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japanese industrial policy

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Introduction

Introduction In the 1950s and 1960s, the Japanese government created a complicated system of policies to promote industrial development. The objective of industrial policy was to shift resources to specific industries in order to gain international competitive advantage for Japan. Although in the 1970s and 1980s industrial policy remained important in Japan, thinking began to change. Government intervene less and become more respectful of price mechanisms in guiding future development. During this period, trade and direct foreign investment were liberalised, tariff and non-tariff trade barriers were lowered, and the economies of the advanced nations became more integrated, as the result of the growth of international trade and international corporations. Thinking about industrial policy Industrial policy usually indicates a broad set of government policies which promote the same specific targeted industry or industries. The industries that post-war Japanese industrial policy is argued to have promoted include petrochemicals, steel, automobiles and semiconductors. Each at various times benefited from import restraints, subsidies, antitrust exemptions, etc. ...read more.

Middle

Initially, designated machinery in targeted industries qualified for 50 per cent write-off of equipment purchases in the first year. 4) Antitrust exemptions 260 The Anti-monopoly Law of Japan prohibited cartels and price-fixing conspiracies. The Exports Transaction Law, also enacted in August 1952, authorised officially sanctioned export cartels of small and medium firms. With trade opening, Japanese firms responded not only to the dictates if the government, but also to the imperatives of the world marketplace. The Japanese government continued protecting a few sectors, including textiles, transistors, and agriculture, but the general trend of the 1970s was toward openness and Japan's industrial policy took a new focus. The recent decades, 1975 After the mid-1970s, the Japanese government shifted the focus of its industrial policy to towards active promotion of collaborative research efforts in the high tech industries and assistance of firms and workers in declining sectors. 1) Assistance to declining sectors 364 In the mid-1970s, when Japan's macroeconomic growth slowed and world oil prices quadrupled, a number of Japanese industries faced permanent economic reversals, and became widely perceived as "troubled", "structurally depressed", and so on. ...read more.

Conclusion

He claimed that Japan's encouragement of steel, shipbuilding, chemical fertilisers, electronic calculators, and machines tools might have indirectly reduced Japan's net exports of other goods and possibly raised the relative price of those other goods in foreign markets to Japan's net benefit. However, Noland's evidence is unlikely to convince sceptics that Japan's industrial policy did improve the nation's terms of foreign trade. Paul Krugman argues that from enlargement of the steel industry external benefits did not exist. Since 1950, the technology of steel production has advanced little and by 1960 it had been completely assimilated by the Japanese producers, and there were no neighbourhood effects of expanded industry output. Conclusion In conclusion, I think that industrial policy of Japan has been quite successful when government authorities' use of subsidies, tax credits, trade restrictions, anti-trust exemptions, etc, to targeted industries. Japan's industrial policy resides in unique institutions, so much so that "Japanese-style" industrial policy includes government financial intermediaries and an elite bureaucracy with broad powers. ?? ?? ?? ?? ...read more.

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