On Industrial Policy In Post-War Japan

The industrial policy is an important part of industrial economics, which is the sum of all kind of policies made by the government to fulfill the certain goals of economic and social development. The contents of industrial policy include the industrial structure policy and industrial organization policy. The concept of industrial policy stemmed from Japan in 1970s. The industrial policy in Japan has had been recognized as the most perfect theoretically and most successful practically in the world and has held the governments'popular attention after it had been introduced to the whole world as the key of Japan's economic success. The industrial policy has had been used as one of the important economic policy by more and more countries, esp. by the developing countries to realize their industrialization and modernization as it has gradually become one of the important approaches of macro-regulating and macro-controlling the economy for a country. So, there would be a certain theoretical and realistic significance for the socialism modernization construction of our country at present to research into the experience of the success and the lesson of the failure of Japan's industrial policy.This paper includes seven parts, that is, introduction and 6 chapters. The introduction concerned mainly about the reason of selecting the topic and research meaning, the status quo of the research in domestic and from overseas, the thinking of research and analysis methods, the structure and creation of this paper. The first chapter mainly introduced the fundamental theories of the industrial policy and generally summarized the industrial policy of post-war Japan, which was the theoretical foundation to research into the development and evolution of the industrial policy of post-war Japan. The following chapters till chapter five mainly introduced and analyzed the development process and evolvement pattern of industrial policy. This paper divided the period of carrying out the industrial policy into four, ie., the economy rejuvenation period (1946-1960), the economic highly-developing period (1960-1973), the economic slowly-developing and adjustment period (1973-1990), and the period after the crash of bubble economy (1990 till present).The consecution of elaborating the historical process of the development of post-war Japan's industrial policy was followed as the background or basis of making the industrial policy in different periods, the context, the implement approaches, the implement results and appraisal of the industrial policy. The chapter six was actually the ending part of this paper, which overall assessed the post-war Japan's industrial policy and then pointed out the experience and inspiration to the economic and social development of our country at present. This paper came up with several points that China should learn to after deeply analyzing the positive function and negative influence of post-war Japan's industrial policy with the combination of the problems and inadequate of carrying out the industrial policy in China after the reform and opening policy.This paper pointed out that Japan has been carrying out the government-dominating economic system. The making and carrying out the industrial policies in different periods of post-war Japan is based on the current trend of international economic development with the combination of the real situation of Japan, directing against to the shortcomings of market mechanism, selecting the strategic leading industry for different periods, taking advantage of the focus on the resources allocation chose by the government, aided by a series of policies and measures, promoting the leading industrials to develop very fast in different periods, giving fully play in the frontward and backward connection effect to the related industries and then driving the development of the related industrials, promoting the optimization and upgrade of industrial structure, and finally pushing the whole national economy forward fast. The industrial policy played a key role in the economic revival and high-speed growth in post-war Japan. But with the gradual mature of market economy of Japan and the growth and strengthening of non-governmental enterprises, and also to comply with the trend of world-wide economic development after 1970s, Japan government weakened the function and influence of industrial policy step by step and the measures to put the industrial policy into effect had been gradually moved to indirect guidance with providing the information and fostering the market environment rather than direct interference to lead the enterprises'development, Making a general survey of the process of the industrial policy being put into effect in post-war Japan, its positive function should be recognized as follows, firstly, the Japan's industrial structure policy played a key role in the selecting and fostering the leading industry and the transformation of industrial structure to guarantee the successful fulfillment of Japan's catch-up-with-and-surpass strategic mission. Secondly, Japan's industrial organization policy played a key role in boosting the rational organization of social productivity in dealing with the relationship of monopoly and competition, promoting the economy of scale of large-sized enterprises to increase its international competitiveness, coordinating the relationships of large-sized companies and medium-and small-sized companies to maintain the domestic market competitiveness. Thirdly, Japan's industrial technology policy played a key role in promoting the technological development and creation, enhancing Japan's whole scientific and technological level, making contribution to enable Japan to rank among the world's most advanced in science and economy. Fourthly, Japan's industrial policy played a key role in making up and correcting the failure and shortcomings of market mechanism and providing the important experience how to maintain the market competition vigor while practicing the social conscientious intervention in the condition of market economy. Finally, Japan's industrial policy played a key role in coordinating social economic relations, guaranteeing the public stability in the process of Japan's industrialization and truly reflecting the ultimate purpose of the industrial policy promoting the economic growth and enhancing the social welfare while boosting the development of social productivity.However, the industrial policy in nature is governmental interference action, which unavoidably had many negative influences due to government failure and government defects. During the catch-up-with period, the drawbacks of industrial policy had been covered due to the powerful interference of government and weak market force when everything had been motivated to develop and revive the economy. In fact, during the economic revival period and high-speed growth period, the expansion of Renaissance Finance Corporation and many kinds of price subsidy policies had caused severe inflation, the development of heavy chemical industry brought about the public hazard such as environmental pollution and deteriorating the quality of life, protective trade policy had triggered off the extensive trade friction, the lobbying from the interest groups who had been called the iron triangle of Japan's governors, congressmen and enterprises might have resulted in the deviation of the industrial policy's carry-out and have had an influence over the transformation of industrial organization so that the situation of the prevailing monopoly in domestic market and inadequate competition has not been easily changed, the selective of specific industries also have had caused the rent-seeking and corruption, etc. After finishing the catch-up-with mission, the drawbacks of industrial policy had been showed up as the special relations between the government and the enterprises. Japan's enterprises which used to develop with the protection from the industrial policy displayed their dependence on government and embodied the trend of enterprises'preference to expansion rather than to profit when there was sluggish economy or inadequate market condition. Under the background of economic globalization, liberation and marketization, the growing enterprises urged the government to deregulate, lessen the interference and stressed on strengthening the economic vigor by use of market competition mechanism. But due to the government-guiding economic system, the democratic procedure and the lag of carrying out the industrial policies, both of the government and enterprises had not adapted fast to the changes of new situation so that the industrial policy had been very difficult to be put into effect or even far away from the goals of policies. Especially, the fault of industrial policies was the main reason that Japan's economy have had been in downturn situation after 1990s. Such as the long-term fostering of the key industries seriously imbalanced the whole economic benefits, trade friction put the Japan's economy under the pressure of Japanese Yen being appreciated which forced Japan's companies to expand their overseas direct investment and eventually had worsened the phenomenon of domestic hollowing-out-of industry and deteriorated the unemployment issue. Another example was that in industrial technology policy aspect, the policy maker have had been so overconfident that Japan had long overlooked the basic scientific research and focused on hardware production rather than software development in computer industry, which finally caused the Japan's information technology far fell behind USA in the new technology revolution at the end of 1990s.Finally, this paper thought that there would have had many issues and drawbacks in making and carrying out the industrial policy in China because there has only had 20 years of industrial policy being put into effect as an macro-adjustment and control measure after the opening and reform policy, the late starting of market economy, the transition system, the imperfect of national economic marketization and operating mechanism. This paper pointed out the differences and drawbacks when China carried out the industry policy and then put forward some experiences and inspirations after making the comparison with Japan's and China's economy.