Foreign Investment Zone Strategies

In terms of Figure 1.2 (p. 6 above), the main bottlenecks which foreign direct investment is intended to displace onto distant peoples are in the production process and in the supply of labour and the other inputs that go into production. It might seem strange then that Japan’s strongest suit, its productive power, should require relocation, when the fundamental problems of Japanese capitalism have been on the demand side in the form of market deficiencies for consumer goods. However, we have seen how the attempt to resolve the market problem through export drives not only lifted the value of the yen and along with it production costs to levels that threatened Japan’s traditional strength, but also provoked the growing protection of some export markets on which Japanese capital had come to depend. Foreign investment is therefore being driven by the need both to reduce production costs and to preserve or open up markets, but the combinations of these two motives vary, with the emphasis on cutting production costs in the less developed countries and on securing markets in the advanced countries. Production and marketing have thus become increasingly linked in Japanese capital’s overseas operations.