The apparent shift of Japan's foreign direct investment from higher- income host countries (such as the United States) toward Asian developing countries (such as China) may create opportunities for sustained growth in these lower income economies. This shift seems to be part of a strategic reorientation that will gradually reduce Japanese dependence on the United States while Japan explores intra- Asian opportunities.

This text presents an analysis of how international direct investment since World War II has played an important role in the process by which industrial countries generate technology and productivity growth. It covers the complex relations between the US and Japan since 1945.