The evolution of the Japanese textile industry in the past two decades is best characterized by its transition from maturity to decline. The industry's share of manufacturing employment fell from 13.4 per cent in 1965 to 6.1 per cent in 1983, and its share of manufacturing output declined from 8.8 per cent to 3.4 per cent. Over this period, imports of textiles rose from 26 billion yen in 1965 to more than 500 billion yen in 1985 (excluding clothing and synthetic fibres).

This relative decline of the textile industry is not peculiar to Japan. As shown in Chapter 2, the textile industry typically traces out a hillshaped development pattern as a country industrializes, and Japan is no exception to that rule. The importance of textiles in the Japanese economy grew steadily from the 1890s to the 1930s, but it started declining after the 1950s (as shown in Table 2.1 in Chapter 2). The share of production exported in the Japanese textile and clothing industries peaked in the 1930s and has been declining thereafter, whereas the share of domestic sales supplied by imports started increasing from the late 1960s after the period of almost zero import dependence in the 1950s and the early 1960s (Table 2.2).

What is peculiar to Japan is the slowness of the relative decline of its textile industry as compared with other industrialized countries. Despite the record that portrays it as a declining industry, the Japanese textile industry remains a large gross exporter with exports of more than 1 trillion yen in 1985.