Manufacturing

 

Table 6.3 Indices of Industrial Production

 

Figure 6.2 Trends in Indices on Mining and Manufacturing

 

2. Principal Industries in the Manufacturing Sector

This section describes the major industries in the manufacturing sector. For each industry, (a) is described by the "2012 Economic Census for Business Activity (preliminary tabulation)" (with four or more persons engaged), and (b) is described by the "Indices on Mining and Manufacturing" (2005 average = 100).

 

(1) Machinery Industry

(A) Transport Equipment Industry

(a) In 2011, a total of 11,961 establishments employed 945,050 persons, and shipped 50.5 trillion yen worth of products.

(b) In 2012, production and shipments increased year-on-year by 12.0 percent and 11.4 percent, respectively. As a result, both production and shipments recorded their first increase in two years. This was due to the increase in the production and shipments of passenger cars, motor vehicle parts, etc.

 

(B) Production Machinery Industry

(a) In 2011, a total of 21,499 establishments employed 552,090 persons, and shipped 15.6 trillion yen worth of products.

(b) In 2012, production and shipments decreased year-on-year by 5.6 percent and 5.2 percent, respectively. As a result, both production and shipments recorded their first decrease in three years.

 

(C) Electrical Machinery, Equipment and Supplies Industry

(a) In 2011, a total of 10,163 establishments employed 472,893 persons, and shipped 15.1 trillion yen worth of products.

(b) In 2012, production and shipments decreased year-on-year by 4.5 percent and 4.1 percent, respectively. As a result, production recorded the first decrease in three years and shipments decreased for the second consecutive year. Decrease in the production of household electrical machinery resulted in the total production decrease in the industry. Decrease in the total shipments was caused by the decrease in switching devices.

 

(D) Electronic Parts and Devices Industry

(a) In 2011, a total of 5,382 establishments employed 445,988 persons, and shipped 15.7 trillion yen worth of products.

(b) In 2012, production and shipments decreased by 6.8 percent and 1.4 percent, respectively, from the previous year. As a result, both production and shipments recorded their second consecutive year of decrease.

 

(E) Information and Communication Electronics Equipment Industry

(a) In 2011, a total of 1,899 establishments employed 193,994 persons, and shipped 9.8 trillion yen worth of products.

(b) In 2012, production and shipments decreased by 12.8 percent and 25.3 percent, respectively, from the previous year. As a result, both production and shipments recorded their second consecutive year of decrease. Decrease in the production of communication equipment resulted in the total production decrease in the industry. Decrease in the total shipments was caused by the decrease in household electronic machinery.

 

(2) Chemical Industry

(a) In 2011, a total of 4,999 establishments employed 329,435 persons, and shipped 25.9 trillion yen worth of products.

(b) In 2012, production and shipments decreased by 0.1 percent and 0.7 percent, respectively, from the previous year. As a result, both production and shipments recorded their first decrease in three years. In 2012, production and shipments in the chemical industry (excluding medical and pharmaceutical products) decreased by 3.7 percent and 3.4 percent, respectively, from the previous year. As a result, both production and shipments recorded their second consecutive year of decrease. This was attributable to the decline in the production and shipments of plastic, industrial organic chemicals, etc.

(3) Iron and Steel Industry

(a) In 2011, a total of 4,926 establishments employed 218,849 persons, and shipped 18.6 trillion yen worth of products.

(b) In 2012, production and shipments decreased by 0.3 and by 0.2 percent compared to the previous year. As a result, both production and shipments recorded their second consecutive year of decrease. This was attributable to the decline in the production and shipments of cold finished steel, metallic coated steel, etc.

 

Figure 6.3 Crude Steel Production in Selected Countries

 

Table 6.4 Steel Production

 

(4) Fabricated Metal Products Industry

(a) In 2011, a total of 29,469 establishments employed 568,652 persons, and shipped 12.1 trillion yen worth of products.

(b) In 2012, production increased by 0.1 percent and shipments decreased by 0.6 percent compared to the previous year. Consequently, production recorded its first increase in two years, while shipments decreased for the second consecutive year. A rise in the production of metal products for building contributed to the total production increase in the industry. The decrease in total shipments was caused by a decline in heating and kitchen equipment, etc.

 

3. Construction

The construction industry, accounting for about 10 percent of both GDP and all employed persons, is one of the core industries in Japan. However, it faces a series of challenges, including rapidly shrinking construction investment and increasingly fierce price wars. The business environment surrounding the industry is now harsher than ever before. In fiscal 2012, the industry employed 5.05 million persons, and investment in construction stood at approximately 44.9 trillion yen.

 

Table 6.5 Construction Investment

 

Investment in construction in fiscal 2012 showed a year-on-year increase of 7.2 percent at current prices and a year-on-year increase of 8.7 percent at constant fiscal 2005 prices. Construction investment in fiscal 2012 was down by almost half (46.5 percent) from the fiscal 1992 peak of approximately 84.0 trillion yen.

A breakdown of construction investment shows that building construction totaled 23.4 trillion yen (up 4.2 percent from the previous fiscal year), while civil engineering works amounted to 21.5 trillion yen (up 10.7 percent).

In terms of public and private construction investment in fiscal 2012, public investment amounted to 18.9 trillion yen (up 9.6 percent from the previous fiscal year), while private investment totaled 26.0 trillion yen (up 5.5 percent). Public investment accounted for 42.0 percent of total construction investment, while private investment accounted for 58.0 percent.

The 2012 total floor space of building starts was 132.6 million square meters, up 4.8 percent from the previous year. In particular, the floor space of buildings for medical, healthcare and welfare use decreased by 15.0 percent compared to the previous year, to 9.3 million square meters. Meanwhile, the number of housing construction starts (in the case of apartment buildings, the number of apartment units was counted) increased for owned houses, rental units and built-for-sale units alike, totaling 0.88 million housing units. This was a 5.8-percent increase from the previous year, and the third consecutive year with an increase.

 

Figure 6.4 Building Construction Started by Use Objective

 

Chapter 7 Energy (PDF:3,067KB)

Contents

1. Supply and Demand

Japan is dependent on imports for 87.6 percent of its energy supply. Since experiencing the two oil crises of the 1970s, Japan has taken measures to promote energy conservation, introduce alternatives to petroleum, and secure a stable supply of petroleum through stockpiling and other measures. As a result, its dependence on petroleum declined from 77.4 percent in fiscal 1973 to 46.1 percent in fiscal 2011.

Today, in addition to promoting energy conservation and the adoption of renewable energy, the Government of Japan is working on building a disaster-resistant energy supply system, which includes securing nuclear safety, from the perspectives of a zero-based review of energy policy before the Great East Japan Earthquake and addressing global warming.

In fiscal 2011, the total primary energy supply in Japan was 21,960 petajoules, down 5.0 percent from the previous fiscal year. Its breakdown was: 46.1 percent in petroleum, 21.3 percent in coal, 21.4 percent in natural gas, 4.0 percent in nuclear power, and 3.3 percent in hydro power. Other sources were also used, though only in small quantities, including energy from waste, geothermal, and natural energy (solar energy, wind power, biomass energy, etc.).

Energy units

Joule (J) is employed as a common unit (International System of Units: SI) for energy across all energy sources in presenting international statistical information. The unit Petajoule (PJ: 1015 or quadrillion joules) is used here to reduce the number of digits. The energy of one kiloliter of petroleum is calculated using the following formulae:

1 kiloliter of petroleum = 3.871010 joules
1 petajoule = 1015 joules

Petroleum is traded internationally using the volume unit of barrels. One barrel equals approximately 158.987 liters.

 

Japan's final energy consumption was increasing almost steadily since the mid-1980s. However, it has trended downward since fiscal 2005. Final energy consumption in fiscal 2011 decreased by 3.0 percent compared to the previous fiscal year. While energy consumption in the industrial sector has remained mostly level, there were sharp increases in energy consumption in the commercial and residential sector and in the transport sector. In the commercial and residential sector, energy consumption by the commercial sector in particular has risen in recent years. It increased by 40.9 percent over the 22 years from fiscal 1990 through fiscal 2011. This has been mainly caused by (i) the rise in the total floor area of office buildings and large-scale retail stores; (ii) an increase in the amount of air conditioning equipment and lighting appliances used in those facilities; and (iii) the growth of office automation and extending opening hours.

 

Figure 7.1 Total Primary Energy Supply

 

Table 7.1 Trends in Total Primary Energy Supply and Percentage by Energy Source

 

Figure 7.2 Trends in Final Energy Consumption by Sector

 

Figure 7.3 Consumption of Commercial Energy by Country

 

Total primary energy supply per GDP is lower in Japan than in other industrialized countries. This indicates that Japan is one of the most energy-efficient countries in the world.

 

Figure 7.4 International Comparison of Energy/GDP Ratio

 

2. Electric Power

Approximately half of Japan's primary energy supply of petroleum, coal and other energy sources is converted into electric power.

Electricity output (including in-house power generation) in Japan totaled 1,108 billion kWh in fiscal 2011, down 4.2 percent from the previous fiscal year. Of this total, thermal power accounted for 81.9 percent; nuclear power, 9.2 percent; hydro power, 8.3 percent. In the field of thermal power generation, huge replacement has been made from petroleum to natural gas.

 

Table 7.2 Trends in Electricity Output and Power Consumption

 

3. Gas

Gas production was 1,306 petajoules in fiscal 2011, up 1.4 percent from the previous fiscal year. Of this total, natural gas plus liquefied natural gas (LNG) accounted for 96.1 percent; and the remaining 3.9 percent were petroleum gases, such as volatile oil, liquefied petroleum gas, etc. Gas purchases for fiscal 2011 totaled 275 petajoules.

Gas sales for fiscal 2011 totaled 1,503 petajoules, or year-on-year growth of 1.8 percent. Of this total, 52.0 percent was sold to industry, 27.3 percent to residential use, and 12.5 percent to the commercial sector.

 

Table 7.3 Trends in Production and Purchases, and Sales of Gas

 

Chapter 8 Science and Technology/Information and Communication (PDF:3,067KB)

Contents

1. Science and Technology

(1) Researchers and R&D Expenditures

Japan ranks third among major industrialized countries, following the U.S.A. and China, in terms of expenditure on science and technology, and this expenditure supports its position as a technology-based country. Researchers in the fields of science and technology (including social sciences and humanities) as of the end of March 2012 totaled 844,000. The total research and development (R&D) spending in fiscal 2011 amounted to 17.4 trillion yen, recording the first increase in four years. Relative to GDP, R&D spending was 3.67 percent, the first increase in three years.

 

Table 8.1 Trends in Research and Development

 

As of the end of March 2012, the number of researchers in business enterprises amounted to 491,000 persons, the number of researchers in non-profit institutions and public organizations was 40,000 persons, and the number of researchers in universities and colleges was 314,000 persons. In terms of R&D expenditures in fiscal 2011, business enterprises spent 12.3 trillion yen (70.6 percent of total R&D expenditures), non-profit institutions and public organizations spent 1.6 trillion yen (9.0 percent), and universities and colleges spent 3.5 trillion yen (20.4 percent).

Universities and colleges spend more than 90 percent of their R&D expenditure on natural sciences for basic research and applied research, while business enterprises allocate over 70 percent for development purposes.

Japan drives its science and technology policy from a long-term perspective based on the Science and Technology Basic Law, established in 1995. The Fourth Basic Plan (2011-2015), which started in August 2011, sets the restoration of the Great East Japan Earthquake that occurred in March 2011 as a priority issue and states to strengthen efforts to promote basic research and human resources development. Of the total research expenditure spent in fiscal 2011, those spent on specific purposes were for "life sciences," "information technology," "environmental science and technology," "energy" and "nanotechnology and materials," in order of the amount spent.

Figure 8.1 R&D Expenditures by Selected Objective

 

Approximately 90 percent of the 491,000 researchers at business enterprises at the end of March 2012, or 438,000 persons, were in the manufacturing industries; the largest number was in the information and communication electronics equipment industry, followed by the motor vehicle, parts and accessories industry, then by the business oriented machinery. In terms of R&D expenditures in fiscal 2011, of 12.3 trillion yen spent by business enterprises, 10.8 trillion yen was spent by manufacturing industries. The motor vehicle, parts and accessories industry spent the most, followed by the information and communication electronics equipment industry, then by the medical and pharmaceutical industry.

 

Figure 8.2 Researchers and Expenditures by Industry

 

(2) Technology Trade

Technology trade is defined as export or import of technology by business enterprises with other countries, such as patents and expertise. In fiscal 2011, Japan earned 2,385 billion yen from technology exports, which was down 2.1 percent from the previous fiscal year; of the total receipts, 71.6 percent was from overseas parent/subsidiary companies. Meanwhile, Japan paid 415 billion yen for technology imports. This was down 21.8 percent from the previous fiscal year, marking the fourth consecutive year of decrease; of this figure, 27.1 percent was payments to overseas parent/subsidiary companies.

 

Table 8.2 Technology Trade by Business Enterprises

 

Figure 8.3 Trends in Technology Trade by Business Enterprises

 

In fiscal 2011, Japan exported 2,385.2 billion yen of technologies; major destinations for export were: the U.S.A. (804.9 billion yen, or 33.7 percent of total exports), followed by China (306.7 billion yen), Thailand (209.3 billion yen), and the U.K. (162.2 billion yen). On the other hand, Japan imported 414.8 billion yen of technologies, mainly from the U.S.A. (314.8 billion yen, or 75.9 percent of total imports), followed by France (17.9 billion yen), the U.K. (17.8 billion yen), and Germany (11.9 billion yen).

 

Figure 8.4 Composition of Technology Trade by Major Country/Region

 

2. Patents

The total number of patent applications remained robust in and after 1998 as more than 400,000 applications were submitted every year, but a gradual drop has been seen since 2006. In 2011, there were 342,610 applications (down 0.6 percent from the previous year).

 

Table 8.3 Patents

 

Table 8.4 PCT International Applications by Country of Origin

 

Over 140 countries, including Japan, have joined the international patent system of the World Intellectual Property Organization (WIPO) as of July 2012. In 2012, the number of international patent applications made based on the Patent Cooperation Treaty (PCT) was 194,926, of which Japan filed 43,659, an increase of 12.3 percent over the previous year.

The United States Patent and Trademark Office (USPTO) ranked first among major patent offices with which Japanese filed patent applications in 2010, with 84,017 filings. The number of Japanese-filed patent applications at the State Intellectual Property Office of the People's Republic of China (SIPO) has been steadily on a rising trend since the comparable year 2002. It reached 39,231 in 2011, approximately 2.5 times more than the 2002 figure of 15,511.

 

Figure 8.5 Changes in the Number of Patent Applications Filed with Major Offices by Japanese Applicants

 

3. Information and Communication

(1) Diffusion of the Internet

The number of Internet users has been growing steadily since the start of commercial Internet use in 1993. As of the end of 2012, the number of people who had used the Internet in the past year (those aged 6 years and over; covering any and all types of Internet connection devices used, including PCs, cell phones, personal handyphone systems, smartphones, tablet terminals and game machines) totaled 96.52 million, or 79.5 percent of the population aged 6 years and over. An observation by age group showed that the individual Internet usage rate exceeded 90 percent in people in each age group of between 13 and 49, although the rate dropped as the age went up.

Looking at the status of Internet use by terminal as of the end of 2012, the usage rate of home PCs was the highest (59.5 percent), followed by cell phones (42.8 percent), PCs outside the home (34.1 percent), and smartphones (31.4 percent). Figures for the rate of Internet use by terminal by age group show that approximately 80 percent of people in each age group of between 13 and 49 use home PCs. In the 13-29 age groups, usage of smartphones surpassed that of cell phones.

 

Figure 8.6 Trends in Internet Usage Rate by Age Group

 

Among enterprises, the Internet usage rate at the end of 2012 was 99.9 percent (up 0.6 percentage points from the previous year). Trends in the Internet usage rate remained flat, at around 99 percent, showing that Internet usage at businesses is fully diffused.

 

(2) Progress of Communication Technologies

As of the end of March 2012, the contracts of broadband (connection) service subscriptions totaled 37.23 million, marking a 6.6-percent annual increase. Among broadband subscribers, the number of DSL (digital subscriber line) subscribers reached 6.70 million, accounting for 18.0 percent of the total.

In 2011, the number of broadband subscribers in Japan, as an indication of the spread of its use, was 34.92 million, the third largest after China (156.49 million) and the U.S.A. (85.63 million).

 

Figure 8.7 International Comparison of the Number of Broadband Subscribers

 

Meanwhile, IP phone services (voice phone services that use Internet Protocol technology across part or all of the communication network), which use broadband circuits as access lines, entered full-scale use between 2002 and 2003. As of the end of March 2013, the total number of IP phone subscribers was 31.27 million.

Subscribers for Internet connection service using cable television networks (cable Internet) as of the end of March 2012 totaled 5.91 million (up 4.2 percent from the previous year).

FTTH (fiber to the home) service, using optical fiber, is a service that uses an ultra-high speed network capable of communicating faster than a DSL or cable Internet connection. As of the end of March 2012, the number of FTTH (connection) subscribers was 22.30 million, marking a 10.3-percent increase over the past year. The number of DSL subscribers is decreasing, while that of FTTH is increasing. In recent years, the number of BWA (broadband wireless access) service (access services connecting to networks via broadband wireless access systems using the 2.5GHz band [WiMAX, etc.]) subscribers is rapidly increasing, although the share of total is small.

 

(3) Telephone

The number of fixed phone subscription contracts was 28.47 million (down 9.1 percent year-on-year) at the end of March 2013. In contrast, the total number of IP phone subscribers continues on an upward trend. Meanwhile, the number of mobile phone subscribers (cell phones and personal handyphone systems) totaled 132.76 million at the end of March 2012, marking a rise by 6.3 percent year-on-year to 141.12 million at the end of March 2013.

 

Table 8.5 Telecommunications Services

 

Figure 8.8 Telephone Service Subscribers

 

(4) Postal Service

As of the end of March 2012, there were, nationwide, 24,514 post offices and 185,409 mailboxes.

Japan Post Co., Ltd. handled 21.84 billion pieces of domestic mail (letters and parcels) in fiscal 2012 (a 0.1-percent decrease from the previous fiscal year).

Meanwhile, the total number of international mail (including letters, express mail services [EMS] and parcels) sent in fiscal 2012 amounted to 47.9 million pieces (a decrease of 3.2 percent from the previous fiscal year), representing an enormous decrease from that of fiscal 1992 (131.6 million).

 

Table 8.6 Postal Services

 

Chapter 9 Transport (PDF:3,067KB)

Contents

1. Domestic Transport

Various modes of domestic transport are used in Japan; almost all passenger transport is by railway, while nearly all freight transport is by motor vehicle and cargo ship. The transport sector, which released 20 percent of the total CO2 emissions in fiscal 2011, is improving the energy efficiency of cars, promoting the broader use of environmentally-friendly cars, and in an effort to further reduce emissions, the Government works to promote the development and commercialization of next-generation large vehicles and the dissemination of "eco driving."

 

Figure 9.1 Composition of Domestic Transport

 

(1) Domestic Passenger Transport

No major changes have been observed in recent years in the volume of domestic passenger transport. Under these circumstances, a shift from private automobiles to public transportation should be promoted as a measure against global warming. Therefore, in addition to promotion of computerization such as adoption of IC cards (multiple-use IC [integrated circuit] cards) and increased convenience in public transportation through the improvement of transfers, workplace "eco-commuting" measures have been promoted along with cooperation on regional eco-commuting measures to develop greener commuter traffic.

In fiscal 2011, the number of domestic transport passengers was 28.87 billion (down 0.7 percent from the previous fiscal year). The total volume of passenger transport was 543.2 billion passenger-kilometers (down 0.9 percent).

 

Table 9.1 Domestic Passenger Transport

 

In fiscal 2011, the Japan Railways (JR) group reported 8.84 billion passengers (up 0.2 percent from the previous fiscal year) and 246.94 billion passenger-kilometers (up 1.0 percent). Railways other than JR reported 13.79 billion passengers (down 0.4 percent) and 148.13 billion passenger-kilometers (down 0.5 percent).

 

Figure 9.2 Rail Transport by Country

 

Commercial buses transported 4.41 billion passengers (down 1.0 percent from the previous fiscal year) and achieved 66.70 billion passenger-kilometers (down 4.7 percent); both figures decreased in fiscal 2011. In order to encourage the use of buses, various efforts to improve their convenience have been promoted.

Taxi and limousine hire services have marked a long-term downward trend in passengers. They carried 1.66 billion passengers (down 6.9 percent from the previous fiscal year) and reported 7.22 billion passenger-kilometers (down 6.5 percent).

 

Table 9.2 Number of Motor Vehicles Owned

 

Fiscal 2011 air transport records show that there were 79 million passengers (down 3.8 percent from the previous fiscal year), and passenger-kilometers amounted to 71.17 billion (down 3.5 percent).

In fiscal 2011, passenger ships reported 84 million passengers (down 1.2 percent from the previous fiscal year) and 3.05 billion passenger-kilometers (up 1.4 percent).

 

(2) Domestic Freight Transport

In the area of domestic freight, a total of 4.90 billion metric tons (up 0.2 percent from the previous fiscal year) of freight was transported for a total of 426.95 billion ton-kilometers (down 3.9 percent) in fiscal 2011.

As for transport tonnage volume in fiscal 2011, motor vehicle transport accounted for more than 90 percent of the total.

 

Table 9.3 Domestic Freight Transport

 

2. International Transport

(1) International Passenger Transport

The global economic downturns after September 2008, the spread of new influenza in early 2009, and the influence of the Great East Japan Earthquake decreased international air passenger transport with Japanese airlines. In 2012, however, they transported 14.00 million passengers (up 15.1 percent from the previous year) on international flights, and registered 61.36 billion passenger-kilometers (up 15.7 percent). It was the first upturn in the five years since 2008.

The number of Japanese overseas travelers in 2012 rose from the previous year to 18.49 million (up 8.8 percent). It was the third consecutive year with an increase, and the highest number ever.

According to reports on arrivals by tourist offices in countries around the world, China, Republic of Korea and the U.S.A. had many Japanese visitors in 2011.

 

Figure 9.3 Japanese Overseas Travelers and Foreign Visitor Arrivals

 

Table 9.4 Japanese Travelers

 

The number of foreign visitors to Japan was 8.36 million in 2012 (up 34.4 percent from the previous year). Broken down by country/region, the number of visitors from Asian countries was highest, totaling 6.39 million persons (up 35.2 percent from the previous year). Among Asian countries, the number of visitors from Republic of Korea was highest, amounting to 2.04 million, a figure that accounted for 24.4 percent of the total number of foreign visitors to Japan.

 

Table 9.5 Foreign Visitors

 

In 2012, of the total number of foreign visitors to Japan, tourists numbered 6.04 million persons, or 72.3 percent of total foreign visitors. The highest number of tourists came from Republic of Korea with 1.57 million travelers, followed by Taiwan with 1.33 million travelers.

 

(2) International Freight Transport

The volume of seaborne foreign transport in 2012 was 973.9 million tons, up 0.7 percent over the previous year. Of this figure, total exports decreased by 19.2 percent to 41.9 million tons, and total imports decreased by 2.6 percent to 521.8 million tons.

 

Table 9.6 Seaborne Foreign Transport

 

Air-shipped international freight in 2012 totaled 1.14 million tons in terms of volume (up 7.8 percent from the previous year) and 6.10 billion tons in terms of ton-kilometers (up 8.3 percent).

 

Chapter 10 Commerce (PDF:3,067KB)

Contents

1. Wholesale and Retail

The 2009 Economic Census for Business Frame showed that 1.56 million wholesale and retail establishments were in operation in Japan. The number of persons engaged became 12.70 million.

(1) Wholesale Trade

The number of wholesale establishments was 402,000 in 2009. Observed by size of operation in terms of persons engaged, establishments with less than 20 persons accounted for 89.3 percent of the total. A total of 86.6 percent were corporations, while 13.3 percent were individual proprietorships.

The number of persons engaged in wholesale was 4.13 million in 2009, of which there were 804,000 part-timers and temporary employees, 19.5 percent of the total.

Table 10.1 Establishments and Persons Engaged in the Wholesale and Retail Sector

 

(2) Retail Trade

The number of retail establishments in operation totaled 1.15 million in 2009. Observed by size of operation in terms of persons engaged, establishments with less than 10 persons accounted for 82.5 percent of the total. By type of legal organization, 53.1 percent of retail establishments were corporations, while 46.7 percent were individual proprietorships. The proportion of individual proprietorships was higher in the retail sector than in the wholesale sector.

The number of persons engaged in retail was 8.57 million in 2009, of which 4.51 million part-timers and temporary employees comprised 52.6 percent of the total.

2. Eating and Drinking Places

There were 673,000 eating and drinking places establishments in operation and 4.42 million persons engaged in 2009.

Table 10.2 Eating and Drinking Places

Chapter 11 Trade, International Balance of Payments, and International Cooperation (PDF:3,067KB)

Contents

1. Trade

(1) Overview of Trade

Although Japan's trade surplus has continued since 1981, the trade turned to a deficit in 2011 for the first time in 31 years. This trade trend is considered to be affected by the Great East Japan Earthquake, rapid appreciation of the yen, and the slowdown in global economy. In terms of Japan's international trade on a customs clearance basis in 2012, exports (in FOB value) was 63.7 trillion yen, down 2.7 percent from the previous year. This was a decrease for the second consecutive year. Imports (in CIF value) grew by 3.8 percent to 70.7 trillion yen, an increase for the third consecutive year. Consequently, Japan's trade deficit was 6.9 trillion yen. The deficit expanded from 2.6 trillion yen in 2011.

 

Figure 11.1 Foreign Trade

 

Table 11.1 Trends in Foreign Trade and Indices of Trade

 

Japan's 2012 exports increased by 1.9 percent from the previous year in terms of unit value index (an increase for the third consecutive year), and decreased by 4.6 percent from the previous year in terms of quantum index (a decrease next to the preceding year).

Japan's imports in 2012, unit value index and quantum index, increased by 1.6 percent and 2.1 percent compared to the previous year; both indices recorded their third consecutive year of increase.

 

(2) Trade by Commodity

Japan's exports in 2012 consisted of transport equipment, which accounted for the largest portion of the total export value, 23.5 percent, followed by general machinery and electrical machinery, making up 20.1 percent and 17.9 percent, respectively. Motor vehicles, which are in the transport equipment category, constituted 14.5 percent of the total export value, up 9.0 percent in quantity and 12.4 percent in value from the previous year. One characteristic of Japan's exports is the large proportion of high value-added products manufactured with advanced technology, such as motor vehicles, iron and steel and integrated circuits.

The leading import item category was mineral fuels, which represented 34.1 percent of the total value imported, followed by electrical machinery and chemicals, with 11.9 percent and 8.4 percent, respectively. Crude petroleum and partially refined petroleum, in the mineral fuels category, constituted 17.3 percent of the total import value, up 2.0 percent in quantity and 7.3 percent in value from the previous year. In recent years, the ratio of product imports has been rising due to the further industrialization of the Asian region and overseas production relocations by Japanese companies.

 

Figure 11.2 Component Ratios of Foreign Trade by Commodity

 

Table 11.2 Value of Exports and Imports, by Principal Commodity

 

Figure 11.3 Japan's Major Export and Import Commodities

 

(3) Trade by Country/Region

Japan has maintained a trade surplus with Asia and the U.S.A., while has been in a continuous deficit with the Middle East and Oceania.

 

Table 11.3 Trends in Exports and Imports by Country/Region

 

(A) Trade with Asia

Japan's 2012 trade balance with Asia resulted in 3.5 trillion yen in surplus, a decrease for the second consecutive year (down 43.6 percent from the previous year). Exports (in FOB value) totaled 34.9 trillion yen (down 5.0 percent), marking a decrease next to the preceding year; this was mainly due to the contributions for the decrease in general machinery and manufactured goods. Imports (in CIF value) amounted to 31.3 trillion yen (up 3.0 percent), an increase for the third consecutive year; this was mainly attributed to the increase in electrical machinery and mineral fuels.

In 2012, Japan's trade with China amounted to 11.5 trillion yen in exports and 15.0 trillion yen in imports. Trade with China accounts for about 20 percent of the value of both Japan's imports and its exports. China is therefore Japan's largest trade partner.

 

Figure 11.4 Japan's Foreign Trade by Country/Region

 

(B) Trade with U.S.A.

Japan's 2012 trade balance with the U.S.A. showed a surplus of 5.1 trillion yen. This was bigger than the previous year (up 25.0 percent). Exports (in FOB value) amounted to 11.2 trillion yen (up 11.7 percent), the first increase in two years. Transport equipment and general machinery made major contributions to the increase. Imports (in CIF value) totaled 6.1 trillion yen (up 2.5 percent), the third consecutive annual increase. The rise was due mainly to the contributions of transport equipment and mineral fuels.

 

(C) Trade with EU

As for trade with the EU (27 countries) in 2012, exports (in FOB value) decreased for almost all products, including general machinery and transport equipment. Exports therefore fell by 14.7 percent year-on-year, to 6.5 trillion yen. Imports (in CIF value), on the other hand, led by increases in transport equipment and chemicals, rose by 3.6 percent year-on-year, to 6.6 trillion yen. The resulting trade balance was a deficit of 141.2 billion yen. It was the first trade deficit with the EU (27 countries) since Japan began keeping the statistic in January 2007.

 

Figure 11.5 Trends in Japan's Trade by Country/Region

 

2. International Balance of Payments

In 2012, Japan's current account surplus dropped to 4.8 trillion yen, half that of the previous year. This was mainly because the trade deficit expanded. Breaking down the current account, in the trade balance, exports decreased, while imports, led by mineral fuels, increased. This led to a trade deficit of 5.8 trillion yen. The services balance posted a deficit of 2.5 trillion yen. The deficits grew for both the trade balance and the services balance. The income balance rose 1.7 percent year-on-year, to 14.3 trillion yen. It was the second straight year with a surplus.

On the other hand, the balance of the capital and financial account registered a deficit of 8.2 trillion yen, scoring a red ink figure (excess outflow) for the first time in two years.

 

Table 11.4 International Balance of Payments

 

Japan's foreign assets (the balance of overseas assets held by residents in Japan) as of the end of 2012 amounted to 661.9 trillion yen, while its foreign liabilities (assets held in Japan by nonresidents) were 365.6 trillion yen. As a result, Japan's net foreign assets (foreign assets minus foreign liabilities) were 296.3 trillion yen.

 

Table 11.5 Trends in Japan's Foreign Assets and Liabilities

 

Japan's foreign reserve assets remained at around 220 billion U.S. dollars during the period from 1996 to 1998. Beginning in 1999, foreign reserve assets increased continuously. At the end of 2012, however, they began to decrease, falling to 1,268.1 billion U.S. dollars (down 2.1 year-on-year).

 

Table 11.6 Reserve Assets

 

The yen against the U.S. dollar was 83.19 yen in May 1995. The trend subsequently shifted to a progressively weaker yen, which eventually reached 143.79 yen in July 1998. After hovering between the 100 and 140 yen ranges for the most part, the yen began appreciating sharply in late 2008. From 2011 into 2012, the yen stayed between the higher 70 yen range and the lower 80 yen range. In January 2013, the Japanese Government announced economic policies such as monetary easing, raising market confidence and accelerating the yen's depreciation. As of the end of June 2013, the yen had reached 98.83 to the U.S. dollar.

 

Figure 11.6 Yen Exchange Rate against the U.S. Dollar

 

3. International Cooperation

In Japan, there are diverse international cooperation donors: official development assistance (ODA) by the government, direct investments and export credits by private corporations, donations by nonprofit organizations, aid activities by NGOs and volunteer citizen groups, etc. In addition, there are various forms of assistance, including bilateral assistance and assistance through multilateral institutions.

 

Table 11.7 Net Flow of Development Cooperation

 

In the ODA framework, Japan has contributed to the growth of developing countries as the world's number-one ODA donor for ten consecutive years up until 2000. Recently, Japan's ODA budget has been declining because of the country's severe economic and financial situation. Its 2011 ODA spending (on the basis of net disbursement at current prices) decreased by 1.7 percent over the previous year to 10.8 billion U.S. dollars.

In 2011, the 23 member countries of the Development Assistance Committee (DAC) of the OECD provided 133.5 billion U.S. dollars in ODA. Of this total, Japan's ODA contribution accounted for 7.9 percent, making Japan the fifth-largest contributor behind the U.S.A., Germany, the U.K. and France. The ratio of Japan's ODA to Gross National Income (GNI) was 0.18 percent, or a decrease of 0.02 percentage points compared with that of the previous year.

 

Figure 11.7 Trends in ODA by Country

 

Of the 10.8 billion U.S. dollars in ODA provided by Japan in 2011, 6.6 billion U.S. dollars or 60.9 percent was bilateral ODA (down 10.2 percent year-on-year), and 4.2 billion U.S. dollars or 39.1 percent was ODA contributed through multilateral institutions (up 15.1 percent).

Bilateral ODA provided in 2011 consisted of 4.7 billion U.S. dollars in grants-in-aid, 3.5 billion U.S. dollars in technical cooperation, and -1.6 billion U.S. dollars in loans, etc. (negative value indicates a larger amount of repayment received in 2011 than the amount lent in the same year).

By region, bilateral ODA (including aid to Eastern European countries and graduated countries) was distributed as follows: Sub-Saharan Africa, 26.6 percent; Asia, 21.1 percent; Middle East and North Africa, 14.6 percent; Latin America and the Caribbean, 5.1 percent; Europe, 2.7 percent; and Oceania, 2.4 percent.

 

Table 11.8 Regional Distribution of Bilateral ODA

 

Bilateral ODA in 2011 (including aid to Eastern European countries and graduated countries) was broken down by purpose (on a commitment basis) as follows: 41.5 percent for improving the economic infrastructure, followed in descending order by social and administrative infrastructure (including education, water supply and sanitation), with 24.5 percent.

 

Figure 11.8 Distribution of Bilateral ODA by Sector

 

In addition to the financial assistance described above, Japan has also been active in the areas of human resources development and technology transfer, both vital to the growth of a developing country, through its ODA activities.

 

Table 11.9 Number of Persons Involved in Technical Cooperation by Type

Chapter 12 Labor (PDF:3,067KB)

Contents

Because of the effects of the Great East Japan Earthquake that occurred in March 2011, the data on labor in 2011 (1. Labor Force - 3. Unemployment) is supplementary estimated figures.

1. Labor Force

The labor force, defined as the sum of the employed and unemployed in population of 15 years old or more, numbered 65.55 million people in Japan in 2012, down 360,000 (0.5 percent) from the previous year.

As for trends in Japan's labor force, until the mid-1990s, both the labor force and the number of persons employed grew along with the population and the working-age population. In 1997, the working-age population began decreasing, and the labor force and the number of persons employed shifted to a downward trend. The labor force is expected to shrink in the long run as the falling birth rate and the aging population change the population composition.

The 2012 labor force participation rate (rate of the labor force to the population aged 15 years and over) was 59.1 percent (down 0.2 percentage points from the previous year). Observed by gender, the rate was 70.8 percent for men (down 0.3 percentage points) and 48.2 percent for women (the same rate as the previous year).

 

Table 12.1 Population by Labor Force Status

 

The female labor force participation rate by age group shows an M-shaped curve. This curve indicates that women leave the labor force when they get married or give birth to a child and then rejoin the labor force after their child has grown and the burden of child-rearing is reduced. A comparison with the data from twenty years ago (1992) shows that, in 2012, the 35-39 age group replaced the 30-34 age group to form the bottom of the M-shaped curve. The participation rate rose by 15.9 percentage points in the 30-34 age group and by 5.3 percentage points in the 35-39 age group, resulting in a noticeable change in the bottom of the curve: it has become flatter and more gradual.

 

Figure 12.1 Labor Force Participation Rate by Gender

 

2. Employment

The number of employed persons in Japan had declined continuously since 1998, but it began to rise in 2004 and continued rising for four years in a row. However, a downward trend set in once again in 2008, which led to a decrease of 190,000 in 2012, from 62.89 million (56.6 percent of the population aged 15 years and over) in the previous year to 62.70 million (56.5 percent).

 

(1) Employment by Industry

In 2012, the primary industry accounted for 3.9 percent of employment; the secondary industry, 24.8 percent; and the tertiary industry, 71.4 percent.

 

Figure 12.2 Structure of Employment by Country

 

Over the long term, the percentage employed in primary industry has been continually falling, while the percentage employed in tertiary industry has been continually rising. The percentage employed in secondary industry has also been trending downward.

By industry, the number of persons employed in the primary industries of agriculture and forestry, and in the secondary industries of manufacturing and construction has been on a downward trend.

 

Table 12.2 Employment by Industry

 

Figure 12.3 Distribution of Employment by Industry

 

In the tertiary industry, which accounted for approximately 70 percent of all industry, employment increased from the previous year by 280,000 in the "medical, health care and welfare" sector. Meanwhile, employment in "wholesale and retail trade" and "transport and postal activities" decreased by 150,000 and 110,000, respectively.

Depending on the industrial sector, a difference was seen in the employment tendency between men and women. In 2012, the percentage of female employment was highest in "medical, health care and welfare" (75.2 percent), followed by "accommodations, eating and drinking services" (61.4 percent) and "living-related and personal services and amusement services" (58.6 percent).

 

(2) Employment by Occupation

In terms of occupation, employment in the "manufacturing process workers" category has been declining in recent years, due to the overseas relocation of production sites and increased imports of manufactured goods. The number of "manufacturing process workers" was 9.02 million in 2012, down 0.3 percent from the previous year's 9.05 million. In contrast, the trend toward a service-oriented economy, the aging population, and improvements to the welfare services have been on a rising trend over the last few years in the number of "service workers" such as home-care workers. At the same time, the expansion of the information industry gave a steady boost to the number of "professional and engineering workers."

 

Table 12.3 Employment by Occupation

 

In 2012, percentages of male and female employed persons by occupation shows that men were particularly prominent among "construction and mining workers" (98.3 percent) and "transport and machine operation workers" (97.3 percent). Women were prominent among "service workers" (67.0 percent) and "clerical workers" (59.1 percent).

 

(3) Employment by Employment Pattern

Observation of employment by patterns in Japan shows that regular staff members have been on a declining trend since the late 1990s, while non-regular staff members, including part-time workers and agency-dispatched workers, have increased almost continuously.

 

Figure 12.4 Percentage of Non-Regular Staff Members by Gender

 

In 2012, there were 51.54 million employees (excluding company executives), of whom 18.13 million, or 35.2 percent, were non-regular staff members. The ratio of non-regular staff members among all male employees was 19.7 percent, while the corresponding ratio for females was 54.5 percent, revealing a large difference between the genders.

A breakdown of non-regular staff members by age group shows that among men, many young and elderly men are employed as non-regular staff members relative to other age groups. Among women, the older the age group is, the greater the non-regular staff ratio is.

 

Table 12.4 Employment by Employment Pattern

 

Figure 12.5 Employment Pattern by Gender and Age

 

Factors behind the rise in non-regular staff members include labor cost-cutting and the trend where seeking work-ready, pre-trained workers was preferred to developing human resources by hiring new graduates. As a result, there was a change in terms of employment patterns in that non-regular staff members increased, particularly among young people.

The employment rate of new graduates had been worsening as a result of the economic slowdown since 2008, but their employment situation showed a sign of improvement in 2012.

 

3. Unemployment

In 2012 the unemployed numbered 2.85 million persons, down 5.6 percent from the previous year. The unemployment rate was 4.3 percent, down 0.3 percentage points from the previous year.

After the ratio of job openings to job seekers peaked out in 2006, it was on a falling trend in recent years. The ratio has been increasing since 2009 and is gradually recovering.

 

Figure 12.6 Unemployment Rate and Ratio of Job Openings to Job Seekers

 

A breakdown by gender shows that the unemployment rate in 2012 was 4.6 percent among men, and 4.0 percent among women. The unemployment rate has been higher among men for fifteenth consecutive years since 1998.

The unemployment rate was seen as notably higher in younger age groups than in other age groups, in men and women alike.

 

Figure 12.7 Unemployment Rates by Gender and Age

 

Analyzing the total number of unemployed in 2012 (2.85 million people), by reasons for job-seeking, the major reasons were: (i) involuntarily dismissed due to corporate or business circumstances, or reaching retirement age limit, 1.02 million persons; (ii) voluntarily left their jobs for personal or family reasons, 1.01 million persons; (iii) new job seekers due to the necessity to earn income, 0.37 million; and (iv) new job seekers just graduated from schools, 0.16 million.

In terms of the duration of unemployment, most were unemployed for "1 year or more" (1.07 million persons), followed by "less than 3 months" (0.85 million persons). The younger a job seeker is, the shorter the job-seeking period tends to be; on the other hand, the older a person, the longer the job-seeking period tends to be.

 

Figure 12.8 Unemployment Rates by Country

 

4. Hours of Work and Wages

In 2012, the monthly average of total hours worked was 147.1 per regular employee (in establishments with five or more regular employees), up 0.5 percent from the previous year, and an annual average of 1,765 hours.

Of the total monthly hours worked, 136.7 were scheduled working hours, representing an increase of 0.5 percent from the previous year. Non-scheduled work such as overtime work averaged 10.4 hours per month, representing an increase of 0.6 percent from the previous year. Working days averaged 19.1 days per month in 2012.

In 2012, the monthly average of total cash earnings per regular employee (in establishments with five or more regular employees) was 314,000 yen. This total amount includes 262,000 yen in "contractual cash earnings" (which include "scheduled cash earnings" plus "non-scheduled cash earnings" for working overtime, on holidays and late at night, as well as other allowances), and 53,000 yen in "special cash earnings" (which include summer and year-end bonuses, payments to celebrate employees' marriages, etc.).

 

Table 12.5 Hours of Work and Wages

 

Generally, the average earnings (scheduled cash earnings) in Japan go up with age until roughly the 40s to mid-50s are reached and then declines. This reflects one characteristic of Japan's seniority employment system in which salaries are determined mainly on the basis of employment duration. Into the 1990s, an increasing number of enterprises reviewed their salary system, resulting in more widespread introduction of a merit-based pay system placing emphasis on performance. There has been a trend in recent years, particularly among large enterprises, to value the practice of long-term employment once again and attach importance to job execution skills.

 

Figure 12.9 Monthly Contractual Cash Earnings by Size of Enterprise

Chapter 13 Family Budgets and Prices (PDF:3,067KB)

Contents

1. Family Budgets

In 2010, there were approximately 52 million households in Japan, of which about 70 percent are two-or-more-person households and about 30 percent are one-person households. Family budgets vary significantly depending on the employment situation and ages of their members. In this section, family budgets in various types of households are described on the basis of the 2012 results of the Family Income and Expenditure Survey.

(1) Income and Expenditure

(A) Two-or-more-person Households

The 2012 average monthly consumption expenditures per two-or-more-person households (the average number of household members being 3.07 and the average age of the household head being 57.5 years) was 286,169 yen. Compared to the previous year, it increased by 1.1 percent in both nominal and real terms. The share of food expenses to the whole consumption expenditures (Engel's coefficient) was 23.5 percent.

 

Figure 13.1 Average Monthly Consumption Expenditures

 

(a) Workers' Households

A workers' household means a household of which the head is employed by a company, public office, school, factory, store, etc. The average income of workers' households (the average number of household members being 3.42 and the average age of the household head being 47.8 years) was 518,506 yen in 2012, of which about 80 percent came from the household head's income.

 

Table 13.1 Average Monthly Income and Expenditures

 

Disposable income, calculated as income minus non-consumption expenditures such as taxes and social insurance contributions, was 425,005 yen. Of this disposable income, 313,874 yen was used for living expenses (consumption expenditures), such as food and housing expenses, while the remainder (surplus), totaling 111,131 yen, was applied to savings, life insurance premiums and repaying debt such as housing loans.

A look at consumption expenditures by category showed that some categories, including spending on "transportation and communication" and "medical care," increased from the previous year in real terms, while "housing," "education" and other spending decreased in real terms.

 

Figure 13.2 Balance of Income and Expenditures

 

Figure 13.3 Annual Change in Household Income and Expenditures

 

Family budgets differ among households according to their stages in life. Observed by age group of the household head, the 2012 average monthly disposable income of workers' households was the highest in households in the 50s group (480,037 yen), followed by those in the 40s group (450,136 yen) and the 30s group (398,669 yen).

The 2012 average propensity to consume (the ratio of consumption expenditures to disposable income) was the lowest in households in the 30s group (68.2 percent). The figure was 70.8 percent in those in the 40s group, 74.2 percent in the 50s group, and 90.3 percent in the 60s group. The percentage tends to be higher as the age goes up, except for the under-30 group (74.7 percent) and the 70-and-over group (76.8 percent). Meanwhile, a net increase in financial assets (an amount added to savings) was the highest in households in the 50s group, followed by those in the 40s group.

 

Figure 13.4 Average Monthly Family Income and Expenditures by Age Group of Household Head

 

(b) Non-working Elderly Households

According to an analysis of the average monthly income and expenditures of non-working elderly households (two-or-more-person households where the age of the household head is 60 and over), the average income was 215,555 yen in 2012. Social security benefits amounted to 183,769 yen, thus accounting for 85.3 percent of income.

Disposable income averaged 185,113 yen, while consumption expenditures averaged 242,138 yen. The average propensity to consume in non-working elderly households was 130.8 percent, which means consumption expenditures exceeded disposable income. The deficit of disposable income to consumption expenditures (57,025 yen) increased from that of the previous year (52,819 yen). This deficit was financed by the proceeds from private and/or corporate pension insurance, and by withdrawing financial assets.

 

Figure 13.5 Average Monthly Income and Expenditures (Non-working elderly households)

 

(B) One-person Households

The average monthly consumption expenditures of one-person households in 2012 was 156,450 yen, down 2.8 percent in both nominal and real terms from the previous year. Compared on an age-group basis to the previous year in real terms, the average monthly consumption expenditures were down 6.7 percent for the under 35-year-old group and down 6.2 percent in the 35-59 age group, while there was a 1.4 percent increase in the 60-and-over. Spending on categories such as "fuel, light and water charges," "furniture and household utensils" and "medical care" tended to be larger in older age groups. Meanwhile, older age groups were found to spend increasingly less on categories such as "housing."

 

Table 13.2 Average Monthly Consumption Expenditures of One-Person Households by Age Group

 

(2) Savings and Debts

Two-or-more-person households in 2012 showed that the average amount of savings per workers' household was 12.33 million yen, resulting in its ratio to average yearly income (6.91 million yen) amounting to 178.4 percent. On the other hand, the average amount of debts per household was 6.95 million yen, which was 100.6 percent relative to yearly income. The portion for "housing and land" accounted for 6.48 million yen of the debts (6.95 million yen). A total of 40.8 percent of workers' households held "debts for housing and land."

 

Table 13.3 Average Amount of Savings and Debts

 

By age group of the head of the household, the average amount of savings was found to be the highest in the 70-and-over group, while debts were the highest in the 40s group.

 

Table 13.4 Amount of Savings and Debts by Age Group of Household Head

 

By yearly income group, an almost positive correlation was observed between yearly income and savings/debts: the higher the yearly income, the higher the amount of savings as well as debts.

 

2. Prices

A general overview of Japan's price movements in recent years showed that corporate goods prices were going up since 2004, reflecting the recovering economy and rising prices in raw material imports. Meanwhile, consumer prices, which had been deflationary for the past decade, changed their pattern in 2006 to later take on an upward trend in the start of 2008. However, since September 2008, corporate goods prices and consumer prices have both declined. This was due to falling prices of petroleum products, etc. which resulted from a global economic slowdown triggered by the failure of an American securities investment bank in September 2008. After the beginning of 2013, domestic corporate goods prices have risen at a moderate pace. Consumer prices have declined moderately. From a long-term viewpoint, price movements are different between consumer prices and domestic corporate goods prices.

(1) Consumer Price Index (CPI)

The overall index of consumer prices (with base year 2010 = 100) was 99.7 in 2012, the same level as the previous year.

 

Table 13.5 CPI for Major Categories of Goods and Services

 

Figure 13.6 Price Trends

 

Figure 13.7 CPI by Country

 

According to the regional difference index of prices, which compares the difference in consumer price levels by prefecture, Tokyo-to had the highest score in 2007, with a figure of 108.5 against the national average set at 100. Following Tokyo-to were Kanagawa-ken (104.8) and Kyoto-fu (102.8). On the other hand, Okinawa-ken registered the lowest score at 91.9. Comparing Tokyo-to and Okinawa-ken, price index of Tokyo-to was 18.1 percent higher than that of Okinawa-ken.

 

Figure 13.8 Regional Difference Index of Prices by Selected Prefectures

 

(2) Corporate Goods and Services Price Indices

The corporate goods price index measures the price developments of goods traded between companies. It is comprised of the domestic corporate goods price index (index of transaction prices between companies for domestic products targeted at the domestic market), the export price index, and the import price index.

In 2012, the domestic corporate goods price index (2010 as the base year = 100) was 100.6, down 0.9 percent from the previous year.

In 2012, the export price index decreased 101.6 on a contract currency basis (down 1.5 percent from the previous year); measured in yen, the index decreased to 95.8 (down 2.0 percent). Meanwhile, the import price index fell to 115.1 on a contract currency basis (down 0.1 percent from the previous year) and to 107.3 on a yen basis (down 0.2 percent), thus turning down in both contractual currency and yen terms.

The corporate services price index measures price movements of services traded between companies. In 2012, the corporate services price index (2005 as the base year = 100) was 95.8, down 0.4 percent from the previous year.

 

Table 13.6 Corporate Goods and Services Price Indices

Chapter 14 Environment and Life (PDF:3,067KB)

Contents

1. Environmental Issues

The list of environmental issues is wide-ranging, from waste management to global warming. Japan is, while pursuing regional development at home, taking the initiative in efforts to prevent global warming and conserve the natural environment to help achieve sustainable growth of the entire world.

In fiscal 2011, Japan's total emission of greenhouse gases, which are a major cause of global warming, amounted to 1.31 billion tons (calculated after their conversion into carbon dioxide), representing an increase of 4.0 percent from the previous fiscal year. Carbon dioxide accounted for 95 percent of these greenhouse gases, with an emission volume of 1.24 billion tons. A breakdown of carbon dioxide emissions by sector revealed that emissions from the industrial sector accounted for 34 percent of the total, followed in order by emissions from the commercial sector (office buildings, etc.), the transport sector, the residential sector, and the energy sector (electric power plants, etc.).

 

Table 14.1 Breakdown of Carbon Dioxide Emissions in Japan

 

Figure 14.1 Sources of Carbon Dioxide Emissions in Japan

 

The state of waste management in Japan had remained grave due to the shrinking remaining capacity of final disposal sites and increased illegal dumping. This led to the Basic Act on Establishing a Sound Material-Cycle Society (brought into force in January 2001), which defines basic principles for the creation of a sound material-cycle society. This law has established a legal framework to address issues such as waste disposal and automobile and electrical appliance recycling. Another ongoing effort is the promotion of the "3Rs" (reduce, reuse and recycle) in waste management, including appropriate management of hazardous materials and R&D on waste recycling technology.

Of various types of waste generated as a result of business activities, 20 of them, including sludge, waste oil, and soot and dusts, are designated as "industrial waste." The fiscal 2010 nationwide industrial waste generation totaled 385.99 million tons. Sludge, animal waste and debris, which account for approximately 80 percent of the total industrial waste, are now increasingly recycled into construction materials, organic fertilizers, and other materials. Thanks to this development, the volume of final disposal (to be put into landfills) fell from 89.73 million tons in fiscal 1990 to 14.26 million tons in fiscal 2010.

Meanwhile, a total of 45.36 million tons of "nonindustrial waste" (household waste and also shop, office and restaurant waste) was generated in fiscal 2010. This translates to 976 grams per person per day. In terms of nonindustrial waste disposal in fiscal 2010, the total volume processed was 42.79 million tons. The total volume of recycled waste was 9.45 million tons, with the recycling rate at 20.8 percent.

 

Table 14.2 Waste Generation and Disposal

 

Figure 14.2 Recycling of Nonindustrial Waste

 

2. Housing

According to the Housing and Land Survey conducted in October 2008, the total number of dwellings (in the case of apartment buildings, counting the number of individual units) in Japan was 57.59 million, up by 3.70 million (6.9 percent) from 2003. The number of households was 49.97 million, representing the excess in number of dwellings over households by 7.61 million.

In 2008, the number of occupied dwellings (where people usually live) amounted to 49.60 million, accounting for 86.1 percent of the total number of dwellings. Of these, the number of dwellings used exclusively for living totaled 48.28 million, accounting for 97.3 percent of the occupied dwellings.

A breakdown of occupied dwellings by class of ownership showed that owned houses totaled 30.32 million, accounting for 61.1 percent of the total, which represented a decrease of 0.1 percentage points from the figure of 61.2 percent in 2003. Rented houses, on the other hand, numbered 17.77 million, accounting for 35.8 percent of the total.

 

Table 14.3 Housing Conditions

 

Table 14.4 Occupied Dwellings by Type of Building

 

Occupied dwellings by building type showed that 27.45 million or 55.3 percent were detached houses, and 20.68 million or 41.7 percent were apartments. The proportion of apartments has consistently increased in recent years.

In terms of construction materials, 25.42 million or 92.6 percent of the detached houses were wood-frame houses (including fire-resistant ones). On the other hand, 15.04 million or 72.7 percent of the component apartments were steel-framed concrete structures.

A study of housing with accessibility equipment for the elderly and physically challenged persons showed that the number of housing units "with equipment for the elderly, etc." was 24.15 million, or 48.7 percent of all housing, up 8.9 percentage points from 18.66 million (39.8 percent) in 2003. Housing "equipped with handrails" accounted for 37.3 percent of all housing, and housing with a "step-free interior" made up 20.0 percent. Figures increased from 2003 in all categories of equipment surveyed.

 

Figure 14.3 Ratio of Housing with Barrier-Free Features

 

3. Traffic Accidents

In 1970, the annual number of fatalities from traffic accidents hit a record high of 16,765, leading to the enactment of the Traffic Safety Measures Basic Law in the same year. Based on this law, the government has since promoted traffic safety measures in a comprehensive and systematic manner. As a result, the number of traffic accident fatalities declined to 4,612 in 2011, and they recorded their eleventh consecutive year of decrease. This represented less than one-third of that of 1970.

In 2011, traffic deaths per 100,000 population were 3.6 persons, while the number of persons killed per 10,000 motor vehicles was 0.6 persons.

 

Table 14.5 Traffic Accidents and Casualties

 

4. Crime

In 2012, the reported number of penal code offenses (excluding cases related to traffic accidents) was 1.38 million, a decrease of 98,639 (6.7 percent) compared to the previous year. The proportion of thefts was the highest, accounting for approximately 75 percent, or 1.04 million cases (down 8.2 percent from the previous year).

The number of persons arrested for penal code offenses was 287,021 in 2012, a decrease of 18,610 (6.1 percent) compared to the previous year, marking an eight-consecutive-year decline.

The ratio of arrests to reported number of offenses marked a post-World War II low at 19.8 percent in 2001. Since 2002, however, it has shown signs of recovery, accounting for 31.7 percent in 2012.

 

Table 14.6 Trends in Crime

 

Various kinds of computers and computer networks are currently playing an essential role as a social foundation. In line with this, crimes utilizing computer networks are becoming increasingly diversified. The number of arrests for cybercrime in 2012, involving the abuse of computer technology and telecommunications technology, was 7,334, up 27.7 percent from the previous year. This represented about an eightfold increase from the 913 cases registered in 2000.

The police organization consists of the National Public Safety Commission and the National Police Agency, both of which are state organizations, as well as the Prefectural Public Safety Commission and prefectural police, both of which are organizations under the authority of individual prefectures. As of April 1, 2012, the prefectural police operated police headquarters, police schools, 1,174 police stations, 6,240 police boxes (Koban) and 6,714 police substations in 47 prefectures.

Local police officers at their respective police boxes/substations are engaged in standing guard over their communities, patrolling, and dealing with criminal cases and accidents to prevent crimes and catch criminals.

Chapter 15 Social Security, Health Care, and Public Hygiene (PDF:3,067KB)

Contents

1. Social Security

In Japan, the birth rate has been falling, while the number of elderly people has been growing. As these trends continue, Japanese society faces the prospect of accelerating population decline. Meanwhile, its social security system is required to address various changes in the socioeconomic environment, including the expanding the fiscal deficit.

In April 2000, a long-term care insurance system was launched. This is due to the fact that the issue of elderly care, including the excessive burden of care resting on family members alone, had loomed as a social problem as the aging of society progressed. At the onset of the system (in 2000), the number of care service users was approximately 1.5 million. It subsequently jumped, coinciding with rapid rises in the aggregate long-term care insurance cost (long-term care insurance finances). Therefore, an all-round revision was made to the system in 2005, including putting greater emphasis on nursing care prevention. Moreover, a 2011 revision emphasizes building a comprehensive local care system (an integrated system to provide medical treatment, caregiving, prevention, and livelihood support to people in the places where they live). As of April 2012, the number of long-term care service users amounted to approximately 4.5 million.

In fiscal 2010, social security benefit expenditures totaled 103.5 trillion yen (up 3.6 percent from the previous fiscal year), a figure which amounted to 808,100 yen per person. The ratio of Japan's social security benefit expenditures to national income registered 29.6 percent. Total expenditure on social security benefits is increasing annually, thus making a review of benefits and burdens an urgent issue in order to ensure that the social security system is sustainable over the long term. Benefits for the aged accounted for approximately 70 percent of total social security benefit expenditures.

 

Table 15.1 Trends in Social Security Benefit Expenditures by Institutional Scheme

 

Figure 15.1 Trends in Social Security Benefit Expenditures by Sector

 

In fiscal 2010, pensions accounted for half (50.7 percent) of total social security benefit expenditures, while medical care accounted for 31.2 percent, and social welfare and others for 18.1 percent. Social security benefit expenditures are forecasted to continue growing, and are projected to reach 149 trillion yen in fiscal 2025.

In accordance with the rise in social security benefit expenditures, the amount of funds necessary to cover these expenditures has also increased, reaching 112.2 trillion yen in fiscal 2010. This was financed by 57.8 trillion yen from social insurance contributions, 40.1 trillion yen from taxes and 14.2 trillion yen from other sources.

The national contribution ratio (the combined ratios of taxes and social security costs to national income) was 40.0 percent in fiscal 2011 (taxation burden: 22.9 percent; social security premiums: 17.1 percent), up 1.5 percentage points from 38.5 percent in fiscal 2010. The national contribution ratio in 2010 was 30.9 percent in the U.S.A., 47.3 percent in the U.K., and 58.9 percent in Sweden. While the ratio in Japan was higher than that of the U.S.A., it was lower than European countries.

 

Figure 15.2 National Contribution Ratio by Country

 

The social welfare institutions shown below provide users with various services either for free or partially free.

 

Table 15.2 Social Welfare Institutions

 

2. Health Care and Public Hygiene

Japan has a universal health insurance regime to ensure that anyone can receive necessary medical treatment. Under this regime, every citizen enters a publicly regulated medical insurance system, such as employees' health insurance or national health insurance.

This medical care system has contributed to Japan's achieving the highest life expectancy in the world, as well as a high standard of healthcare along with improvements in the living environment and better nutrition. Currently, reform of the whole system is being undertaken in order to sustain this medical insurance system in the future.

Life expectancy at birth was 86.4 years for women and 79.9 years for men in 2012. Japan's life expectancy remains the highest level in the world. Japan's infant mortality rate was 2.2 per 1,000 births in 2012.

 

Figure 15.3 Death Rates by Major Cause

 

The death rate was 997.4 per 100,000 population in 2012. The leading cause of death was malignant neoplasms (286.4 per 100,000 population), followed by lifestyle diseases such as heart diseases (157.7; excluding hypertensive diseases), in which people's daily diet and behavior are significant factors therefore, and pneumonia (98.3). Malignant neoplasms became the leading cause of death in 1981. The death rate by malignant neoplasms has continued to increase since, reaching 28.7 percent of all deaths in 2012.

Due to the increasingly complex social environment created by a highly-technological, competition-oriented society, the stress levels felt by all age groups are rising. The number of suicides in Japan was 26,400 in 2012, and had remained at the same level of around 30,000 a year since 1998. In 2012, suicide became the leading cause of deaths for people aged between 15 and 39.

In the past, humanity faced the threat of epidemic diseases such as smallpox and bubonic plague. Today, infectious diseases that especially require countermeasures are new strains of influenza. Japan has taken measures to combat such new strains in Japan and abroad, including R&D on vaccines against them, through steps such as establishing the Influenza Virus Research Center (a WHO-designated center) inside the National Institute of Infectious Diseases.

In terms of healthcare provision, Japan had 292,338 physicians engaged in medical care, or 228.3 physicians per 100,000 population, in 2010. While the number of physicians providing healthcare is increasing nationwide, their uneven distribution has become a problem due to the lack of physicians specializing in certain areas of medicine and the lack of physicians operating in regional parts of the country.

 

Table 15.3 Number of Medical Personnel at Work

 

The number of hospital beds in Japan (excluding those in medical clinics and dental clinics) totaled 1,238.7 per 100,000 population in 2011.

 

Table 15.4 Number of Medical Care Institutions and Beds

 

National medical care expenditures have been increasing gradually. In fiscal 2010, the expenditures totaled 37.4 trillion yen or 10.71 percent of Japan's national income. The cost of medical care per person averaged 292,200 yen in fiscal 2010.

Medical costs for treating the latter-stage elderly in fiscal 2010 were 12.7 trillion yen, or about one-third of national medical care expenditure, and accounted for 3.61 percent of the national income. The per-capita cost of medical care for the latter-stage elderly averaged 904,795 yen for the year. Rising medical costs for the latter-stage elderly, resulting from the rapidly aging population, etc., is one of the major contributors to the overall uptrend in national medical care expenditures.

 

Figure 15.4 Trends in Medical Care Expenditures

Chapter 16 Education and Culture (PDF:3,067KB)

Contents

1. School-Based Education

Japan's primary and secondary education is based on a 6-3-3 system: 6 years in elementary school, 3 years in lower secondary school, and 3 years in upper secondary school. The period of compulsory schooling is the 9 years at elementary and lower secondary schools. Higher education institutions are universities, junior colleges, and colleges of technology. Other education establishments include kindergartens, which provide pre-school education, and schools for special needs education. There are also specialized training colleges and miscellaneous schools for a wide range of vocational and other practical skills learning. Given the nearly 100-percent upper secondary school entrance rate, the School Education Law was amended in 1998 to authorize combined lower and upper secondary schooling, which began at some lower and upper secondary schools in 1999. On an additional note, school years in Japan start in April and end in March.

 

Table 16.1 Educational Institutions in Japan

 

Figure 16.1 Japanese School System

 

Of the March 2012 upper secondary school graduates, 53.6 percent went straight on to enter a university or junior college. The ratio of upper secondary school graduates who entered a university, junior college, etc. in 2012 was 56.2 percent (56.8 percent of male and 55.6 percent of female graduates), including graduates from previous years.

 

Table 16.2 Number of University Students

 

Figure 16.2 University Students by Major Subject

 

As of May 1, 2012, a total of 110,518 foreign students were enrolled in Japanese junior colleges, universities, and graduate schools. Of the total foreign students, 91.0 percent were from Asia, including 69,117 from China, 14,097 from the Republic of Korea and 3,042 from Taiwan.

Fiscal 2010 public expenditure on education in Japan was 22.8 trillion yen, which was equivalent to 14.3 percent of the net expenditure of national and local governments. Fiscal 2010 school expenditure by households with children attending public school averaged 54,929 yen per elementary school pupil, 131,501 yen per lower-secondary school student and 237,669 yen per upper-secondary school student.

 

Figure 16.3 Public Expenditures on Education

 

2. Lifelong Learning

In recent years, people's demands for learning are increasing and the contents are becoming more diverse and advanced. This has raised more and more expectations over the realization of a "Lifelong Learning Society" in which people are able to utilize their learning outcomes.

 

Table 16.3 Social Education Facilities

          

Table 16.4 Sports Facilities

 

Today, in order to develop a society where people have the freedom to continue learning throughout their lives, efforts are being made to develop learning opportunities such as school education, social education, cultural activities, sports activities, recreational activities, volunteer activities, and corporate in-house education. In providing places and opportunities for such lifelong learning, educational institutions, social education facilities (public halls, libraries, museums, etc.) and sports facilities play a vital role.

 

3. Leisure Activities

The results of the 2011 Survey on Time Use and Leisure Activities conducted with people aged 10 and over show that the per-day average amount of free time was 6 hours and 27 minutes, which is the time remaining after activities that are physiologically necessary (sleeping, eating, etc.) and societally essential (work, housework, etc.). It was found that 1 hour and 14 minutes of free time was spent on hobbies, sports, learning for personal development, volunteer activities, etc.

 

Table 16.5 Major Leisure Activities by Gender

 

The participation rate (percentage of people who engaged in the activity within the past 12 months) for "sports" was 63.0 percent. The most popular sport for both genders was "walking or light physical exercise" (men: 31.1 percent; women: 39.2 percent). Other popular sports for men were "bowling" (15.1 percent) and "golf (including golf practice range)" (13.7 percent). For women, such sports were "bowling" (10.6 percent) and "swimming" (9.7 percent). The participation rate for "learning, self-education, and training (excluding school and professional activities)" was 35.2 percent. Men preferred "computing etc." (14.8 percent) and "foreign language" (11.0 percent), while women preferred "cooking, sewing or home management, etc." (12.6 percent), as well as "arts and culture" (12.3 percent).

 

Figure 16.4 Participation Rates for Sports by Gender and Age Group

 

4. Publishing and Mass Media

The total number of books and magazines published in Japan during 2011 was 1.31 billion and 3.13 billion, respectively, of which 1.93 billion were monthlies and 1.20 billion were weeklies.

A total of 78,863 new book titles were released in 2011. The number of magazine titles published was 3,949 (including 2,202 monthlies and 108 weeklies) at the end of March 2011. In recent years, the spread of electronic media, such as the Internet and e-books, that compete with traditional print media has had a heavy impact. The publishing industry is facing a major turning point.

A total of 118 daily newspapers were in circulation, and the penetration was 0.88 newspapers per household as of October 2012.

 

Figure 16.5 Trends in Number of Publications

 

Table 16.6 Number of New Publications

 

Figure 16.6 Newspaper Circulation by Country

 

Japan has a public broadcasting network (NHK: Nippon Hoso Kyokai, or Japan Broadcasting Corporation), as well as commercial networks. NHK was the pioneer broadcasting station, and has been funded through fees paid by subscribers.

Major broadcasting services can be divided roughly into three categories: terrestrial, satellite, and cable television. Terrestrial digital broadcasting was launched in some areas of the Kanto, Kinki and Chukyo regions in December 2003 and then also in other areas, including all prefectural capitals, in December 2006. As of March 31, 2012, analog broadcasting ended and was completely replaced with terrestrial digital broadcasting in all parts of Japan. Satellite broadcasters offer an increasing number of channels through, for example, new digital broadcasting which began in March 2002.

 

Figure 16.7 Subscribers of Cable Television Service

 

Subscribers of cable television services (self-originating broadcasting using licensed facilities) have increased to 27.1 million households, or 50.0 percent of all households in March 2013.

In 2012, advertising expenditures on the four major media types in Japan (newspapers, magazines, radio and television) totaled 2.8 trillion yen, recording the first increase in eight years. This accounted for 47.2 percent of total 2012 advertising expenditures, which were 5.9 trillion yen. Internet advertising expenditure made up 14.7 percent, up 7.7 percent from the previous year.

 

Table 16.7 Advertising Expenditures by Medium

 

5. Cultural Assets

As a country with a long history, Japan has been endowed with an abundance of valuable cultural assets, including works of art, historic landmarks, and many natural monuments. To pass on this cultural heritage to future generations, the Japanese government has accorded many of the most important assets as national treasures, designated important cultural properties, historic sites, places of scenic beauty, or natural monuments, based on the Cultural Assets Preservation Law. The government has also been engaged in efforts to preserve and repair existing cultural assets, search for and recover other buried artifacts and restore historic landmarks.

 

Table 16.8 Cultural Properties Designated by the National Government

 

As of May 1, 2013, 12,874 items were assigned as designated important cultural properties, of which 1,085 were classified as national treasures. In addition, the government has provided support for such activities as theatrical performances, music, handicrafts and other important intangible cultural properties. It also has worked to preserve important folk-cultural properties such as annual cultural events and folk performing arts, as well as to train people to carry on such traditions.

Japan ratified the UNESCO World Heritage Convention (the Convention Concerning the Protection of the World Cultural and Natural Heritage) in 1992. In June 2011, Ogasawara Islands, Tokyo, was inscribed as the 15th World Heritage Site in Japan. Located approximately 1,000 kilometers south of the heart of Tokyo, Ogasawara Islands comprise a group of approximately 30 islands that vary in size. Every one of those islands is an oceanic island that has never been connected to any continent since its formation and is, therefore, the habitat of a great number of living creatures native to it, a fact that gave the islands the nickname "Galapagos of the Orient."

This was then followed by "Hiraizumi - Temples, Gardens and Archaeological Sites Representing the Buddhist Pure Land" being named as the 16th World Heritage Site in June 2011. It consists of temples, former temple sites, gardens and other sites. All those temples were built with the involvement of the Oshu Fujiwara clan, which flourished in the Tohoku region in the 12th century throughout four generations.

In June 2013, "Fujisan [Mt. Fuji], Sacred Place and Source of Artistic Inspiration" straddling the border between Yamanashi and Shizuoka Prefectures, was designated Japan's 17th World Heritage Site. A graceful, conical stratovolcano, Mt. Fuji is Japan's highest mountain. It is famed worldwide as a symbol of Japan. The mountain's majestic, sublime form has inspired the development of the Japanese faith in nature and Japan's unique artistic culture. The mountain inspired the development of Japanese belief in sacred mountains, as well as unique Japanese artistic culture with outstanding universal value, such as ukiyo-e by KATSUSHIKA Hokusai and UTAGAWA Hiroshige, which were influential far beyond Japan's borders in the late 19th century. Across many centuries, Mt. Fuji has not only shown a profound relationship with various aspects of one country's culture and expressed the cultural tradition of the sacred mountain, it has become famed as a striking example of the pattern for the world's "great mountains." It is thus a mountain with outstanding universal value.

 

Table 16.9 Heritage Sites Inscribed on the World Heritage List

 

In 2006, the UNESCO Convention for the safeguarding of the intangible cultural heritage entered into force. As of April 2013, Japan has 21 entries on its list, including: nogaku theater, ningyo johruri bunraku puppet theater and kabuki theater (the kind of kabuki performed by a traditional method of acting and directing).

 

Chapter 17 Government System (PDF:3,067KB)

Contents

1. Division of Powers

The Japanese Constitution, which went into effect on May 3, 1947, is based on three core principles: sovereignty of the people, respect for fundamental human rights and pacifism. To control governmental power effectively through checks and balances, governmental power is separated into three independent branches: legislative, executive and judicial, and each contains a separate set of agencies and personnel.

 

Figure 17.1 Separation of the Three Branches of Government under the Japanese Constitution

 

Figure 17.2 Government Organization of Japan

 

2. The Legislative Branch

The Diet is the highest organ of state power, and is the sole law-making organ of the State. The Diet consists of the House of Representatives and the House of Councillors. Both Houses consist of elected members, representative of all the people.

The most important responsibility of the Diet is to enact legislation. The Diet also has the authority to fulfill a number of additional functions, including the deliberation and passage of the budget and other matters of fiscal importance, the approval of treaties, the designation of the Prime Minister and the initiation of motions to amend the Constitution. Each House may conduct investigations relating to the government, and demand the presence and testimony of witnesses, and the production of records. For the Diet to pass a resolution, the agreement of both Houses of the Diet is necessary. However, when the two Houses differ in their resolutions regarding legislative bills, draft budgets, the approval of treaties or the designation of the Prime Minister, under the terms of the Constitution, decision of the House of Representatives overrides that of the House of Councillors.

The term of office for Diet members is set by the Constitution. Members of the House of Representatives serve a four-year term, while members of the House of Councillors, six years. Elections for the latter are held every three years, so that one half of the seats are contested in each election.

The House of Representatives has 480 members. Of these, 300 are elected under a single-seat constituency system, while 180 are elected under a proportional representation system in which the nation is divided into 11 regions. The last general election was held in December 2012. The House of Councillors has 242 members, of whom 96 are elected through proportional representation, and 146 are elected as representatives from 47 electoral districts of the nation, i.e. prefectures. The last regular election was held in July 2013.

All Japanese citizens, both men and women, aged 20 years or older, have the right to vote in elections for both Houses of the Diet. Furthermore, both men and women above the qualifying age are eligible to run in elections. The qualifying age for members of the House of Representatives is 25 years or older, while the qualifying age for members of the House of Councillors is 30 years or older.

 

Table 17.1 Number of the Diet Members by Political Group

 

3. The Executive Branch

The Cabinet exercises its executive power on the basis of the laws and budgets adopted by the Diet. The Cabinet, composed of the Prime Minister and other Ministers of State, is collectively responsible to the Diet, regarding the exercise of the executive power. The Prime Minister is elected in the Diet from among its members. The majority of the ministers of state to be appointed by the Prime Minister must be Diet members. Thus, Japan adopts the parliamentary Cabinet system, in which the organization and existence of the Cabinet rest on the confidence in the Diet.

The Cabinet's powers include the following: (i) implementing laws; (ii) engaging in foreign diplomacy; (iii) signing treaties; (iv) overseeing the operational affairs of public officers; (v) formulating a budget and submitting it to the Diet; (vi) enacting Cabinet orders; and (vii) deciding amnesty. In addition, the Cabinet powers also include naming the Chief Justice of the Supreme Court and appointing other judges. The Cabinet also gives advice and approval to the Emperor in matters of state, and bears the responsibility for this.

 

Table 17.2 Successive Prime Ministers

 

4. The Judicial Branch

Judicial power resides in the courts and is independent from the executive branch and the legislative branch.

The Constitution provides for the establishment of the Supreme Court as the highest court with final judgment, while the Court Act provides for four lower-level courts (High Court, District Court, Family Court and Summary Court). At present, there are eight High Courts, 50 District Courts, 50 Family Courts and 438 Summary Courts throughout the nation.

To ensure fair judgments, Japan uses a three-tiered judicial system. The first courts in the court hierarchy are the District Courts, the second being the High Courts, and the highest court being the Supreme Court. The system allows a case to be heard and ruled on up to three times in principle, should a party involved in the case so desire. The Summary Courts and Family Courts handle simple cases, domestic relations and cases involving juveniles as first instances.

The Supreme Court has the authority to deliver the final judgment on the legitimacy of any law, ordinance, regulation, or disposition. It is chaired by the Chief Justice and 14 judges.

A new saiban-in (lay judge) system began in May 2009. This is a system under which citizens participate in criminal trials as judges to determine, together with professional judges, whether the defendant is guilty or not and, if found guilty, what sentence should apply. What is hoped for is that the public's participation in criminal trials will make citizens feel more involved in the justice process and make the trials easier to understand, thus leading to the public's greater trust in the justice system. A total of 3,173 people were tried in saiban-in trials held between the start of the system and December 2011.

 

Table 17.3 Judicial Cases Newly Commenced, Terminated or Pending

 

5. Local Governments

The affairs of local governments are conducted on two levels in Japan: by the prefectures and by the municipalities within each prefecture. As of January 1, 2013, Japan has 47 prefectures, within which there are 1,719 municipalities, plus the 23 wards (ku) in metropolitan Tokyo. In order to strengthen the administrative and fiscal foundation of the municipalities, municipal mergers were promoted by law. Consequently, the number of municipalities was reduced by nearly half from the 3,232 existing at the end of March 1999.

Municipalities that satisfy certain population criteria (i.e., 500,000 people or more) are eligible for designation as "Cabinet-Order designated cities." This designation gives them administrative and fiscal authority equivalent to those of prefectures. With the addition of Kumamoto-shi in April 2012, there are presently 20 cities that have earned this designation. (Administrative map[PDF:3,067KB])

 

Figure 17.3 Government System by Level

 

Figure 17.4 Local Government Employees by Type of Administrative Services

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