Steeling the 'developmental state'c The comparative political economy of industrial policy and state-business relations in the Chinese and Japanese steel industries

Abstract

This paper conducts a comparative historical review of industrial policy and state-business relations in the Chinese and Japanese steel industries. The paper challenges a common assumption within literature concerned with the developmental state, as well as research on the Chinese steel industry, that China and Japan represent polar opposite cases with respect to the effectiveness of bureaucratic intervention in strategic sectors. Through a comparative review of China’s current efforts and Japan’s mid-twentieth century efforts to consolidate and set price cartels in the steel industry, the paper finds a remarkable resemblance between policy challenges and failures in both countries at a similar phase of their market-oriented industrial development. These findings offer insights into the policy challenges that China and other late industrialising countries currently face as they proceed with modernising their respective steel industries.