Comparison of Japan and China History - Essay Example

assignment was due: Japan & China history (Japan) The 20th century especially and for the sake of this paper, its second half, greatly saw Japan emerge as an economic success. This was a tumultuous period that saw ideological transformation in full force. This turn around was as a result of an ideological shift in the way Japan as a country viewed the rest of the world and the way it operated in it. It was also out of the reality at the time that the world was a fast changing economic arena that required a country to not only adapt to it but to also sought ways of moving ahead in time to counter the inevitable changes (Johnson 1986). The onset of 1952-1991 period is quite well considered to be the post world war II era in Japan’s economic transformation. A peace treaty had just gone into effect in 1952 that ended the Japanese occupation by the allied powers. This created a window for self awareness of Japan as a country. The end to this occupation was characterised by government need to develop their country and the private sector’s need to invest. The government had the motive of promoting industrialisation. On the other hand the private sector was well equipped to kindle economic growth. Japanese government needed the market and private sector needed the state for favourable business environment. Due to these facts there had to be a partnership between the two in order for both to achieve their desired ends. In short, the Japanese government was supposed to be the channel and business the creator. Many businesses at this time developed quickly into large corporations. Government came out as a principal supporter of private enterprise (Johnson 1986). Towards the late 1950s the private industry cooperation with the government was at its peak. The government’s focus was on doubling steel production. The neo-zaibatsu at the time had the required capital outlay, construction assets etc. The government made sure that it brought the private sector’s interest at par with its economic interests and goals. This was mainly through coordinating the efforts of the private industries for example Kairetsu. There was also the separation of policies regarding importation of technology goods and others. The ministry had the powers to engage in negotiations regarding the condition as well as the price of technology good being imported (Katz 1998). Price negotiations on technology goods ensured that these goods came in cheaply or at manageable prices which consequently saw rapid growth of industries involved. The two decades i.e. the 1950s and the 1960s industrial organisation was highly promoted by the Japanese government and this was in the structure of a competitive oligopoly. In particular in 1951 Japan’s economy was a third that of Britain and a half that of West Germany. It was also recorded to have been around 4 percent of the US GDP. It was still in the 1950s that Japan saw its rice production rice dramatically due to advancement in the farming methods in regards to use of better fertilizers, seeds and insecticides. In addition to this, Japan also increased its vegetables, fruits, and dairy and meat productions. It was also in this period that the electronic industry emerged with heightened growth in its production of appliances, automobiles, textile as well as photographic equipments. This rapid growth had to be coupled with huge government involvement in development projects that were to support the input the private sector was putting in. By this realisation the government embarked on an expansion programme. This saw huge government investments go to infrastructure where many highways, subways, high-speed railways as well as airports were built (The University of Michigan 2001). After this there were plans to turn the market to be 80 percent liberal but this was criticised heavily. Ikeda’s plans met harsh resistance from the sectors which had flourished on over-loaning and the public which was alarmed by foreign venture takeovers. This liberalisation was compared by the Japanese press with the old days of the occupation which were characterised by Japan not being able to defend its islands from capitalist powers, black ships coming to Japan, the coming of the black ships and calling for another war based on the fight over which is the capital in foreign terms and in national terms. The government to cool the growing public outcry and tensions introduced the income-doubling plan. Eventually Ikeda liberalised trade after having properly protected market where many regulations were put in place to cushion all products and companies from Japan. The Ministry of International Trade and Industry (MITI) was actively involved in the post-world war II economic recovery. This ministry was to formulate favourable taxation policies, establish sound foreign exchange regulations as well as control government spending on key public investment portfolios like infrastructure, health and education. This way the businesses were to have the best supportive services in terms of roads, rail and air transport, a healthy workforce which is also well qualified. The government’s summative roles were to establish regulations, create a protectionist approach to local businesses and to establish a trade expansionist atmosphere. All these saw Japan achieve an extraordinarily quick economic recovery (The University of Michigan 2001). By 1970 Japan had seen itself past all the economies of European countries. This was a true success story considering the duration that this achievement took. It was now ranked second economically in the world. Its education sector had grown a great deal within the past two decades that it was regarded as the best by this time. It is also at this time that the Japanese GNP was at 40 percent that of the United States and double that of Britain. The government had endorsed a sequence of policies that were pro-business. This partnership saw the 1960s to 1980s be called the miraculous economic period whereby the platform had been laid in the 1950s. This is because the economy grew at record rates of 10%, 5% and 4% in the 1960s, 1970s and 1980s respectively hereby making sixties be termed as the golden period. The government policy of public-private partnership had truly bore fruits by this time and by the 1980s the economy was on its full swing and a lesson to be learnt by all the rest. It was in the 1980s that the government had engaged in what is termed as over-investment whereby a banking crisis arose since there were many bad loans as a result of the over-loaning policy that had been in effect for many years before then. Many industries were unable to repay as required of them considering that many had borrowed more than they were able to repay (Katz 1998). This was at times more than their worth. This had created a strain on the Bank of Japan since the city banks were extending this over borrowing to it. This however had given the Bank of Japan huge control over these banks. In 1991 the Japanese asset price bubble brought with it huge implications as from this time onwards to year 2000 the economic growth went on a slow trend if not a downward one. The period of rapid growth and prosperity was coming to an end. Japan as a country has faced many challenges in the past as well as a share of remarkable successes. It is in the periods 1955-1973 and 1973-1991 that Japan had its best times of success in history as well as the period that set the pace for the big economic crisis that befell it in the 1990s. However, the success that was witnessed during this era was primarily from the partnership and dependency that the government had with the private enterprise. Japan & China history (China) People’s Republic of China is considered to be the fastest growing country economically in the past three decades. China to be where it is today has had many policy changes and reforms both on the political front and the economical one. This paper shall seek to establish the effects of particularly the market-oriented reforms that were put in place in the 1980s. For the sake of this paper the People’s Republic of China shall take the name China. In the light of 1980s the reforms undertaken aimed at opening up China to the rest of the world for trade purposes. The same reforms also focused on instilling good and to a good extent self-sufficing agricultural practices on the Chinese households. This is where they could sell their surplus produce in open markets in the township and village enterprises. These reforms followed a realisation that the Soviet model that had been in place for 30 years was not offering much in terms of economic growth. The reform process is still a going concern but the results so far have yielded quite positive results (Gregory 1987). Deng Xiaoping was the leader of China for more than a decade i.e. 1978 to early 1990s. Deng Xiaoping’s theory about letting a few people become rich before the rest in no way denigrates or undermines socialism. This is because socialism should be the situation where the economy is controlled deliberately as centralised control of property in order to eliminate the sense of class or even state. In the light of this statement, there has to be a few controlling resources for the rest. There is also the extended ideology which states that in a capitalist society, socialism can exist (Wei Li 1997). Therefore, it is correct to state that few people at some point may become richer than the rest since they may be the ones in control of the economy and property. Taking an example of the market oriented reforms, it is clear that this was to lead to some acquiring more wealth than others as the rest catch up. This would have been by being allowed to sell the surplus produce rather than having farmed for the community. Afterwards open door policy, international trade as well as foreign direct investment were introduced. It is not after long that positive results of the reformed began to emerge. The people’s standards of living improved. The 1980s saw the economy shift from being administrative driven to being a price driven one. With the establishment of the responsibility system in production, food production was on the increase since the farmers were to retain the proceeds from the land they farmed on contract basis and this was by 1984. Therefore, the more one had the more money they retained. It created the practise of working hard (Raphael 2000). With time government involvement declined whereby people were appointed as managers and firms were to operate on profit basis. Consequently, the private sector grew at a considerably high rate. Many trade barriers and restrictions were lifted and foreign firms were given the chance to improve on their technology as well as bringing in foreign exchange. The shift towards the market system had its negative effects although the system had quickly alleviated China’s economic problems. The biggest that came was inflation. This was worsened by the fact that there was growing interest to make profit which in turn brought about inequality. The inequality in incomes resulted in crime. Corruption was also on the increase as well as increased adoption of the western culture. The western culture was taken to be a negative influence especially by the elderly. Wealth disparity in China was the highest in the late 1980s and into the 1990s. To curb the spread of corruption requires many economic reforms to be put in place as suggested by many scholars from China. Although the income levels of a majority of Chinese have improved, the corrupt lot continue to become richer at the expense of the rest (Gregory 1987). Also there are a number of advantages to the market system. First is that there has been improved competition among the existing firms thereby leading higher productivity, efficiency and better quality products. There are also the reforms in the public enterprise where foreign direct investment is being encouraged (Wei Li 1997). As a result China has also been integrated into the world economy and introduction of better technology. There is also a great deal of information circulating about the economy in China as a result of the reforms. This has heightened the level of awareness for the people. In conclusion the reforms have on general terms let China to greater heights of economic stardom whereby it is being ranked close to the leading economic giants (Raphael 2000). However, the system has tended to favour the rich more than the poor since it is leaning hugely towards the capitalist ideology thereby making the poor climb the wealth ladder quite slowly while the rich are becoming richer by exploiting the incentives for private enterprise. It is here that they employ the poor to work for them. In this way they control both the resources as well as the property. In looking at the above points and arguments China has grown to what it is by letting a few manage more resources than others while the rest work harder than before to create wealth. Works Cited Johnson, Chalmers, A. MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975. Charles E. Tuttle Co. 1986. Katz, Richard. Japan, the System that Soured: The Rise and Fall of the Japanese Economic Miracle. M.E. Sharpe, 1998. The University of Michigan. Japan in Transformation 1952-2000. Longman. 2001. Raphael, Shen. Chinas Economic Reform: An Experiment in Pragmatic Socialism. Greenwood publishing group. 2000. Gregory, C. Chow. The Chinese Economy. World scientific, 1987. Wei, Li. The Impact of Economic Reform on the Performance of Chinese State Enterprises, 1980–1989. Journal of Political Economy, Duke University. 1997. vol. 105, no. 5. Read More