Japan and China in Quick Historical Comparison and Contrast

Some of the things happening in China and happened in Japan are similar and some are not. Let’s take a look at a comparison.

Japan in ’70 & ’80”s China in ’00’s and ’10’s

1

Government development policy focused on infrastructure

Same

2

Followed an export model of development

Same

3

Focused in manufacturing for the world

Same

4

Learned a lot through JV’s

Learned little in JV’s

5

Had few controls of tariffs in imports as Japanese people naturally shunned foreign products.

Has many controls and tariffs as Chinese people love foreign products.

6

Had strong links between banks and businesses

No formal link but SOE’s and banks have same owner

7

Over half bank loans went to many private companies

Bank loans went to many government owned companies and very few private businesses

8

Dominance of 1 political party

Same

9

Suffered from capital accounts imbalance leading to need to invest foreign currency outside own country

Same

10

Bad economic actors not consistently brought to trial due to complicated relationships

Same

11

Seen by the U.S. as wrong and as a threat

Same

12

Asset prices rose high

Same

We can see that China faces some future problems due to following the export/infrastructure model too closely.  The government knows this and will find a way to avoid.

As businessmen, we should note  point 5.  Surely many of you already have.  Chinese people have some nationalism to buy Chinese, but they will not buy if it will hurt their family or business to buy Chinese. They trust Western business to have proper materials and often proper quality.  The luxury market boom presently is one sign of a good future market for all.

So the future market for Western goods is very good.  This is not merely the best place to manufacture presently, it is also a market that is mature enough for Western products now like it was not 5 or 10 years ago.

Thoughts?  China Business Leadership Group on LinkedIn might be a good place. Comment here. You have to register to comment here, but do so. We really welcome all comments.

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Posted in: China, Chinese Culture, Customers, External Stakeholders, Market Entry

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