The Rise and Fall of Abacus Banking in Japan and China phần 2

Acknowledgments Part of this book was completed during Panos Mourdoukoutas’ stay at Nagoya University and Chukyo University. The authors are indebted to professors Akira Yakita of Chukyo University, Tadashi Yagi of Doshisha University, and Shogo Kimura of Nagoya University, and to Mr. Atsushi Nishiyama and Mr. Katsuya Miyoshi. The Rise and Fall of Abacus Banking in Japan and China Chapter 1 Beyond Non-performing Assets: Abacus Banking In the years 1986 to 1991, Japan generated a wave of hyperliquidity. This extraordinary surge of money created one of the great collective madnesses of world financial experience, a speculative excess that created what came to be known as the bubble economy, an event that Forbes magazine in 1987 identified as comparable with the no-torious Dutch tulip bulb craze of the 17th century or the South Sea bubble of the 18th. —Peter Hartcher1 For decades, Japan’s robust economy was the envy of the world. Her export-led industrialization growth strategy served as a role model for growth and prosperity for the emerging economies of nearby Southeast Asia and elsewhere around the world. Her labor institutions and man-agement practices became case studies in MBA programs around the world. Her bureaucrats at the legendary Ministry of International Trade and Industry (MITI) and the Ministry of Finance (MOF) dreamed of tak-ing on the world’s largest economy, the United States, especially in the second half of the roaring 1980s, in the ‘‘bubble years’’ when the U.S. and European economies remained stagnant. In fact, according to some Japanese politicians, the country’s modern economic model, especially management organization, was an alternative to the antiquated U.S. ec-onomic model: 2 The Rise and Fall of Abacus Banking in Japan and China The Japanese way of doing things seems to fit this stage of history better. . . . The Japanese system puts emphasis on stability and teamwork and has distinct ad-vantages. It fits the requirements of the times, particularly of this stage of tech-nological development.2 As we enter the new millennium, Japan’s sluggish economy is no longer the envy of the world. Her export-led industrialization strategy no longer serves as a role model for the emerging economies in Asia or elsewhere, but as a bad lesson, an example of crony capitalism doomed to economic bubbles and bursts. Her labor institutions and management are losing their popularity with MBA programs around the world. Her bureaucrats at MITI and MOF face the anger and the dismay of their U.S. counterparts for failing to address the economic problems of the country, a failure that has turned into a threat for the global economy. Indeed, Japan’s economic performance since the early 1990s, a period of world recovery and robust growth for the U.S. economy, has been dis-appointing. Real GDP growth fell from 6.1 percent in 1988 to 3.8 percent in 1991, falling into negative territory by 1994. After a 3.5 percent re-bound in 1996, it slid into negative territory again in 1998 and expected to grow by 0.6 percent in 1999. In the meantime, the Nikkei stock average dropped from 40,000 in 1989 to below 13,000 by 1998 before returning to 17,000 by mid-1999, while real estate prices returned to their pre-1985 levels. At the core of Japan’s economic woes is a prolonged banking crisis, as manifested in the billions of dollars of non-performing loans which have yet to be written off. Even as recently as 1998, in spite of several gov-ernment packages, Tokyo Mitsubishi Bank, DKB, Sumitomo Bank, and Sakura have disposed of less than half of their non-performing assets (see Exhibit 1.1). Japan’s banking crisis is also manifested in a credit crunch that has neutralized monetary policy (i.e., aggressive monetary easing has failed to expand lending to allying business sectors of the economy and resolve the banking crisis). As an Economist report puts it, ‘‘The sickness of Ja-pan’s banks makes any macroeconomic approach to the problem, fiscal or monetary, irrelevant; the country’s productive potential, not merely its ability to mobilize demand, is collapsing.’’3 Indeed, since 1990, the Bank of Japan (BOJ) has launched an unprecedented expansionary mon-etary policy, lowering the discount rate from 5.5 percent to 0.25 percent without avail. At the same time, the Japanese government has launched an aggressive fiscal stimulus package that poured billions of yen into Exhibit 1.1 Non-performing Loans for Selected Japanese Banks in 1998 ... - tailieumienphi.vn