1995 and 1996 saw a record number of corporate bankruptcies, along with a dramatic deterioriation in public finances. But the energy shown by some new sectors of industry, a growing trade surplus and the younger generation's aspirations for a profound transformation of society argue against an over-pessimistic view. There are so many conflicting signals coming out of Japan that it is hard to keep your bearings. Economic stagnation goes hand in hand with low unemployment. The banking sector is in a shambles, but the US deficit is funded by Japanese savings.
Industrial mutation is a Japanese tradition.
The key sectors of the economy have followed each other in a series of waves which the Japanese liken to flocks of wild geese. Light industry, textiles, etc. belong to the pre-1973 past and are now the province of China and Vietnam, Asia's least developed countries. The 1973 oil crisis also saw the demise of the heavy industry and chemicals sectors, which have been taken over by South Korea and Taiwan. Production of cars, air conditioners and television sets peaked in 1985, before the rise in the yen. Exports of cars and televisions have been falling ever since, but the manufacturers have not given up.