Japan's farming population has been declining steadily and was less than 5% of the total population in 2004; agriculture accounted for less than 2% of the gross domestic product. Arable land is intensively cultivated; farmers use irrigation, terracing, and multiple cropping to coax rich crops from the soil. Rice and other cereals, sugar beets, vegetables, and fruit are the main crops; some industrial crops, such as mulberry trees (for feeding silkworms), are also grown, and livestock is raised. Fishing is highly developed, and the annual catch is one of the largest in the world. The decision by many nations to extend economic zones 200 mi (322 km) offshore has forced Japan to concentrate on more efficiently exploiting its own coastal and inland waters.
In the late 19th cent. Japan was rapidly and thoroughly industrialized. Textiles were a leading item; vast quantities of light manufactures were also produced, and in the 1920s and 1930s heavy industries were greatly expanded, principally to support Japan's growing imperialistic ambitions. Japan's economy collapsed after the defeat in World War II, and its merchant marine, one of the world's largest in the 1930s, was almost totally destroyed. In the late 1950s, however, the nation reemerged as a major industrial power. By the 1970s it had become the most industrialized country in Asia, and in the early 21st cent. it was the third greatest economic power in the world after the United States and a rapidly developing China.
Japanese industry is concentrated mainly in S Honshu and N Kyushu, with centers at Tokyo, Yokohama, Osaka, Kobe, and Nagoya. In the 1950s and 1960s textiles became less important in Japanese industry while the production of heavy machinery expanded. Japanese industry depends heavily on imported raw materials and fuels, which make up a large share of the country's imports. Japan receives all of its bauxite, phosphate, steel scrap, and iron ore from imports, as well as virtually all of its crude oil and copper ore. Manufactured goods make up the vast majority of the nation's exports. Japan became one of the world's leading producers of machinery, transportation equipment, motor vehicles, steel, and ships, and by the 1980s it had become a leading exporter of high-technology goods, including semiconductors and electrical and electronic appliances.
Japan has increasingly shifted some of its industries overseas through outsourcing and has made massive capital investments abroad, especially in the United States and the Pacific Rim. With the recession of 2001, the closing of manufacturing plants in Japan accelerated, as did the opening of plants abroad, particularly in China, but the economy remains export-driven. Since the late 1960s Japan's economy has been marked by a large trade surplus, with China, the United States, and South Korea being its largest trading partners. Japan has also become a global leader in financial services, with some of the world's largest banks, but for many years after the collapse of the stock and real estate markets in the early 1990s many of Japan's banks were burdened with high numbers of nonperforming loans.
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