Chinese and Japanese capitalisms: a comparative analysis of co-ordination problems in vehicle electrification paths

This article investigates the divergent automobile electrification trajectories of China and Japan, the world’s largest car exporters. Inspired by Regulation Theory approaches, it analyses how their capitalisms’ distinct configurations of socio-economic institutions, including state–economic relations, labour relations, inter-firm competition, financial regimes and the integration into the global economy, have produced different electrification approaches. Supported by Beijing’s de jure electrification strategies through state policies and regulations, China’s automakers have leapfrogged to all-spectrum green vehicles and battery components and dominated global battery electric vehicle production and supply chains. Meanwhile, de facto strategies have been dominant in Japan, where electrification emerged through enterprise-led initiatives and market competition. Japan’s automakers with globally diversified businesses have responded to vehicle demands and regulations of different markets, focusing on currently profitable hybrid electric vehicles, but have lagged in battery electric vehicle development, with limited backing from the state. This article argues that the divergent electrification paths are attributable to their capitalisms’ institutional architectures, which have caused distinctive co-ordination problems (excess capacity, weak consumption and geo-political tensions for China’s and Japan’s weakened public–private ties and corporate risk-taking). Amid geo-political tensions and competition over advanced technologies, major economies worldwide have increasingly favoured de jure strategies, enhancing de-globalisation risk.