First, the Japanese administrative means to the effect of production capacity in general

After the Second World War, Japan as a manufacturing power, the rapid development of the steel industry experienced many cyclical "overcapacity."

After the Second World War in 1945, Japan's primary task was to stabilize the economy, restore production and promote effective supply. After 10 years of recovery period, Japan entered a new era of catching up with advanced industrial countries and realizing the modernization of the national economy, formulated the strategy of "establishing trade country", and gained rapid growth in the economy, and the rapid development of traditional industrial sectors such as steel. By the end of the 1950s, the government had controlled the production and price of the steel industry through the "open sale system", but with the market downturn, the system was abandoned by the enterprises.

In the 1960s, the government tried to control the excessive expansion of iron and steel enterprises, over-investment efforts have failed, so began to seek to expand domestic demand to digest the production capacity, put forward a clear and specific "national income multiplier plan", the introduction of "minimum Wage system "and other policies. This policy sparked a consumer revolution in Japan, starting consumption as the main channel for digestion.

However, the above-mentioned excess steel production capacity is only cyclical excess, when the economy improved, the phenomenon of excess capacity disappeared. However, the first oil crisis broke out in 1973 to make Japanese steel demand turning point, the steel industry began to enter the substantial overcapacity in 1973, Japan's crude steel production reached 120 million tons of peak levels in 1975 to 100 million tons. In 1979, after the second oil crisis, the excess capacity was further exacerbated, and by 1982 the output dropped to 96.3 million tons.

After the structural recession, the Japanese government tried to stimulate domestic demand again to stimulate production capacity, introduced a series of measures to stimulate demand, increase public sector investment. But limited by the total demand in the doldrums, with little success, domestic demand is still continuing down, this round of stimulating demand side to resolve the overall effect of excess capacity is not good.

After the demand stimulus policy was ineffective, the Japanese government then turned to reform from the supply side, through the strengthening of industrial policy guidance, eliminate backward production capacity, the effect is more obvious.

The first time the oil crisis triggered the economic crisis, to promote some enterprises to carry out business adjustments, the Japanese government to promote the situation, and actively promote and guide the "reduction of business" in the country, the core is mainly to save energy consumption, reduce interest burdens and reduce labor costs, The steel and other energy consumption, pollution of the industry, through administrative guidance and various restrictions, reduce productivity or guide its shut down and turn.

In May 1978, the Japanese government enacted the "Provisional Measures for Specific Industrial Stability Act", referred to as the "special law", trying to deal with excess equipment through administrative means, control new equipment and the establishment of depressed cartels and other means to resolve excess capacity. "Tean" provides for the furnace furnace steelmaking industry, aluminum industry, synthetic fiber industry, shipbuilding and other manufacturing industry as a "structural recession industry", the government will assist the industry to deal with surplus equipment.