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a strict requirement that Japanese government departments and authorities under Government control shall, wherever possible, purchase Japanese manufactures, even if they are inferior to foreign goods.
A policy is followed of obtaining for Japanese manufacturers the fullest information as to recent models and developments in foreign industry, Direct aid to the Japanese export trade is given by means of government encouragement of the establishment of co-operative guilds of manufacturers engaged in producing goods principally for export, and by partial payment of the cost of establishing export associations. The Japanese Government further assists industry by recompensing exporters for 70 per cent. of the losses sustained on shipments to undeveloped markets or markets which present obstacles to trade. By affording direct financial assistance to banks in dealing with bills for the export trade, it enables the banks to quote exporters lower rates of discount than the normal market rates.
During the past year, the Japanese Government has established a Bureau of Foreign Trade within the Department of Commerce and Industry.
Throughout the period of Japan's industrialisation the Japanese Government has, in effect, been a partner in Japanese commerce and industry.
82. The industrial growth of Japan, fostered by a policy designed to make her self-supplying in manufactured goods, has not, until now, greatly affected the volume of her imports of these goods. There are, however, unmistakable signs that Japan henceforth will more fully supply her own needs in finished goods, and for those which she still must buy from abroad will only offer a limited and highly competitive market where price will, even more than formerly, determine the source of supply.
PRODUCTION COSTS IN JAPAN.
83. Chief among the contributing causes of Japanese success is the low price at which Japanese goods can be sold, consequent to a large extent on low wages paid to Japanese labour. After making allowance for the superiority of the British operative in certain in- dustries, it must be admitted that Japanese industry has a definite advantage in labour costs. The average wage throughout Japan for all factory workers was, in 1924, officially ascertained to be Yen 1.44, equalling approximately 3 shillings per day of from eight to ten hours, and in some cases twelve hours (varying with the in- dustry) and for a six-day week. In certain industries and districts only two rest days a month are the custom. For males only, the average wage throughout Japan was, in 1924, Yen 2.10 (or 4s. 2d.) per day, and for females, who out-number the males in textile factories, the average wage was 88 sen (or 1s. 10d.) per day.
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The foregoing figures were the result of an investigation covering factories employing 1,290,000 workers, and may therefore be taken as truly indicative of the country as a whole. The average wages paid in Japan in 1928 were very slightly below those paid in 1924, as quoted above.
84. There is in Japan a system of bonus payments and money allowances on dismissal. These two together, we are informed, add approximately 10 per cent. to the figures quoted above for wages. On this basis, the average wage for female workers in factories throughout Japan, including money allowances and bonus payment, is about two shillings a day. Some further addition to wage costs must be made for the provision in certain of the larger factories of dormitories, cheap food, cooking facilities, and welfare work. The cost of the whole of these additions to wages may be assessed at from 20 to 30 per cent, of money wages.
85. In addition to the wide difference in labour costs, Great Britain is often handicapped by the unnecessarily high quality of the goods she offers for sale. In the case, however, of goods exactly similar in nature and quality, the disparity in price to the dis- advantage of Great Britain is still noticeable. This is due to many causes additional to labour costs. Outstanding amongst these, in the case of Great Britain, are high taxation, freight rates, both by rail and steamer, packing costs and complete separation in many cases of manufacture from export marketing.
COMPETITION FROM OTHER COUNTRIES.
86. Competition with Great Britain in the Japanese market, while keen from Japanese manufacturers in lines in which they have made good progress, is intensely keen from other industrial countries for such manufactured goods as Japan must or desires to import. We have cited examples of Continental and American pre-eminence in the supply of Japan's iron and steel and engineer- ing imports, which constitute so large a share of the total imports. In addition, Germany holds the leading position in the supply of ammonium sulphate, and woollen and worsted yarns. The United States leads in leather, soda and soda-ash, and motor vehicles. As
the United States and Germany are our
chief competitors in the Japanese market, we set forth below, side by side, the principal classes of manufac- tured goods imported and the values secured by Great Britain, the United States and Germany in 1913, 1929 and 1930. We have included the 1930 figures because they show that, in a period of depression such as the world is now passing through, Great Britain is less able than her rivals to supply a market of shrinking purchasing power. In common with all other countries of the world, Japan's import trade in 1930 recorded a sharp decline. The countries sharing Japan's import trade all suffered from this decline, but we regret to report that the decline of Great Britain
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