President Bush's trip to Japan in search of "jobs, jobs, jobs," the travails of the American auto industry and its Buy America campaigns, and the renewed expansion of Japan's trade surplus have all revived the debate over Japanese investment in the United States. On balance, Japanese investment can help strengthen the American economy, and the dangers attributed to it are mostly nonexistent or exaggerated. Nevertheless, several real issues remain: the behavior of Japanese corporations is genuinely different from that of other foreign investors, and while it is changing, complete convergence with the Anglo-American corporate model is unlikely. Reciprocal investment in Japan by foreign firms is still difficult. The impact of Japanese investment differs across the sectors, and has been most beneficial in mature, heavy industries. Finally the overall type and effect of Japanese investment is not simply determined in Tokyo or Osaka, but depends on the measures we take to strengthen the American economic base.
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