This controversial study examines Japan's 'economic nationalism' which forms the basis of central government policy, i.e. the system in which business and politics are inseparable and which impacts on Japan's relations with the world.

In this important new and controversial study about the nature and focus of the Japanese economic agenda, the author argues forcefully that the official mind-set of leading bureaucrats, top politicians and big business, makes it virtually impossible for the western industrialized world to do business on an equal footing. Put simply, it is a question of western free-market economics facing Japanese economic nationalism, which is, by its very nature, both an expansive and a protectionist ideology. International observers continue to ask is Japan changing?' or more forcefully, is Japan capable of change?'. Notions of reform' and restructuring' are today part of the Japanese lexicon, but appear to hold little substance. Trevor argues that any western notion of Japan changing fundamentally (i.e. adopting western, or Anglo-Saxon, philosophies) is facile completely unrealistic. This book is for everyone who wonders what motivates Japan's politico-economic system, and whether it is changing.

The internationalization of the J apanese economy, or the shift from an export-Ied to a domestic demand-Ied growth, is one of the important cu ne nt developments in the world-economy. lt involves the interaction of a variety of economic, social and cultural factors which many observers outside of Japan need to appreciate in order to understand what the process entails. Drs. Higashi and Lauter have written a book which is providing de tailed insight into the policy alternatives which the Japanese government has chosen to achieve the objectives of the internationalization process. Moreover, they have also analyzed the potential problems which sur round the implementation of the complex policies. I believe that their book is a valuable addition to both the academic and the generalliterature on Japan's efforts to change its role in the world economy and to contribute to the well-being of people everywhere. Michio Watanabe Tokyo, March 1987 Minister of International Trade and Industry December 1985-July 1986 Minister of Finance July 1980-November 1982 Xl The Internationalization Of The Japanese Economy 1 THE PATH TO ECONOMIC POWER Japan, known around the world as a smalI, resource-poOf island country, has experienced a greater than tenfold increase in its gross national product (GNP) in real terms since 1950.