Re-examining "Japan incorporated" : Japanese coal procurement and western Canadian coal

In the current si t u a t i o n of oversupply i n world coal markets, Japanese" coal buyers are accused i n some quarters of having deliberately over-stimulated the supply by offering loans and extending long-term contracts to more coal mine operations than has been warranted by market conditions. Contained i n the accusation i s the charge that the Japanese government and steel industry have collaborated to set the conditions for oversupply. The thesis finds at the root of th i s assumption remnants of the "Japan Incorporated" stereotype. Examining the case of the steel industry,.the study demonstrates the inaccuracy of the e l i t i s t model of Japan from which the stereotype derives. The purchase of thermal coal by Japanese interests i s discussed to introduce further evidence of the d i v e r s i t y of interests which participate i n policy decisions i n Japan. An examination of the ste e l industry's approaches to acquiring coal reveals that a major concern of the industry has been to find ways to assure that i t w i l l have r e l i a b l e supplies of reasonably-priced material. The industry's actions are best understood as ad hoc arrangements which have developed i n response to domestic and international market conditions. To achieve i t s goals, the industry has pursued a strategy of d i v e r s i f i c a t i o n of supplier. The case of Western Canadian coal i s presented to i l l u s t r a t e some of the main features of the implementation of the strategy. To enhance the security of their coal contracts, Japanese buyers increasingly have chosen to invest d i r e c t l y i n the coal mine.