Japanese Bid to Rule the World.

China does have ghost cities, over-building campaigns and heavy local government debt, a legacy of the planned economy in the new era. The communist party has misdirected much of the economy, but most Chinese are still willing to trust the party, which has done everything it can to maintain social stability and has poured trillions of dollars into infrastructure and new industries. Singapore, Taiwan, South Korea and pre-war Japan were all one-party states in their period of rapid development, and you can think of it as a feature of east Asian Confucianism.

That’s way overselling it. You could easily blame it on a high savings rate or destroyed post-war economies. Blaming it on Confucianism is vaguely, somehow, insulting to the many varied peoples on the Pacific Rim. Do you blame America’s post-war boom on Christendom?

The Chinese economy is having its share of indigestion. The CCP stays in power due to keeping the gravy train rolling. But that can’t continue forever. Over time, those who make the economy run - which is not the government in general - will demand more influence over policy decisions and that will lead to a loosening of the CCP’s monopoly on power. That may occur with different factions of the CCP to maintain the illusion of a one-party state but trust me, if there are two factions of the CCP and one is free market and another is controlled economy what you have is a two-party state.

Vidal wasn’t the only one to get it wrong. All of cyberpunk depended on a future in which Japan and its popular culture took over the world.

Voyager, most likely the article was talking about finished products that use semiconductors, such as home audio equipment, televisions, dvd players, and so on.

The lower quality Chinese ones that have taken over the market do generally use high quality components for the core ICs, often made in fabs in Taiwan, which supports your theory. And we all know what happened when they cut corners on electrolytic capacitors for several years.

With that said, the Chinese have managed to *greatly *reduce costs for many, many goods. And clearly the quality tradeoff is generally worth it. A product that costs 1/3 as much to purchase but has a 5% annual failure rate vs a product that costs 3 times as much but has a 1% failure rate - in consumer applications, this is a no-brainer. Even with the failures the Chinese product is much cheaper.

Also in commercial applications. Obviously, in certain applications the higher failures will shaft you - in automotive, in medical and military, and so on.

I was in business school in the late '80s. As I remember it, the feeling in the U.S. business community wasn’t really that “the Japanese were bent on financially conquering the world,” so much as that they suddenly leapfrogged over the U.S. on manufacturing. As late as the early '70s, “Made In Japan” was still shorthand for cheap, low-quality merchandise…and, then, suddenly, it wasn’t.

U.S. businesses (especially in industries like electronics and autos) were obsessed with studying and learning from Japanese technques. Ironically, in that era, the Japanese venerated an American engineer, W. Edwards Deming, who had worked with Japanese manufactures in the 1950s to help them build a culture of producing quality products, lessons that many western companies were slow to embrace.

As others have already stated in this thread, what happened was that Japan was riding the high of a bubble economy at that time, which couldn’t last. American auto manufacturers finally learned how to make vehicles that could compete with the Japanese on quality and reliability, and other Asian countries (particularly South Korea) also mastered making high-quality electronics.

I strongly recommend to anyone interested in this subject to read David Halberstam’s The Reckoning, one of the all-time great corporate biographies, a dual history of the Ford Motor Company and Datsun/Nissan from a masterful writer who explores the issues of this thread in viewpoints ranging from the factory floor to the executive suite.

Actually, there’s a real short-hand answer for this. The final episode of Newhart.

For those of you who have never heard of this, the relevant part is this. Bob Hartley, an innkeeper in a rustic small town in Vermont, ends up being the last person in town who hasn’t sold out to a giant Japanese corporation. The corporation then tears down the town and builds a huge golf course/resort entirely around Hartley’s inn.

That episode first aired in May 1990. It was all a big joke of course, but it shows that Gore Vidal wasn’t so far out of the mainstream that he seems to be 30 years later.

Not to mention that episode turned out to be one of the greatest moments in TV history, but that goes in a different forum.

Manufacturing they were great at. But at the time I was involved in trying to sell expensive EDA software to major Japanese companies. For a demo, I got the netlist (description of a digital circuit at the gate and cell level) from a major Japanese electronics company.
It was a piece of shit.
I felt much better then.

I don’t think the Japanese necessarily believed that they would take over the world, but they probably did believe then, and probably still do believe, that they can adapt any system to make it work more effectively. And if nothing else, they make it work more effectively for their society. I think the Japanese were just proud that they had come so far economically considering where they had been in the late 1940s and were occupied by a foreign power - the only time in its 2000-plus year history - as late as 1953.

Anybody else remember Rising Sun by Michael Crichton? In the late 1980’s and at the beginning of the 1990’s, it really did seem like Japan was buying everything. Rockerfeller Center in New York is just one example. So why didn’t Japan end up owning the world? Mainly because of inflation. Japan’s initial rise starting in the mid-1950’s was based on price. They were the low-cost manufacturers for the world. However, the Japanese conglomerates that controlled the economy were smart. They invested heavily in many industries including manufacturing and banking. They also emphasised quality and efficiency, which gave them a further competitive advantage. As a result, from the mid-1960’s to the early 1970’s, Japan had a booming economy. It multiplied to 12 times as large. Japan was then hit by the oil crisis of the early 1970’s, but so was the rest of the world. Japanese industry’s investment in efficiency then paid off. While much of the world was economically stagnating, Japan continued growing, although at a slower rate. So Japan had become the second largest economy in the world, and was continuing to grow faster than any other major economy.

What happened to stop that in the early 1990’s? Basically, during the boom years, income levels increased massively throughout society. Average personal wealth grew from a relatively low baseline to an affluent level. This rise in income levels continued past the early 1970’s and into the 1980’s but was met with rising costs. Domestic consumption and speculative investments (such as shares and real estate) increased at a rate higher than economic growth. The difference was made up in loans. Meanwhile, the rest of Asia was catching up. Japan was no longer the world’s low cost manufacturer. Globalisation mean that Japanese conglomerates had to compete against worldwide conglomerates. And very few people in Japan were paying attention to the overspending and putting on the brakes. So when an adjustment was made to monetary policy to devalue the yen to support manufacturing exports, suddenly a lot of people had “wealth” that was based on high prices. The stock market took a major hit in 1990. Real estate prices fell soon after. The loss in personal wealth meant that domestic spending plummeted. So even though the exporting manufacturing sector of the economy was doing okay, most of the rest of the economy was in decline. Lots of the loans mentioned above were defaulted on, leading to a banking crisis. That banking crisis hit the conglomerates that had invested in both manufacturing and banking, and they were likewise hit by the domestic spending decline. So all the money that Japan was using to buy the world was now directed at covering their domestic losses.

In the late 90’s, I worked in a GM plant that bought 24 large machining centers, from a Japanese company that was bankrupt, but it was kept in business by the provincial government. I guess it was better to subsidize the company, than pay unemployment. GM got them really cheap, I found it interesting that the Japanese taxpayers were subsidizing General Motors, if only indirectly. Weirdly, we never used them, they sat for several years before being sold to folks from Turkey.

Living through the bubble was an extraordinary experience. So many stories. The saddest was the friend of my ex-wife. The following is a long, pointless story, so you can skip it.

TLDR version is that the collapse of the bubble economy wreaked havoc in many people’s lives.

I never particularly cared for him. He wasn’t a terrible person, just not someone I wanted to be close friends with. His father was an attorney who was the son of an attorney who was also the grandson of attorney, in a time and place where that was a quite an achievement. This friend has graduated from the law program, but like so many law program graduates, he couldn’t pass the incredibly difficult Japanese annual bar exam despite attempting it six or seven times. That didn’t stop him from pretentiously himself a “lawyer to be.”

The family house was located in a neighborhood, many houses of which had escaped the Tokyo Firebombing. They had a locally famous cherry tree in their back yard. Every year, they would have large numbers of guests come to view the tree in the cherry blossom viewing season.

The stock market and real estate prices we going up and up and up. That house has been worth a million or so before the bubble and at the height had a paper value of over $10 million. The stock market moved only in on direction. Banks kept knocking on people’s doors encouraging them to borrow against their homes to dump money in the market. Even the most conservative attorneys can fall prey to dreams of untold wealth.

Of course, what goes up can’t stay up and it all came apart. The house which his great grandfather built, with that famous cherry tree, well it was collateral. After all of the legal battles ended and they had no choice but to vacate, the family sold off many of their prized possessions then packed up what was left. On the morning of their move, the son and mother went out to give their final goodbyes to the tree, only to see the father hanged there. He couldn’t bear the shame and killed himself rather than live with the shame of being the one to lose the family home.

OTOH the cyberest, punkiest city was the Kowloon Walled City. I wonder how much it directly inspired various authors. The “cyberpunk” milieu was not all high-tech, low crime utopia (nor is Japan…)

One of the big issues that caused the panic about Japan ‘taking over’ was the trade deficit. This is also true of China today. When you run a trade deficit, you are buying more from the other country than they are buying from you. That means they are accumulating your currency. Japan used this excess to start buying real estate in the U.S., which is what panicked people. They were seeing beloved American institutions being purchased by the Japanese and it scared them.

What actually happened was the Japan eventually had a a recession, and the Japanese sold off a lot of that real estate - at a huge loss, because real estate was low at that time. So America benefited from cheaper, higher quality goods, and the money they paid for it came back in part in the form of profits for the people who sold the real estate.

The same thing is happening with China, but the effect there is that wealthy Chinese people are buying up coastal real estate in the U.S. and Canada, causing price inflation that’s pricing people out of the market. Vancouver is, I believe, thinking of restricting foreign real estate investment for this reason, and other cities are considering rules such as an occupancy requirement to prevent the Chinese from buying homes and apartments and leaving them empty.

But I predict this will not end well for those investors, because eventually China is going to need the money, and the investment will stop, and when it does real estate prices will go down and the Chinese who bought it will be left holding the bag. We may see a very similar thing happen to the Chinese that happened to the Japanese.

And I would not bet on China’s economic future at all. The Communist party has been re-asserting control all over the place, they now have a leader for life, and they have made huge missteps in their centrally planned economy. A Communist system simply cannot compete. China has been growing fast precisely because it began embracing capitalism and allowing markets to work. The more that they move away from that, the worse their economy will be.

Also, China is increasingly restricting access to the Internet. That will also hurt productivity as the average Chinese worker will have less information than everyone else. That plus their new social controls designed to get everyone to conform to a universal model of behavior will constrict innovation and risk-taking - already low in China, which is why they have to steal so much tech.

Yeah, it’s always better to have more information than less.

My worry is that the Chinese won’t reveal the true situation until a crisis develops, and that will reset a lot of expectations about the global economy and trigger a serious downturn. But as you say, if that’s the truth, better to know it than not.

China also cuts costs by skimping on safety and good engineering practices. I have a very cheap Chinese 3D printer I built from a kit. The thing isn’t fused properly, the mains wiring is attached with screw terminals that are easily exposed, the software doesn’t have thermal runaway protection, the wires and connectors are under-rated and have caused fires, etc. I bought one because I know what I’m doing and could fix the obvious design shortcomings. Others haven’t been so lucky.

Another way cheap Chinese manufacturers skimp on quality is in their tooling. Tooling costs in a factory are expensive, and we work out lots of measurements and signals to tell us when drill bits are getting dull and that sort of thing. In a factory that guarantees tight tolerances, the tooling needs to be replaced or refreshed regularly. Many Chinese plants simply cut back by running their tools long past the point where they should be replaced or sharpened or refurbished. If you are lucky enough to get a product from early in the production run it may be of very high quality. If you get it from a later run, not so much.

Cheap Chinese manufacturers also skimp on scrap costs by simply reworking or ignoring production faults that would result in rejects in a higher quality factory. Did you drill a hole in the wrong place on that shaft? No matter - just re-drill the right hole and ignore it. Sure, the shaft is now weaker and you’ve opened up a spot for potential corrosion or the collection of debris, but hey, who cares? It should probably be okay. And we’re not spending the money to replace it. So ship it!

Yeah, I’ve never worked on factory project where the managers wanted to lower quality to save money. High quality in production saves money.

But there are ways to have ‘too much’ quality. For example, putting your gizmo in a lovely anodized magnesium case is more expensive than a plastic box. Knurled metal knobs look awesome, but plastic knobs work too. Higher control limits may reduce scrap while leaving the product okay for the majority of uses. Etc.