The Japanese government understands how foreign direct investment, including mergers and acquisitions, can help address Japan's current problems. We had talks on this subject with the Japanese government this past week. The United States continues to benefit immensely from foreign direct investment. I am hopeful that Japan will too. As both our governments recognize, Japan's recovery is vital to Asian recovery.
Japan is the region's biggest market and largest source of capital.
In 1996, the Japanese economy generated new wealth equal to the entire GNP of Malaysia. The following year Japan's economy shrank, leaving exports from its trading partners in the region stranded. It is clear that a strongly growing and open Japanese market would underpin East Asian recovery, providing a market of first resort for Asian exports and much-needed capital flows. A weak, struggling Japanese economy, on the other hand, would seriously dampen growth prospects for the region. In pressing Japan to help with Asian recovery, the United States is acting as a loyal friend and ally.