chapter  5
34 Pages

RESTRUCTURING THE JAPANESE ECONOMY

It is doubtful whether the Japanese leadership ever anticipated that the West would be so critical of their behaviour in international trade but they were certainly conscious that the unrelenting pursuit of economic growth would eventually not only create domestic problems (i.e. environmental pollution, etc.), but also tension with their trading partners. The Economic and Social Development Plan (1967-71) had already emphasised in March 1967 that:

In Western countries, large-scale investment reflecting the progress of technical innovation is being made vigorously, while merger of firms to cater for multinational markets is on the increase. The expansion of industries in the developing countries based on low wages is threatening some of Japan’s industries, together with the emergency problem of special tariff reductions for these countries. Under these circumstances, Japan is going to face the Kennedy Round and the problem of capital liberalization. It is Japan’s duty to fulfil its responsibility as one of the advanced nations of the world and to promote economic cooperation with the developing countries… Japanese industry’s competition in world markets must be strengthened through intensified efforts for technical development, through improvement of capital structure of firms and through reorganization of the domestic economic structure.1