Fast Facts about the California Economy



Fast Facts about California-Japan Trade Relations

Compiled by: Assembly Committee on Jobs, Economic Development, and the Economy

Juan Arambula, Chair

Japan is the third largest economy in the world with a gross domestic product (GDP) of $4.29 trillion.[i] It is also the third largest market for exports of California-made goods.[ii] In 2007, $13.5 billion in goods were exported from California to Japan.[iii]

California's Trade Economy

• California’s gross state product is $1.8 trillion, making it one of the world’s largest economies in 2007[iv].

• Exports from California accounted for 12% of total U.S. exports in 2007.[v]

• California's export shipments of merchandise in 2007 totaled $134.3 billion, ranking California second only to Texas ($168.2 billion) among the states in terms of total exports of products in 2007.[vi] However, if the value of services were added to the export of profit, it is likely that California would rank first in total exports.[vii]

• California leads the nation in export-supported jobs - one in seven jobs is related to trade.[viii]

• Small and medium-sized firms generated more than two-fifths (44%) of California's total exports of merchandise in 2006.[ix]

• California exported to 222 foreign destinations in 2007.[x]

• California's largest export markets in 2007 were its NAFTA trading partners Mexico ($18.3 billion) and Canada ($16.3 billion), followed by Japan ($13.5 billion).[xi]

• In 2007, the state's leading export category was computers and electronic products, representing 33% ($43.7 billion) of California's total merchandise exports. [xii]

Profile of Japan

• Japan's estimated July 2008 population is 127 million,[xiii] while California's population is 38 million.[xiv]

• Geographically, Japan is slightly smaller than California, but it also has more than three times the population of California.[xv]

• Japan's GDP in 2007 was $4.29 trillion based on purchasing power parity. [xvi] By comparison, in 2007, the U.S.'s GDP was $13.84 trillion[xvii] and California's total gross state product was $1.8 trillion.[xviii]

Japan's Economy

• Japan advanced their economy with extraordinary rapidity from the 1960s to the 1980s by focusing on industry corporation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP).[xix]

• In the past, one notable characteristic of the Japanese economy was that manufacturers, suppliers, and distributors worked together in close-knit groups called "Keiretsu." Also, the corporations used to guarantee lifetime employment for a substantial portion of the urban labor force. These features have now eroded.[xx]

• Japan's industrial sector is heavily dependent on imported fuels and raw materials[xxi] such as wood, ore and concentrates of non-ferrous base metals, iron ore and concentrates, and soybeans. [xxii]

• Japan's major export commodities in 2006 were transportation equipment, motor vehicles, semiconductors, electrical machinery, and chemicals.[xxiii]

• Japan's major import commodities in 2006 were machinery and equipment, fuels, foodstuffs, chemicals, textiles, and raw materials.[xxiv]

• The small agricultural sector (an estimated 1.4% of Japan's GDP in 2007) is highly subsidized and protected by the government.[xxv]

• Japan's major export partners in 2006 were the U.S. 22.8%, China 14.3%, South Korea 7.8%, Taiwan 6.8%, and Hong Kong 5.6%.[xxvi]

• Japan's major import partners in 2006 were China 20.5%, U.S. 12%, Saudi Arabia 6.4%, UAE 5.5%, Australia 4.8%, South Korea 4.7%, and Indonesia 4.2%.[xxvii]

Academics in Japan

• Japan had 87 national, 89 local, and 568 private universities in 2006.[xxviii]

• Japan's top three colleges are University of Tokyo, Kyoto University, and Osaka University.[xxix]

• There were 2,859,212 college students in Japan in 2006.[xxx]

• In 2006, 603,054 people entered universities[xxxi] and 558,184 people graduated from universities with a bachelor's degree.[xxxii]

• According to the 2007 World University Rankings by Times Higher Education, the University of Tokyo is ranked number 9 of the top 50 universities for Technology,[xxxiii] number 12 for Natural Science,[xxxiv] and number 13 for Life Sciences and Biomedicine.[xxxv] Kyoto University is ranked number 17 for Natural Science,[xxxvi] number 27 for Life Sciences and Biomedicine,[xxxvii] and number 29 for Technology.[xxxviii] Osaka University is ranked number 39 for Life Sciences and Biomedicine.[xxxix]

Japan Exports to the U.S.

Japan's major exports to California are substantially similar to the exports from Japan to the U.S. as a whole.[xl] Japan primarily exports the following products to the U.S.:

• Vehicles, other than rail way or tramway rolling stock, and parts and accessories thereof[xli]

• Nuclear reactors, boilers, machinery and mechanical appliances, parts thereof[xlii]

• Electrical machinery and equipment and parts thereof, sound recorders and reproducers, television recorders and reproducers, parts and accessories[xliii]

Japan and U.S. Trade Relations

• The U.S. is Japan's top export market representing 22.8% of all exports in 2006.[xliv]

• The U.S. is Japan's second largest import market representing 12% of all imports in 2006.[xlv]

• Japan is the U.S.' fourth largest trading partner, representing 5.4% of all exports in 2007.[xlvi]

• In 2007, the U.S. trade deficit with Japan was $82.8 billion, accounting for 10.5% of the U.S.' overall trade deficit. However, the U.S. trade deficit with Japan is decreasing year by year.[xlvii]

California Exports to Japan in 2007

• Japan is California's third largest export partner.[xlviii]

• California exported $13.5 billion worth of goods to Japan, accounting for approximately 10% of California's overall goods exports.[xlix]

• California's top exports to Japan are computers and electronic products with 26.5% of total exports.[l]

• California's second largest exports to Japan at $1.9 billion (14.2%) are machinery manufactures.[li]

• Japan is the third major California agricultural export destination. California's main exports to Japan are rice, almonds, hay, oranges (fresh and juiced), and wine.[lii]

2007 Exports from California to Japan by Industry Sector

| |Product |Value ($) |Percent |

|[pic] |334 _Computers & Electronic |3,565,350,203 |26.5 % |

| |Prod. | | |

|[pic] |333 _Machinery Manufactures |1,909,820,942 |14.2 % |

|[pic] |336 _Transportation Equipment |1,806,157,813 |13.4 % |

|[pic] |311 _Processed Foods |1,106,569,853 |8.2 % |

|[pic] |All Others |5,064,271,173 |37.6 % |

| | Grand Total |13,452,169,984 |100 % |

[pic]

Source: TradeStats Express

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[i] ; accessed 7/15/08

[ii] ; accessed7/16/08

[iii] ; accessed 7/15/08

[iv] Bureau of Economic Analysis, Gross State Product, bea/regional/gsp/ ; accessed 7/17/08

[v] ; accessed 7/16/08

[vi] ; accessed 7/17/08

[vii] California Business, Transportation & Housing Agency; Toward a California Trade and Investment Strategy: Potential Roles for the State in Global Market Development, October 1, 2007; Page 8

[viii] ; accessed 7/16/08

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[xiv] .; accessed 7/16/07

[xv] ; accessed 7/15/08

[xvi] ; accessed 7/15/08

[xvii] ; accessed 7/21/08

[xviii] Bureau of Economic Analysis, Gross State Product, bea/regional/gsp/; accessed 7/17/08

[xix] accessed 7/17/08

[xx] accessed 7/17/08

[xxi] accessed 7/17/08

[xxii] ; accessed 7/22/08

[xxiii] accessed 7/17/08

[xxiv] accessed 7/17/08

[xxv] accessed 7/17/08

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[xxviii] ; accessed 7/22/08

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[xxxvii] ; accessed 7/23/08

[xxxviii] ; accessed 7/23/08

[xxxix] ; accessed 7/23/08

[xl] Ishihara, Tetsu; Japan External trade Organization called 7/24/08

[xli] ; accessed 7/23/08

[xlii] ; accessed 7/23/08

[xliii] ; accessed 7/23/08

[xliv] ; accessed 7/17/08

[xlv] ; accessed 7/17/08

[xlvi] ; accessed 7/16/08 translated from Japanese

[xlvii] ; accessed 7/16/08 translated from Japanese

[xlviii] ; accessed7/16/08

[xlix] ; accessed7/16/08

[l] ; accessed 7/15/08

[li] ; accessed 7/15/08

[lii] ; accessed 7/22/08

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