Reflections on the options for Malaysia after the Japan model :is the China model an alternative

Abstract

Some fifty years or so after independence, Malaysia no longer uses the Japanese model, which it adopted in 1982, as a justification for a particular type of state intervention in the economy as in Malaysia Incorporated). The Japanese model was seen then in 1982 as one which could bring about economic growth and social equity. That justification has been greatly eroded by two developments, the bursting of the Japanese bubble in the early 1990s and the Asian Financial Crisis. The former has shown in Japan that the model could not deliver great economic growth while the latter brought home to Malaysians and indeed to Asians that Malaysia incorporated could not deliver. But neither has shaken the faith of Malaysians in governmental intervention in the economy, at least for social ends. In the light of the tremendous growth in the Chinese economy, can the Chinese model (pushed by some for the developing countries) be a replacement for Malaysia. This paper will argue that this is unlikely.