Chapter 33 Section 2 Japan's economic development experience and lessons
"learn from past experience".China's future economic development should carefully study the experience and lessons of the Japanese economy.Just as Klein, the Nobel laureate in economics, said: "In my opinion, China should study Japan well. Japan's previous development and China's current development are 'similar in purpose'. Japan had 15 years of The years of high-speed growth, that is from the late 1950s to 1972. At that time, Japanese economists believed that Japan's growth rate should be 10% per year under 'normal' circumstances, and then came the 'Oil shock', Japanese economists changed their words, not 10%, but 7% to 8%. Then there was a second oil crisis, they said, not 7% to 8%, but every year 5%. Now facing the latest round of economic recession, they say it should be 3% to 4%. It can be seen that the rapid growth of Japan since the 1960s has brought surreal optimism to the Japanese, I thought this rapid momentum would last forever. But looking at the Japanese economy since the middle of the 19th century, its long-term average growth rate has remained at around 6%, so Japan is very likely to return to this average. But judging from the current situation, if Japan can achieve a growth rate of 4%, it will be very rare."
Japan experienced an economic miracle after World War II.As shown in Figure 4-6, the period from 1955 to 1973 was a period of rapid economic growth in Japan.During these 18 years, the real growth rate has averaged 9.7% per year, making the world dumbfounded. At the end of 1955, the Japanese government aimed at full employment and economic self-reliance, and planned an average annual growth rate of 5% to 6.5%. In 1956, Japan strengthened the construction of the power industry and imported crude oil from abroad, which promoted the development of the oil refining industry. From 1955 to 1957, Japan experienced its first high tide of economic development.The Japanese call this unexpected prosperity the "Shenwu Boom".The actual economic growth rate has greatly exceeded the target set by the government. In 1958, Japan began to produce household appliances such as automobiles, televisions, and semiconductor radios. Iron and steel replaced textiles as the main export material. There was a second economic growth climax, known as the "Iwato boom." In 1960, the Japanese government formulated a national income doubling plan.Economist Osamu Shimomura, who participated in the formulation of the plan, made a suggestion, "The Japanese economy is now in a period of historic prosperity, and the liberation of national creativity is the driving force for this historic development. Although the economy expanded rapidly in 1959, the growth rate reached 17% (the nominal growth rate at the time of statistics), but continued to move forward steadily".
Since 1961, Japan's annual economic growth has reached 11%, and it took Japan 10 years to double its economic aggregate.In order to welcome the 1964 Tokyo Olympic Games, a large number of stadiums and other facilities were built. After 1963, social infrastructure investment and private equipment investment both increased significantly, thus forming the so-called "Olympic boom". In October 1964, when the Tokyo Olympic Games was grandly opened, the Tokaido Shinkansen, the Tokyo Elevated Monorail, the Metropolitan Expressway Network, the subway, and the Nagoya-Kobe Expressway had been opened to traffic one after another, and the "three major items" became popular in Japanese national life, namely At that time, there were so-called "3Cs" (new three treasures): automobile (car), air conditioning (airconditioning), and color television (colortelevision). The "Iraino boom" refers to five consecutive years of high economic growth from 1965 to 1970, which became the longest economic expansion cycle after World War II. The World Expo was held in Osaka from March 15th to September 13th, 1970. The theme was "Humanity's Progress and Coordination". There were 81 countries and international organizations participating, and as many as 64.21 million visitors. It achieved great success and promoted The rise of the Kansai economic zone centered on Osaka. In the early 1970s, Japan's total GDP ranked third in the world, with a per capita GDP of US$4,000. In 1955, Japan's economic aggregate was only 6.0% of that of the United States, but in 1973 its share to the United States increased to 35.1%.
In January 1974, the "oil crisis" broke out.This year, Japan's economic growth rate dropped sharply, and the real economic growth rate turned negative for the first time, announcing the end of the era of rapid growth.Since Japan's economic bubble burst in 1991, there was only a short-term growth when the Great Hanshin Earthquake occurred in 1995, and it has been in a long-term downturn since then.The period from 1991 to 2001 was the "first lost decade" of the Japanese economy. After 2002, driven by rising foreign demand, especially Chinese imports, the situation improved. The growth rate picked up somewhat in 2007, but the foundation is still quite fragile. Encountered the world financial crisis in 2008, the Japanese economy was prone to recession.
Why did the Japanese economy suddenly slow down?To answer this question, we must study its manufacturing. "Made in Japan" has conquered the entire world, especially in industries such as automobiles, electronics, shipbuilding, and steel, with many world-class companies.Almost all Japanese industries are mechanized, such as advanced precision instruments and precision machine tools, which are world-class and can be said to be very efficient industries.Due to the limitation of land area, Japan did not develop commercial aircraft projects, but chose the technical path of robots. The production of industrial robots accounts for about 70% of the world. "Made in Japan" has an international image of high quality.Toyota Motor's pursuit of "lean management" with zero defects has become a model for the global management community to learn from.Japan relies on manufacturing to maintain a per capita annual income of US$40,000.
Japan's manufacturing growth is highly positively correlated with industrial growth, and it is the deceleration of manufacturing that drags down Japan's overall economic activity.The technological progress of Japan's manufacturing industry has reached the level of "exquisiteness" in the industrial economy. The potential that can be tapped is limited, the marginal productivity of capital is declining, and the enthusiasm for investment is gradually losing. As a result, the economy will stagnate and enter the "high-level equilibrium trap."After 40 years of high-speed growth, Japanese manufacturing profits entered a smooth period in 1991. Although they rose sharply again in 2002, they stopped growing after 2007. This shows that the long-term stable trend of rising manufacturing profits no longer exists.
Japan is not sensitive to the emergence of the information revolution. At the end of the 1970s, economic reform was supposed to be initiated, but Japan, on the one hand, was busy coping with the oil crisis and the emergence of a floating exchange rate system; good time.The lack of economic system reform and the lagging adjustment of Japan's industrial structure prevent Japan from being able to catch the "new economic express train". In the 1990s, information technology became an important engine of economic development, but Japan did not adjust its industrial structure in time. Japanese companies were still immersed in the manufacturing industry and did not regard the information industry as a new economic growth point, thus losing the opportunity for continuous growth.As shown in Figure 4-7, from 2001 to 2008, the investment of Japanese software companies did not grow fast, did not increase significantly, and was far behind that of manufacturing investment.
Kenichi Ohmae pointed out in his book "M-Type Society" that because Japan was one step late in catching up with the "new economy" wave that started in 1985, the economy fell into a long-term recession as soon as it entered the 1990s.Under the new economic conditions, the existing economic models of the 20th century are almost useless. In 2001, Drucker also pointed out in the "Economist" magazine: "Japan is not psychologically prepared to face the fact that the manufacturing industry will decline. After all, the reason why Japan has become the world's second largest economic power is because of the The second half of the 20th century became the manufacturing center of the world. We should never underestimate Japan as a nation. Throughout Japanese history, they have shown a first-class ability to deal with reality, and they can change overnight. However, due to manufacturing Manufacturing is the foundation of Japan's economic success, and the decline in manufacturing remains an unprecedented challenge for Japan."
In my book "Learning Economics" published in 2002, I pointed out that Japan lost the opportunity of the information revolution:
After the 1970s, did Japan have opportunities for emerging sectors?The answer is yes.Since 1971, a revolutionary technological innovation, that is, information technology, has quietly appeared in the world economy, bringing a shock wave of a technological revolution.This requires Japan to create and develop emerging information technology industries in addition to the manufacturing-led industrial structure formed during the period of rapid economic growth, and the overall economic structure to shift from mechanization and electronics to informationization and networking; reform.At this point, the "winner's curse" came true.Due to the high level of accumulation of exclusive capital (advanced equipment, human resources and corporate organization) in Japan's manufacturing industry, the corresponding wage level is also high; on the other hand, Japan's financial system is not sensitive to the information revolution, and emerging information The department does not receive the original capital supply, and the salary level is low.Therefore, no one is willing to work in the emerging information sector.As a result, the return on investment in Japan's manufacturing industry declined further, emerging sectors could not grow, and the economic structure could not be adjusted. Japan lost the impetus for economic growth in the 1990s.
"Winning or losing does not matter".What made the Japanese economy fail to transition was precisely the economic system that once enjoyed great glory in the era of industrial economy:
First, the main banking system.Major companies in Japan have a major bank as the main bank, which is not only the main lender, but also the main shareholder of the company.In this process, the bank forms a close relationship with the enterprise.This enables the enterprise to have sufficient funds to meet the needs of long-term investment.The premise of this financial system arrangement is that enterprises always have investment opportunities, and the investment is effective.Once investments fail, the banking system assumes a large amount of systemic risk in the corporate sector.We know that during a specific productivity revolution, as capital accumulates, marginal returns diminish, investment returns decline, and investment opportunities are bound to gradually disappear.At the same time, this main banking system has a repelling effect on high-risk private equity investment.Therefore, Japanese private venture capital is not active and lacks the flexible financing mechanism of the United States.It is very difficult for Japanese entrepreneurs to borrow money from financial institutions. In case of business failure, they must bear a large amount of debt.
Second, Japanese companies have a lifetime employment system.The lifetime employment system of large enterprises promotes the loyalty and professionalism of employees, and also encourages enterprises to make long-term investment in the human capital of employees, which improves the labor productivity of employees.In the 1970s and 1980s, Japan was in a period of rapid growth in the manufacturing industry, and the labor productivity of Japanese companies had long been in the leading position in the world. This triggered a lot of detailed research on Japanese companies in the American economics circle and published many papers.However, the lifetime employment system of Japanese companies makes it impossible for companies to effectively reduce labor costs by cutting personnel when demand is not strong and when they need to open up blue oceans. Skilled labor to adjust the human resource structure of the enterprise.The rigid labor market has prevented traditional industries from continuing and emerging industries from rising.
Third, the education system is single.The advantage of Japan's education system lies in popularizing education and cultivating homogeneous talents, which is suitable for the industrial economy, but it is obviously insufficient for the information economy that requires creativity and imagination.Kenichi Ohmae pointed out in "M-Type Society": "The current education system in Japan is still in the era of industrialized society; that is to say, Japan's education is to mass-produce talents above the average level. It is ironic that , Under today's Japanese education system, the 'excellent' children taught are not suitable for the future era." Since 1991, Japan's manufacturing has reached its peak and gradually stagnated.Entrepreneurship is easily lost when manufacturing investment opportunities disappear.Management guru Drucker believes that innovation can become a discipline for people to learn and practice.The Japanese education system needs to foster a culture of entrepreneurship and innovation.
From 1991 to 2001, Japan made every effort to manage aggregate demand. The interest rate of monetary policy was reduced to zero, and multiple fiscal stimulus policies made the national debt/GDP ratio continue to increase, but Japan’s economic stagnation still could not be changed.The deposit interest rate has been close to zero for a long time, and the conditions for promoting demand through monetary policy have been lost in general, and the Japanese people have lost an opportunity to accumulate wealth through compound interest.After Japan's "lost first decade", the demand school was eclipsed, and it was the turn of the supply school to make an appearance. In May 2001, the then Japanese Prime Minister Junichiro Koizumi delivered his first policy address to the Diet, arguing that there would be no economic growth without structural reforms, emphasizing the need to restore national confidence and revive the economy through bold economic structural reforms.Koizumi's reforms have been more popular than ever among the Japanese public, despite his clear statement that implementing the reforms could cause Japan a few years of pain before reaping the rewards.Prime Minister Koizumi said the most important task facing him was to "rebuild the economy, build a confident and proud Japanese society" and "play Japan's constructive role" in the world.
Koizumi compared the reform he wanted to carry out with the Meiji Restoration more than 100 years ago, and put forward the slogan "Nopain, nogain", calling on the people to endure the pain of the reform, saying that he would carry out a "no pain, no fear of touching vested interests, and break through past experience". "New Century Restoration" to establish an economic system adapted to the 21st century.The main measures he put forward are: eliminate bank bad debts, bad debts and other bad debts within 2 to 3 years, let go of market competition, and control the issuance of national bonds. Since 2001, Japan has successively issued the "Basic National Strategy for Information Technology", "Nanotechnology Development Strategy", "National Biotechnology Strategy" and "National Intellectual Property Strategy", playing the technology card.
Koizumi's structural reforms have enhanced the vitality of Japan's economic system. Non-permanent employees began to account for a considerable proportion of the labor force, bank bad debts were greatly reduced, and enterprises began to transform.However, Koizumi's economic system reform goals are not clear, there is a lack of domestic consensus on reform, and key reforms such as the labor market are far from being in place, making it difficult to fundamentally solve Japan's long-term institutional problems.Although the Japanese economy has improved in recent years and began to recover in January 2002, it still has not resumed strong growth. In 2008, affected by the world financial crisis, it soon fell into recession, and business confidence continued to decline, showing the long-term growth potential. Fragility, what Paul Krugman calls a "W-shaped" recession. The period from 2001 to 2011 will unfortunately become Japan's "second lost decade".The Japanese economy needs the reform efforts of "Dahua Reform" and "Meiji Restoration", with "learning economy" as the goal of economic system reform, in order to finally get out of the "high-level equilibrium trap" in the manufacturing industry.
Japan's monetary policy is insufficient in coping with the complex international and domestic economic and financial environments.The exchange rate policy has a strong international financial color.For quite a long time after World War II, Japan fixed the exchange rate at 1 US dollar = 360 yen. In 1971, the United States announced the decoupling of the U.S. dollar from gold. The Bretton Woods monetary system, which lasted for a quarter of a century after World War II, came to an end, and the world economy entered the era of floating exchange rates.With the depreciation of the US dollar, the yen began to appreciate, and the era of 1 US dollar = 360 yen has also come to an end. In December 1971, the meeting of the finance ministers of 10 western countries was held in the United States to negotiate the multilateral adjustment of international exchange rates.Under pressure, Japan announced the implementation of a floating exchange rate, and the yen rose from 360 yen to 308 yen per dollar, an appreciation rate of 16.88%.Figure 4-8 describes the long-term appreciation of the yen against the dollar.
In the 1980s, the U.S. economy began a difficult transition to an information economy, resulting in a complex domestic economic environment. In the 1970s, the United States and Western European countries were in the predicament of "stagflation". Latin American countries borrowed a lot of foreign debt for domestic construction, and international capital also adapted to this demand. In 1984, under the circumstances that no one expected, the United States took the lead in getting out of "stagflation" and entering the information economy, and the American economy recovered. From 1981 to 1982, the real interest rate in the United States jumped sharply, which is a generally accepted fact. In the early 1980s, information technology entered the stage of practical application in the United States, and the expected return on investment suddenly rose, opening up new investment opportunities.However, the world capital stock dedicated to information technology was still very small in 1981, so the marginal productivity was high, which led to a jump in real interest rates in the United States, international capital flowed into the United States, and triggered the debt crisis in Latin America in the 1980s. The dollar also strengthened steadily.In the United States' own structural adjustment, the manufacturing industry has been declining, the trade deficit has expanded, and the unemployment rate has risen.The U.S. blames the trade deficit on the overvaluation of the U.S. dollar and requires the U.S. government to coordinate international exchange rate relations. The preferred targets for negotiation are Japan and the former Federal Republic of Germany, which have large trade surpluses with the U.S.
After 1972, the yen maintained a long-term and stable appreciation trend against the US dollar. This trend was suddenly interrupted in 1985, and the turning point was the "Plaza Agreement" in 1985.In the three years since the agreement was signed, the dollar has fallen sharply, while the yen has risen sharply, reaching postwar record highs.With the rapid appreciation of the yen, the international competitiveness of Japan's manufacturing industry declined rapidly, and Japan experienced a short-term economic recession.However, ironically, the appreciation of the yen has not achieved the original intention of the "Plaza Agreement", which is to solve the US-Japan trade deficit.
The gradual decline of Japan's manufacturing industry is an inevitable trend, but the rapid appreciation of the yen after the "Plaza Accord" accelerated this process. In the 1980s, the Japanese economy bid farewell to the "high-speed growth" stage and entered the "medium-speed growth" stage.This created serious excess liquidity in Japan, and the monetary policy of maintaining low interest rates encouraged the generation and explosion of asset bubbles.There are four main reasons for the Japanese asset bubble: 1. The savings rate of Japanese residents has always maintained a high level during the period of rapid growth in the 1960s and 1970s. Through the transformation of the main banking system, it has become the main support for corporate investment. .However, since the 1980s, Japan's manufacturing industry has slowed down, investment opportunities have decreased, Japan's banking system has experienced a large amount of liquidity, and it has begun to tend to invest in industries such as real estate, retail, and personal residences; The central bank's foreign exchange reserves force the central bank to increase the money supply.
After the 1970s, Japan maintained a huge trade surplus for a long time. After the "Plaza Accord" in 1985, Japan continued to maintain a trade surplus with the United States; 3. Japan's capital account surplus.In the impression of the world at that time, Japan, which was still a low-income country 30 years ago, had quickly become a first-class rich country.Due to the advent of the "Japanese Century", international capital expects the yen to continue to appreciate, and a large amount of international hot money will flow into Japan; 4. Irrational optimism. In the late 1970s, "No. 1 in Japan" became a world bestseller.The slogan "Japan is the best in the world" appeared in Japan, and all the people had a premonition that "the era of Japan" was coming.This irrational optimism was exacerbated by the "Maekawa Report," drafted by former Bank of Japan Governor Haruo Maekawa.The report was issued at the wrong time. Not only did it fail to mention the urgency of economic reform, but it was also overly optimistic that domestic demand could be expanded by promoting consumption and housing popularization, and that foreign expansion could be increased through direct investment.Japan's high savings rate has proven hard to change.
Due to the lack of new investment opportunities and surplus in the balance of payments account, and the low level of internationalization of the yen, the liquidity of the Japanese domestic economy has gradually increased, resulting in long-term low interest rates.Under the unanimous praise of the international community and the irrational optimism of the country, an asset bubble appeared in Japan. From 1987 to 1991, Japan began to speculate on stocks and real estate, leading to skyrocketing stock prices and land prices. From 1984 to 1989, land prices soared about twice; as shown in Figure 4-9, the average Nikkei stock price rose from 11,000 yen in 1984 to 39,000 yen at the end of 1989, and the highest price-earnings ratio was as high as 90 times, far from Higher than the US stock market's long-term average of 15 times, triggering a serious stock market bubble.
In 1989, the Bank of Japan began to worry about soaring asset prices and took adjustment measures.As shown in Figure 4-10, after raising the discount rate to 4.25% in 1989, the Bank of Japan raised it to 6% in August 1990, which caused the Japanese stock market to plummet (see Figure 4-9); In April, the Ministry of Finance imposed a limit on the total amount of loans that banks can invest in the real estate sector, causing real estate prices to start falling and causing financial institutions to have huge non-performing loans.A year after the stock market crashed, the Bank of Japan has continued to raise interest rates and has been reluctant to lower them.At that time, the Bank of Japan believed that popping out bubbles was a normal response to economic adjustment, and as the economic situation deteriorated, it was forced to take remedial measures. On July 1, 1991, the Bank of Japan lowered the statutory discount rate from 6% to 5.5%, marking a major change in Japan's monetary policy from tight to loose.Since then, the Bank of Japan has gradually reduced the statutory discount rate to zero (see Figure 4-10), which is equivalent to falling into a "liquidity trap" and the monetary policy has basically failed.
The economic stagnation that Japan has fallen into since 1991 is not an economic crisis in the conventional sense, but a structural problem.Economic structural adjustment is painful, and economic reform is also difficult, which requires the support of economic growth.Since 1991, the Japanese government has been expanding domestic demand and stimulating economic growth through multiple fiscal stimulus, while also trying to control the medium and long-term fiscal deficit.However, it is difficult to coordinate the two policy operations in different directions for a long time.For example, from 1992 to 1995, Japan implemented an active fiscal stimulus policy.However, in 1996, the government suddenly reduced the investment in announced projects, and in 1997, it began to increase the consumption tax rate.Japan's population is aging rapidly.From the perspective of the proportion of the elderly population over 65 years old in the total population, currently 1 out of every 5 people is an old man, and in 2013 it will reach 1 out of every 4 people; in 2035, there will be 1 out of every 3 people Elderly; by around 2050, an average of 1 in 2.5 people will be elderly.The aging of Japan has led to a gradual increase in social security expenditures in the fiscal budget, but there has been no significant increase in social security revenue.The government has a long-term fiscal deficit, leading to rising government debt.The ratio of government debt to GDP was around 200% of GDP in 2008, far exceeding the 60% ceiling set by the EU for member states.
As shown in Figure 4-9, the Nikkei rose from over 10,000 points in 1984 to its peak of over 39,000 points in 1989. After the 1990s, due to the decline in the Japanese economy, the stock price index began to fall.It has been 18 years from 1991 to 2009, and it is still hovering around 15,000 points.Affected by the world financial crisis in 2008, Japan experienced an astonishing recession, and the Nikkei index fell below 10,000 points, as if returning to the starting point in 1984, which made people feel the cycle between economic prosperity and stagnation.
There are many similarities between the Japanese economy and the Chinese economy.From the course of Japan's economic development, China's economy can summarize four experiences and lessons:
1. China's manufacturing industry has achieved important development by relying on price advantages, and it will be a period in which international brands need to be established in the future.However, "Made in Japan" has successfully created a large number of international brands. In terms of brand building, the experience of Japanese companies is worth learning from Chinese companies.
Second, prevent falling into the "high-level equilibrium trap" of the manufacturing industry as early as possible. After reaching its peak, "Made in Japan" inevitably began to decline. After "Made in China" has experienced the brand economy, due to the huge domestic market and huge regional differences, it is easy to control costs.But "Made in China" will eventually begin to decline just like "Made in Japan".The Japanese economy failed to turn to the information economy in time, and stayed on the "Made in Japan" at sunset, fell into the "high-level equilibrium trap", and finally fell into a long-term stagnation after 1991.If the Chinese economy only relies on "Made in China", it will also follow the same path as Japan, that is, long-term stagnation.
3. In the period of rapid economic growth, it is even more necessary to promote the reform of the economic system.The best time for Japan's economic reforms was in the late 1970s. After economic growth stagnated in 1991, further structural reforms would face more resistance.At the same time, Japan lacks the reserve and dissemination of economic ideas, and it is difficult to reach a consensus on reform.To avoid long-term stagnation of the Chinese economy, it is necessary to unremittingly promote the reform of the economic system, build an "innovative country and a learning economy", enhance the ability of independent innovation, and gradually transform the financial system dominated by banks into a financial system dominated by capital markets , to improve the adaptability of the economic system to the productivity revolution.
4. From the perspective of demand, macro control should not only prevent asset bubbles, but also maintain fiscal stability and the sustainability of national debt.Japan's high domestic savings rate, large surplus in international trade, and the low degree of internationalization of the yen have led to excess liquidity in the Japanese economy and low interest rates.When "Made in Japan" lacked investment opportunities, a large amount of liquid funds poured into the stock market and real estate market. Once irrational optimism formed, asset bubbles appeared.Japan's monetary policy did not take enough precautions to deal with the bubble, and did not cut interest rates in a timely manner after the bubble burst.Japan's fiscal policy continues to introduce stimulus plans in the face of economic stagnation, but the effect is not good, and it is difficult to coordinate with the medium and long-term fiscal balance goals.Coupled with the acceleration of population aging, Japan's debt/GDP ratio has reached 200%.China's monetary policy should carefully deal with the possible excess liquidity and prevent the emergence and development of asset bubbles.
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