Lessons to learn from Japan's ups and downs

• Source: Globaltimes
• [02:10 March 01 2010]
• Comments

Mention of Japan stirs both awe and antipathy among many Chinese. The recent fiasco of Toyota seems to be yet another example adding to Japan's decline from its past glory.

Again, Chinese people received the news with mixed feelings.

Has Japan run out of steam in the race against Western developed countries? Will Japan's experience be repeated by other Asian countries, many of which have charted the Japanese growth model to the prosperity? Japan's history of ups and downs offers much food for thought.

Japan was the first Asian country to adopt the Western modernization drive in the 19th century and usher in an era of rapid growth. Its defeat of the Russian navy in the 1904-05 war struck awe among other Asian countries, as they were then under the yoke of Western colonizers.

Japan's post-war economic miracle provides a classic study of how a country, poor in resources and capital, could achieve stunning growth by leveraging its comparative advantage to the utmost.

Since the 1960s, Japan has been holding on to the position of the world's second largest economy.

Japan's success has offered other Asian countries, long under the shadow of the West, an in-spiring example to follow in fields ranging from manufacture to sports. China, too, has received inspiration from it.

In contrast with Japan's economic hibernation over two decades is China's rapid and dramatic rise.

Inside China, many cheer the fact that China may soon overtake Japan as the world's second largest economy. Surpassing Japan has enormous symbolic significance.

Given China's population and size, its GDP overtaking Japan's should not be overly played up. Media commentators have been quick to point out that the per capita GDP of China is only one-tenth of Japan's.

Japan has maintained social stability even in periods of prolonged negative growth, and it still leads China by a big margin in many ways. This is something from which China should learn.

While the ambition to outperform Western competitors is shared by many Chinese companies, it would be instructive for them to learn from Japan how it succeeded and stumbled on the overseas expansion route.