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Japan's economy grew rapidly after WWII, mainly as a result of manufacturing goods for export.
The Japanese economy was helped very much by the Korean War. It happened very soon after WWII, while Japan was still weak. Since it was so close to Japan, the US ordered a good deal of materiel from the Japanese.
After this, Japan used its government to push its economy towards exporting and a few other industries such as shipbuilding. Much like China has in more recent times, Japan was able to start with cheap labor and build from there. It started by making cheap exports and then gradually came to be competent in making more and more things that could compete with high-quality goods (like cars) from other countries.
Another important factor to consider is how the traditional Japanese culture, which had allowed their war effort such success for almost two decades, was used to great effect to build a nation of business "warriors".
Many elements of "Bushido", or the code of the warrior, including respect, benevolence, loyalty and a constant pursuit of perfection, are evident in the development and ongoing culture of successful Japanese businesses, which were begun after the US invasion. The tradition of the Japanese company has many similarities with the traditional feudal relationships of peasant to samurai and daimyo, even though the new economic system encouraged a more equal and egalitarian society.
Japanses business owners ensured that their workforces were safe (in that they were well paid), and in return, workers dedicated their loyal service to their bosses and the company, in a way which far surpasses a Western understanding of "loyal worker". Combined with this were the high numbers of very well educated young people (due to Japan's excellent education system) who were keen to enter an industrial workforce following the end of the war. So, Japan could grow strong on the foundation of good education and a moral compass.
With the outbreak of the Cold War, American interests and their occupation policies in Japan were subsequently dominated by the issue of global bipolarity. The Americans sought to use Japan as a linchpin for their Cold War policy in the Pacific and attempted to do so through economic reconstruction by creating social stability and a conducive environment for growth to occur. Japan also benefited greatly from the outbreak of the Korean War, experiencing an economic boom during the war. Before the onslaught of war on the Korean peninsula, the Japanese economy, devastated from World War II, was struggling domestically and many Japanese firms were on the verge of collapse. With the start of the war in 1950, the American military became the prime customers of such Japanese corporations - since it was too far to transport resources needed for the war from North American, the US used Japanese heavy industries to produce the goods they required (e.g. military vehicles).
After the war, the Japanese economy continued to experience rapid growth due to the policy of state-guided capitalism. The government played a major role in generating rapid economic growth by creating MITI (Ministry of International Trade and Industry), which directed economic policies that prioritised certain industries (e.g. ship-building, iron and steel, heavy industries) necessary for industrialisation. After the accumulation of sufficient wealth and technology, the Japanese government switched to a policy of supporting auto-mobile industries. The central authorities also controlled the influx of FDI (foreign direct investment) - the extremely low degree of FDI present in Japan gave domestic industries the time and space needed for them to grow to become worthy competitors of foreign corporations. Such protectionist policies also allowed local firms to generate enough wealth and technology to develop their own products for the global market. Industries in Japan became increasingly export-oriented and an emphasis was placed on producing high-quality, but cheap goods.The authorities, however, did encourage the inflow of foreign technology. An example of this was the productivity programme in 1955, where Japanese officials were sent to the US to learn about productive methods of managing businesses and innovation.
A combination of such strategies contributed to the rapid growth rates in Japan. By emphasising on the need to attain economic growth at all cost, and promoting the idea of Japan as a large, homogeneous family, the authorities helped the Japanese economy to reach its maturity in 1973.
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