Current State History Forecast Top News 5 Page  1   2    Trade Friction as a Result of Over-dependence on Exports    The second oil shock occurred in 1979. The structure of Japanese industry changed greatly through the two oil crises, and it saw the rise of the fabricating industry which consumed less amounts of energy. The main player shifted from industrial materials manufacturing, with its consumption of a large amount of energy, to the machine industry such as automotives, electronic and electric machinery, and precision instruments.    It was during this time that the world saw the end of the era of Japan's rapid growth. Japan ceased to record the nearly 10 percent annual growth-averages of past years. New cars loaded into an exclusive transport ship at the wharf of Oppama Plant of Nissan Motor, Yokosuka-shi It not only moved into a period of low economic growth but became ever more dependant on exports. This was not only because domestic consumption was at a standstill but also due to the slowdown in investments. Japan looked abroad for demand. Exports, centering on Europe and the United States, rose sharply while there was little growth in imports. It was difficult for foreign products to cut into the Japanese market because of stagnant domestic consumption, countless restrictive legislation that remained toward imports, and a complex distribution mechanism. With Japan enjoying a trade surplus while its partners recorded deficits, Japan became the target of global criticism and the root of economic friction with other countries. Issues related to the structure of Japanese industry, including closed trade practices which did not welcome entry by newcomers and the high number of government regulations, were singled out for criticism by abroad. The Bursting of the Economic Bubble and its Repercussions    Japan's path to stabilized growth seemed assured in the late 1980s after Japan had overcome two oil shocks, and Japan re-entered a state of super economic growth. Ear-pleasing phrases such as "Japan as number one" and "the 21st century would be Japan's century" abounded, while share and land prices rose sharply in a short period of time. The Japanese went on a buying spree, snatching up shares, bonds, real estate, and even works of art around the world. The bubble economy, which began in November 1986, continued for 51 months and lasted until February 1991, during which time banks put out loans indiscriminately, and money games of unprecedented scales were unfolded. Brooks Brothers opened in Marunouchi Area, the center of the business town in Tokyo    The repercussions were disastrous. When the bubble burst, financial institutions found themselves strapped with massive bad loans and were absorbed or went under. The ballooning amount of nonperforming loans gradually began to drain corporate stamina. The once highly-admired Japanese management style, with lifetime employment as one of its major pillars, became an anachronism. The Japanese economy continued to worsen, excess facilities were disposed, and corporate downsizing became a boom. Instability continued, and when it looked at times as if the economy was on the upturn, it would immediately revert to a downward trend. When deflation and a decrease in consumer prices hit Japan, pessimistic views forecasting that "Japan would sink" was heard. The 1990s was dubbed "the lost decade" for Japan in the sense that the country was too busy cleaning up after the economic bubble to implement any forward-looking measures to revive its economy.