What China Learned from Japan’s “Economic Miracle”

i'm curious quickly how you came to a  different conclusion than everybody else   okay good question um so uh let me go back a  little bit my own history um i graduated from   college in 1963 and um i got a grant to go out to  the east west center in honolulu to study japanese   and so i did that i then went to to  japan to tokyo studied at ko university   got my master's degree at ko long story short  i wound up spending uh the 19 part of the 1960s   and significant part of the 1970s  in japan during the economic miracle   yeah and and i spent that time part of that  time i was a student but part of that time   i was actually in business i actually ran the  uh japanese subsidiary of an american company   i worked for a swiss consulting company in japan  so so you know i was watching the japanese miracle   occur i was participating in the japanese  miracle in the 1970s uh and and then um in   1981 i was asked by malcolm baldridge  who was as secretary of commerce to   join the commerce department uh to help with  negotiations with ch with japan now you go back   to 1981 you may remember that the japanese  auto industry was was eating detroit whole   that the japanese semiconductor  industry was beginning to eat   silicon valley hole that the japanese had already  conquered much of the steel industry all the   textile industry all of the consumer electronics  industry and that our trade negotiators with japan   had been negotiating a series of so-called  voluntary export agreements under which   japan would agree to limit to a certain number  its exports so in fact in 1981 we had we signed   a deal on voluntary exports limitations with  japan on autos uh and japan was japanese auto   exports the japanese said we volunteer that we  will not export more than i forget the number of   around two million automobiles to the us work  so baldrige asked me to join the commerce   department i did and i became the lead u.s  negotiator with japan and also with with   korea and then i was the leader of the first  u.s trade mission to china in 82 but i had   this experience with japan throughout the 1980s as  the key us negotiator on all kinds of trade issues   and um and what i realized after a while was that  there was a repetitive dynamic to our discussion   and here's the way it would go uh  we'd be sitting here in washington   and some american industry let's say the  semiconductor industry would uh come and and   they would say to us uh hey you know we're getting  killed by these japanese they're not playing fair   they're dumping uh products in the american  market they're stealing our technology and   and you know can you the commerce department help  us out and so we the commerce department and the   trade representative would go to japan and we  would say to the japanese hey guys you know you   got to stop doing this you're cheating and you're  not playing fair square and the japanese would say   what are you talking about man the problem  is we're not we're playing fair square hey   you know what we have lower tariffs than  you do and they did we have fewer non-fewer   border protection measures than you do and  that was true so technically if you looked   at the u.s and the japanese economy technically  the japanese economy was more open quote unquote   than the u.s economy and so they would say  hey look our companies we're open they're your   economy the problem is your businessman and your  business when it comes they don't try hard enough   their delivery is always late they're they put  the steering wheel on the wrong side of the car   i mean come on you know and it didn't matter  it could be semi-conductors it could be cars it   could be almonds it didn't matter that was the  debate and i went through that you know after   going through that about 100 times i scratched  my head and i said there's something wrong here   so here's the deal we would go to the japanese we  say okay what kind of uh of a political system do   you have the japanese say well we're a democracy  just like you oh okay we know how that works   and and your economy oh well we're a market a  capitalist market economy oh okay we know how that   works just like us ah and but if you sat down and  if you had had experience in the japanese economy   and saw how it actually worked and experienced in  japanese politics and saw how it actually worked   yeah okay it was a democracy but only one party  had ruled japan uh at that point only one party   had ruled japan you know for the past 50 years ah  and you said okay it's a it's a market economy but   it's a market economy in which uh 70 of the  shares on the tokyo exchange never trade uh   because of crushed shareholdings between the major  corporations so you have the mitsubishi group   so mitsubishi autos its bank is which  of ishi bank and uh it's it's you know   the bank and the other mitsubishi entities are  all linked together by cross-share holdings   and you have a very powerful bureaucracy  so i remember meeting with akio morita the   founder of sony at one point we were having  a discussion about semiconductor industry   and marina says to me miti the ministry  of international trade and industry   must give them strong guidance so there's  a term in japanese called gyosei shido   which means administrative guidance and  effectively what it means is that the   secretary of uh industry or finance or whatever  it is calls up a ceo and tells them what to do   and the ceo does and why does the ceo pay  attention to this bureaucratic uh figure   because the bureaucratic figure is powerful and  the bureaucratic figure can cause the ceo just a a   an eternity of pain informally uh and and and the  ceo's not going to be able to take him to court   uh because it's all done behind the scenes  and informally and so effectively okay   theoretically the japanese economy is a  capitalist market economy but effectively   it is a significantly government-guided economy  that was more true in the 1980s than it is today   um and and then just to add to that uh you know if  in the united states uh you're a mother or a dad   and you have a really brilliant kid and and what  do you want for the future of that child you know   do you want your child to become let's say the  undersecretary of commerce uh in in washington   uh or would you rather have your child  let's say be the ceo of intel well in the us   ceo of intel every time right but not in japan not  in japan no no if you're in japan in those days   you wanted your son to be a high-ranking official  that's where the prestige was that's where the   power was uh and only secondary guys only second  raiders uh would you know go into tobiota or   mitsubishi or something like that i can really  see why you're seeing yeah it's reflections of   china it's very similar well it's interesting  because in america it's like wall street controls   washington yes and in japan it's the polar  opposite polar opposite exactly uh and so you   know i had had this experience in japan and then  on top of that my wife is chinese and she comes   from a large chinese family her uncle at one point  was the biggest uh builder in the state of hawaii   and i had i saw you know how a chinese tycoon  ran his company and and dealt with his people   so i had some insight that most people don't  have into you know how china and east asian   economies and companies work and what  i and as i got more involved with china   what i quickly realized was that uh china  in many respects was japan all over again   except in a way even more so uh and and  but before getting to china let's just   mention the tigers because japan had uh its  economic miracle was formally announced in 1964   and you know the 1970s were kind of the really  glory years of the chinese of the japanese economy   but then that they just sitting across the the  water was korea and the koreans looking at japan   and you know the koreans know that anything the  japanese can do they the koreans can do better   and so park chung-hee is sitting in korea they say  holy cow these japanese are making semiconductors   and automobiles and steel we're going to do  the same thing and so korea adopts a similar   policy through the japanese taiwan singapore they  all basically adopt the same kind of export-led   uh uh mercantilist uh economic policies and they  all have miracles and then china becomes the last   tiger or the first dragon uh and while you know  most of the american analysts are looking at china   and and analyzing it in terms of the the  the american or let's say the anglo-american   economic model and they're saying  oh china is adopting market   forces and oh china is going to allow private  enterprise to be more active and so they're going   to be more like us but i was watching it and i  was looking at the five-year plans of the chinese   communist party and of the government and and  you know i was talking to chinese officials and   i realized that uh they weren't looking at  the american model they were looking at the   japanese model uh and uh and actually not only  were they imitating the japanese model but they   were improving upon it and they could improve upon  it because the one place where the bureaucracy had   even more power than in japan was in china and  and so sometimes in japan i mean for example honda   honda was never supposed to happen the the  champions for the japanese industry uh in the   auto industry for the japanese bureaucracy were uh  and toyota and honda was not supposed to make cars   but honda was clever and uh and they  managed to get into the auto business   largely because they had a big market in the us  i mean to this day honda sells far more and makes   far more cars in the us than it does in japan uh  but the japanese bureaucracy turned out not to be   powerful enough to strangle honda but the chinese  bureaucracy could do it i find it so ironic that   considering the anti-japanese propaganda that the  communist party loves that they were so inspired   by the japanese you're exactly right um chinese  commerce party loves the anti-japanese propaganda   but even more they love japanese industrial  policy those communists love money yeah right you

Channel: China Unscripted

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Keywords: China Unscripted, China Uncensored, Chris Chappell, Shelley Zhang, Matt Gnaizda, clyde prestowitz, The world turned upside down, china, chinese communist party, china economy, xi jinping, china technology, chinese economy, new economic thinking, china usa, china growth, Globalization, World Trade Organization, liberalize, china economic reforms, japan economic miracle, made in china 2025, economic miracle, China japan, ccp, cpc, high tech, WWII, honda, japan china

Id: glszdAp56Ec

Length: 13min 32sec (812 seconds)

Published: Wed Sep 15 2021