How Does State Policy Shape East Asia’s Steel Industry? A Selective Review

Abstract

This chapter reviews previous extant research on postwar state policies in East Asia’s steel industry. The governments of Japan, the Republic of Korea, and China have always attached great importance to the rapid ascent and restructuring of the steel industry. As a strategic sector, the steel industry requires frequent government interventions to obtain a comparative advantage in raw material sources, technology improvement, and trade. In contrast, the overreaching of the government’s involvement has led to market distortions and overcapacity that have worsened with the economic maturity of these three East Asian economies, particularly that of China. The current global steel sustainability is increasingly influenced by excess capacity, low profitability, and environmental issues. As the largest producer, consumer, and exporter in the global steel market, East Asia’s steel industry will play a critical role in addressing these problems and in contributing to the low-carbon transition in response to climate change challenges. This chapter outlines the similarities and differences among the state policies in Japan, the Republic of Korea, and China and discusses how they are associated with the steel industry’s growth and current issues, which might help identify potential development strategies that can lead to a more sustainable development path.