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

By Legewie, Jochen | Journal of Southeast Asian Economies, August 1998 | Go to article overview

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


Legewie, Jochen, Journal of Southeast Asian Economies


Asia in Japan's Embrace: Building a Regional Production Alliance. By Walter Hatch and Kozo Yamamura. Cambridge, UK: Cambridge University Press, 1996. 281 pp.

The subject of this book is the analysis of Japan's strengthened economic presence in East and Southeast Asia. Although the analysis focuses on the manufacturing sector, the book is of wider importance for a general evaluation of the role of Japan and its companies for Asia, which has once again become a topic of utmost concern due to the ongoing regional economic crisis.

Challenging the neo-classical view that Japanese investments in Asia simply follow the model of comparative advantages and are thus beneficial to all concerned parties, the authors argue that such undertakings primarily reflect the implementation of a strategic deployment of technology. The thesis is proposed that Japan's economic and governmental leaders are clearly co-operating closely to bring Asia into a transnational and exclusive production network under Japanese leadership, that is essentially a geographical broadening of the production system in Japan, as characterized by the system of industrial relations in Japan (keiretsu). For the future of Asian nations, this is said to result in lingering technological dependence on Japan and, with this, a shrinking of their developmental potential. Meanwhile, the far-reaching exclusiveness of these production networks will mean that Western enterprises will be severely restricted in their access to Asian markets, just as they are said to be in the case of the Japanese market. For Japanese business, on the other hand, this model will make possible not only a substantial minimization in costs and risks in the production process, but also the long-term protection of their technological lead and, along with this, their international competitiveness.

With respect to theoretical contribution, this book does not attempt to offer a new theory on foreign investment in general but only a new and different perspective on Japanese foreign investment activities in Asia. The main focus is to challenge the flying geese pattern which is often used to explain and defend the Japanese approach towards Asian countries and the whole region. However, the citing of obvious contradictions between theory and reality fails somehow in helping to build up a new perspective from the theoretical point of view.

The real contribution of the authors lies in their detailed description and elucidation of Japanese involvement in Asia, which continues even today to have a decisive influence on economic development there and which is characterized by intricate interconnections between government and business, and, even more so, between individual corporations. …

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