Newsletter of the lnstitute of Social Science, University ...web.iss.u-tokyo.ac.jp/kyoten/research/doc/The... · 2006, ISS Contemporary Chinese Studies No. 1; and Tajima Toshio and

The ContemporaryChina Research Base

Newsletter of the lnstitute of Social Science, University of TokyoISSN 1340-7155

SocialScience 39

September 2008

Page 2 Social Science Japan September 2008Page 2

Published by:The Information Center for SocialScience Research on JapanInstitute of Social ScienceUniversity of Tokyo

Editorial Committee:Hirashima KenjiYamazaki Yukiko

DistributionSocial Science Japan is available onthe World Wide Web at:http://newslet.iss.u-tokyo.ac.jp

All inquiries to:Social Science JapanInstitute of Social ScienceUniversity of TokyoHongo 7-3-1, Bunkyo-kuTokyo 113-0033 JAPANTel +81 3 5841 4931Fax +81 3 5841 4905Electronic mail:[email protected]

Cover PhotoMemorandum-signing ceremony inBeijing(From left: Yuan Gangming,research professor of theUnderdeveloped Economic Centerof CASS; Liu Shucheng, director ofthe Institute of Economics at CASS;Komorida Akio, director of ISS; andTajima Toshio, director of theContemporary China Research Baseat ISS)Photo by Kajima Jun (ISS)

Editorial NotesPersonal Names

All personal names are given inthe customary order in thenative language of the personunless otherwise requested.Hence in Japanese names, thefamily name is given first, e.g.Toyotomi Hideyoshi, and inWestern names the familyname is given second, e.g.George Bush.

Copyright © 2007 by the Institute ofSocial Science, University ofTokyo, except where noted. Allrights reserved.

This issue of Social Science Japan focuses upon the Contemporary China Research Base,founded in the Institute of Social Science (Shaken) in 2007. The Base is a product of collabo-ration between the University of Tokyo and the National Institutes for the Humanities(NIHU), an Inter-University Research Institute Corporation in Japan. The ContemporaryChina Research Base was established to explore China’s economic growth and stability.

The Base consists of two main research groups, each of which is composed of three sub-groups (please read the “Aims of the Contemporary China Research Base” for moredetails). This issue of SSJ carries six articles from scholars involved in the research activitiesof the Base.

First, Professor Tajima Toshio, director of the Base, describes the achievements and futureplans of the Economy Subgroup and the Rural Issues Subgroup.

In the next article, Professor Tanaka Nobuyuki reflects on the activities of the Law Sub-group. He indicates a strong desire to study the transformation of the legal system inChina, examining the processes and problems involved.

Professor Suehiro Akira and his colleagues represent the Trade Subgroup and examinetrends in Asia's intra-regional trade. They found that Asia’s increase in intra-firm trade andvertically specialized trade (especially surrounding China) underlies the region's growth inintra-regional trade.

Professor Marukawa Tomoo explains the research focus and findings of the IndustrialAgglomeration Subgroup. The discovery of Chinese industrial agglomeration is a recentdevelopment and the Subgroup aims at analyzing the factors involved.

Professor Kawashima Makoto reports on the work of the ODA Subgroup in 2007. The Sub-group conducted field research on China’s aid programmes in Africa to clarify how theyare being undertaken.

In the final of the six articles for our theme issue, Project Research Associate Kajima Jun’sarticle introduces the organization of the Beijing Research Base and how it operates.

Since last year, we have all of course heard much about China due to the poisoneddumpling incident, the massive earthquake in Sichuan Province and the (as of this writing)ongoing Olympic Games in Beijing. These major events attract a somewhat longer mediaattention than the usual 24-hour news cycle. But even then, the coverage soon fades andrarely gets beyond stereotypes. The articles in this issue remind us that it is important toapproach China with a broader and much longer-term focus.

For more detailed information on the Base, please see:http://web.iss.u-tokyo.ac.jp/kyoten/index.html (Japanese only)

Contents

The Contemporary China Research Base

Contemporary China Researgh Base Steering CommitteeAims of the Contemporary China Research Base ..........................................................................p.3

Tajima Toshio The Lewis Turning Point and China’s Aim for a Harmonious Society ..................p.5

Tanaka Nobuyuki Law Subgroup Report: The Property Law of the People’s Republic of China.....................................................................p.7

Suehiro Akira, Miyajima Yoshiaki, and Oizumi Keiichiro The Rise of China andDevelopment of Intra-Regional Trade: Findings from the World Trade Atlas (1996-2006) ...........p.9

Marukawa Tomoo The Discovery of Industrial Agglomerations in China ..................................p.13

Kawashima Makoto Chinese Foreign Aid ODA Subgroup Report .............................................p.16

Kajima Jun The Beijing Research Base .....................................................................................p.18

ISS Research ReportIshikawa Hiroyasu.......................................................................................................................p.20

Questions and Answers with Visiting ProfessorDimitri Vanoverbeke....................................................................................................................p.24

Page 3Social Science Japan September 2008

The Contemporary China Research Base wasestablished in the University of Tokyo’s Instituteof Social Science (ISS) in April 2007 to conductresearch on Economic Growth and Stability inChina. The Base is a collaboration between theUniversity of Tokyo and the National Institutesfor the Humanities (NIHU), an Inter-UniversityResearch Institute Corporation in Japan.

Paralleling the course of the Hu Jintao regimewhich came to power in the fall of 2002, the Chi-nese economy is now entering a transitionalphase. The era of ‘unlimited labor supply’ fromrural China, once the backbone of the country’sgrowth, is now coming to an end. The market foryounger labor is growing tighter in urban areas,while expanding economic activity is bringingenvironmental and resource constraints to theforefront. The issues of the adjustment of theurban-rural labor force distribution and the coor-dination between agricultural and non-agricultur-al sectors can no longer be avoided. To build amore stable society, and to adjust and manageresource allocation smoothly, improvements mustbe made to the social safety net, income distribu-tion, the legal system and the regulation of areassuch as ownership, governance and the environ-ment. A more democratic political system will berequired to safeguard these new institutions.

China’s economic expansion is making a strongimpact on the international community in boththe political and economic spheres. Meanwhile,under multilateral frameworks such as the IMFand WTO, as well as intra-regional arrangementssuch as the China-ASEAN FTA, China itself isfeeling pressure to improve foreign economicrelations and achieve domestic change, such asbetter coordination among different industrialsectors and the development of more robust legalinstitutions.

The pursuit of area studies grounded in the socialsciences has been a core mission of the ISS eversince its foundation in 1946, with scholars in eco-

nomics, law and political science engaging in Chi-nese Studies within their respective disciplines.The University of Tokyo signed an exchangeagreement with the Chinese Academy of SocialSciences (CASS) in 1986. As the University’s prin-cipal interface for this agreement, the ISS has usedjoint research projects, researcher exchange andvisiting professor programs with CASS-affiliatedinstitutes to develop an extensive track record ofexchange activity and a diverse research network.

Building on these foundations, the ISS Contempo-rary China Research Base was launched with theaim of contributing to the development of Con-temporary Chinese Studies, not only within theUniversity of Tokyo, but throughout Japan andacross the world. The Base envisages two majorcomponents of activity over its five-year period ofoperation.

Research Group 1: Institutions, Policies and Eco-nomic Development (leader: Tajima Toshio)

Attentive to the challenges of structural adjust-ment and institutional reform in China’s econom-ic sector and the realignment of economic andlegal institutions occasioned by China’s member-ship of the WTO, this group will chiefly addressissues concerning the domestic economy, institu-tions and policies, including: (a) macroeconomicpolicy and fiscal / monetary reform, and the rela-tionship between government and private enter-prise; (b) the development of systems of civil andcommercial law / intellectual property law /environmental law, and issues of ownership andgovernance; (c) structural adjustment in the agri-cultural sector and land use / community self-government; (d) labor markets / labor forcemobility / social security; and (e) economic ideol-ogy and perceptions of society and history, etc.Research activity is organized around three sub-groups: (1) structural adjustment and economicpolicy (the ‘Economy Subgroup’), (2) intensifiedreform / opening and reorganization of economiclaw systems (the ‘Law Subgroup’), and (3) agri-

Aims of the Contemporary China Research Base, Instituteof Social Science, the University of Tokyo

Contemporary China Research Base Steering Committee

cultural and rural problems in a period of transi-tion (the ‘Rural Issues Subgroup’).

Research Group 2: Foreign Economic Relationsand Industrial Structure (leader: MarukawaTomoo)

From the standpoint of China’s economic interna-tionalization and increasingly apparent resourcelimitations, as well as economic partnerships andindustrial adjustment in Asia, this group willchiefly address issues in China’s industrial devel-opment and foreign economic relations, includ-ing: (a) trends of foreign trade and intra-regionaleconomic partnerships in China and the Asianregion; (b) foreign economic relations pertainingto investment, foreign exchange and intellectualproperty rights; (c) industrial agglomerations andinternational division of labor in Asia; (d) off-shore development and the growth of outsourc-ing to China; and (e) resource constraints anddevelopment-and-import schemes / officialdevelopment assistance (ODA) / resource diplo-macy. Research activity is organized around threesubgroups, focusing on: (1) the structure of tradein connection with China both within and outsideAsia and possibilities for East Asian economicpartnerships (the ‘Trade Subgroup’), (2) industrialagglomeration in China and the Asian region (the‘Industrial Agglomeration Subgroup’), and (3)resource constraints in China and development-and-import schemes / ODA / resource diploma-cy (the ‘ODA Subgroup’).

The two Research Groups and six Subgroupsoperate in a manner enabling cross-participation,with research activities and workshops conductedon a routine basis, as well as field survey andresearch exchange activities in China and else-where, and the publication of research findings.Research seminars are held roughly twice amonth at the ISS or on the Komaba Campus, andare generally open to the public. Further informa-tion on research activities and seminars is postedregularly on our website: http://web.iss.u-tokyo.ac.jp/kyoten/index.html.

These research activities are supported by a secre-tariat, consisting of an Associate Professor sta-

tioned full-time in an administrative and researchoffice in the ISS, as well as two Research Assis-tants responsible for the Hongo and Komabaarea. In addition, a residential facility for fieldresearch in Beijing (and the rest of China) is pro-vided by the ISS Beijing Research Base establishedin October 2007 within the Institute of Economicsof the Chinese Academy of Social Sciences(CASS).

Research in the Base’s first year of operation hasalready yielded two publications (both in Japan-ese): Miyajima Yoshiaki and Oizumi Keiichiro(2008) The Rise of China and Intra-Regional Trade inEast Asia: Analysis of the World Trade Atlas, 1996-2006, ISS Contemporary Chinese Studies No. 1;and Tajima Toshio and Furuya Shinsuke, eds.(2008) Offshore Development, Staffing Service, andVocational Education in China’s Software Industry,ISS Contemporary Chinese Studies No. 2.

The Base has also launched projects in the educa-tional sphere. In the winter term of the 2007 acad-emic year, a course on ‘Multiple Dimensions ofJapan-China Relations’ was offered across allgraduate schools under the Japan-Asian StudiesProgram of the Asian Studies Network at the Uni-versity of Tokyo (ASNET). This course is beingtaught once again in the summer of 2008. In asimilar vein, a half-year seminar on ‘Revised Chi-nese Modern History’ is set to be taught on theKomaba Campus (Graduate School of Arts andSciences) in the 2008 winter term.

Page 4 Social Science Japan September 2008


Tajima Toshio is a Professor of Chinese Economy

and the Director of the Contemporary China

Research Base at the Institute of Social Science

at the University of Tokyo

Institute of Social ScienceUniversity of TokyoHongo 7-3-1Bunkyo-ku, Tokyo [email protected]

In 2007 discussions were held on China’s ‘unlimited’supply of labor and its advance toward the ‘Lewisturning point’, and the Contemporary ChinaResearch Base was established to conduct researchon ‘Economic Growth and Stability in China’. Inrecent years, shortages of young laborers and wageincreases in urban and coastal China have beenremarkable. Our research activities have focused pri-marily on understanding the extent of the economicimplications of China’s contemporary policy issues,and determining how to frame them in terms oflong-term economic development.

However, there is actually a surplus of middle-agedlabor in China’s rural regions. Looking at the demo-graphic features, China’s labor force will enter aphase of definite growth over the next several years,and the dominant debate is that this is the medium-term process leading up to the surpassing of theLewis turning point. It is commonly accepted thatJapan surpassed its Lewis turning point around1960, but the post-war Baby Boom Generation (1947

– 49) did not reach working age until 1963 and later,so the nation continued to enjoy demographic divi-dends even after the turning point. Real develop-ment of the regional labor market probably began inthe early 1970s in Japan. However, in light of the seachange in the Japanese society and economy fromthe mid-1950s to the early 1970s, it is reasonable tosay that China, since entering the 21st century, is inthe midst of unprecedented social change.

As a member of the same generation that experi-enced Japan during this era, I shall briefly recountthe situation.

Around the time of the Lewis turning point, the rela-tion of supply and demand for labor grew tight. Itwas a seller’s market. The ratio of labor distributionrose, and industrial development and export-orient-ed industrialization that relied on an abundant sup-ply of low-cost labor faced revision. Short-termemployment relations receded as laborers andunions continued to gain clout, and the spotlight fellon skills development via internal labor markets.Worker protection advanced, universal healthcarewas implemented and a public pension system waslaunched. With the expansion of the labor market,farmers began taking on second jobs as the agricul-tural structure adjusted and agricultural protectionwas brought in line with these new policies. Highereducation became common as labor force participa-tion and birthrates fell. A middle class was created,and consumer durables like appliances and automo-biles came into widespread use. Social interest inpublic and environmental issues rose, and socialrestrictions on industrial activity grew tight. Afterweathering the Nixon Shocks in 1971 (i.e. the transi-tion from managed to floating currency and thethaw in relations with China) and the first Oil Shockin 1973, Japan’s rapid economic growth came to anend.

The 5-year project of the ISS Contemporary ChinaResearch Base is an attempt to comparativelyobserve the social and economic changes in China asit approaches the Lewis turning point in light of

The Lewis Turning Point and China’s Aim for aHarmonious Society

Tajima Toshio


Japan’s experiences.

In this article, I will discuss the research conductedin the 2007 academic year by the Economy Sub-group and the Rural Issues Subgroup.

The Hu Jintao-Wen Jiabao regime came into being atthe 16th National Congress of the Chinese Commu-nist Party in the Fall of 2002. It championed a ‘Care-for-the-People Policy’ and ‘Building a HarmoniousSociety’, and offered solutions to the ‘three ruralissues concerning agriculture, countryside and farm-ers’. This approach differs from the previous neolib-eral trend toward deregulation, market economiza-tion and ownership reform, and it appears thatChina is aiming for social democratic or Keynesianpolicy management. But the predominant disciplinein China today is imported Neoclassical economics,with a trace of left-wing Marxist economics remain-ing.

In light of this situation, we invited Prof. Sun Ge ofthe Institute of Literature, Chinese Academy ofSocial Sciences (CASS) to serve as an ISS VisitingProfessor, and held a workshop on recent changes inChinese economic and social thought. Discussionscovered the affinity between neoclassical trends andnationalism as observed in both Japan and China.The voice of caution is strong regarding the resur-gence of Big Government in the wake of China’straumatic planned economy, and the existence ofany theoretical or ideological underpinnings in thispolicy transition appears to be rather flimsy.

Given the shift to closer, mutually complementaryeconomic ties between Japan and China, we con-ducted field surveys of cases in the software indus-try. Giving consideration to offshore software devel-opment due to the shortage of talent in Japan andthe inevitability of staffing from overseas, we con-ducted interviews at over 100 software companies,human resources companies, and vocational educa-tion institutions in Dalian, Beijing, Xi-an, Chengdu,Wuhan, Shanghai, Shenyang and Suzhou regardingthe development of the software industry in China’scoastal regions and the potential for industrialdevelopment inland. In the case of the softwareindustry, direct communication in Japanese withcustomers and clients, among systems engineersand programmers, is necessary for creating a bor-derless division of labor. The issues faced are slight-

ly different in nature than those in manufacturing.

So-called Bridge Systems Engineers (Bridge SEs)serve as liaisons to overcome these problems andencourage effective offshore software development.Fluent in both Japanese and Chinese, Bridge SEscomprise a class of experienced leaders and man-agers. Dalian, Beijing and Shanghai are rich inhuman resources and, for the time being, they willmaintain their competitive advantage, but skyrock-eting wages and office building rents in these citiesmeans there are also opportunities in the inlandregions. This means that since there is already anoversupply of ordinary programmers throughoutthe country, regions will fight for veteran projectmanagers, especially Bridge SEs fluent in foreignlanguages. The outcomes of this research were pub-lished in March 2008 in Tajima Toshio and FuruyaShinsuke, eds. (2008), Offshore Development, StaffingService, and Vocational Education in China’s SoftwareIndustry, ISS Contemporary Chinese Studies No.2.

In the Rural Issues Subgroup, the core mission is toobserve social and economic changes in China as itapproaches the Lewis turning point from the per-spective of agricultural development and labor sup-ply in light of the rural economy over the past fewyears. Speaking of agriculture, the shortage of laborand rising wage standards in non-agricultural sec-tors over the past several years has been caused byan increase in agricultural productivity and higherprices, both at home and abroad. This is alsothought to be the result of agricultural protectionpolicies put into effect since the Hu Jintao-WenJiabao administration came to power. The RuralIssues Subgroup held a joint research seminar withthe Trade Subgroup on the impact of the China-ASEAN FTA on farm product trade, and invited aChinese agricultural policy official to give a report.In March 2008, the Rural Issues Subgroup beganfixed-point surveys in suburban and rural regionson the topic of employment composition of the ruralworkforce and the structural adjustment of land use.However, since this coincided with anti-governmentdemonstrations by minority ethnic groups in Lhasain the Tibet Autonomous Region, research initiallyscheduled for the mountain villages of GansuProvince had to be suspended. This was an unex-pected incident, but it was yet another opportunityto experience China’s serious ethnic and socialissues–and the risks that come with them.


Tanaka Nobuyuki is a Professor of Contemporary

Chinese Law at the Institute of Social Science at

the University of Tokyo


Activities in the first year of operation

New enactments and amendments to laws in thecivil and commercial fields in China are apt to gen-erate intense controversy – a tendency which hasbecome even more marked in recent years. It goeswithout saying that such controversy stems from theacute tension between new legal policies aimed atdeveloping a market economy and the socialist legaltenets which China has maintained up until now,and from the fact that compromise between thesetwo conflicting positions is becoming increasinglydifficult to maintain. A leading example is providedby the fiery debate which arose in the summer of2005 over the enactment of the new Property Law ofthe People’s Republic of China.

The Law Subgroup was established with the aim ofusing an analysis of these and other problems sur-rounding civil and commercial law in China todevelop a clearer understanding of the actual natureof the socialist market economy advocated byChina’s leaders. The Institute of Social Science (ISS)

had pursued exchange and joint research activitieswith the Institute of Law of the Chinese Academy ofSocial Sciences (CASS) for many years ahead of thisSubgroup’s establishment. In order to contribute toadvancements in civil and commercial law researchin China, the ISS also played a part in the formationof the Sino-Japan Civil and Commercial Law Societyand cooperates with the Society’s activities on anongoing basis. It was thus highly significant, albeitsomewhat fortuitous, that an international sympo-sium to mark the enactment of the new PropertyLaw was held jointly by the ISS and the Sino-JapanCivil and Commercial Law Society in 2007, the sameyear in which the Contemporary China ResearchBase was launched.

International Symposium – ‘ContemplatingChina’s Property Law’

Celebrating the 130th anniversary of the founding ofthe University of TokyoHosts: University of Tokyo Institute of Social Science(ISS), University of Tokyo Graduate Schools for Lawand Politics, Sino-Japan Civil and Commercial LawSocietyPlanning: University of Tokyo ISS ContemporaryChina Research BaseDate/Time: Friday August 31, 2007 1:00 to 6:00 p.m.Venue: Main Conference Room, Sanjo ConferenceHall, University of Tokyo Hongo Campus

Law Subgroup Report: The Property Law of thePeople’s Republic of China

Tanaka Nobuyuki


Statement of Purpose:

The adoption of the Property Law of the People’sRepublic of China in March 2007 attracted a greatdeal of attention, both from within China and inter-nationally, for its provision of legal foundations forthe country’s socialist market economy system. Thelaw was initially drafted by a group of scholars fromthe Research Department of Civil Law at the Insti-tute of Law of the Chinese Academy of Social Sci-ences (CASS), commissioned by the Standing Com-mittee of the National People’s Congress and head-ed by Professor Liang Huixing. The draft they pro-duced was seen as lending impetus to China’s shifttowards a market economy model, and generated agreat deal of controversy.

The Symposium on China’s new Property Law wasorganized as part of the Contemporary ChinaResearch Base at the ISS, in collaboration with theSino-Japan Civil and Commercial Law Society con-vened by the Research Department of Civil Law atthe CASS Institute of Law, and the University ofTokyo Graduate Schools for Law and Political Sci-ence. Featuring presentations from the actual schol-ars responsible for producing the Law’s initial draft,the Symposium aimed to review the issues raised inthe processes leading to the adoption of the Law andthereby shed light on its significance and the chal-lenges it presents.

The Symposium featured presentations by sevenscholars from the CASS Institute of Law who hadparticipated in the drafting of the Property Law, partof a contingent of 25 attendees from universities andinstitutes all over China. They were joined in pas-

sionate discussion by seven presenters from Japanand numerous other scholars, making total atten-dance at the Symposium exceed one hundred peo-ple. A volume containing the Symposium proceed-ings is scheduled to be published shortly.

Plans for the future

With the enactment of the Property Law in 2007,compilers of China’s civil code have shifted theirattention to the drafting of a Law of Obligations.However, because no significant activity on thisfront is expected for the next two to three years, theLaw Subgroup will devote itself to research in fieldssuch as intellectual property rights andfinance/securities. These are the most advancedfields of law in terms of application of global stan-dards; examining how China addresses them andwhat kind of laws it formulates is likely to yieldimportant insights relevant to research in otherareas.

In terms of methodology, we plan not only toexplore the theoretical dimensions of these issues,but to address the interface between law and society,extending our scope of analysis to practical consid-erations of how transformation of the legal system isaffecting Chinese society, what processes areinvolved and what kind of problems are beingengendered thereby.

We will continue to enjoy the cooperation of CASS,but we also plan to adopt a diversified, multi-pronged approach to our survey and research activi-ties, involving not only scholars but lawyers andother practitioners as well.


Suehiro Akira is a Professor of Asian Economy at

the Institute of Social Science at the University of

Tokyo

Miyajima Yoshiaki is a Research Associate at the

Institute of Social Science at the University of

Tokyo

Oizumi Keiichiro is a Senior Economist at the

Japan Research Institute, Limited

Institute of Social ScienceUniversity of TokyoHongo 7-3-1Bunkyo-ku, Tokyo [email protected]@iss.u-tokyo.ac.jp

The Japan Research Institute, Limited16 Ichiban-cho Chiyoda-ku, Tokyo [email protected]

Observations and Issues

The growth of the Asian economy since 1990 hasbeen remarkable. Although the Asian currency crisisof 1997 created serious financial and currency crisesfor the countries of the region, the Asian economyrecovered rapidly and by the early part of the 2000swas once again showing signs of strong growthfueled by domestic consumption and manufacturedexports. The regional driving force behind thisgrowth has been China.

If we examine trends in trade for East Asia (Japan,Northeast Asia, Southeast Asia) since the 1980s, we

observe the following four characteristics:

First, while global trade (exports) between 1980 and2005 grew from US$1,932 billion to $10,241 billion(530%), it was outdone by the speed of expansion inEast Asian trade during the same period, whichgrew from $272 billion to $2,696 billion (990%). As aresult, East Asia’s share of global exports grew from14% to almost 26%. In contrast, the North Americanshare dropped from 15% to 12%, and the Europeanshare dropped from 42% to 37%.

Second, the expansion in East Asian trade up to 1985was buoyed by a growth in exports to the UnitedStates. However, the Plaza Accord in 1985 signaled aturning point after which trade with neighbors inthe region began to rise (from 34% in 1985 to 49% in2005). In other words, East Asia was no longer sim-ply a base for production and export but also a des-tination for goods manufactured in the region, creat-ing an ‘Asian economy’ by shifting its major mar-kets from the U.S. to Asian countries themselves.

Third, the driving force behind East Asian tradeexpansion has been the remarkable growth of Chi-nese exports. If we compare the years 1998 and 2006,we see that China’s position as an import tradingpartner increased for each of the majornations/regions, going from #4 to #2 for the UnitedStates, from #4 to #1 for the 15 nations of the EU,and from #2 to #1 for Japan.

Fourth, the most significant increase in trade withChina over the past 10 years has come from themembers of ASEAN. While the value of this trade isless than that of trade between China and the UnitedStates or China and the EU, the percentage increasein imports from China for each ASEAN member hasbeen 700 to 800%, compared with 200 to 300% foroverall imports. This is one of the factors responsiblefor the increase in the proportion of East Asian intra-regional trade.

With these four characteristics in mind, our TradeSubgroup set out to examine the following two

The Rise of China and Development of Intra-RegionalTrade: Findings from the World Trade Atlas (1996-2006)

Suehiro Akira, Miyajima Yoshiaki and Oizumi Keiichiro

(From left: Oizumi Keiichiro, Suehiro Akira, and MiyajimaYoshiaki at the Golden Triangle, the border among Laos,Myanmar and Thailand, on August 19 2008)


major research issues;What factors are responsible for the increase in tradebetween China and ASEAN members? What is happening to the competitive relationshipbetween China and the other countries of East Asiawithin the three major markets of Japan, the UnitedStates and the EU? In other words, is China’s risedriving the other countries of East Asia out of theglobal market?

Data Source: World Trade Atlas

The trade statistics which each country announcesfor itself are not sufficient to address these twoissues because different countries use different com-modity categories, creating significant discrepanciesin the statistical figures given by exporting andimporting countries. Thus, we instead used the elec-tronic version of the World Trade Atlas (WTA) putout by Global Trade Information Services, Inc. Byusing the WTA, we were able to obtain moredetailed and relevant trade relations informationbased on a Harmonized Commodity Descriptionand Coding System (HS Code).

We used the latest version of the WTA to producedetailed trade statistics for 1,270 commodities (rep-

resented by four-digit HS Codes) for 12 countriesand regions: Japan, China, Hong Kong, Taiwan,Korea, Singapore, Thailand, Malaysia, Indonesia, thePhilippines, the United States, and the EU (15 coun-tries). The resulting database contains 335,280 itemscreated from 1,270 commodities × 12 countries andregions × 2 groupings (exports and imports) × 11years (1996 – 2006). Furthermore, for each majorcommodity, the intensity of trade, trade specializa-tion index and market share shift within the threemajor markets was calculated for China and theother countries of East Asia. This data is arrangedand organized in ‘The Rise of China and Intra-Regional Trade in East Asia: Analysis of the WorldTrade Atlas, 1996-2006’ (Miyajima & Oizumi [2008]).

While the WTA is useful in that it includes HongKong and Taiwan in its statistics, there is a problemin that it does not include such countries as Vietnam,Laos, or Cambodia due to their failure to maintaintrade statistics corresponding to the HS Codes.Thus, the ASEAN members are limited to the fourcountries of Thailand, Malaysia, Indonesia and thePhilippines (Singapore is included in the NIES4).

Trade Expansion for China and ASEAN Members:Intra-firm Trade and Traditional Vertical Trade

Table 1 Increase of IT Goods Trade Between China and Major Countries, 1998-2006

(Units: Million US dollars, times)

The primary commodities supporting the expansionof trade for China and the ASEAN4 are IT goodssuch as computer-related products (HS Code 8471,8473), semiconductor devices (8541), and integratedcircuits (8542). Table 1 gives statistics for IT goodsaccording to major country or region.

As Table 1 shows, the United States is the largest

importer of IT goods from China ($97 billion) fol-lowed by the NIES4 ($93 billion). Hong Kong, Tai-wan, Korea, and Singapore have become major mar-kets for Chinese IT goods. At the same time, theNIES4 are the largest exporters of IT goods to China($120 billion). On the other hand, although inferiorin terms of dollar value, the ASEAN4 have shownan astounding growth rate of more than 1,100%


between 1998 and 2006. But what does all this move-ment mean?

Put simply, the growth in bilateral trade of IT goodsfor China and the other nations of East Asia is areflection of the regional expansion and develop-ment of intra-firm trading for Japanese, Korean andTaiwanese companies. For example, if we look atlaptop computers, we see American companies con-tracting Taiwanese companies to design the comput-ers which are then assembled in China, with semi-conductors coming from Japan and peripheraldevices coming from ASEAN members. As a result,the increase in personal computer exports fromChina to United States means an accompanyingincrease in IT goods-related trade within East Asia.Furthermore, the final destination of these personalcomputers is not just the United States or the EU;East Asia, including China, is itself a huge market.

However, trade within and between companiesfrom Japan, etc., cannot fully account for the sudden

increase in trade experienced by China and ASEANmembers. Based on WTA data, Table 2 shows thetop ten commodities (four-digit HS Code) exportedto China from the ASEAN4 in 2006. It shows that the#1, #3, #4, and #5 commodities are all IT goods.However, with the exception of polycarboxlic acid at#9, the remaining commodities are all primary com-modities. In other words, China’s industrializationhas meant increased exports of natural rubber (formaking tires) and crude oil, while higher incomes inChina have meant increased exports of palm oil(cooking oil), rice and other agricultural products toChina. Meanwhile, though not shown here, the topten commodities imported by the ASEAN4 fromChina, excluding IT goods, include mobile phonesand digital cameras (#4), steel products (#5), andaudio-visual equipment (#6). In other words, theASEAN4 export primary commodities to China and,in turn, import industrial products, confirming thata traditional, vertically specialized trade relationshipexists between the two.

Table 2 Top Ten Commodities in ASEAN Four’s Exports to China, 2006

(Units: Million US dollars, %)

From the perspective of catch-up industrialization,the above facts do not make sense (Suehiro [2008]).The common assumption would be that Chinawould export primary commodities and food whilethe ASEAN members export industrial products.What needs to be noted, however, is that whileChina may be a latecomer to the global marketplacecompared to the NIES4 and ASEAN4 countries,China has a longer history of industrialization, justbehind Japan. At the same time, China’s rapid eco-nomic growth provides an immense market for

ASEAN members’ raw materials and food. Thus,China and Southeast Asia’s trade has grown as aresult of the mutually reciprocal nature of horizon-tally specialized trade based on intra-firm trade, andvertically specialized trade based on factor endorse-ment. Therefore, the expansion in intra-regionaltrade is operating according to more autonomousand sustainable mechanisms than when the UnitedStates contributes simply as a consumer of EastAsian manufactured exports.


Competitive Relationship between China and EastAsia in Major Markets

An overlap in products such as electronics and tex-tiles is apparent amongst exports from China andthose East Asian countries which have been late toindustrialize, and a frequent point of contention hasbeen the so-called ‘Chinese menace’ thesis whichasserts that China’s economic rise has been drivingthe industrial products of NIES and ASEAN mem-ber countries out of world markets. Is this assertiontrue?

In order to examine this issue, we undertook the fol-lowing analysis: First, for each four-digit HS Codegrouping, we computed the change in market sharewithin the three major markets of Japan, the UnitedStates and the EU for ten countries/regions in EastAsia (including China). If, for example, Export

Country A increased its market share by 3% or morewithin the Japanese market for product X1 between2000 and 2006, we counted this as a ‘Win’. If itdeclined 3% or more during that time, we countedthis as a ‘Lose’. A variation within the range of 3%to -3% was treated as a gray area because of its diffi-culty in assessing. In the same way, product X1 wasalso evaluated as ‘Win’ or ‘Lose’ for China. If bothExport Country A and China increased their marketshare 3% or more within the Japanese market, thiswas treated as a ‘Win-Win’ relationship for CountryA; if it decreased its market share by more than 3%(but China increased by more than 3%) this wastreated as a ‘Lose-Win’ relationship. Finally, theexport value of Country A’s ‘Win-Win’ products X1,X2, X3… (or ‘Lose-Win’ products Y1, Y2, Y3…) tar-geting Japan was calculated as a ratio of the totalvalue of country A’s exports to Japan. The resultsare shown in Table 3.

Table 3 China and Other East Asian Countries/Regions in Three Major Markets, 2000-2006

(Unit: %)

For example, if we look at Malaysia, we see that 18%of its exports to Japan are ‘Win-Win’ while 19% are‘Lose-Win’; 48% of exports to the United States are‘Win-Win’ while 3% are ‘Lose-Win’; and 22% ofexports to the EU are ‘Win-Win’ while 6% are ‘Lose-Win’. As Table 3 clearly shows, China does not haveone-sided dominance over the other East Asiancountries and regions in any of the three major mar-kets. The export value of ‘Win-Win’ products isquite large, and there is great variation in ‘Win-Win’and ‘Lose-Win’ ratios according to country /region and market. Thus, by needlessly insistingthat a ‘Chinese menace’ exists, people only invite amisunderstanding of the actual competitive relation-ship that exists between China and other East Asiannations.

References

Suehiro, Akira. [2008]. Catch-up Industrialization: TheTrajectory and Prospects of East Asian Economies,Singapore: NUS Press.

Miyajima, Yoshiaki, and Keiichiro Oizumi. [2008].The Rise of China and Intra-Regional Trade in EastAsia: Analysis of the World Trade Atlas, 1996-2006. University of Tokyo Institute of SocialScience Contemporary Chinese Studies No.1,March. (Japanese version available for down-load from the University of Tokyo Institute ofSocial Science Contemporary Chinese Studiesweb page: http://web.iss.u-tokyo.ac.jp/kyoten/index.html).


Marukawa Tomoo is a Professor of Chinese

Economy at the Institute of Social Science at the

University of Tokyo


Industrial agglomeration refers to the phenome-non in which small and medium-sized enterprisesin the same or related industries concentrate in aspecific region. In his Principles of Economics pub-lished at the end of the 19th century, the economistAlfred Marshall reported on industrial agglomer-ation in the United Kingdom. This was the firstacademic treatment of industrial agglomeration,after which the phenomenon was ‘discovered’throughout Europe, Japan, Asia and Africa. Sincethe 1990s, industrial clusters, a type of industrialagglomeration formed from university andresearch institution spin-offs, have been gainingattention–e.g. the Silicon Valley in the UnitedStates–and countries are implementing policies tocultivate industrial clusters.

However, socialist planned economies that focuson planned industrial zoning and economies ofscale are incompatible with industrial agglomera-tion. During China’s planned economy that start-ed in the 1950s, industrial agglomerations thatexisted up to that point completely vanished;

however, they made a quiet comeback under theeconomic reforms of the 1980s. Until recently,industrial agglomeration was generally frownedupon as ‘disorganized, with low technical stan-dards’. Not until the Eleventh Five-Year Plan(2006 – 2010) was the industrial cluster concept(chanye jiqun in Chinese) incorporated into Chi-nese economic policy, and the previously negativeview of industrial agglomeration transformedinto a positive one.

Given this, and the fact that research on Chineseindustrial agglomeration has yet to advance sig-nificantly, instances of industrial agglomerationthroughout China have been ‘discovered’ in rapidsuccession over the past few years. The aim of ourresearch is to discover Chinese industrial agglom-eration that has not been given sufficient focusuntil now and unlock the mechanisms behind itsorigins, development and decline. The first stepin this process was to spend 4 months (November2007 to March 2008) conducting field surveys ofindustrial agglomerations in Wenzhou city inZhejiang Province, and Wuxi and Tianjin cities inJiangsu Province.

Wenzhou city was the first region where industri-al agglomeration was noticed after China’s eco-nomic reforms. Wenzhou is home to a collectionof somewhat unrelated industries such as leathershoes, rubber and plastic shoes, synthetic leather,electric parts, lighters, valves and pumps, buteach individual case of industrial agglomerationhas a history.

The leather and leather shoe industrial agglomer-ation is one of the small-scale agglomerations thatexisted before the establishment of the People’sRepublic which made a comeback after economicreforms. During the planned economy, this indus-trial agglomeration vanished, and tradesmenbecame laborers in state-owned companies.Under the new open-door policy, individualswere allowed to start household enterprises, sothe former tradesmen turned laborers set up their

The Discovery of Industrial Agglomerations in China

Marukawa Tomoo

own businesses and, in turn, rejuvenated theindustrial agglomeration. The plastic shoe indus-trial agglomeration began when the tradesmenthat left the leather shoe factories started makingshoes by melting scrap plastic with solderingirons. Their neighbors began imitating this prac-tice, and over the course of several years, thou-sands of small plastic shoemaking operationssprang up, creating the industrial agglomeration.The industrial agglomeration for valve-makingwas born around 1970, right in the middle of theplanned economy era. During this time, even theslightest hint of private enterprise, includingfarmers raising chickens in their yards, was sub-ject to crackdown in an effort to keep capitalismat bay. Some farmers in Wenzhou started theirown business under the guise of ‘People’s Com-mune-Operated Enterprise’, and began manufac-turing valves–which were in high demand at thetime–for petrochemical factories. By the end ofthe Cultural Revolution, the number of valve-makers in Wenzhou skyrocketed to over 1,000companies. Every time the government wouldclamp down, the valve-makers would springback to life, and now Wenzhou has grown intothe largest valve manufacturing region in China.In the 1980s, some of these companies saw theincreasing demand for water pumps in high-riseapartment buildings and switched industries.Many enterprises followed suit, giving rise to anindustrial agglomeration in pumps.

Several industrial agglomerations have sprung upin southern Jiangsu Province. In the 1980s, facto-ries operated by village government agenciesflourished, and this region was often contrastedto the agglomeration of small business owners inWenzhou. Some of these village-run enterpriseshave since grown into massive corporations withthousands of employees. As opposed to Wen-zhou, where only a handful of companies havemore than 1,000 employees, the existence ofindustrial policies in the village governmentagencies is part of the reason why there are somany large companies in southern JiangsuProvince. On the other hand, southern JiangsuProvince and Wenzhou are becoming similar innature. This is due to the increasingly large num-ber of employees that are leaving the village-runcompanies to set up their own businesses nearbyin the same or similar industries. For example,

400 small and medium-sized apparel manufactur-ing factories started by former employees of alarge knitwear company nearby form an industri-al agglomeration in the Zhutang district of Wuxicity. Likewise, a large apparel factory in theChangan district of Wuxi is surrounded by anagglomeration of 300 small and medium-sizedapparel manufacturing factories started by formeremployees. This region of industrial agglomera-tions now includes factories in the related indus-tries of dying and clothing accessories.

While industrial agglomerations in China are dis-tributed largely along the southeastern coast inthe provinces of Jiangsu, Zhejiang and Guang-dong, they also exist in the north. Tianjin city ishome to a bicycle manufacturing agglomerationthat produces approximately 40% of the world’sbicycles. Tianjin was originally the home of one ofthe most powerful state-owned bicycle manufac-turers in China, and this industrial agglomerationwas born out of a slump in state-owned manufac-turing. Unable to respond to rising productioncosts and changing needs in the early 1990s, thestate-owned enterprise went into a slump. Manyworkers left the enterprise to start their own busi-nesses or to take jobs with private companies inrural areas, taking the state-run bicycle factorytechnical know-how with them. With the declineof the vertically integrated state-run factory thatmanufactured everything from parts to finishedbicycles, private companies created an industrialagglomeration, with each company specializingin certain parts or finished bicycle assembly. Theroad to agglomeration, however, has not beeneasy. Since 2003, cost competition among Tianjin’s bicycle manufacturers has grown fierce, as theindustry is wracked by skyrocketing raw materi-als and personnel costs. However, in the face oftrouble, Tianjin’s privately-owned bicycle makersare switching over to electric bicycle productionin addition to making use of new materials in aneffort to ride out the storm.

In this article I described the industrial agglomer-ations in the 3 cities of Wenzhou, Wuxi, and Tian-jin. It used to be thought that industrial agglomer-ation of numerous private companies was a phe-nomenon only limited to certain regions such asWenzhou city; however, with private enterprisesreplacing state-run companies as the major play-


ers in the economy, cities such as Wuxi and Tian-jin, with historically dominant industrial organi-zations much different than Wenzhou, are grow-ing more and more similar to Wenzhou. The verti-cally integrated large bicycle company of Tianjinhas since been replaced by an industrial agglom-eration of specialized small and medium-sizedenterprises, and the region’s growth into both adomestic and an international manufacturingstronghold has been impressive. The fact thatindustrial agglomerations of small and medium-sized enterprises in specialized industries havemore of a competitive advantage in the marketover China’s large vertically-integrated compa-

nies can, for the most part, be taken for granted.

Of course, small and medium-sized enterprisesdo not have a strong competitive advantageacross all industries. In some cases vertically-inte-grated companies in the same industry may havethe upper hand due to changes in technology.Under what conditions can industrial agglomera-tions demonstrate their strengths? To what extentcan industrial agglomerations adjust to changesin technology and outside forces? These are thekinds of questions that we intend to consider aswe continue to investigate more cases in ourresearch.


Kawashima Shin is an Associate Professor of

History of Politics and Diplomacy in Asia at the

Graduate School of Arts and Sciences at the

University of Tokyo

Graduate School of Arts and SciencesUniversity of TokyoKomaba 3-8-1Meguro-ku, Tokyo [email protected]

Our Subgroup consists of Takahara Akio, Professor ofChinese politics in the Graduate Schools for Law andPolitics, Endo Mitsugi, Professor of international rela-tions in Africa in the Graduate School of Arts and Sci-ences, myself, and Matsuda Yasuhiro, Associate Profes-sor of Asian political history in the Institute of OrientalCulture, who joined the Subgroup in 2008.

China’s astounding economic growth, rooted in foreigninvestment, continues in the midst of globalization.While it provides the world with cheap products, it isalso expected to grow as a market itself. Now, China isturning the tables and using its financial muscle to pro-vide aid to foreign countries as an actor in the globaleconomy. Amidst this backdrop, even the local Japan-ese media now covers China’s activities across theglobe as it seeks to secure resources and food in a pub-lic-private joint effort. The fact that China, which is stillan aid recipient with a per-capita GDP of approximate-ly U.S. $2,000, now actively engages in foreign aid witha focus on its national interests has shocked the world’sdonor nations. Most donor nations adhere to OECD-

DAC rules for development assistance, but since Chinais not a member, its non-compliance with these rules isconsidered a new problem. China does not requirefreedom, human rights or democracy for its ODA, andits procedures are simple, so in some respects, aid fromChina has been embraced more than aid fromadvanced nations. In addition, anti-American senti-ment driven by the Iraq War helped draw some recipi-ent nations closer to China. From China’s standpoint,ODA was crucial for securing resources to maintaingrowth and for keeping inflation in check. Investmentwas not led by the private sector, but rather the govern-ment provided aid, or in some cases, the governmentinvolved the private sector in its initiatives. In otherwords, the delineation between aid and investmentand between public and private is unclear. ODA as agovernment vehicle remains unregulated, and asidefrom what is released by the Ministry of Commerce’sDepartment of Foreign Aid, even information on gov-ernment aid is not sufficiently disclosed.

In light of this, the ODA Subgroup must delve into avery gray area. Our research covers China as well rivalTaiwan, and has taken to recipient nations, includingthose in Africa. Our aim is to create a precedent byclearly determining how China is actually implement-ing aid and investment. The outcomes of this researchwill provide an important key for understanding theglobal expansion of China’s economy and shall con-tribute to the overall Research Base. We also expect todevelop synergies with research on Africa, the cross-strait relationship, Chinese diplomacy and global gov-ernance to create an interdisciplinary field. For this rea-son, we planned collaborations with domestic andinternational Africa researchers and have alreadybegun implementing some of these projects.

Activities are divided into research seminars andresearch. In the 2007 academic year, we held the follow-ing research seminars at the Komaba Campus. All ses-sions were open to the public. The first seminar(2007.12.05) featured a report by Wu Jinan of theShanghai Institute for International Studies on the topicof ‘China’s Diplomatic Relations with Africa’. The sec-ond seminar (2008.01.23) featured a report by Hirano


Chinese Foreign AidODA Subgroup Report

Kawashima Shin

Katsumi of the Institute of Developing Economies onthe same topic, ‘China’s Diplomatic Relations withAfrica’. In the third seminar (2008.02.28) Dr. Christo-pher Alden, a Senior Lecturer in the Department ofInternational Relations, London School of Economics,introduced and led discussions on his book–China inAfrica (African Arguments), Zed Books, 2007. These pre-sentations provided us with insight on China’s pres-ence in Africa, perspectives on both sides of China-Africa relations, and information on trends in researchon these topics. These sessions all served as briefingsfor the field research we conducted in February andMarch.

Field research was conducted in Ethiopia and Tanzaniaby Professor Takahara and in South Africa and Malawiby Professor Endo and myself. Reports on this researchwere presented at the 4th research seminar, the China inAfrica Mini-Workshop, held on June 6th. ProfessorTakahara’s ‘China’s Advancement into Tanzania andEthiopia’, my ‘Malawi’s Anti-Taiwan Pro-China Diplo-macy and Chinese Aid’, and Professor Endo’s ‘TheAfrican Standpoint on Chinese Aid’ all noted the fea-tures of Chinese foreign aid and the wide-ranginginvolvement of China in Africa. Professor Takahara’sreport pointed out that ‘assistance’ is not clearlydefined and the concept of ‘ODA’ has not yet beenestablished in China. Official aid to Africa falls underU.S. $1 billion according to the supervising Ministry ofCommerce’s Department of Foreign Aid (operated in-country by the embassy commerce sections). Chinesebanks handle aid loans and charge a high 2% interestrate across the board. Professor Takahara also profiledthe diverse types of Chinese citizens in Tanzania andEthiopia. He especially noted the large number of Chi-nese nationals in these countries, both laborers andengineers alike. He divided actual assistance projectsinto 2 types: projects for the establishment (i.e. parlia-ment building construction) and projects for the people(i.e. soccer stadium construction). Looking at the over-all picture, China is entering a transition period as anaid donor, and at this time they are trying to learn therules for development assistance.

Reports by Professor Endo and myself examined thecourse of events leading up to Malawi’s cessation ofdiplomatic relations with Taiwan at the end of 2007 infavor of ties with China. We attempted to illustrate themachinations of Chinese foreign aid from the 3-wayrelationship between China, Taiwan and Malawi. Theissue of government approval is a key factor in Chinese

diplomacy in Africa. Landlocked Malawi was alarmedby the surrounding countries of Mozambique, Tanza-nia and Zambia that were progressing with nation-building due to their friendly ties with China. Itthought it would be isolated in the region. China thenoffered to establish diplomatic ties with Malawi andproffered a generous aid and investment package. Withan eye on the upcoming elections, the President seizedthe initiative and sealed an agreement in a short time-frame. Taiwan and its low-key economic cooperation todate were no match for China’s financial might.Malawi explains its relationship with China in terms ofnational interest in a domestic context, not in terms ofthreat. As was the case with Zambia, relations withChina are sometimes merely an election issue. Howev-er, developed nations’ ambassadors stationed inMalawi are trying to involve China in the group ofdonor nations, and China is showing signs that it willagree to certain conditions.

In this article I have reported our research outcomes todate. Commentator Hirano Katsumi and many othershave given us several issues to ponder. In the 2008 aca-demic year, we shall build on these achievements, andwith our new member Matsuda Yasuhiro, we aim toselect regions for field research, including regions out-side of Africa. We are also planning to hold researchseminars every other month.


Taipei Park in Malawi

The Rand Confucius Institute in South Africa

Kajima Jun is a Project Research Associate of the

Contemporary China Research Base at the

Institute of Social Science at the University of

Tokyo


The University of Tokyo Institute of Social Sci-ence’s (ISS) Beijing Research Base was establishedin the Institute of Economics of the Chinese Acad-emy of Social Sciences (CASS) to encourage effec-tive in-country research and research exchangefor the ISS Contemporary China Research Base.This Base was established in April 2007, and theResearch Base is the fruit of a memorandum onacademic exchange concluded by ISS and theCASS Institute of Economics on October 28th ofthe same year.

The Beijing Research Base host institution, theCASS Institute of Economics, is located southwestof the Fucheng Gate, one of the old Beijing citygates. It is one of China’s premier economicresearch institutes. Its history dates back to 1929,when its preceding organization–the Institute ofSocial Survey of the Chinese Education and Cul-ture Foundation–was founded. It later mergedwith the Institute of Social Sciences of the Acade-mia Sinica. The Institute as it is organized todaywas formed after the establishment of the People’s Republic of China in 1949 (it changed its nameto CASS in 1977–see http://ie.cass.cn/index.asp).The Institute has grown to house 8 researchdepartments with 145 researchers. In addition toits active research, the Institute’s library,renowned as a treasure trove of materials on Chi-nese society and economy since the days of theR.O.C., attracts many scholars of Chinese eco-nomics.

The Beijing Research Base was launched sharingspace and staff with the Underdeveloped Eco-nomic Center of CASS. Center Director YuanGangming is one of the overseas joint researcherswith the ISS Contemporary China Research Base,and he has been cooperating closely with the Baseon joint research. With the support of thisResearch Center, the Beijing Research Base servesto assist ISS Contemporary China Research Baseresearchers with their in-country research, librarymaterials collection and research exchange. Withthis we expect to further develop the researchactivities of the Contemporary China ResearchBase.


The Beijing Research Base

Kajima Jun


The Contemporary China Research Base Photo Gallery (Photos by Tajima Toshio)

The face of the “new socialist countryside”(Donghan village, Hu county, Shaanxi province)

A starch factory (Hu county, Shaanxi province)

A bazaar in a rural village (Hu county, Shaanxiprovince)

A row of plastic greenhouses, used for growingwatermelons (Tongxing village, Hu county,Shaanxi province)

A milking plant at a ranch (Wangfang village, Hucounty, Shaanxi province)

A herd of cows at a ranch (Wangfang village, Hucounty, Shaanxi province)


Ishikawa Hiroyasu is an Associate Professor of

Civil Law at the Institute of Social Science at the

University of Tokyo


Comparative Contextual Approach to ContractLaw

My field is civil law and my research is particular-ly focused on problems related to contracts. Con-tracts are one of the most important instrumentsindividuals have when forming their self-autonomous realms. At the same time, contractsfunction only when legal and social systems sup-port them. In thinking about the role of law in therelationship between individuals and society, theissues within contract law provide very interest-ing material. On the other hand, as is obviousfrom the rules in the present Japanese civil code,the origins of many of these varied rules in theJapanese civil code can already be found presentin Roman law more than 2,000 years ago. Ofcourse, this is not the result of serendipity. It isnot that the present Japanese legal rules just hap-pen to be the same as those in Roman law. It isnothing more than the result of long years of aca-demic work by legal scholars consciously usingand continuing to develop those various Roman

legal rules and principles. One of the reasons Ifocus my research on contract law is that I think itis possible, through investigations related to con-tract law, to get down to more fundamentalinsights concerning the society and history thatformed the context of contract law. I think thatonly by this kind of contextual analysis of society,institutions, and history can an analysis of con-tract law be more precise and articulated.

The Modern Restoration of numerus clausus andnatura contractus in Contract Theory

With this contextual-based approach to the studyof contract law, I have until now written a num-ber of publications that I would like to discusshere, starting with a series of essays concerningthe doctrine of good faith and contract categories.Among these publications, my primary work is aseries of articles entitled the ‘Theory of natura con-tractus’ (Keiyaku no honsei no horiron), which I firstdiscussed at the 2005 meeting of the Japan Associ-ation of Private Law, and later published in theJournal of the Jurisprudence Association (Hogakukyokai zasshi) between 2005 and 2007. The centralissue considered in these articles is the trichotomyof contractual obligations, which classifies thecontent of contracts into the three elements of sub-stantialia, naturalia, and accidentalia. Today, this tri-chotomy has been widely adopted through thecontract law of various countries belonging to thecivil law system that includes Japan.

In the trichotomy, the general understanding ofeach of the three elements is that, first, substan-tialia are the elements which, without an arrange-ment on, a contract cannot come into being (e.g.,the price and the object in a contract of sale, etc.).Next, naturalia are those elements that shouldflow from the category of the contract and, evenwithout the agreement of all parties pertaining tothose matters, become terms of a contract andmay be excluded by the agreement of the parties(e.g., a seller’s liability for eviction, etc.). Finally,accidentalia are those elements that are unessential

History, Institutions, and JurisprudenceA comparative contextual approach to the analysis of contract law

Ishikawa Hiroyasu


parts of the category of the contract, and thereforefirst come into being due to the special arrange-ments of the parties pertaining to those mattersand, even in the absence of such arrangements,do not hinder the contract from existing. To date,the common understanding on the origins of thetrichotomy of contractual obligations is that itwas developed in the Middle Ages under theinfluence of Scholastic philosophy, with Baldus deUbaldis in particular making the greatest contri-bution to formulating and crystallizing the logicof the trichotomy. However, this understanding isdecidedly superficial because it only focuses on aresemblance between the elements of the trichoto-my and the Scholastic concepts. To revise ourunderstanding of the trichotomy, it is necessary tomake a historical and contextual investigationinto some problems regarding what legal issuesthe trichotomy was related to during its genera-tive process and what relation the trichotomy hadto the Roman legal concept of natura contractus,which is a prototype version of the trichotomy.

In pursuing historical investigations into theseproblems, my articles make the following argu-ments. Namely, while the theory of natura contrac-tus (nature of contract) was concerned with anextension of actio (the right of action) within theRoman law of contracts, when looking at Romanlegal texts related to this theory, the usage of theword of natura found therein is divided intoinstances which use either the meaning of sub-stantialia, or the meaning of naturalia in the tri-chotomy. Of these two, the cases about naturausing the meaning of substantialia present anextremely broad range of legal issues that do notnecessarily allow for the detection of a unifiedcontext for the issues. In contrast, most of thecases about natura using the meaning of naturaliaare related to the protection of pacta adiecta (infor-mal ancillary agreements) that were appended tobonae fidei contractus (contracts of good faith) andthe extension of actio in bonae fidei iudicia (actionsof good faith). The following are specific exam-ples in the texts of Corpus Iuris Civilis:

• D.2.14.7.5 prescribes that pacta ex intervallo,which are pacta adiecta appended with the inter-val from the conclusion of a contract, don’t pro-duce a right of action but a right of defensewhen it is appended extra naturam contractus

(away from the nature of contract).• D.19.1.11.1 prescribes that the terms naturally

included within the scope of the buyer’s rightof action, even if there are no arrangements ofthe parties for them, become the contents of thebuyer’s right of action.

• D.19.5.5.4 prescribes that pacta adiecta in a con-tract of mandate can override the natura of thecontract of mandate.

• D.16.3.24 prescribes that pacta adiecta that causesthe charging of interest before falling intoarrears with respect to depositum irregulare(deposit for consumption) infringe on the naturaof depositum and bona fides.

• D.2.14.27.2 prescribes pacta ex intervallo as actuscontrarius (contrary act) that subsequently dis-solve pacta in continenti, which are pacta adiectaappended at the same time of the conclusion ofa contract, cause the return to the legal positionwhich the law has assigned to natura.

In this way, the theory of natura contractus whichworks within the meaning of naturalia in the tri-chotomy serves to provide a theoretical frame-work to extend the right of action in bonae fideiiudicia, simultaneously enclosing this extendedprotection within a scope that can maintain theunity of the original terms of the contract. Bybeginning with this limited kind of problem, theinherent significance of the theory of natura con-tractus can be found in the context of legal rules ofRoman law. Namely, in the contract system ofRoman law where contracts with protectionthrough action were restricted to numerus clausus(closed number), the theory of natura contractusrelieves the constraints of numerus clausus to someextent by allowing a more flexible structure ofcontract type and serves to substantially maintainnumerus clausus.

In the medieval period when the trichotomy(namely the theory of substantialia, naturalia, andaccidentalia) emerged as a derivative version ofthe theory of natura contractus, the problem origi-nally concerning this theory overlapped with thecontext of the problems in the theory of naturacontractus known as the legal rules for pactaadiecta. In this way, through the relation to thetheory of natura contractus, the trichotomy deeplyconnected to the juridical structure of a discre-tionary judgment by arbiter in bonae fidei iudicia


and the doctrine of bona fides which lies at thefoundation of bonae fidei iudicia. The trichotomyalso implied that it required a specific type ofsocial foundation as functional and environmen-tal conditions, such as the structure of Romansociety during the Late Republic, which madetransaction norms derived from fides (faith)between boni viri (men of virtue) customary incommercial relationships among the cities aroundthe Mediterranean and constituted the back-ground for the wide prevalence of the relation ofbona fides. Even in modern contract law, the tri-chotomy of contractual obligations is used in rela-tion to various kinds of issues and, on those occa-sions, one must bear in mind the structuringbased on the social context and the presupposi-tions as above.

In the contract law of the civil law system of mod-ern France, Germany, Japan, and elsewhere, thetrichotomy of contractual obligations serves toconfirm the scope of an agreement required forthe conclusion of a contract, to supplement con-tractual obligations beyond the arrangements ofthe parties, and to regulate the clauses which arein conflict with the essence of the contract whichcan’t be excluded from the contract type (e.g., thetheory of obligation essentielle, that is the Frenchjuridical precedent pertaining to the regulationsfor exemption clauses, as well as Art.307, par.2,subpar.2 of the German Civil Code, concerningthe regulation for a clause in a standard contractform which restricts cardinal rights and obliga-tions arising from the nature of the contract).Accordingly, the trichotomy, on the basis of aqualification as a contract type, supplements theterms of a contract that should have naturallybeen provided for in the contract type and deniesthe validity of clauses which conflict with theessence of the contract type. In this way, the tri-chotomy makes the contractual obligations moretypical and standardized. This kind of modernfunctioning of the trichotomy is delineated that itis realized by the trichotomy to revive the systemof numerus clausus of contract types in a compati-ble form with consensualism (pacta sunt servanda),which substantively guarantee the effectivenessof consensualism.

A Sociological Contextual Approach regardingTrust and the Doctrine of Good Faith

My research relating to the theory of natura con-tractus and the trichotomy of contractual obliga-tions is part of a project concerning the doctrineof good faith. While based on the historical con-text pertaining to the doctrine of good faith that isin the doctrine of bona fides and the legal regula-tions in bonae fidei iudicia, this research aims toclarify the functions of the doctrine of good faithin modern contract law and its functional condi-tions. Because one of the most important func-tions of the doctrine of good faith is characterizedby the incorporation of conventions and socialnorms, it requires a more multi-layered contextu-al approach through a sociological analysis con-cerning the structure of social norms and theirfunction.

Concerning these issues, I have published severalarticles on trust and social institutions with refer-ence to interdisciplinary studies on trust that haveranged broadly across sociology, psychology, eco-nomics, and biology over the last decade. Whileseeking to understand trust as cooperative behav-ior resulting from rational calculation based ongiven incentive structures, I emphasize that trustand law indirectly facilitate the formation of trustrelations and the rationalization of the content oftrust through offering sources of motivation fortrustworthiness. Based on this thinking, conven-tions and social norms serve an important func-tion as sources of trust and trustworthiness alongwith law. Through the doctrine of good faith,trust and trustworthiness are raised to the level oflaw while being provided structure as contractualobligations.

Of course, regarding the incorporation of socialnorms, social norms must include content thatcan be reasonably expected by the concerned par-ties. For that reason, it is necessary to grasp con-tract as a categorical existence appearing in theactual practice of transactions and confirm thecontent of social norms that are categorized foreach type of contract. From this perspective, ifthere is a need for the restoration of the system ofnumerus clausus of contract types in modern con-tract law, the contract types that should be pre-supposed when social norms are incorporatedthrough the doctrine of good faith must be themore specific and practical types of contracts(e.g., selling of real estate, installment sales, etc.),


which are subordinated to the contract types inthe civil code (e.g. sale, lease, etc.). Accordingly, itis necessary that social norms which are to beincorporated be socially connected with the cate-gory of contract, but it is unnecessary that thesocial normative order be intersubjective. A socialnormative order must be viewed self-evidently inthe subjective semantic relation of each individualfor it to be sufficient for the order to functioninstitutionally. This perspective of the structure ofsocial norms is based on the phenomenologicalsociological view of institutions about what isnecessary for norms to function as an informalinstitution. This is one more conclusion that canbe stated as a result of an analysis of the doctrineof good faith using a sociological contextualapproach.

Toward a Multi-layering of Context of Lawthrough Pluralistic Interdisciplinary Studies

Besides the articles I introduced above, I havealso published some articles regarding hardshipin contracts. With regard to hardship in the legalsystems of various countries, the frequent resultof hardship is to adapt or terminate a contract,but as a preliminary step, it must be emphasizedthat it is important for parties to first be encour-aged to an autonomous renegotiation to revise acontract. From this point of view, the obligation torenegotiate, instituted as a legal obligation incases of hardship, should be theoreticallydesigned for supporting a value-creating processthrough autonomous renegotiation. Consequent-ly, the obligation to renegotiate should be sepa-rate from the effects, as the adaptation and termi-nation of a contract aim for some fixed result, andinherent conditions and sanctions should begiven to it. This perspective is based on someinsights from negotiation theory that have been

advancing with research centered on the HarvardNegotiation Project, etc. In this area, I also per-form analyses from a comparative contextualapproach that relies on insights from interdiscipli-nary research.

Since the late nineteenth-century, Japanese codesfor civil and commercial law have been modeledon Western law, and legal studies in Japan hasdeveloped with a focus on comparative legalresearch examining the legal institutions of Japanand various Western countries. The adoption inJapan of Western legal institutions also meansthat Japanese law stands in direct relationshipwith the history of law and jurisprudence inWestern law and that research from a historicalapproach based on this view holds even more sig-nificant meaning. Of course, it is necessary toapproach the structure of legal systems multilat-erally, not only from a historical perspective, butalso from various contextual approaches regard-ing institutions, society, etc. In my research, Ibelieve it is important analytically to get down tothe various contexts based on the law. Fortunate-ly, at the Institute of Social Science, it is possibleto have many opportunities to debate and carryout collaborative research with my economist andsociologist colleagues. While making maximaluse of this environmental advantage, I endeavorto bring the precision and diversity of compara-tive contextual approaches to an even higherlevel.

Reference

Ishikawa, Hiroyasu. 2006. ‘Theory of natura contrac-tus’, Shiho (Journal of Private Law), 68: 282-283. (English summary of the report at the69th conference of Japan Association of Pri-vate Law.)


Questions and Answers with Visiting Professor

ProfessorFaculty of ArtsJapanese StudiesCatholic University of Leuven (Visiting Shaken from July 1 to September 29, 2008)

Q. How did you first come to know about Shaken?

I have known of Shaken since I spent a year and ahalf in 1992-1993 in the law faculty here at the Uni-versity of Tokyo. At that time I attended a seminaron the sociology of law taught by Professor Toshi-tani Nobuyoshi. That seminar undeniably stimulat-ed my academic interest, and I still have very posi-tive memories of Professor Toshitani. Later, I metwith Professor Sato Iwao when he was in Belgiumbriefly for research on legal statistics in variousEuropean countries. Professor Sato explained aboutthe possibility of applying to stay at Shaken to con-duct research, and knowing the high standard ofresearch conducted at Shaken, I did not hesitate totake advantage of the opportunity, with the positiveresult of being granted a three month stay.

Q. What is the main purpose of this visit?

The main purpose of my visit is to study judicialreform in Japan. I am not only interested in the judi-cial reforms which are currently changing the judi-ciary in Japan, but I am also interested in the judicialreforms in modern Japanese history. I am nowmainly studying the establishment and changes inthe judicial institutions in Meiji and Taisho Japan.Aside from the characteristics and functions of the

judicial institutions in Meiji and Taisho Japan, I amlooking at the policy-making process in the field ofjustice in that period. This permits to see a broader,dynamic picture of the development of law, politicsand society. I am convinced that the historicalprocess of reform is very relevant for the currentjudicial reforms when we consider this as the resultof a political process. More specifically, my researchat Shaken first focuses on the experience of Japanwith the popular jury system in the late 1920s andthe 1930s. Of course this topic is related to the cur-rent measures to establish the mixed-court systemwith lay assessors in the judicial process from May2009. It is very interesting to study why and howJapan established a jury system in 1923 as it rancounter to the general idea of law in the period, thatthe court was a scary place which had to remain farfrom the people’s regular lives.

The second specific focus of my research at Shaken isa very interesting and polyvalent savant: OsatakeTakeki. He liked to call himself the “useless savant”(muyo hakase) but Osatake was everything but use-less as he still influences leading scholars in variousdisciplines today. Osatake was a Supreme Courtjudge from 1924 till 1942. He received a doctoraldegree from the law faculty of the University ofTokyo, created the Meiji Culture Research Associa-tion (Meiji bunka kenkyukai) with Yoshino Sakuzoand others, and was a professor of law at Meiji Uni-versity. Osatake became a judge at age 19 and in hisearly career he was confronted with the lack ofknowledge of the law by regular people, and of thelack of understanding of the lives of regular peopleby lawyers. This was the starting point of his scien-tific interest. The first books he wrote were on thecustoms and punishments on the islands of Niijima,where he was assigned as a judge in 1908. Later, healso became a judge in courts in Fukui, Nagoya andTokyo, mainly specializing in criminal cases. Osa-take, as a judge, apparently regularly met pettycriminals such as gamblers and pickpockets andbecame interested in the techniques they used. It isreported that he did not hesitate to ask pickpocketsto explain and demonstrate their skills so that hecould understand this (he called it an “art”) better.This judge of the Supreme Court of Japan became a

Dimitri Vanoverbeke


Questions and Answers with Visiting Professor specialist on the issue and wrote a reference workon gambling and pickpockets in 1920. Another focusof Osatake is the modernization of justice in Japan.First, he studied the path to establishing the Meijiconstitution in detail, and was awarded a doctoraldegree at the law faculty of the University of Tokyofor this research. Second, he studied the historicalprocess towards the establishment of the jury sys-tem in Taisho Japan.

Osatake’s books actually were among the first stud-ies on law in Japan from a historical and socio-legalperspective. Osatake’s numerous studies are some-times quoted in major studies on Japanese history,but his work and ideas have never thoroughly beenstudied. He focused on the legal customs or the so-called “living law” which was new in a periodwhen most legal scholars studied law as it was inEurope or in the United States. Osatake demonstrat-ed that the newly imported foreign legal codes actu-ally had a very fruitful ground of Japanese customsand institutions which were not so different, butrather similar to the “new” legal institutions andlegal thinking. Indeed it is surprising that anapproach such as Osatake’s existed as early as the1920s in Japan.

Here at Shaken, I have the opportunity to talk withspecialists in various fields, such as historians, soci-ologists, sociologists of law and many more on theabove-mentioned points of interest. I am also veryfortunate to find many written sources such asdiaries by policy entrepreneurs (Sasaki Takayuki,Hara Takashi, etc.) who were involved with thereform of justice in prewar Japan, and to find manydocuments on and by Osatake Takeki.

Q. What are your current research interests?

My current research is on policy-making in the fieldof the judiciary, focusing on Japan. There are verychallenging theoretical developments in the field ofpublic policy-making and in research on the historyof institutions. I am particularly interested in thedynamics of policy-making over an extended periodof several decades, and I try to include several fac-tors to explain changes and stability. Those factorsinclude the public discourse on a certain subject,economic developments and the power balancebetween political parties as well as the efforts ofparticular actors in a certain period, or incidents

such as scandals which can have an important effecton the development of institutions and their func-tions.

Societies are dynamic but dynamism in certainfields, such as judicial institutions, is not always asstrong at some times compared to other times. Iwant to try to explain factors behind periods of rela-tive stability and periods of rapid change. This is thecurrent focus of my research.

Q. What do you like about Shaken?

I like very much the interdisciplinary nature of Shak-en. I had the opportunity to present my research atthe Shaken Staff Seminar and was surprised thatscholars from a wide range of disciplines attended. Italked about the modernization of judicial institu-tions in Meiji and Taisho Japan and Osatake Takeki.After the presentation, the Shaken staff-memberssliced my presentation into many parts: history, law,sociology, economics and more. I am grateful for thevaluable feedback I received then. This certainly isthe first aspect I like very much at Shaken, becausethe interdisciplinary character of these institutionsmakes you think about issues which you do notconsider when staying in your own field orapproach. The presence of faculty members at Shak-en from various disciplines is indeed valuable forme because the topics I tackle transgress the disci-pline of legal studies. I also want to stress that thecollection of sources here at Shaken is impressive,although I only had a limited time to use the librarythis time due to construction going on around theShaken building. Still, I can find much interestingdata and documents useful for my research at theother libraries in the Hongo campus of the Universi-ty of Tokyo. The location of Shaken is an additionalmerit, allowing me to further my research. Finally,to be freed from teaching obligations is very advan-tageous for my research. I think that this researchinstitute inside the University of Tokyo is unique,and is a perfect environment to conduct high levelresearch. I would like to take this opportunity toexpress my sincere gratitude to Professor Sato Iwaoand to Professor Komorida Akio as well as to theadministrative staff of Shaken who were instrumen-tal in arranging this stay.


Assistant Professor of Sociology, Bryn Mawr College

Takenaka AyumiRe-Migration of Immigrants and Its Consequences for JapanJuly 7, 2008

Abstract:With growing human mobility and ageing populations,many rich countries are competing to attract “desirable”immigrants with high levels of human capital. Withinthis context, there is concern in Japan that it is losing toother countries, such as the US, in attracting such immi-grants. Although the number of foreign migrants inJapan has steadily increased in recent years, a significant

number of them, particularly skilled migrants, have re-migrated from Japan. While studies oninternational migration have primarily focused on migratory flows from poorer countries to richerones, more and more immigrants today re-migrate to North America via Western Europe andJapan, using one rich country as a stepping-stone to reach their final destinations.

Why do immigrants re-migrate from one rich country to another, despite the countries’ comparableeconomic status? How do migrants choose destinations, or how do rich countries succeed or fail inattracting the kinds of immigrants they desire? This presentation examines the causes of re-migra-tion, focusing on South and East Asian and Latin American re-migratory flows from Japan to theUS, and the possible consequences for Japanese society.

Based on interviews and quantitative analysis I have conducted so far, I find that an importantcause of re-migration lies in the patterns of immigrants’ racial/ethnic integration and social mobili-ty. Chances of immigrants’ upward social mobility are relatively limited in Japan, compared to theUS, and this often has to do with the way they are treated and perceived as racial and ethnicminorities.

ISS Contemporary Japan Group at the Instituteof Social Science, University of TokyoThe ISS Contemporary Japan Group serves as a forum for researchers on Japan to receive criticalfeedback on their work. Researchers visiting Tokyo are invited to contact Professor Ishida Hiroshi([email protected]) for more information if they would like to make a presentation.Meetings are open to everyone. Photo by Morita Hidetsugu (ISS).


Recent Publications by ISS and ISS StaffRecent Publications by ISS and ISS Staff

田嶋俊雄�『現代中国の電力産業「不足の経済」と産業組織』�昭和堂（2008年2月）�

小森田秋夫�『体制転換と法　ポーランドの道の検証』�有信堂（2008年2月）�

工藤章・田嶋信雄（編）�『日独関係史�　一八九〇－一九四五（I～III）』�東京大学出版会（2008年1月～3月）�

Suehiro Akira�『Catch-up Industrialization The Trajectories and � the Prospects of East Asian Economies』�National University of Singapore Press （2008年3月）�

佐藤博樹・連合総合生活開発研究所（編）�『バランスのとれた働き方　－不均衡からの脱却－』�エイデル研究所（2008年4月）�


Recent Publications by ISS and ISS Staff*For more publications, please visit the ISS Homepage (http://jww.iss.u-tokyo.ac.jp/, http://www.iss.u-tokyo.ac.jp/).

Recent Publications by ISS and ISS Staff*For more publications, please visit the ISS Homepage (http://jww.iss.u-tokyo.ac.jp/, http://www.iss.u-tokyo.ac.jp/).

工藤章・井原基�『企業分析と現代資本主義』�ミネルヴァ書房（2008年5月）� 中村民雄・須網隆夫・�

臼井陽一郎・佐藤義明（著）�『東アジア共同体憲章案�　実現可能な未来をひらく論議のために』�昭和堂（2008年7月）�

ナン・リン(著)　筒井淳也・石田光規・�桜井政成・三輪哲・土岐智香子（訳）�『ソーシャル・キャピタル　社会構造と行為の理論』�ミネルヴァ書房（2008年7月）�

Hirashima Kenji�『University of Tokyo Journal of �　Law and Politics Vol.5』�Inoue Masahito (ed.) Graduate School of Law �and Politics, University of Tokyo (2008年3月)

廣渡清吾�『市民社会と法』�放送大学教育振興会（2008年4月）

Documents

Newsletter of the lnstitute of Social Science, University ...web.iss.u-tokyo.ac.jp/kyoten/research/doc/The... · 2006, ISS Contemporary Chinese Studies No. 1; and Tajima Toshio and