Japan in Crisis PDF
Preview Japan in Crisis
International Political Economy Series General Editor: Timothy M. Shaw, Professor of Commonwealth Governance and Development, and Director of the Institute of Commonwealth Studies, School of Advanced Study, University of London Titles include: Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen POLICY REGIMES AND INDUSTRIAL COMPETITIVENESS A Comparative Study of East Asia and India Roderic Alley THE UNITED NATIONS IN SOUTHEAST ASIA AND THE SOUTH PACIFIC Dick Beason and Jason James THE POLITICAL ECONOMY OF JAPANESE FINANCIAL MARKETS Myths versus Reality Mark Beeson COMPETING CAPITALISMS Australia, Japan and Economic Competition in Asia-Pacific Deborah Bräutigam CHINESE AID AND AFRICAN DEVELOPMENT Exporting Green Revolution Steve Chan, Cal Clark and Danny Lam (editors) BEYOND THE DEVELOPMENTAL STATE East Asia’s Political Economies Reconsidered Abdul Rahman Embong STATE-LED MODERNIZATION AND THE NEW MIDDLE CLASS IN MALAYSIA Dong-Sook Shin Gills RURAL WOMEN AND TRIPLE EXPLOITATION IN KOREAN DEVELOPMENT Jeffrey Henderson (editor) INDUSTRIAL TRANSFORMATION IN EASTERN EUROPE IN THE LIGHT OF THE EAST ASIAN EXPERIENCE Takashi Inoguchi GLOBAL CHANGE A Japanese Perspective Dominic Kelly JAPAN AND THE RECONSTRUCTION OF EAST ASIA L. H. M. Ling POSTCOLONIAL INTERNATIONAL RELATIONS Conquest and Desire between Asia and the West Pierre P. Lizée PEACE, POWER AND RESISTANCE IN CAMBODIA Global Governance and the Failure of International Conflict Resolution S. Javed Maswood JAPAN IN CRISIS Ananya Mukherjee Reed PERSPECTIVES ON THE INDIAN CORPORATE ECONOMY Exploring the Paradox of Profits Cecilia Ng POSITIONING WOMEN IN MALAYSIA Class and Gender in an Industrializing State Ian Scott (editor) INSTITUTIONAL CHANGE AND THE POLITICAL TRANSITION IN HONG KONG Mark Turner (editor) CENTRAL–LOCAL RELATIONS IN ASIA-PACIFIC Convergence or Divergence? Fei-Ling Wang INSTITUTIONS AND INSTITUTIONAL CHANGE IN CHINA Premodernity and Modernization International Political Economy Series Series Standing Order ISBN 0–333–71708–2 hardback Series Standing Order ISBN 0–333–71110–6 paperback (outside North America only) You can receive future titles in this series as they are published by placing a stand- ing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England Japan in Crisis S. Javed Maswood School of International Business and Asian Studies Griffith University Nathan, Brisbane, Australia © S. Javed Maswood 2002 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2002 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-43011-6 ISBN 978-1-4039-1850-5 (eBook) DOI 10.1057/9781403918505 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Maswood, Syed Javed. Japan in crisis / S. Javed Maswood. p. cm.—(International political economy series) Includes bibliographical references and index. 1. Japan—Economic conditions—1989– 2. Financial crises—Japan. 3. Banks and banking—Japan. I. Title. II. Series. HC462.95 .M3845 2002 338.952—dc21 2001059843 10 9 8 7 6 5 4 3 2 1 11 10 09 08 07 06 05 04 03 02 Contents List of Tables vii List of Abbreviations viii 1 Introduction 1 Economic stagnation in Japan 3 Structural adjustment in Japan 5 The Asian financial crisis 9 The Asian crisis as a catalyst for change in Japan 12 The structure of this book 16 2 Economic Stagnation in Japan 17 From a Japanese bubble to an Asian bubble 24 The Asian crisis and the Japanese economy 28 Explaining the failure of economic recovery packages 30 Conclusion 36 3 Financial Reforms in Japan 39 Crisis in the Japanese financial sector 40 Banking sector reforms in Japan 46 Regulatory controls and surveillance 54 Bank reform and persisting economic weakness 56 Conclusion 61 4 Corporate Reforms 62 Main features of the J-firm 63 Corporate reforms and convergence 68 Corporate reform in Japan 74 Conclusion 83 5 Regulatory Reforms 87 Regulatory politics in Japan and the United States 88 Regulatory reforms in Japan 93 Bureaucratic opposition to deregulation and reform in Japan 96 Structural reform in the context of Japanese party politics 97 Prime Minister Koizumi and Japan’s reform agenda 106 Conclusion 113 v vi Contents 6 Japan’s Regional Economy and the Asian Monetary Fund 115 The Asian crisis as a foreign policy opportunity 119 Japanese aid to crisis countries 125 The Asian Monetary Fund 128 American rejection of the Asian Monetary Fund 132 The AMF revisited 136 Conclusion 142 7 Conclusion 144 Notes 155 Bibliography 168 Index 172 List of Tables 2.1 Official discount rates in Japan 24 2.2 Bank lending to emerging Asian markets at end June 1997 26 3.1 1998 Upper House election results 44 3.2 Bank support and restructuring goals 54 4.1 Corporate failures in Japan 70 4.2 Company restructuring in Japan 80 5.1 Amakudari in selected Japanese industries 97 vii List of Abbreviations ADB Asian Development Bank AMF Asian Monetary Fund APEC Asia Pacific Economic Cooperation APT ASEAN Plus Three ARC Administrative Reform Commission ARF ASEAN Regional Forum ASEAN Association of South East Asian Nations CCL Contingent Credit Lines CEFP Council on Economic and Fiscal Policy CEM Comprehensive Economic Measures CPSU Communist Party of the Soviet Union DIA Deposit Insurance Agency DPJ Democratic Party of Japan DSP Democratic Socialist Party EAEC East Asian Economic Caucus EOI Export-Oriented Industrialization EPA Economic Planning Agency FDI Foreign Direct Investment FDIC Federal Deposit Insurance Corporation FRC Financial Restructuring Commission GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product IMF International Monetary Fund ISI Import Substitution Industrialization JNR Japan National Railway JSP Japan Socialist Party LDP Liberal Democratic Party LTCB Long-Term Credit Bank NLC New Liberal Club NPL Non-Performing Loans OPEC Organization of Petroleum Exporting Countries PKO Peace Keeping Operations RRC Regulatory Reform Committee RTC Resolution Trust Corporation SDPJ Social Democratic Party of Japan UK United Kingdom viii List of Abbreviations ix UNCLOS United Nations Law of the Sea Conference US United States WTO World Trade Organization
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