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Chinas Industrial Structure Change: Lessons from Japans Financial Slump

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  • Yasushi Suzuki

Abstract

This paper is undertaken to highlight the lessons that China can learn from Japan‟s prolonged financial slump. China has been experiencing high economic growth along with massive change in its industrial structure. How will the industrial structure change affect the Chinese economy? Similar change was observed by Japan when Japanese banking system fell into a structural failure in terms of the inability to respond to the paradigm shift from “catching up†to “frontier economy†. This paper points out that big cities in China have already shifted to frontier economy and major provinces are on the same trend. We should argue that in spite of economic reform reshaping the Chinese banking system, the financing pattern of state owned commercial banks (SOCB) is not in line with the industrial change. Chinese banking system should be overhauled or transformed to respond to the increasing uncertainty along with the paradigm shift. Otherwise China may fall into the same dilemma that Japan had faced in its industrial structure change.

Suggested Citation

  • Yasushi Suzuki, 2015. "Chinas Industrial Structure Change: Lessons from Japans Financial Slump," Journal of Public Policy & Governance, Research Academy of Social Sciences, vol. 2(1), pages 1-15.
    • Handle: RePEc:rss:jnljpg:v2i1p1
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    References listed on IDEAS

    as
    1. Yasushi Suzuki, 2011. "Japan’s Financial Slump," Palgrave Macmillan Studies in Banking and Financial Institutions, Palgrave Macmillan, number 978-0-230-30770-4, December.
    2. Brandt,Loren & Rawski,Thomas G. (ed.), 2008. "China's Great Economic Transformation," Cambridge Books, Cambridge University Press, number 9780521885577, Enero-Abr.
    3. Takeo Hoshi & Anil Kashyap, 2004. "Corporate Financing and Governance in Japan: The Road to the Future," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582481, December.
    4. Fan Gang, 2003. "China's Nonperforming Loans and National Comprehensive Liability," Asian Economic Papers, MIT Press, vol. 2(1), pages 145-152.
    5. Hitoshi Sasaki & Satoko Ueyama, 2009. "China's Industrial Structure and its Changes in Recent Years: An Analysis of the 1997-2005 Input-Output Tables," Bank of Japan Working Paper Series 09-E-2, Bank of Japan.
    6. Masaharu Hanazaki & Akiyoshi Horiuchi, 2001. "Can the Financial Restraint Hypothesis Explain Japan's Postwar Experience?," CIRJE F-Series CIRJE-F-130, CIRJE, Faculty of Economics, University of Tokyo.
    7. Brandt,Loren & Rawski,Thomas G. (ed.), 2008. "China's Great Economic Transformation," Cambridge Books, Cambridge University Press, number 9780521712903, Enero-Abr.
    8. Hanazaki, Masaharu & 花崎, 正晴 & ハナザキ, マサハル & Horiuchi, Akiyoshi & 堀内, 昭義 & ホリウチ, アキヨシ, 2001. "Can the Financial Restraint Hypothesis Explain Japan's Postwar Experience?," CEI Working Paper Series 2001-12, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    9. Alicia Garcia Herrero & Daniel Santabarbara Garcia, 2004. "Where Is The Chinese Banking System Going With The Ongoing Reform?," Macroeconomics 0408001, University Library of Munich, Germany.
    10. Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2010. "Formal versus Informal Finance: Evidence from China," The Review of Financial Studies, Society for Financial Studies, vol. 23(8), pages 3048-3097, August.
    11. Yasushi Suzuki & Md. Dulal Miah & Jinyi Yuan, 2008. "China's Non-Performing Bank Loan Crisis: the role of economic rents," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 22(1), pages 57-70, May.
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