Asia in Japan’s Embrace: Building a Regional Production Alliance

300 Pages·1996·16.51 MB·English

by  Walter Hatch

ASIA IN JAPAN'S EMBRACE
CAMBRIDGEASIA-PACIFICSTUDIES
Cambridge Asia-PacificStudies aims to provide a focus and
forumforscholarlyworkon theAsia-Pacificregionasawhole,
and its .component sub-regions, namely Northeast Asia,
SoutheastAsiaandthe PacificIslands.
Editor:JohnRavenhill
Editorial Board:James Cotton, Donald Denoon, Mark Elvin,
DavidGoodman,StephenHenningham,Hal Hill,DavidLim,
Ron May,AnthonyMilner,TessaMorris-Suzuki.
R GerardWard and Elizabeth Kingdon (eds) Land, Custom
andPracticein theSouthPacific
Stephanie Lawson Tradition VersusDemocracy in the South
Pacific
ASIA IN JAPAN'S EMBRACE
Building a Regional Production Alliance
WALTER HATCH
and
KOZO YAMAMURA
HenryM.JacksonSchoolofInternationalStudies
UniversityofWashington
CAMBRIDGE
UNIVERSITY PRESS
cambridge university press
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Published in the United States of America by Cambridge University Press, New York
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© Cambridge University Press 1996
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 1996
Reprinted 1997, 1999
A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication Data
Hatch, Walter
Asia in Japan’s embrace: building a regional
production alliance/Walter Hatch and Kōzō Yamamura.
p. cm. - (Cambridge Asia-Pacific Studies).
Includes bibliographical references and index.
1. Japan - Foreign economic relations - Asia. 2. Asia - Foreign
economic relations - Japan. 3. Strategic alliances (Business) -
Japan. 4. Strategic alliances (Business) - Asia. 5. Trading blocs -
Asia. I. Yamamura, Kōzō, II. Title. III. Series.
HF1602.15.A74H38 1996
37.5052-dc20 96-282
isbn 978-0-521-56176-1 Hardback
isbn 978-0-521-56515-8 Paperback
Cambridge University Press has no responsibility for the persistence or
accuracy of URLs for external or third-party internet websites referred to in
this publication, and does not guarantee that any content on such websites is,
or will remain, accurate or appropriate. Information regarding prices, travel
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Contents
ListofTables vi
ListofFigures vii
Preface viii
PartOne: Co-ProsperityAgain
1 CrossingBorders:TheJapanese Difference 3
2 FlyingGeese: An UnequalAlliance in Asia 20
PartTwo:TheEmbracerandtheEmbraced
3 Cooperationbetween Unequals 43
4 The PoliticalEconomyofJapan 62
5 ThePoliticalEconomyofAsia 77
6 HoldingTechnology 97
PartThree:AJapaneseAllianceinAsia
7 TheVisible Handshake 115
8 Vertical VeinsofHumanity 130
9 The LaborNetwork 146
10 The SupplyNetwork 158
PartFour:APowerfulEmbrace
11 TheTies thatBind 175
12 Looseningthe Knot 192
Notes 205
SelectBibliography 261
Index 275
v
Tables
1.1 Japan'sTechnologyExports toAsia 8
1.2 Japan'sManufacturingTechnologyExports toAsia 8
5.1 Asia's Macro-indicators 79
5.2 Ethnic Chinese in ASEAN-4 82
6.1 JoiningForces:Japan's Major SemiconductorPartnerships
inAsia 105
7.1 Regional DistributionofJapanese ODA 128
8.1 Asian Countries towhichJapan isLeadingDonor (1992) 131
10.1 SourceofProcurementsbyJapanese Manufacturers
Overseas (1992) 159
11.1 Destination ofJapan'sManufacturedExports 179
11.2 Destination ofAsia's Manufactured Exports 181
11.3 IntrafirmTradebyJapanese Firms in AsiaasaPercentage
ofTheirTotal TradewithinAsia 186
vi
Figures
1.1 Japanese andUSFDIin Asia 5
1.2 Japanese ManufacturingFDIinAsia 7
1.3 ShareofTotal FDIbyJapaneseSMEsGoing toAsia 7
2.1 Evolution ofJapanese Networks in Asia 24
2.2 Toyota MotorNetwork 26
2.3 MitsubishiMotorsNetwork 34
5.1 ScientistsandTechniciansWorkinginR&D 84
7.1 The "AsianBrain"ManagingEconomicCooperation 120
9.1 Japanese Personnelin ManufacturingAffiliatesin Asia 156
11.1 Asia'sTradeBalancewith the UnitedStates, European
Community, andJapan 175
vii
Preface
Attheturnofthelast century, theUnitedStateswasplantedfirmlyin the
Asia-Pacific region. It hadopened trade relationswith ChinaandJapan,
exploredanumberofislands,andevenlaidclaimto itsown archipelago,
the Philippines. Puffed up with patriotic pride, expansionists such as
Chauncey Depew crowed that the Pacific Ocean had become an
"Americanlake"dominatedbyUSmerchantvesselsandwarships.'Asia's
fate, theybelieved,wasAmerica's.
As a new centuryunfolds, US aircraft carriers laden with sailors and
fighterjetssteam in andoutofTokyo Bay,servingasfloating symbolsof
America's now unrivaled military clout in a post-Cold War world. US
container ships cruise these waters as well. But they are vastly out-
numberedbyJapanesevesselscarryingautomobileparts,.machinetools,
and myriadelectricand electronic productsmanufacturedbyJapanese-
affiliated firms all over the region. We are exaggerating only a little in
saying that, in termsofcommerce, the "Americanlake"has all butdried
up; a 'Japaneselake"isrisingin itsplace.
TheebbandflowofeconomicpowerinAsia,thegrowthcenterofthe
worldeconomy,iscriticallyimportantto everyoneinsideandoutsidethis
region. While the industrialized economies of the world limp along,
hoping for a growth rate of 3 percent a year, the industrializing eco-
nomies ofAsia are expandingat phenomenal rates ofup to 13 percent.
DevelopingAsia,whichdoesnotincludeJapan,generatedonly9percent
oftheworld'soutputin 1990, butisgeneratinga largershare everyyear
and could, according to one estimate, contribute more than 50 percent
viii