With the $3.5bn sale of Sharp to Taiwan’s Foxconn last week, any wishful thinking that the state would rescue Japan Inc from foreign takeovers proved to be an illusion.
Yet it is too soon to celebrate the complete end of state bailouts and protectionism in Japan. The government of prime minister Shinzo Abe has been active in streamlining underperforming industries through mergers of regional banks and oil refiners. Ministers have also encouraged consolidation in consumer electronics, automobile and other sectors, as Japanese companies compete to survive in an era of artificial intelligence and connected devices.
The government’s role, however, is more controversial when it uses the guise of “national interest” to justify injecting taxpayers’ money into troubled companies through vehicles such as the Innovation Network Corp of Japan.