"It is correct that Japanese exports are quite well at the moment, mainly due to the fact that Japan's main export destination is China and China's economy is the strongest in the world," said Martin Hennecke, an associate director at Tyche Group Ltd. in Hong Kong.
Yes, this sounds like a sustainable result for Japan however the truth is far from that.
The key rebutting arguement is that Japan holds the largest amount of National Debt as a percentage of its GDP in the entire world.
For a country to be moving forward sustainably, it has to has not just the lowest debt but preferably the lowest debt as a percentage of its GDP. Then, it will be able to use the remaining of its GDP for investments and reserves. Countries with a huge load of reserves along with a gargantuan sum of Foreign Direct Investments will be recognised as a sustainable country that is extremely stable.
Also, the thing about exports is that it is not stable. It is de facto fluctuating and volatile. Once your currency's strength increases, the export market will be heavily impacted. You will almost see an immediate effect on the export surplus. It will plummet!
Well, of course, we should be more optimistic. Afterall, Japan has been through the various vissicitudes of life. They have been in debts for more than two decades. They have more than enough knowledge when it comes to dealing with debts. It is a matter of how you fine-tune your economy and its priorities. Whether to focus on exports or reserves or investments.
I'm pretty sure that the new government will be able to make a sagacious decision that is apposite for its economy.
Credits -marketwatch, -newpeopleworld, -artlex, -tectonic uplift
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