Japan's exports have been falling throughout 2019, declining for seven consecutive months. The most recent figures, released Thursday, show a 6.8 percent drop in exports in June (compared to the year before). For a country dependent on external markets for economic growth and well-being, these numbers are harrowing, and it is imperative that politicians and business strategists understand the causes of this decline and what they can do about it.
Sadly, the answer is not much. Japan's economy — like many others — is being battered by events beyond its control, chief among them the U.S.-China trade war and the simultaneous slowdown in China, the world's second-largest economy. While there is more at work than the current discord, leading trade nations, Japan among them, must redouble efforts to stabilize and shore up the world trade system.
Japanese exports to China fell 10.1 percent in June (again, compared to a year ago), the fourth consecutive monthly decline. Hard hit were electronic components and chipmaking equipment companies: Their exports to China dropped 21.3 percent and 27.1 percent, respectively. Total exports to China declined 8.2 percent in the first half of 2019, a fall that well outpaced the deceleration of the Chinese economy overall: It posted 6.25 percent growth in the quarter from April to June, its slowest expansion in 27 years. The slowdown has rippled across Asia, with Japanese exports dropping to every other country on the continent except India.