2. Chapter 5 Changes in Japan Topic 2 Factors for the Economic Growth since 1945 Sub-Theme 2 Modernization and Transformation of China

3. Internal Factors Cooperation between management and labour New family-run business Emphasized that management and labour belonged to the same family Lifetime employment system Japanese employer-employee relationship Labour had a sense of responsibility and honour They actively supported their enterprises to adopt new technology and new management

4. Internal Factors Seniority-based wage system The longer the labour served the company, the greater their benefits would be Enterprise union One union for every enterprise Weakening the overall links between worker movements

5. Internal Factors Establishment of legal and management systems Active roles played by the government Support to small to medium companies The legal system was relatively complete The small to medium companies co-existed with big enterprises Paid much attention to the functions of experts and academics in decision-making The government provided startup support to small to medium companies, so that they could grow independently

6. Internal Factors Political stability and policy consistency On the surface, many factions branched out from the LDP, but within the party maintained a united motive The economy of Japan remained stable even when political changes occured Provision of stable business environment The ruling Liberal Democracy Party (LDP) held many seats in the Diet Economic activities were mainly run by private enterprises, state-run enterprises and public enterprises were rare

7. External Factors Cold War The US shifted her original policy from weakening Japan to strengthening it International instability Japan was used as part of a defense against communism in East Asia The Korean War Japan provided war supplies to the US The industries of Japan expanded rapidly

8. External Factors The signing of the San Francisco Peace Treaty, 1951 Ended the US occupation and restored independence to Japan Japan was integrated into the political, economic and military system of Western Europe and North America Capital and technique were attracted from these regions into Japan, enabling the Japanese economy to develop rapidly

9. The End