In Asia, Japan began its recovery in the 1960s after World War II. Japan’s trade pattern had two distinguishing characteristics: a large trade surplus and high domestic prices. South Korea also had maintained a large trade surplus, at least until the 1980s and domestic prices were rising fast. It appears that China is following the same footsteps since the early 1990s.
Does a country really benefit from accumulating large trade surpluses? Of course, a country with a $1 billion trade surplus is better off than without it, simply because it can spend that amount to import more foreign goods. However, a trade surplus must eventually be spent to buy goods from the country that has offsetting trade deficit.
Here are two pictures that show the prices of cantaloupes. One was taken in Mongkok in August 2003, and the other in Tokyo in March 2003.
A cantaloupe costs about 4 USD in Hong Kong, and 40 - 80 USD (or up to 10,000 yen) in Tokyo. According to World Bank, per capita daily incomes of Hong Kong and Japan are about $73 ($26,800 per year) and $92 ($33,500 per year), respectively. A typical Chinese in Hong Kong can purchase 18 cantaloupes from daily income, whereas an average Japanese may barely afford one or two. Cantaloupes are not an exception. Prices of other fruits and meat are also much higher in Japan.
Japanese are also growing and exporting square watermelons which cost more than USD100.
The Fruit market in Mong Kok, Hong Kong, August 2003.
A display of cantaloupes in a grocery store in Shibuya, Tokyo, March 2003.