Libmonster ID: JP-1280
Author(s) of the publication: E. LEONTIEVA


Japan is a country of economic success, which has managed to become one of the leaders of the world economy in a historically short time. But if back in the 80-ies around the world said that the XXI century will be the "century of Japan", then the 90-ies are considered by many to be a lost decade, and the stagnation and crisis of these years with an average annual increase in gross domestic product (GDP) of one percent is said to be the first defeat of Japan after World War II wars.

Japan is a typical nation-state with an ethnically homogeneous population. Its recent history began in the 70s of the XIX century, when the country emerged from feudal isolation, uniting around a single national goal-to avoid the fate of a colony of the West. Japan needed Western technologies and institutional examples, and all this was imported and assimilated. But the country avoided political concessions and direct financial assistance from the West, and accelerated industrialization relied on domestic financial resources, although they were always limited, sometimes very sharply.

Japan has given a model of" catch-up " development to the countries of Southeast Asia that belong to the area of Chinese culture, and has managed to modernize the economic system without losing the features of its culture.


Back in the 70s, no one disputed the role of a sovereign nation-state in the economy and life of citizens of a country that solves development problems.

It should ensure sustained economic growth, maintain social stability and the rule of law, redistribute wealth and take care of the well-being of citizens. The priorities that guide such a state are akin to the priorities of a mobilization economy. The main thing is to identify strategically important areas and increase production while concentrating scarce resources in these areas. This is achieved by limiting competition.

Of course, the tasks of wartime and peacetime are different, but at the stage of" catching up " development, they are united by a certain cross-cutting value. Therefore, the institutions that supported the growth of the national economy in Japan were called "systems of the 40s". In the post-war period, economic growth as the main value deeply entered the public consciousness. There is a strong belief that this is the only way to create export potential, the only way to solve the most acute problem for this country-the lack of physical resources for industry, and therefore for everything else - creating jobs, increasing incomes and well-being of the population.

Economic growth was an indisputable priority until the country became the world's second-largest industrial power. In this place, it was brought by the sector of large corporations: in the 70s - as an exporter of goods, and in the late 80s-as an exporter of capital. In 1985-1989, Japan's foreign investment grew by an average of 62 percent annually, supported by the high exchange rate of the yen against other currencies, which reduced the cost of buying foreign assets, a large current account surplus, and protectionism in export markets.

In 1989, Japan became the second largest international investor after the United States, after the United Kingdom. It has entered the "triad" of countries - the United States, Britain, and Japan-that account for the lion's share of global capital flows and exports (much more than their share in trade). Japan's largest industrial corporations have become multinational, following the path of European and American TNCs. They are guided by the conditions of global markets. Currently, the entire sector of open joint-stock companies (2,900), with the exception of those working only for the domestic market, actually consists of TNCs.

It seems that the expansion of the activities of large corporations beyond national borders is evidence that the country is passing the line between internationalization and globalization of the economy.

The production network of Japanese multinational corporations abroad accounts for approximately 12.5 percent of sales (close to the level of American TNCs). But there is a very large skew in the ratio of capital exports to imports: as of March 2000, foreign direct investment in Japan accounted for only 18.5 percent of foreign direct investment.

Formally, foreign firms are granted national treatment, but in reality, the entire "system of the 40s" and its institutions blocked their access to the Japanese market until very recently. And as soon as Japan became an economic superpower, the "40s system" was criticized as an anomaly outside its borders, and its formal regulations and informal traditions were criticized as an example of a "non - capitalist market economy." Although Japan is dominated by private property and private corporations, business practices are governed by a set of unwritten rules and regulations.

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obligations that are confusing and incomprehensible to outsiders.

In the second industrial country in the world, there is no normal labor market. It does not have flexibility because of the so-called lifetime hiring and payment of employees based on length of service, rather than on qualifications and quality of work. There is internal retraining of personnel, and it is almost impossible to hire a manager from the outside.

There is no proper corporate governance: decisions are made in the best interests of managers, not investors. It is not clear who the corporations belong to, where their decision-making centers are located, or what criteria work. They do not seek to increase their profits, but their market share.

There is no institution of an independent firm: joint-stock companies are linked to each other and to banks in groupings based on cross-ownership of shares. Group relationships form an inter-firm environment that is impenetrable to outsiders, especially foreigners. Firms cultivate and preserve long-term partnerships.

There are no normally functioning financial markets either. Companies are financed not so much by the stock market as by the "parent" banks that control the business decisions of their clients. The stock market is not able to value firms fairly. Change of ownership through market mergers and control grabs is impossible, because the market does not work as a mechanism for selecting viable firms.

Firms and the state have developed a special "fraternal" relationship, state paternalism reigns, and officials help establish, develop, and curtail entire industries by insistently pursuing protectionist industrial policies that give Japanese companies unfair advantages in international trade. Free competition does not work because it does not determine the strategic priorities of companies.

All these shortcomings relate primarily to large corporations, their ownership structure, management methods, markets, factors of production, and relations with government agencies.

Charges of violating free competition and economic closeness in 1989 were brought against Japan at a high diplomatic level. At the Japanese - American talks, the issue of "structural impediments" in economic relations between the two countries was raised. Washington demanded an end to the closure of the Japanese economy. But in Japan, many saw this only as a violation of national interests and an attempt on the independence of a sovereign state.


The current crisis of the national economy is probably the last autonomous one, not directly provoked by external price or currency shocks. The richest highly developed country simply wasn't ready for the global economy. The institutions that supported "catch-up" development played a destructive role.

The "System of the 40s" was changing too slowly.

At the end of the 1980s, selective support for large corporations based on the industry principle (state-sanctioned industry cartels) lost all meaning and became a thing of the past. However, strong state support continued to operate in the financial sector, where the government did not allow bankruptcy, and in non-export industries with a predominance of small businesses.

The Japanese state has a strong tradition of protectionism and knows how to "hold the line" to the last.

The yen has been fixed for longer than in Western European countries. It was only abolished in 1971 after the Nixon administration abandoned the gold parity of the dollar. Two years later, the exchange rate rose from 360 yen per dollar to 265 yen. Buying rice from farmers by

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fixed prices continued until 1995, although these subsidies meant that for many years the country had a surplus of rice, and its prices were about twice as high as the world's. Under such conditions, agricultural land owners stop cultivating their land, do not sell plots, do not move and concentrate land ownership, and the level of self-sufficiency in food has fallen to 46 percent.

The protection of small retailers from large department stores and supermarkets lasted until 1996, leaving behind a high level of retail margins in department stores and a huge small-scale retail sector.

Restrictions on foreign exchange transactions for the Japanese remained in place until 1998. Currency payments were made through authorized banks. Japanese banks did not open foreign currency and multi-currency accounts for local individuals and legal entities, leaving these operations at the mercy of branches of foreign banks. As a result, TEC's internal settlements with foreign subsidiaries went through foreign banks.

The system of state support for the banking sector remained in its traditional form until 1999. To prevent the risk of "raids" by depositors, the state kept an inflated level of protection - 10 million yen, that is, 80 thousand dollars per depositor. The country has developed a stable illusion of the complete impossibility of bank failure. Due to excessive state insurance, bank managers did not experience the disciplining effects of normal competition. Such insurance was provided both in the legislative order (under licenses of the Ministry of Finance) by compulsory specialization of financial institutions, and by secret refinancing of weak banks by the Bank of Japan at preferential rates. Until 1984, deposits were subject to fixed rates, which were abolished only under pressure from the Reagan administration. Like all overprotection, this system reduced the responsibility of managers, encouraged them to make risky decisions, distribute unjustified loans, and make low-performing investments.

State protectionism everywhere provides additional income to "protected" industries. In Japan, it served as a social policy function paid for by the entire population of the country.

The country's economy still has a dual price structure. Not only agriculture, but also construction, retail trade, and road transport are extremely inefficient. These sectors, especially agriculture, determine the overall high level of prices in the domestic market. With an official exchange rate of about 125 yen to the dollar, its purchasing power parity, calculated from the consumer basket, currently stands at about 160 yen. At the same time, large exporting corporations maintain the exchange rate of 90-100 yen per dollar, that is, they actually trade in foreign markets at dumping prices.

An attempt by the American occupation authorities in 1947 to prohibit cross-holding of shares was unsuccessful. After the massive sell-off of pre-war concerns and the tough budget reform of Dodge (1949), their prices fell below par, companies began to illegally buy up shares from each other. In 1951, such a ban had to be abandoned.

The share capital structure is characterized by close property ties within the corporate sector. More than 40 percent of the total share capital belongs to financial institutions. Commercial banks, trust banks and insurance companies have become "stable investors" of non-financial companies, holding their shares to consolidate partnerships. A quarter of the capital is cross-owned by non-financial companies. Large blocks are not typical: usually the top ten largest shareholders hold 30-50 percent of the shares, while the rest are very dispersed. The Board is not used to considering the interests of shareholders.

Capital adequacy ratios of banks (the ratio of own funds to total assets, taking into account some other factors. - Ed. ) were introduced in 1954 and 1991. But in the first case, this requirement (10 percent) was not mandatory. The actual average ratio in the 60s and 70s was about six percent, and in the 80s it fell to four percent.

The standard reporting format for civilized countries - consolidated balance sheets of corporate groups-was introduced in 1978 and 2001 (the regulations of the securities and exchange legislation are not fixed in the tax legislation). However, groups led by production holdings with a loose structure and informal partnerships are not interested in publishing such reports.

As of December 1998, the Japanese Association of Auditors estimated that the average share of parent companies in the capital of subsidiaries ranged from 40 to 59 percent, and in the capital of associates - from 15 to 20 percent. In such groups, there are non-financial management methods - an intertwined directorate, permanent transactions, commodity and credit contracts. They allow you to include peripheral companies in the group with a low share of their participation.

Large corporations have widely taken advantage of the ability to easily hide their profits and losses in the Internet.

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transactions with your own branch network. Financial assets were accounted for at purchase prices and were not translated to market prices, and gains and losses on them were left off the balance sheets and out of the view of shareholders.

The closed capital structure of corporations and banks (and all large banks are joint-stock companies), their non-transparent financial statements and vague responsibility of managers - all these, from the point of view of other developed countries, defects in corporate governance in Japan were common and were perceived as normal features of the national economic structure.

In Western Europe, the integration of national economies has led to the unification of economic institutions for more than 30 years. Japan did not pass this preparatory stage.


The source of the current deep crisis was the "financial bubble" that emerged in the stock market and land market in 1986-1990 - the inflation of financial assets.

The oversupply of money that fed this "bubble" had two objective sources: a prolonged export boom and a high rate of personal savings. The subjective factor was the policy of the financial authorities. The Bank of Japan was bound by international obligations under the "Plaza Hotel" agreement of September 22, 1985 (the decision of the "big five" finance ministers on coordinated currency intervention by central banks to prevent the appreciation of the US dollar). Under the Bank of Japan Act, which was in force until April 1998, it was not completely independent: the bank itself determined the rate of re-accounting of bills of exchange, but decisions on currency interventions were made by the Ministry of Finance, and the bank only carried them out. The sale of dollars from the gold and foreign exchange reserve led to the fact that by 1988 the yen rate against the dollar rose from 265 to 138, that is, almost doubled.

As a result, nominal wages have become the highest in the world. Japanese industry has begun to lose competitiveness, exports have slowed, and car and electronics manufacturers have begun to shift their capacity to North America, Western Europe, and East Asia. The country started talking about the "devastation" of the national industry.

In order to avoid an economic downturn. The Bank of Japan cut the discount rate by half, and increased the growth of the money supply (M2 +CD) from nine to 12 percent per year.

Fearing inflation, the bank's management repeatedly stated the need to raise the discount rate, but commodity prices were stable, and its arguments seemed unconvincing. The "easy money" policy continued for two years and three months, maintaining speculative euphoria. During this time, an artificial "bubble" appeared.

The depreciation of bank assets continues for more than a decade. During this time, stock prices have described two cycles of rising and falling and reached the third, and land prices have not yet reached their bottom. The "bubble" casts a long shadow so far.

The crisis was "blamed" not so much on those who made erroneous decisions, but rather on existing systemic flaws - defects in banks ' balance sheets that distorted information about the scale of the disaster, shortcomings in corporate governance of banks that allowed managers to manipulate reporting, and outdated regulation of financial markets, which is associated with a belated reaction of the authorities, in particular, the Ministry of Finance, which functions of financial supervision.

Resulting in deflation (depreciation) it only gradually revealed itself. This led to the accumulation of accounts receivable (unpaid bills to be received) and the crisis of the entire banking system. Finally, in 1991, Japan adopted the international system of banking standards developed by the Basel Bank for International Settlements. From this point on, banks that fail to comply with capital adequacy regulations are automatically subject to severe disciplinary measures. The authorities put them under administrative surveillance and publicly declare them dysfunctional. In self-defense, banks are forced to sell assets, securities from their portfolios, and collateral.

For a long time, the Ministry of Finance could not abandon the usual paternalism and encouraged banks to hide information about the state of their loan portfolios. Only in 1998 was the program of rehabilitation of the banking system adopted. It provided for the separation of non-performing and benign assets and replenishment of the capital of problem banks with funds from the Deposit Insurance Corporation. Some of the" bad debts " were written off by banks themselves from their reserves, as well as through the sale of assets and current profits, but this did not help. In 1998-2000, two of the three long-term loan banks, several commercial banks, the largest brokerage company, the largest mortgage loan company, and two large department store-owning firms went bankrupt. Next in line are major construction contractors, trust banks, and insurance companies.

Conservatism and the slow reaction of the authorities to the consequences of the bursting of the "soap bubble" are the direct reason that the financial crisis has dragged on for 10 years. The end of it is not yet in sight, and it has caused a chain of the most serious consequences.

The first is mass bankruptcies of companies due to the depreciation of their property, against which loans can be obtained, and the accumulation of debts. Credit cuts directly led to industrial downturns in 1992-1993 and 1998.

The second is a "deflationary spiral", that is, a decline in prices against the background of falling production. It arises from the fact that households and companies postpone decisions about any large expenses "for later", when everything becomes cheaper. As a result, savings are rising, while consumer spending and investment are falling. Any holder of a financial resource with a constant nominal price, for example, a term deposit in a bank, receives a real and risk-free income. On the contrary, investing in a declining economy and large consumer spending is associated with increased risk.

The crisis did not cause social upheaval. Unemployment is high only by Japanese standards (4.7 percent), and nominal incomes have not fallen significantly. Financial assets of Japanese people reach an average of 26 million 600 thousand yen (212 thousand dollars) for each of the 46 million 150 thousand registered families.

However, the fall in real estate prices has also hurt consumers ' wallets. Prices for apartments purchased in the early 90s have fallen so much that their sale does not cover mortgage arrears. Due to the fall in the profitability of trust banks that manage pension funds, the low level of interest rates has reduced the monetary income of pensioners.

The third is an increase in public debt. The government is losing tax collections and pumping money from private depositors and financial institutions into the economy with the aim of-

page 6

Lew's method of restoring effective demand through budget investment follows a proven Keynesian recipe. Financial flows from the private sector go to the inefficient and corrupt "mixed" sector of public works, primarily the construction of transport infrastructure. But for the government, a return to economic growth is the highest priority that it cannot refuse.


The pressure of the crisis finally forced the Government to undertake a genuine reform of the financial sector.

The draft reform was prepared in 1996 by the Hashimoto Cabinet, and its implementation was decided only in 1999 by the Obuchi Cabinet. It was called the "big bang" by analogy with the financial reform that was successfully implemented in England in 1986. In terms of the scale of one-time liberalization of financial transactions, this reform, which provides for a package revision of the laws on banks, securities transactions, stock exchanges and insurance, is unprecedented.

Barriers to access to financial markets have been removed, and the so-called "brick wall" separating banking, insurance, and securities operations has been broken down. Banks, brokers and insurance companies were given the opportunity to engage in all types of financial transactions. The ban on access of non-financial companies to financial markets, trading of securities outside stock exchanges and creation of electronic trading systems, as well as regulation of brokerage commissions, has been lifted. Finally, financial institutions have strict rules for disclosing information about "non-performing assets", similar to the standards applied by the US Securities and Exchange Commission.

Japan's reform of the financial sector is taking place in the global context of rebuilding financial markets to work in the global economy. In developed countries, the barriers separating banking, insurance, and brokerage are breaking down. The US Congress at the end of 1999 repealed the Glass-Steagall Act, which established this "wall" during the years of the "great depression". The United States has created a single market for all financial companies and banks, although non-financial companies are not yet allowed access to it. In the UK, department stores, supermarkets and telecommunications operators are allowed access to banking.

The "Big Bang" marked the beginning of a large-scale reorganization (of Japan's financial sector. This sector has become competitive: various players operate in the financial markets, and foreign financial institutions are more active. But there is still much to come.

After the repeal of an article of the Antimonopoly Law prohibiting financial holding at the end of 1997, leading banks began to reorganize using this form in order to survive in international competition. Currently, there are four financial holding groups ("megabanks"), which include seven of the eight major commercial banks and several trust banks. This is the result of global competition and an absolute plus for the future of the economy, but the full organization of their activities will require long-term efforts.

Banks are united, regardless of whether they belong to historically formed various financial groups dating back to the pre-war zaibatsu concerns. The main borrowers, competitors in the commodity markets, receive a common "parent bank". This is followed by a wave of mergers and reorganizations in the corporate sector, which helps companies gain the necessary scale for global competition.

Japanese corporations are belatedly entering the global transition from indirect to direct financing through the issuance of shares and other securities. All developed countries have markets for such direct financing, even for small companies, and bonds are issued even by firms with low credit ratings.

In Japan, the picture is different: bank financing still prevails, and the total assets of banks are 30 percent more than annual GDP (in the United States - about half of GDP). In the structure of corporate sector liabilities, stock market instruments - stocks, bonds, etc. - account for about 30 percent, although there has been a shift: in 1989, this figure was only 13 percent. The corporate sector's dependence on banks generates a flood of bad debts.

Ordinary Japanese people are afraid to keep their savings in risky stock market instruments: about 11 percent of the population's funds are invested in stocks, bonds, and shares of investment and pension funds, compared to 47 percent in the United States. The postal savings system still seems to them the most reliable, since deposits in it are fully guaranteed by the state.

But at deposit rates of 0.13-0.20 percent per annum, the population's funds leave banks and the postal savings system and remain "in stockings". In order to attract public funds to the stock market, small depositors need a reduction in the tax rates on dividends (now they are higher than the tax rates on interest income), tax incentives and the right to refer them to the state budget.

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losses on future income. Improvements in the stock market infrastructure are urgently needed.

Since 1997, there has been an intensive sale of shares from the portfolios of commercial banks and the unleashing of cross-ownership of shares. This process will last at least a few years. Banks own huge blocks of shares, which are 50 percent more than their own share capital. In the old days, when a crisis occurred, group ties were strengthened: strong members helped the weaker ones with finances and management personnel. Now it is extremely risky to keep such packages.

The driving force behind the share dump is the transition to international accounting standards that began on April 1 last year, according to which corporations are required to evaluate their shares at market value and, by switching to the financial holding form, publish consolidated financial statements with their subsidiaries. This move toward greater business transparency will open up new debts, but without it, Japanese corporations risk losing investor confidence.

Group relationships between companies and banks are falling apart. The transition to the organizational form of a financial holding company and consolidated financial statements was initiated by Japanese TNCs, which now find it unprofitable to maintain groups of subcontractors (suppliers, dealers, etc.) within the country under the umbrella of a production holding company.

The stock sell-off was one of the factors contributing to the drop in stock prices in 2000-2001. Next up are new reforms that should speed up the reorganization of large companies that are forced to get rid of unprofitable and low-income divisions. To this end, the Commercial Code was revised last year. The ban on repurchasing their own shares, which American companies successfully use to withdraw these shares from the market and maintain their exchange value, has been lifted.

Since 1998, the number of mergers and acquisitions with the active participation of foreign investors, who often initiate transactions, has been growing rapidly - 35-40 percent per year. There are very large-scale deals: for example, Renault bought 38.8 percent of Nissan shares for $ 5.4 billion. In Japan, a category of owners of really large blocks of shares has appeared. Foreign co-owners are abandoning traditional management practices, including paternalistic relationships with suppliers and the distribution network.

The stock market, where foreign investors became the biggest buyers, has lost its previous impenetrability. It began to work synchronously with the global market. In 2000-2001, there was a synchronization of the movement of stock indices in America and Japan. Currently, more than a hundred financial institutions around the world are preparing to move to a global clearing system that will be able to centralize information about cross-border transactions and securities settlements. The Tokyo Stock Exchange, as well as some other leading exchanges in the world, is preparing to reorganize into a joint-stock company.

No less radical changes are taking place in the structure of the stock market. The stock market is underdeveloped because the government has protected the banking sector from competition for too long. The Japanese stock market has always been undersupplied with "risky" capital.

In the spring of 2000, the Tokyo Stock Exchange established an electronic trading system "Market of High Growth and Emerging Stocks" for venture capital companies. The second electronic trading system "Nasdaq Japan", opened by the new Japanese brokerage company" Softbank Corp. " together with the Osaka Stock Exchange, is already working. This means that a full-fledged venture entrepreneurship sector has begun to form in Japan, which until recently existed almost only within large corporations (spin-offs).

Large corporations are moving to a pension system that allows employees to freely transfer their savings to other firms when they change jobs, following the example of American savings accounts. This creates the conditions for the emergence of American-style pension funds as new institutional investors.

The revision of the law on securities transactions allowed brokerage companies to provide clients with services that investment banks specialize in - guarantees for initial placement of securities, mediation in mergers and acquisitions, organization of financing for companies that are not listed on the stock exchange. Japanese brokerage firms are rapidly turning into investment banks, as branches of American banks Merrill Lynch, Goldman Sacks, Morgan Stanley and others are already operating on a large scale in the Japanese market.


The monetary and fiscal policies of the Government and the Bank of Japan are focused on overcoming the crisis.

The government, in the old-fashioned way, widely finances "public works" from the budget, although it is well known that corrupt officials and politicians feed on budget money. But 560,000 construction companies and six million construction workers depend on this money. An attempt to transfer at least some of these works to private funding failed.

Fiscal year 2001, which began on April 1, saw the start of a budget reform that was postponed four years ago. It is necessary to transfer parastatal companies and banks from financing from the extra-budgetary Investment and Loan Fund to issuing bonds, liquidate this fund itself and many companies and banks of mixed ownership, as well as gradually privatize the postal and savings network. Resistance to these reforms is very strong.

Investments in "public works", which support (with little success) demand in the domestic market, during the crisis decade increased the national debt to 130 percent of GDP (as of April 2001). This third budget crisis in Japan's post-war history is the most severe among developed countries. The absolute figure of accumulated debt is 645 trillion yen ($5.5 trillion). In terms of urgency of repayment, the debt structure is quite safe and does not threaten Japan with default, but its servicing eats up huge budget resources, and new issues of securities to pay off debt threaten to raise interest rates on long loans. Moody's Investors Services has downgraded its rating on Japanese government - issued or guaranteed bonds from Aa1 to Aa1, the lowest among the top seven industrial countries other than Italy.

In Japan, the deficit of private financial institutions is covered only by domestic public debt. There are two sources of its coverage - the budget (including the issue of bonds) and funds of the Deposit Insurance Corporation. Government debt bonds are purchased by commercial banks and the Bureau of Trust Funds, which is subordinate to the Ministry of Finance and manages the state pension system.-

page 8

the banking system and citizens ' deposits in postal insurance and savings banks. Over 90 percent of government debt bonds pass through the Bureau of Trust Funds.

The Japanese state performs the functions of crisis management with great difficulty, because the usual mechanisms do not work. Is it not possible to stimulate consumer demand, which is key for the development of the economy, because the income tax is not too high? and it is impossible to reduce its rates in such a fiscal situation. Monetary policy levers do not work in a "deflationary spiral", and the abolition of business licensing and other methods of restricting market access brings down prices, increasing deflation.

At present, national barriers to the movement of goods, capital, and people, as well as the time of transnational contacts and mergers between large corporations, are being reduced. Under these conditions, close ties between the state and the corporate sector are disintegrating, and the mechanisms of financial and budgetary control over the economy and income redistribution are working extremely poorly. However, the nation-State's social obligations to its citizens remain valid. In the context of globalization, this contradiction becomes a key one. The policy of social support for large groups of the population is deprived of a financial and legal basis.

The loss of growth rates is painfully perceived in Japanese society, as they were considered the main criterion for the country's success in the post-war years. Japan - the" sick man " in Asia-has ceased to be an example for its region, especially against the background of a booming China. But the methods of stimulating growth do not work, and reforms are difficult, because they hurt the former strong group interests and meet resistance from officials, politicians, and company managers. Many would like to maintain the status quo simply out of fear of risk, and the generation that experienced the tremendous success of the national economic model is not yet gone.

In Japan, the search for new rules of the game that meet the needs of an economic superpower in the face of global competition is intense and difficult. It is now obvious that numerous elements following the American model are emerging in the economic order.

So, large companies are gradually abandoning the so-called lifetime hiring system, which has become too expensive for many of them. The ban on temporary employment contacts for a number of professions was lifted and restrictions on the opening of private employment agencies were lifted, and the market for these services began to grow rapidly. However, the labor market is still very far from being as flexible as in the United States.

Western institutions imported to Japan twice, in the late 19th and mid-20th centuries, entered into a kind of symbiosis with local conditions. Now the country is trying to repeat this success for the third time in the last century and a half, but it is moving with great difficulty.

Globalization leads to convergence of national economic systems and forces national Governments to provide a higher degree of freedom for economic activity.

The nature and extent of economic regulation varies from country to country. Standardizing the rules of such regulation is not relegating one's own system to someone else's, but rather unifying them so that markets can operate as freely as possible.

Is it true that globalization leads to the" cloning " of the American economic system and American social values, and to the loss of cultural heritage?

Most of the international standards are indeed of American origin. But they are not imposed by force, but selected in competition.

Now it is difficult to predict what kind of combination of national and international will eventually turn out, especially since, apparently, in the era of the global economy, the criteria for strengthening or weakening state intervention in the economy are blurred, losing simple quantitative measurement.


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