Chinese Industrial Policy and Reforms--Preliminary Comparisons with Japan

Abstract

In Susan Shirk's analysis of recent Chinese industrial reforms as 'efficiency-oriented' rather than 'organisation-oriented', she nevertheless suggests that the Chinese may soon be looking to Japan rather than to the West for a model.' In advocating conglomerates of enterprises the Chinese have alluded directly to Japanese experience. In addition, a number of characteristics of Chinese policy and experience have or have had at least a superficial similarity to those of Japan. Because the Japanese case has also generally been seen as a model for emulation with special characteristics, it seems worthwhile to attempt a preliminary look at possible comparisons. Even a preliminary discussion requires a number of caveats and conditional comments. First, descriptions of Japan's special characteristics are usually designed to explain the success of state guidance and labour relations in a private enterprise system, while China is attempting to alleviate the problems of a system of relatively total state planning and low enterprise and individual incentives high costs, low labour productivity and waste of raw materials. Therefore the starting points are quite different in the two cases. Secondly, although the focus here is not on the question of why China has failed while Japan has succeeded in terms of industrial development (at whatever costs), resource considerations have influenced results and informed options differently in the two cases. The Chinese designate energy and transport bottle-necks and generally low levels of scientific and technical education as major obstacles to be overcome. Differences in the availability of specific skills at the levels of economic bureaucracy and management also have been significant.