Japanese-German Business Relations: Co-operation and Rivalry in the Interwar Period

301 Pages·1998·1.64 MB·English

by  Akira Kudo

Japanese–German Business Relations
The Nissan Institute/Routledge Japanese Studies Series
Editorial Board
J.A.A. Stockwin, Nissan Professor of Modern Japanese Studies, University of Oxford and Director,
Nissan Institute of Japanese Studies; Teigo Yoshida, formerly Professor of the University of
Tokyo, and now Professor, Obirin University, Tokyo; Frank Langdon, Professor, Institute of
International Relations, University of British Columbia, Canada; Alan Rix, Professor of Japanese,
The University of Queensland; Junji Banno, Institute of Social Science, University of Tokyo;
Leonard Schoppa, University of Virginia
Other titles in the series
The Myth of Japanese Uniqueness, Peter Dale
The Emperor’s Adviser: Saionji Kinmochi and Pre-war Japanese Politics, Lesley Connors
A History of Japanese Economic Thought, Tessa Morris-Suzuki
The Establishment of the Japanese Constitutional System, Junji Banno, translated by
J.A.A. Stockwin
Industrial Relations in Japan: the Peripheral Workforce, Norma Chalmers
Banking Policy in Japan: American Efforts at Reform During the Occupation, William
M. Tsutsui
Education Reform in Japan, Leonard Schoppa
How the Japanese Learn to Work, Ronald P. Dore and Mari Sako
Japanese Economic Development: Theory and Practice, Penelope Francks
Japan and Protection: The Growth of Protectionist Sentiment and the Japanese
Response, Syed Javed Maswood
The Soil, by Nagatsuka Takashi: a Portrait of Rural Life in Meiji Japan, translated and
with an introduction by Ann Waswo
Biotechnology in Japan, Malcolm Brock
Britain’s Educational Reform: a Comparison with Japan, Mike Howarth
Language and the Modern State: the Reform of Written Japanese, Nanette Twine
Industrial Harmony in Modern Japan: the Invention of a Tradition, W. Dean Kinzley
Japanese Science Fiction: a View of a Changing Society, Robert Matthew
The Japanese Numbers Game: the Use and Understanding of Numbers in Modern
Japan, Thomas Crump
Ideology and Practice in Modern Japan, Roger Goodman and Kristen Refsing
Technology and Industrial Development in pre-War Japan, Yukiko Fukasaku
Japan’s Early Parliaments 1890–1905, Andrew Fraser, R.H.P. Mason and Philip Mitchell
Japan’s Foreign Aid Challenge, Alan Rix
Emperor Hirohito and Showa Japan, Stephen S. Large
Japan: Beyond the End of History, David Williams
Ceremony and Ritual in Japan: Religious Practices in an Industrialized Society, Jan
van Bremen and D.P. Martinez
Understanding Japanese Society: Second Edition, Joy Hendry
The Fantastic in Modern Japanese Literature: The Subversion of Modernity, Susan J.
Napier
Militarization and Demilitarization in Contemporary Japan, Glenn D. Hook
Growing a Japanese Science City: Communication in Scientific Research, James W.
Dearing
Architecture and Authority in Japan, William H. Coaldrake
Women’s Gidayu and the Japanese Theatre Tradition, A. Kimi Coaldrake
Democracy in Post-war Japan, Rikki Kersten
On the Margins of Japanese Society, Carolyn S. Stevens
The Right to Life in Japan, Noel Williams
The Dynamics of Japan’s Relations with Africa, Kweken Ampiah
Treacherous Women of Imperial Japan: Patriarchal Fictions and Patricidal Fantasies,
Hélène Bowen Raddeker
Japan, Race and Equality: the Racial Equality Proposal of 1919, Naoko Shimazu
Japanese–German Business Relations: Cooperation and Rivalry in the Inter-war
Period, Kudo Akira
Japanese–German Business
Relations
Cooperation and rivalry in the inter-war
period
Kudo Akira
London and New York
First published 1998
by Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2001.
© 1998 Kudo Akira
All rights reserved. No part of this book may be reprinted or reproduced or utilized in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Kudo, Akira,
Japanese–German Business Relations : Cooperation and rivalry in the inter-war period / Kudo
Akira.
p. cm. – (Nissan Institute/Routledge Japanese studies series)
Includes bibliographical references and index.
1. Japan—Foreign economic relations—Germany. 2. Germany—Foreign economic
relations—Japan. 3. Technology transfer—Japan—History—20th century. 4. Technology
transfer—Germany—History—20th century. 5. Investments, Japanese—Germany—
History—20th century. 6. Investments, German—Japan—History—20th century. 7.
Competition, International—History—20th century. I. Title. II. Series.
HF1602.15.G3K83 1998
337.43052–dc21 97-42299
CIP
ISBN 0–415–14971–1 (Print Edition)
ISBN 0-203-01851-6 Master e-book ISBN
ISBN 0-203-11623-2 (Glassbook Format)
Contents
List of tables viii
Series editor’s preface ix
Acknowledgments xi
Introduction 1
Part I Overview
1 Japanese–German business relations 11
I Japanese–German relations in the inter-war period 11
II Strategy choices of German companies 18
III Forms of business relationships 21
IV Conclusion 32
Part II Export strategy
2 Competition and cooperation: I.G. Farben, international
dyestuff cartels, and Japan 35
I German dominance and the Japanese challenge in the 1920s 35
II The Japan strategy of the international dyestuff cartels 37
III The conclusion of special market agreements 42
IV The Mitsui indigo agreement 44
V Conclusion 48
3 Rivalry between German and Japanese trading companies:
C. Illies & Co. and Mitsubishi Shoji 49
I The actors 49
II The battle 55
III Conclusion 64
4 Competition and cooperation among German companies:
Krupp, I.G. Farben, and Japan’s synthetic oil project 66
I Japan’s project for synthetic oil production and Krupp’s
activities in Japan 67
vi Contents
II Action taken by Oshima of Imperial Fuel, and Krupp and
I.G. Farben’s response 74
III Conclusion 85
Part III Licensing strategy
5 Downstream transfer of the Krupp-Renn process 89
I The Krupp-Renn process and Japanese businesses 89
II The plant-construction process 93
III The technology-absorption process at Mitsubishi Mining’s
Chongjin plant 100
IV Conclusion 107
6 Downstream transfer of the Haber-Bosch process 110
I Diffusion of the Haber-Bosch process in Japan 111
II Technological absorption of the Haber-Bosch process by
Taki Fertilizer Works 116
III Conclusion 127
7 Downstream transfer of the I.G. process for synthetic oil 130
I I.G. Farben’s licensing strategy and the Japanese synthetic
oil industry 130
II Development of licensing strategy 133
III Probing the unsuccessful results 140
IV Conclusion 144
8 Upstream transfer of the Shimadzu process 148
I Technological cooperation on an equal footing: the
establishment of Ost Lurgi 149
II An attempt at licensing upstream 152
III Revision of the technological cooperation 157
IV Conclusion 161
Part IV Direct investment strategy
9 Giving up control: Siemens, Fuji Electric, and Fujitsu 165
I The period of forced export strategy 166
II From localization of sales to localization of manufacturing 177
III Fuji Electric’s management crisis and the move toward
cooperation 187
IV Forced localization of automatic switchboard manufacturing 195
V The forced separation of companies 207
VI Conclusion 215
10 Concluding remarks 218
Summary 218
Contents vii
Ambition and pride 220
Notes 223
Bibliography 262
Index 279
Tables
1.1 German trade with Japan, 1913–38 21
1.2 Foreign ownership of industrial rights in Japan (as of
December 7, 1941) 24
1.3 Ownership and management forms of foreign-affiliated
companies, 1931 27
4.1 Enquiries from Japan regarding high-pressure reaction pipes
(as of December 1938) 67
4.2 Enquiries from Japan regarding high-pressure reaction
pipes, 1938 68
4.3 Enquiries from Japan for which permission to export was
refused (as of January 25, 1941) 73
5.1 Japanese companies granted licenses for the Krupp-Renn
process, 1937–42 92
5.2 Tonnage of pig iron produced by rotary kilns, 1940–5 95
6.1 Introduction of the Haber-Bosch process in Japan, 1935–40 114
6.2 University and college graduate personnel, Taki Fertilizer
Works (as of May 1934) 117
6.3 University and college graduate personnel, Taki Fertilizer’s
ammonium sulphate plant, 1943 117
6.4 Organization of general and operative personnel, Taki Fertilizer
Works (as of December 31, 1938) 118
6.5 Numbers of German engineers and foremen dispatched to Taki
Fertilizer Works, 1936–8 121
9.1 Western Electric’s market share based on Siemens’ proposal,
1913 168
9.2 Implementation of Communications Ministry’s telephone
system expansion plan (business years 1916–36) 178
9.3 Adoption of automatic switchboards for public telephone system
(business years 1926–9) 181
9.4 Ministry of Communications’ company contracts (business
years 1926–31) 182
9.5 Business results of Fuji Electric (business years 1923–37) 184
Series editor’s preface
‘. . . [W]e are a people whose glorious history will bear to be held up to the gaze of
Western nations. We have learned a great many things from the West, but there are
some instances of our having outstripped our tutors.’
So wrote Count Okuma in Fifty Years of New Japan, published in 1910, some five
years after Japan had emerged victorious in the Russo–Japanese war. Over the
eighty-seven years that have elapsed since those words were written, the history of
Japan’s relations with the rest of the world has passed through phases more turbulent
than Okuma could probably have imagined. The tragic and terrible history of the
1930s and 1940s gave way, however, to decades in which the Japanese forged an
amazing (and often deserved) reputation for economic development and efficiency.
The idea of the Japanese outstripping their tutors is no longer as exotic as it must
have sounded to an English-speaking readership in 1910, but its content has been
radically changed with the passage of time. Japan has been widely accused by some
Americans and others of exploiting American goodwill and soft attitudes since the
1950s in such a way as to maximize ruthlessly the interests of Japanese corporations
and the Japanese economy in general. Whatever the truth of these accusations,
during the late 1990s many influential Japanese have been moving to the view that
forces of globalization leave Japan little choice in terms of national interest but to
move toward a more open, less controlled, form of economic, political and social
order. Entrenched resistance to such a fundamental systemic change remains strong,
but the balance of influences is shifting significantly. How the Japanese seek to
resolve the quandary of how far they can preserve a distinctive Japanese identity
and practice in an increasingly globalizing world is fascinating to watch.
The Nissan Institute–Routledge Japanese Studies Series seeks to foster an
informed and balanced, but not uncritical, understanding of Japan. One of its aims is
to show the depth and variety of Japanese institutions, practices and ideas. Another
is, by using comparison, to see what lessons, positive and negative, can be drawn