Draft-Evaluation about economic groups.docx - Evaluation...

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+ Evaluation about economic groups: * The importance of economic groups in the Japanese economy: + Zaibatsu: The zaibatsu used their contacts in the government to secure lucrative monopolies, subsidies, and tax concessions. In return, the zaibatsu helped to finance strategic semiofficial enterprises in Japan and abroad, particularly in Taiwan and Korea. The tightly-organized control of the zaibatsu over large areas of the economy was responsible for Japan’s successful industrialization and rapid growth as an economic power. By 1937, the four leading zaibatsu directly controlled one third of Japanese bank deposits, one third of all foreign trade, one half of Japan’s shipbuilding and maritime shipping, and most of the heavy industries in Japan. 1 + Keirasu: *Why zaibatsu was dissolved and replaced by keiretsu? Because of political and historical conditions: After Japan’s surrender (1945) in World War II, the breakup of the zaibatsu was announced as a major aim of the Allied occupation. Assets were seized, holding companies were eliminated, interlocking directorships were outlawed, and the individual companies that made up the zaibatsu were made independent entities. Complete dissolution of the zaibatsu was never achieved by Allied reformers, mostly because, in an effort to reindustrialize Japan as a bulwark against Communism in Asia, the U.S. government rescinded the SCAP (Supreme Commander of the Allied Powers) orders to deconcentrate Japan's large companies. Individual companies began associating in “enterprise groups” (kigyo shudan), organized around leading companies or major banks. The cooperative nature of these groups became a major factor in the rapid economic growth of postwar Japan, as they pooled their resources to invest in developing industries. Though large industrial conglomerates continue to exist in Japan, the vertically-integrated

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