Social norms and (de-)financialization: Japan's and China's divergent paths in consumer credit

Since the 1980s, American-led financialization promoting capital and labour mobility has influenced Asia, but the Japanese and Chinese trajectories in financialization of consumption (consumer credit development) have diverged, with the 1995-2013 contraction in Japan contrasting with the skyrocketing growth in China since 2010. I argue the divergence can be attributed to the varying levels of compatibility between American financial norms and their social norms, the different timings of their integration into the global economy (the influence of 'embedded liberalism' or neoliberalism), and the interests of key actors of each country. Anti-liberal Japanese elites reversed the financialization of consumption to preserve anti-capitalistic 'industrious norms' and strong attachments to intermediary organisations, which are the cornerstones of their dominance. In contrast, economic rationalism embedded in Chinese society since late imperial China, when capital and labour mobility was enhanced by removing fixed intermediary organisations considerably under autocracy, has facilitated China's financialization of consumption.