Dec. 13, 1989: Japan's Rising Economy

Japanese companies rapidly buy and invest billions in American assets.
6:29 | 12/13/11

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Transcript for Dec. 13, 1989: Japan's Rising Economy
The size of Japan's rapidly growing economic power are everywhere. Nine of the world's top ten banks are Japanese. Last year Japanese investors spent almost 25 times what they did in 1980 on US assets. And for the first time since World War II they are now investing more in the US on factories office buildings and equipment. America appears to be faltering badly and -- that has come a new tension between the countries. A recent poll shows more Americans are worried about Japan's economic power in the Soviet union's military strike. Prominent Japanese have replied that America's problems are its own making and its complaints about -- strength. Are racist. How -- to friends come to be so quarrelsome. And should Americans worry that their future is being counted out in Japanese yen. For some -- we Begin with Nightline correspondent. Jeff Greenfield. Symbols of American corporate might support the New York skyline. Now owned by the Japanese. -- this coattails from New York. The -- Symbols of American culture and ethics -- -- now by the Japanese. The Firestone tire and rubber company symbol of American industrial power. Now the Bridgestone company owned by the Japanese. A movie couple born in the USA and named after an embodiment of American itself. Columbia Pictures now owned by Sony. And Rockefeller Center one of the best known pieces of American real estate. Now owned by the Japanese. Last year Japan's direct investment in the United States topped fourteen billion dollars more than double what it was just two years earlier. It's direct investment now exceeds fifty billion dollars more than any other nations except for Great Britain. And estimates are that within a few years Japan will be the single biggest -- and owner of United States assets. It's going to be a long time before the Japanese buy America. -- I think that is certainly the case that Japan already has a very influential position. In the US industry and that position we'll grow. The sale of Rockefeller Center to the Japanese as a powerful symbol but a -- Well most likely -- highly combustible mix of fears economic cultural even racial. Connected by a common thread the concern that we are somehow mortgaging our future to foreigners. Without doubt the memories of world war two and the flood of images of the Japanese as our implacable dangerous enemies -- It gives an -- to Japanese investment it's simply does not apply to other nations especially other nations with the same skin color as hours. But Americans. -- -- we don't want to admit to ourselves. Simply worry about. People who look like the Japanese who have different color skin. Having that much claim honest there's also history there is after all. The Second World War. And many Americans. Cannot forget. There is however more to the story -- this some observers say that for all the talk of harmony and cooperation. The Japanese approach to investing here is unique. And troublesome. In that country's reluctance to use American goods. For the moment ways. The construction of Japanese plan in the US usually means very substantial important parts and components from -- In some cases Japanese construction companies -- even you for the thought the -- That of course means that the much touted economic benefits of this investment. Don't blow to American companies a benefit that proponents of Japanese investment insist is very real. When the Japanese computer. Am bothered by American companies. -- a lot of money at it. As Bridgestone Firestone or -- new factories and the most modern state of the art equipment in them. We ought to be happy we ought to celebrate we ought to try to get the Japanese here. To do -- that because that makes us all more productive. Once you're at increased Japanese investment does seem misplaced. The idea that the purchase of record and movie companies somehow poses a threat to American culture. Sony which now owns Columbia Pictures knows it must first of all appeal to American audiences. That is why it is spending literally hundreds of millions of dollars. The by the services a producers Jon Peters and Peter -- of that man came to -- Columbia. But what of a different year. That economic clout could lead to political clout at a time when the congress is debating -- get tougher trade policy -- Japan. Former trade negotiator Clyde Prestowitz says Japan is very -- -- of that possibility. If -- politicians. Let's say are seen to be voting. In ways that the Japanese feel are opposed through their interests. Consideration is given through putting a plant in that state or -- -- politician's district. As a way of kind of neutralizing. That that -- And and so clearly there is a political aspect that. But proponents argue heavy Japanese investment here may in fact -- the US and it. It's a Japanese invest more and more in the United States have more factories have more production more equipment more stake in the United States. That doesn't necessarily give them more power. He gives us more power because they have a lot to lose if we start going under. The intensity of this whole issue can be summed up by a story that has President Bush fallen into a deep sleep. Waking up four years later to be told by an advisor that unemployment is at zero inflation is zero and the budget deficit is at zero. Greatness -- the president by the -- -- couple property. How much as one these days post as the advisor about fifty yet. I'm Jeff Greenfield for Nightline in New York.

This transcript has been automatically generated and may not be 100% accurate.

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