Globalization through the international movement of goods, services, and factors of production is a key force driving economic growth. Japan's own historical experience provides ample illustration of this observation. Foreign direct investment (FDI) played a vital role in the country's early industrialization, providing not only capital but, crucially, also much of the technology, know-how, and managerial skills that underlie the development of the electrical machinery, motor vehicle, and machine tool industries during the first decades of the twentieth century. Similarly, exports (incidentally largely concentrated in these industries) were a main engine of growth in Japan's postwar economic miracle, with imports supplying the necessary raw materials. More recently, the relocation of production through overseas direct investment has helped Japanese firms to bolster their international competitiveness, first as a way to mitigate the impact of rapid yen appreciation during the 1980s and, more recently, as a means to take advantage of lower production costs in China and other parts of the world.
Although Japan has clearly benefited from globalization, the country's attitudes toward economic integration with the rest of the world have always been ambivalent. With the exception of that brief period of relative openness at the beginning of twentieth century, Japan has been reluctant to open its economy to imports and inward FDI, viewing them, in general, as a threat rather than as a boon.