INTR9018-lecture2-Rise-and-Future-of-Japan翻译报告课件

TheRiseandFutureofJapanFiveKeyQuestionsHowdoweexplaintherapidriseofJapanfromthe1960sto1990s?IstheJapanesemodelfinished?Werethe1990s10lostyearsandisJapanstillacompetitivepowerintheworld?HowhasJapan’sdevelopmentaffectedotherEastAsianeconomies?IsitpossibletoseeJapanriseagaininthe2020s?RiseofJapanRequiredReadingsAndressen,C.AShortHistoryofJapan:SamuraitoSony,Sydney,Allen&Unwin,2002.(Chapters6&7)Furuoka,F.“Japanandthe‘flyinggeese’patternofEastAsianintegration,”eastasia.atVol.4No.1,2005.RiseofJapanMulgan,A.G.“Japan:Asettingsun?”ForeignAffairsVol79No.4,2000.T.Hamashita.China,EastAsiaandtheGlobalEconomy:RegionalandHistoricalPerspectives(Routledge,LondonandNewYork,2008),Chapter5,57-85.JosephEStiglitzandShahidYusuf(2001),RethinkingtheEastAsianMiracle:Aco-publicationoftheWorldBankandOxfordUniversityPress.RiseofJapanCanJapanMakeItselfGreatAgain.JapanTimes16.4.2016.https://www.japantimes.co.jp/news/2016/04/16/national/media-national/can-japan-make-great-2050/#.XYxDE0YzbIUTheLeadingPowerinAsiawillbejapan,notChina(2017)./sites/johnmauldin/2017/02/08/the-leading-power-in-east-asia-will-be-japan-not-china/#46966e3c2463Kuepper.J.(2019)WhatyoucanLearnfromJapan’sLostDecade./japan-s-lost-decade-brief-history-and-lessons-1979056.18September2019.

JAPAN–KEYDATES

1868 19451950~19601964

1970s1997 MeijiRestorationLosttheSecondWorldWarHigheconomicgrowthTheFirstAsianmemberinOECDThesecondlargesteconomyintheworldAsianeconomiccrisisThe‘FlyingGeese’ModelHamishita–OutlinesKaname

Akamatsu‘FlyingGeese’TheoryHamashitaoutlinesaMulti-tierhierarchical‘flyinggeese’modelthatwasdevelopedin1930sThefocuswasessentiallyonhowindustrialisationspreadfromdevelopedcountriestothedevelopingcountriesJapanwastheleadinggooseThe‘FlyingGeese’ModelTheFirstGaggleAftertheMeijiRestoration(1868),whenJapanopeneduptotheworld(itwasclosedbeforethenfornearly300yearsundertheTokugawashoganate),itre-establisheddiplomaticrelationshipswithWesterncountries.Shortlyafterwards,JapanstartedtoexpanditsterritoryandincreaseitseffortsatAsianregionalintegration.BriefHistoryJapan’sTokugawa(orEdo)period,whichlastedfrom1603to1867,wouldbethefinaleraoftraditionalJapanesegovernment,cultureandsocietybeforetheMeijiRestorationof1868toppledthelong-reigningTokugawashogunsandpropelledthecountryintothemodernera.Nevertheless,theTokugawadynastyofshogunspresidedover250yearsofpeaceandprosperityinJapan,includingtheriseofanewmerchantclassandincreasingurbanisation.

BriefHistoryToguardagainstexternalinfluence,theTokugawashogunsclosedoffJapanesesocietyfromWesternisinginfluences,particularlyChristianity.ButwhentheTokugawashogunatewasgrowingincreasinglyweakbythemid-19thcentury,twopowerfulclansjoinedforcesinearly1868toseizepoweraspartofan“imperialrestoration”namedforEmperorMeiji.

BriefHistoryInitseffortstocloseJapanofffromforeigninfluence,theTokugawashogunatealsoprohibitedtradewithWesternnationsandpreventedJapanesemerchantsfromtravellingabroad.WiththeActofSeclusion(1636),JapanwaseffectivelycutofffromWesternnationsforthenext200years(withtheexceptionofasmallDutchoutpostinNagasakiHarbor).Atthesametime,itmaintainedcloserelationswithneighboringKoreaandChina,confirmingatraditionalEastAsianpoliticalorderwithChinaatthecenter.BriefHistoryTheMeijiRestorationspelledthebeginningoftheendforfeudalisminJapan,andwouldleadtotheemergenceofmodernJapaneseculture,politicsandsociety.JustsevenyearsaftertheMeijiperiodended(withtheEmperorMeiji’sdeathin1912),anewlymodernisedJapanwasrecognisedasoneofthe"BigFive"powers(alongsideBritain,theUnitedStates,FranceandItaly)attheVersaillesPeaceConferencethatendedWorldWarI.Let’snowexploretheflyinggeesemodelingreaterdetail.The‘FlyingGeese’ModelTheFirstGaggleThefirst-tiergoose:JapanThesecond-tiergeese:ChineseTaiwan,KoreaandManchuriamanyofthesejurisdictionswereforcedtoacceptJapan’sleadershipanditsvaluesThethird-tiergeese:AsiancountriesthatJapanoccupiedduringtheSecondWorldWarlikeMalaysia,Indonesia.The‘FlyingGeese’ModelTheFirstGaggle–MainfeaturesFormedforciblybyusingmilitaryforce.UnlikeotheroccupyingpowersliketheUK,JapanaggressivelypromoteditsownidealsontheAsiancountriesitoccupied.The‘FlyingGeese’ModelTheFirstGaggle–EndofFlightIn1945,itceasedtoexistwhenJapansurrenderedtotheAlliedForcesJapanthenbecameoneofthepoorestcountriesintheworldandreliedonassistancefromWesterncountriesJapanthenstartedfullyfocusingonrestorationandrehabilitationThe‘FlyingGeese’ModelTheSecondGaggleBythistime,Japansheditsconfrontationalanti-WesternstanceItformedJapan-USsecuritypactJapanattemptedthesecondEastAsianintegrationThe‘FlyingGeese’ModelTheSecondGaggleThefirst-tiergoose:JapanThesecond-tiergeese:SouthKorea,ChineseTaiwan,HongKongChinaandSingapore(NIEs)Thethird-tiergeese:China,Thailand,MalaysiaandIndonesiaThe‘FlyingGeese’ModelTheSecondGaggleInitialStage:JapanexportedmanufacturedgoodstoAsianNIEs(HK,Korea,SingaporeandChineseTaipei).ThesecondStage:JapanproceededtoestablishproductionbasesinAsianNIEsEventually,AsianNIEsthemselvesbecameexporterstothird-tiergeese.The‘FlyingGeese’ModelTheSecondGaggle–MainfeaturesJapanreliedsolelyonitseconomicpowerJapanemployeditsaidtoboostitseconomicpowerandconsolidateitsproductionnetworkinEastAsiaJapankeptalowprofileininternationalpoliticalaffairsThe‘FlyingGeese’ModelTheSecondGaggle–EndofFlightBythe1990s,JapancontinuedslidingeverdeeperintoeconomicrecessionLosingitsenergytoleadtheregionTherestofthegagglewereabletocontinuetheirflightuntiltheAsianfinancialcrisis(1997)putastoptoit.StiglitzandYusufLet’snowturntowhatweresomeofthedriversofJapan’sremarkableeconomicmiracle–atleastfromabout1947(post-war)toaround1990.AccordingtotheStiglitzandYusufreference(chapter10)itwasopennesstotradethatwasacrucialsourceofJapan’srapidgrowthandtheJapanesegovernment’smaincontributionwastolimittradeprotectionandensurethatincentiveswereneutral.Thisisincontrasttowhathasbeenpositedbyotherauthorswhohavestressedinterventionistpolicies.TheWorldBankin1983identifiedmanufacturedgoodsexportsasadriver–throughtheintroductionofnewtechnologiestoexportingfirmsandtherestoftheeconomy.StiglitzandYusufBycontrast,othernotableauthorssuchasMichaelPorter(1990)suggestthatJapaneseexportsuccessreflectedfavourabledomesticconditions,strongproductivitygrowth.StiglitzandYusufcontendthefollowingreJapan’searlysuccess:Theydon’tfindevidencethatexportsledtohigherproductivity.Itmaywellhavebeentheotherwayaround.TheyareNOToftheviewthatindustrypoliciesorsubsidiesboostedproductivity.ThatmostauthorsANDtheWorldBankneglectedimportsasadriverofproductivityandgrowth.Theauthorscitestatisticalevidenceandregressionmodelsthatsupportthishypothesis–thatimportsdroveperformance.StiglitzandYusufTheyalsofindthatwhileproductivitygrowthdroveexportperformanceinJapan,importprotectionretardedperformancewhileimports,somewhatcounterintuitively,enhancedit.2reasonswhyimportsimpactedpositivelyontotalfactorproductivitygrowth.Thequalityoffirmsinindustryimprovesbecauseofaddedcompetitionfromforeignfirms.Accesstobetterintermediariesmaybeafactor–forexample,Japaneseapparelmanufacturersmaybenefitfromimportinghigherqualityinputs.

StiglitzandYusufStiglitzandYusufcontendthatgreaterimportsofcompetingproductspurinnovationandcompetitivepressuresandlearningfromforeignrivalsareimportantconduitsforeconomicgrowth.Thesechannelsareevenmoreimportantasindustriesconvergewiththemarketleader.TheprincipallessonfromthisisthatfurtherliberalisationbyJapanmaybebeneficialforthefuture,sinceJapan’sperformancehasslippedoverthepast2andahalfdecades.EndoftheJapanmodel?ObstacletoJapan’seconomicrecoveryThekeyobstaclesare:InflatedbudgetsAgingsociety:social-welfareservicesandpensionsPubliclossconfidenceinJapan’sgovernmentCorruptionscandalsPublicdebt:thenPMObuchiissuedmoregovernmentbondsthananyotherprimeministerdid.EndoftheJapanmodel?Bankingreform(1999):attempttometeoutpreferentialtreatmenttoSMEsPolicyshiftsaddedtoanticompetitivethrustofgovernmentmeasuresTaxreforms(postponed):promotecorporaterestructuringandincreasethecompetitivenessofJapanesecompaniesEndoftheJapanmodel?FiscalrigidityConstantemphasisonroad-buildingMainweapontorevivingtheeconomy:fiscalstimulustospurdomesticdemandTheconsensusisthatunlessJapanreformsitseconomy,itisonthebrinkofstructuraldeclineEndoftheJapanmodel?Isthereanopportunity?Governmentcoulddiscarditsconventionalspendinghabitsandadopteffectiveones–ie,greaterfiscalconsolidationResumingthegovernment’sderegulationagenda:169JapaneseeconomistschoosethisasthemostimportantmeansforbringingaboutaneconomicrecoveryEndoftheJapanmodel?Tosumup,deregulationwould:Encouragebusinessstart-upsLeadtogreatercorporateefficiencyLeadtolowerpricesforconsumersNewjobsResultinamorecompetitivebusinessenvironmentAllupabetterfunctioningJapaneseeconomy,reversingthetrendofthepast2-3decades.IsJapan’smodelfinished?

WeshallnowturntothequestionofwhetherornottheJapanesemodelisfinished.ManycommentatorshavesaidthatJapan’seconomicmodelhasimploded.Since1991,growthhasaveragedjust0.9percentversus4.5percentovertheprevioustwodecades.Asnotedearlier,slowgrowth,combinedwithlargefiscaldeficitsandnearzeroinflation,hasdrivengovernmentdebtfrom50percentofGDPtoaround236percentofGDP.IsJapan’sModelFinished?Despiteallthis,theprevailingwisdomaboutthesupposedfailureoftheJapanesemodelmightbewrong.WhileJapan’sdemographicdeclineposeschallenges,itmayalsoimplysomeadvantages.AndJapan’sdebtsarefarmoresustainablethantheyappear.IsJapan’sModelFinished?True,Japan’sGDPgrowthlagsmostotherdevelopedeconomies,andwilllikelycontinuetodosoasthepopulationslowlydeclines.ButwhatmattersforhumanwelfareisGDPpercapita,andonthisfrontJapan’s0.65percentannualgrowthinthedecadesince2007equalstheUnitedStatesandisbetterthantheUnitedKingdom’s0.39percentandFrance’s0.34percent—notbadforacountrystartingwithoneoftheworld’shighestlivingstandards.IsJapan’sModelFinished?SomeredeemingfeaturesreJapan’seconomy.Japan’seconomyisnotdisfiguredbythemassiveincreaseininequalitythathas,forinstance,leftmanyAmericanworkersfacingstagnantrealwagesthroughoutthatperiod.Unemploymentisbelow3percent.IsJapan’sModelFinished?Wemustnotforgetthatasamachinefordeliveringprosperitytoawiderangeofcitizens,Japan’seconomythereforecompareswelltodaywithalmostanyother.Withcrimeratesamongthelowestintheworld,theJapanesesocialmodelmustbedoingsomethingsright.Andtourismisbooming,withthenumberofforeignvisitorsupfrom5milliontonearly30millioninthelast15years.IsJapan’sModelFinished?Japanleadstheworldinthetechnologiesthatcanenableolderpeopletoremaineconomicallyactivelonger,andintheroboticsthatallowgoodsandservicestobeproducedbyeverfewerworkers.Infact,aworldofradicalautomationpossibilities,highandrisinglifeexpectancyandadecliningpopulationarebetterproblemstofacethantherapidpopulationgrowththatthreatenstooverwhelmjobcreationinsomeemerging-marketeconomies.Japan’s10LostYears!TheprobleminJapanstartedwithJapan’sso-called‘LostDecade’.1991-2002.InJanuary1990,Japan'sstockmarketcrashed.Propertyvaluesfell87%.TheBankofJapanfoughtback.Itlowered

theinterestratefrom6%to

0.5%by1995.Itdidn'trevivetheeconomybecausepeoplehadborrowedtoomuchtobuyrealestateduringthebubble.Theytookadvantageoflowratestorefinanceolddebt.Theydidn'tborrowtobuymore.

Japan’sLost10Years!Thegovernmenttriedfiscalpolicy.Asnotedearlier,itspentonhighwaysandotherinfrastructurethatcreatedthehighdebt-to-GDPratio.By2005,companieshadrepairedtheirbalancesheets.In2007,Japan'seconomystartedtoimprove.Itwasup2.1%in2007and3.2%inQ12008.Thisledmanytobelieveithadfinallygrownoutofits20-yearslump.Japan’sLost10Years!The2008financialcrisissent

GDPgrowth

plummeting12.9%inthefourthquarter.Itwasthe

worstdeclinesincethe1974recession.Japan's

economiccollapsewasashock,sinceQ3growthwasonlydown0.1%,followingadecreaseof2.4%in

Q22008.Theseveredownturnwasaresultofslumpingexportsinconsumerelectronicsandautosales.Thatsectorwas16%ofJapan'seconomy.Ithadbeenadrivingforcebehindthecountry'seconomicrevivalfrom2002to2008.WhatisHinderingJapan’sGrowth?Thefollowing

factorshinder

Japan'sgrowth.Thecountry'sleadersmustaddressthesechallengestorestoregrowth.1.

Keiretsu.This

isthestructuredinterdependentrelationshipsbetween

manufacturers,suppliers,anddistributors.Thisallowsthemanufacturer

monopoly-like

powertocontrolthe

supplychain.Italsoreducestheimpactoffreemarketforces.New,innovativeentrepreneurscan'tcompetewiththelow-costkeiretsu.Italsodiscourages

foreigndirectinvestmentbecausenon-Japanesecompaniescan'tcompetewiththeadvantagesgivenbykeiretsu.WhatisHinderingJapan’sGrowth?2.

Guaranteedlifetimeemployment

meantcompanieshiredcollegegraduateswhostayeduntilretirement.Around25millionworkers,aged45to65,benefitfromthesystem.Mosthaveoutdatedskillsandarejustcruisinguntilretirement.Thatburdenscorporatecompetitivenessandprofitabilitybyartificiallyraisingwagesfortheseworkers.Therecessionmadethatstrategyunprofitable.By2014,only8.8%ofJapanesecompaniescontinuedtoofferit.Butitsinfluenceremains.WhatisHinderingJapan’sGrowth?3.Japan'sagingpopulation

meanslessdemandtodrivegrowth.Olderfamiliesdon'tbuynewhouses,cars,andotherconsumerproductsasmuchasyoungeronesdo.Andthegovernment

mustpayoutmoreretirementbenefits

thanitreceivesinincometaxesfromworkers.Itdoesn'thelpthatthepopulationisalsoshrinking.By2065,

Japanwillhave30%

fewerpeoplethanitdidin2015.Thecountrydoesnotwelcome

immigrants.Aninfluxofyoungerfamilieswouldboosttheeconomy.Instead,JapanesecompaniesmustrelyontemporaryworkersfromnearbySouthAsiancountrieswhosendtheirremittancesbackhome.WhatisHinderingJapan’sGrowth?4.Japan's

massive

debt-to-GDPratio

meansJapanowesmorethantwiceasmuchasitproducesannually.ThebiggestownerofitsdebtistheBankofJapan.Thathasallowedthecountrytokeepspendingwithoutworryingabouthigherinterestratesdemandedbylenders.

Butitalsomeansgovernmentspending,unfortunately,doesn'tboosttheeconomyWhatisHinderingJapan’sGrowth?5.

Japanbrieflybecamethe

largestholderofU.S.debt

in2015andagainin2017.

Japandoesthistokeeptheyenlowrelativetothedollartoimproveitsexports.

6.

Japanisthe

world’slargestnetfood

importer.Thecountryhasjust

one-thirdasmucharablelandperpersonasChina.HasAbenomicsWorked?OnDecember26,2012,

ShinzoAbe

becameJapan'sPrimeMinisterforthesecondtime.Hisfirsttermwasfrom2006to2007.Hewonin2012bypromisingeconomicreformtoshakethecountryoutofits20-yearslump."Abenomics"hasthreeprincipalcomponents,calledthe"threearrows."HasAbenomicsWorked?First,Abe

instructedtheBankofJapan

toinitiate

expansivemonetarypolicies

throughquantitativeeasing.That

loweredthevalueoftheyen

from$0.013in2012to$0.0083byMay2013.

That'sexpressedintermsofthe

valueofthedollar,

whichrosefrom76.88yento120.18yen.

Butby2019,theyenstrengthenedagainstthedollar.Onedollarcouldonlypurchase110.5Japaneseyen.HasAbenomicsWorked?Makingtheyencheapershouldhaveincreasedexports.Theirpricesdropindollarterms,makingthemmorecompetitivelypriced.ButJapanesecompanies

didn'tincreaseexports

asexpected.

Somecompaniesdidn'tlowertheirforeignprices.Theypocketedtheprofitsinstead.HasAbenomicsWorked?Otherbusinessesalreadyoutsourcedfactoriestolower-costareas,sothedevaluationdidn'thelp.Stillothersweren'thelpedbecausetheyhadmovedproductionintotheirmarkets.ThedevaluationactuallyhurtJapanesebusinessesthatrelyonimports.Theircostsrose.Italsohurtconsumers,whohadtopaymoreforimports.HasAbenomicsWorked?Second,Abelaunched

expansivefiscalpolicy.Heincreasedinfrastructurespending.HepromisedtooffsettheriseinJapan's235%

debt-to-GDPratio

witha10%consumertaxin2014.Itbackfiredwhenitbrieflyreturnedtheeconomytorecession.In2016,Abespentanother

$276billion.Ofthat,$202billionwasgovernmentloanprograms.The

restwenttoward

infrastructureconstruction.HasAbenomicsWorked?Third,Abepromisedstructuralreforms.HepromisedtomodernizeJapan'sagriculturalindustry.Hesaidhewouldreduce

tarif