Past as Prologue? Japan’s Past Industrial Trajectory and China’s Future One

This paper seeks to explore whether China's industrial and technological trajectory over the past several decades and going forward bears similarities to Japan's industrial and technological trajectory from its developmental boom to the low growth from the 1990s onwards. The key to comparing these trajectories are the politics of financing in each country. As an inseparable part of the politics of financing are the corporate beneficiaries of this financing and their concomitant technology strategies. While financial repression was pronounced in both countries, the Japanese system created firms that had both comparative institutional advantages tied to financial repression and comparative institutional advantages that could thrive even without the benefits of financial repression. In contrast, the beneficiaries of China's financial repression appear to have developed no other comparative institutional advantages. At the same time, other dynamic firms within China have been held back from fully developing their own competitive advantages due to China's pernicious politics of finance.