306
116
in volume by approximately 23 per cent. over 1913, but the volume of imports from Great Britain has declined by one-third, whilst the trade secured by the chief competitors of Great Britain has substantially increased. Although the economic structure of each of Great Britain's principal competitors is so different-the United States being a country with a high standard of living, Japan a country with a comparatively low standard of living, and Ger- many with a European standard approximating to our own-it is a significant fact that they have, all of them, made substantial progress in recent years in the China market, largely at Great Britain's expense.
JAPAN.
245. The remarkable development of Japan has enabled her, in the period 1913-1929, to treble the value of her imports of manufactured and semi-manufactured goods, of which trade Great Britain, in 1913, secured nearly one-half. In 1929, our share of this trade had declined to less than one-quarter. In contrast, Germany has, since the war, recovered her pre-war share, which in 1929 exceeded that of Great Britain, while the United States is by far the largest supplier of manufactured goods with nearly one-third of the total. Iron and steel and machinery are the principal trades in which our competitors have advanced at our expense in the Japanese market. We are of the opinion that as Japan continues to expand her industrial production a decrease in her import of manufactured goods may very well result. The Japanese market will become increasingly competitive.
246. In the world depression of 1930, imports into Japan suffered a heavy decline, and we note that Great Britain's per- centage share of this decreased import fell from 6.9 per cent. in 1929 to 5.9 per cent. in 1930, and was therefore considerably below the percentage share of Germany in 1930 (6.8 per cent.). The increased share secured by Germany of Japan's trade in a period of depression indicates the inability of Great Britain to compete successfully with her rivals in supplying manufactured goods, particularly in a period when prices are falling.
COTTON.
247. Our conclusions and recommendations in regard to the British cotton trade to the Far East are summarised in para- graphs 304 and 305 of this Report.
IRON AND STEEL AND ENGINEERING.
248. The growth of the iron and steel and engineering indus- tries in Japan has been very rapid in the last 20 years. Of recent years, however, these industries have been subject to periods of crisis and depression, and the present outlook is obscure.
117
249. The requirements of Japan and Japanese territory in respect of iron ore are, for normal output, about 33 million tons a year, of which, however, nearly 2 million tons have to be imported. Japan's normal production of pig iron at present is 1,400,000 tons, but she needs to import about 650,000 tons in addition. Japanese pig iron works are, to a large degree, in diffi- culties, and are pressing for further assistance by way of increased import duties, bounties, and the application to imports of Indian pig iron of anti-dumping measures.
250. As regards steel, Japan's present productive capacity is nearly 2 million tons a year, but she has to import nearly 1 million tons of steel products. Plans for a merger of the Gov- ernment Steel Works at Yawata and private steel companies, and for rationalisation of Japan's steel industry, are under considera- tion. As the object of these schemes is to increase productive capacity, and as over-production is noticeable in many lines already, steel importers will find it difficult to secure any but low price orders, and then only in lines in which production in Japan is insufficient. A revival of trade may give opportunities for increased imports of such goods, but it is essential that manu- facturers, in order to take advantage of any such openings, should have resident experts in Japan. We recommend this suggestion to the consideration of iron and steel manufacturers.
251. As regards machinery, Japanese production competes keenly with imported products. Energetic assistance is given to the industry by the Japanese Government in many ways. Although in the immediate future work for Government services or public utilities will no doubt be carried out by Japanese firms, there are prospects that the increasing development of the country and the demand for improved public utilities will render it neces- sary for Japan to import foreign machinery to a greater propor- tion than at present. The improving standard of living and the increasing demand for the amenities of applied mechanics should also help in this direction.
252. In engineering probably more than in any other industry, expert representation is essential. We strongly recommend that manufacturers should supplement the knowledge and sales capacity of their agents in Japan and the information given in catalogues and trade literature by attaching direct technical representatives to the offices of their agents. Several manufacturers might combine in sharing the expenses of employing a joint expert if they cannot afford the expense individually.
253. Close investigation by manufacturers of the possibilities of co-operation with Japanese industry in various ways is strongly recommended.
307