Against the backdrop of intensifying Japan-U.S. trade frictions in the 1980s, it was considered for some time that Japan's economic power was a threat to the United States. This country's high rating has since declined, however, giving way to comments like "Japan has disappeared from the world's radar screen."
Over time Japan had boasted of its excellent manufacturing skills. But in recent years, China has replaced Japan as the leader in the production of traditional industrial goods while South Korean and Taiwanese makers have overtaken Japanese counterparts in the output of LEDs, 3-D products and other high-tech items. In addition, Japan now lags behind the U.S. in the development of trendy products, such as the iPhone, iPod and iPad.
The fundamental cause of Japan's industrial slump developed in the 1980s when its economy got so strong and its business circles became so confident that some people even claimed that there was "no longer anything to learn from Europe and America." Such arrogance weakened Japan's capacity for industrial innovation.