石井 晋

Japan succeeded in establishing both heavy and chemical industries in the postwar period. This was a result of the rapid expansion of the domestic market, the existence of a competitive market environment and other favorable factors. However progress was anything but smooth in the early stages, and important difficulties occurred frequently. Between 1953 and 1954, Japan came up against balance of payments difficulties. Moreover, because export and domestic demand had stagnated, it became difficult to realize economies of scale, particularly in the steel and machinery industries. Therefore, prices in these industries were higher than international standards. This had an adverse effect on the international competitiveness of Japanese industry, and also made it difficult to expand domestic demand. In short, the Japanese steel and machinery industries were stagnating because supply and demand restricted each other. The situation seen in 1953-54 was a critical point in the process of import-substitute industrialization. The bad cycle mentioned above was particularly evident in the iron an steel industries. Government and the trade associations thought of varlous counter measures, including a search for new markets, reorganization of the industry, and export promotion. But friction occurred between them when it came to their execution. It was export promotion by means of subsidies that was the most effective. Because of this, and an improvement in worldwide business conditions, Japanese exports rapidly increased after the second half of 1954. The balance of payments therefore improved, and the bad cycle of supply and demand disappeared. Japan had entered an era of high economic growth. The policies executed by government and industry were effective because thorough execution made their merits and demerits clear,