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

This book is an incisive analysis of Japan's deepening economic presence in Asia. A challenge to neoclassical economists who argue that Japanese investment in Asia is based on 'comparative advantage' and is thus beneficial to all parties, it contends that such investment is based on the strategic deployment of technology. The authors emphasize that Japan is not, as some have alleged, creating a 'yen bloc' in Asia. Instead, they argue that Japanese business and government elites are working together to build an expanded - and potentially exclusive - production zone which is an extension of their domestic base. Japan has a growing presence throughout the Asian region, and Walter Hatch and Kozo Yamamura find that many standard Japanese business practices have been transplanted. Central to this argument is the concept of cooperation between industry and government, labor and management, and even independent firms belonging to the same keiretsu (enterprise group). This cooperation allows a complex web of quasi-integrated vertical production networks to develop. The book shows that such strategic control of technology is a unique model of globalization. The authors recommend ways in which damaging 'trade wars' between Japan and the West can be avoided, making this book essential reading for businesspeople, policymakers, academics, and students.