The developmental state concept was at first within the setting of the financial arrangements that were received in East Asia to create quick industrialization, and in some cases, it is tied to a specific industrial technique. Hence, much of the formative state writing is around the exact arrangement measures that were put in put. In any case, there’s a case for tolerating a broader definition that’s not tied to specific approaches and instep stresses state targets and the organization courses of action by which the state goes around actualizing them (Knight, 2014:1335).
The broadest level development in both countries may be said to be driven by the three pillars of development (agricultural reform, the export driven economy, and financial repression). In nations with the plenteous supply of country labor, the yields of little ranches are higher than the yields of huge ranches worked by occupant ranchers or wage laborers, so, when cultivate possession is divided, it is much simpler for the state to capture a portion of the critical agrarian overflow made than it would be in the event that it was managing with more capable arrive proprietors. The assets, hence captured would be at that point utilized by the state for fundamental industry and framework ventures (Voinea, 2019:48).
The differences between the development factors in the two countries become increasingly clear as the authors work through each country’s specific development experience. Although Japan’s Land Reform following WWII was critical to the country’s stabilization, it was enabled by the US policy of building a dependent but strong Japan. In China, the part of the State in industrialization has been generally bigger than in Japan. Within the long time taking after the communist insurgency in 1949, all mechanical firms were brought beneath open proprietorship. At first, financial approach was taken after the illustration of the Soviet Union. National Five-Year Plans were presented, with the physical generation objectives for all mechanical divisions being foreordained and laid down. As in numerous economies in East Asian, China succeeded in the tall level of investment funds, but not at all like them all speculation in China was done through the open segment (Kasahara, 2013:7)
Similarly, the export orientation occurred in different phases and from different motives. In Japan, under US direction in the 50s and 60s, US based quality processes accompanying huge investment sought to capture Japanese export trade to boost its domestic consumables market. The subsequent shift away from US markets, to engaging Southeast Asian countries through aid and direct investment, as a way of building capability and assuring competent and viable futures markets, shows an increasing reduction in US influence on economic policy. The attraction of Southeast Asia was based on many factors, including geographical and political areas of influence, relative absence of competition in those markets compared to USA. So the Plaza accord in 1985 may have been partly to make the Southeast Asian markets less viable, as the increased value of the yen put Japanese imports out of reach of the majority of the urban population, leaving the US as the preferred market. But by the 1990s the seeds of urban development in SE Asia were resulting in massive shifts of populations to urban centers, with stable wages and increasing spending power.
China’s state-owned enterprises dominating the economy until in the 1980s under Deng the party enabled its principles and processes to embrace a form of commerce whereby it could safeguard domestic prosperity by engaging the wider world in trade. From this perspective, it had an independent and for more global perspective than Japan, and certainly was not consciously following a Eurasian Development model.
The third pillar, Financial repression, followed the traditional Japanese model of collaboration between government and banks and industry that had been in place since the 19th century. It builds on an existing banking and industrial base and was able to increase its efficacy from the massive injections of finance and political and industrial structure brought in from the USA. In addition to transparent planning structures that clearly mapped the collaboration between the three areas, much of the collaboration was less than transparent. This is unlike China, where the financial repression was manifested through total state control.
The factor that is not mentioned throughout these first explanatory pages is demographics. Demographics are the biggest factor differentiating the Japanese and Chinese experience. Finally, it is given full attention in the last pages of the paper, in the context of ‘will demographics in China imitate the Japanese experience, and lead to a slowdown in development?’
Since the current demographic picture is very different, not only in total numbers but in the disproportionate spread among provinces (China’s provinces vary significantly) it seems that a forecast based on (a) a very broad similarity of top level development drivers – Agrarian reform, Export focus, Financial repression – combined with (b) a superficially similar potential demographic pattern is not sufficiently sound to start to define how such a slow-down in development will happen in detail. Therefore, it is tantamount to saying that ‘there will be a slowdown’ but we don’t know what it will look like. One example difference resulting from the different demographic patterns, is that the Chinese spread being so varied among provinces, will allow domestic migration from province to province. This could mitigate the impact of aging populations in the ‘oldest’ provinces.
As we now see from the current recession, there is already a slow-down in development as GDPs fall around the world. But this rejoinder contends that due to the differences that drove those strategies on a national level are so different, and since the demographics are chronologically distant and geographically distinct, the model plus demographics are insufficient to use as a basis for extrapolating future development scenarios in the two countries.
Kasahara, S. (2013). The Asian Development State and The Flying Geese Paradigm (UNCTAD Discussion Papers 213). United Nations Conference on Trade and Development. https://ideas.repec.org/p/unc/dispap/213.html
Knight, J. B. (2014). China as a developmental State. The World Economy, 37(10), 1335-1347. https://dx.doi.org/10.1111/twec.12215
Voinea, I. (2019). The Role of Japan in the Development of Emerging Markets in Asia: Key lessons learned for China. Asociatia Generala a Economistilor din Romania – AGER, 2(619), 47-62.