Made Well in Japan

As Japan's biggest customer, the U.S. bought $600 million worth of Japanese goods last year, largely because Japanese cameras, textiles, machinery and electrical goods are among the world's least expensive. Last week many a Japanese businessman was looking in the other direction: toward higher-priced, quality products fitted to compete with the world's best. They argue that Japan actually damages its potential U.S. markets with cheap, often shoddy goods copycatted from U.S. or other foreign manufacturers. To U.S. consumers, the label "Made in Japan" frequently acts as a red light that warns of inferior goods. Now Japan wants to turn the light green.

The campaign is to establish a stable price and uniform quality for its exports by policing Japanese industry, encouraging manufacturers to design their own products. The idea is already showing results, though there are plenty of problems. The best Japanese transistor radios compete on even terms with RCA's--and $4,300,000 worth of them poured into U.S. markets in 1958's first six months. The one trouble is that so many fly-by-night Japanese companies are trying to hop aboard the gravy train that the Japanese Trade Ministry has been forced to lay down a check price of $14.95 for exports, refuse licenses to firms that price below it.

The same is true in cameras. Through the efforts of such topnotch firms as Nikon and Canon, whose cameras are cheaper and almost as good as the best German makes, Japan now enjoys a $6,800,000 export market in the U.S. The Japanese are convinced that it could be bigger still were it not for dozens of other camera makers, who get around export regulations by labeling their third-rate products "toys." Once Japanese businessmen winked at the practice. Today, it aggravates them so that Matsushita Electric Industries Co., Japan's biggest electrical-communications maker, withdrew from the U.S. transistor market "rather than lose face." Matsushita intends to launch a sales campaign, win U.S. consumer confidence by providing service for its radios.

Grand Prix. The efforts of the radio and camera men have encouraged other Japanese industries to follow suit. Says Koji Kato, director of Alps Shoji toy company: "Past experience shows that flimsy, cheap toys are the best way to lose a market. We are now working to make toys more durable, safer, and at the same time more advanced than foreign makes." U.S. Toymaker Louis Marx is giving the industry a hand, recently went to Japan with a plan to reorganize the entire Japanese toy industry by supplying U.S. technicians, leasing machines, supplying designs and working out a "division of labor" between Japanese and U.S. firms.

The prize to date goes to Japan's optical and sewing-machine industries. Optics last year accounted for more than $8,000,000 of exports to the U.S. and Hitachi, Ltd., Japan's biggest producer of electron microscopes recently walked off with the grand prix at the Brussels Fair. As for sewing machines, the payoff on quality was never better demonstrated than by Fukoku Machine Co. In the last several years it has taken the lion's share of a $21 million U.S. market for Japanese sewing-machine heads, is swamped with U.S. orders for a new zigzag machine head despite the fact that its price is considerably greater than that of rival companies.

By the strangest of ironies, while Japan strives to improve its U.S. exports, a new rival is eating into other Japanese markets with the old Japanese strategy of cheap goods at rock-bottom prices. The rival: Communist China, which is dumping everything from canned goods to machinery in Southeast Asia at less-than-production prices--and having considerable success. In a "silent invasion," Red China pumped $102 million in merchandise into Hong Kong alone in the first half of 1958, a $3,400,000 increase over last year. Cotton prints go for 15-c- a yard, leather shoes for $1.50 per pair, frozen quail for 8-c- each, short-wave receiving sets for $17, umbrellas for 70-c-, violins for $5. Though quality is far inferior, low prices have also led Thailand, Singapore and Malaya to forgo Japanese goods for Chinese--much to the detriment and chagrin of Japan's businessmen.

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