Summary
About 85 percent of bicycles sold in Japan are assembled in China. This share has remained remarkably stable over time, regardless of whether the yen appreciates or depreciates. In this episode, we welcome Professor Tetsuya Komagata of the Faculty of Economics at Keio University to discuss his book, Japan–China Economic Relations through Bicycles: Beyond COVID-19 (Kazankai Academy Shinsho, 2021). From the overall industrial picture that becomes visible through a product with relatively few components, to the structural realities that have made Japan dependent on China, what does the familiar bicycle reveal about the Japan–China economy? We explore the question through concrete episodes.
Bicycles as an entry point, systems as the central subject: the origins of the book and research
The book grew out of a seminar lecture organized by the Kazankai, the successor organization to the Tōa Dōbunkai; Professor Komagata serves as a director of the association. It reworks his earlier academic research into a form accessible to general readers. His fundamental interest, however, is not bicycles themselves. It is the logic by which China moved from a planned economy to a market economy, and the question of how far that system can endure. This has been the consistent theme of his work.
Bicycles became an entry point in the early 2000s, when a Chinese research collaborator introduced him to the case of Tianjin. During the planned-economy era, a large state-owned corporate group had led Tianjin’s bicycle industry. Yet over the short period from the late 1990s to the early 2000s, the group was dismantled and replaced by a market-oriented industrial structure crowded with roughly one thousand private firms. Why did such a rapid transformation occur, and how did it unfold? To answer these questions, Professor Komagata carried out fieldwork throughout China, from north to south, investigating why low-priced Chinese bicycles came to flood the Japanese market.
The origins of this work go back further, to his study abroad in Tianjin in 1989. He observed peri-urban villages turning toward export production and local party committees attempting regional development. What he saw there offered a concrete view of China’s distinctive transition from planning to markets, and laid the foundation for his subsequent method and concerns: observing systems through industry.
Why bicycles? Few components, broad industrial reach
Compared with automobiles and motorcycles, bicycles have far fewer components as industrial products. That makes their overall structure easier to grasp and field verification more manageable. At the same time, they encompass the principal elements of major industries, including metals, machinery, chemicals, electrical engineering, and electronics. Producing everything from components to finished bicycles requires a substantial industrial base within the national economy, while also making it possible to trace technical and supply-chain connections across industries.
Historically, countries and regions able to produce bicycles consistently from components through finished products—Europe, the United States, Japan, and Taiwan—have been regarded as advanced industrial economies. In this sense, the bicycle industry can also serve as an indicator of industrial advancement.
Bicycles also present, in a highly condensed form, the economic relationship between Japan and China in terms of industrial relocation and the international division of labor. New industries have repeatedly emerged from the ordinary bicycle: electric bicycles, which can be ridden without a license and have become common means of mobility and transport; low-speed electric vehicles, created by adding motors and wheels; and bike-sharing, which evolved from a system of virtually unrestricted parking into an explosively popular service.
By following the bicycle industry, one can observe China’s distinctive pattern of industrial formation and development, rather than a simple process of catching up with advanced economies. It also provides topics of broader economic interest, such as how regulation, institutions, and markets interact. Bicycles also have substantial social value in improving mobility, promoting health, and reducing medical costs. Today, these research findings can be connected to practical work in industry associations and to efforts to promote Japan’s bicycle industry. It is, in other words, a field rich in policy implications.
Eighty-five percent assembled in China: a dependence that is difficult to reverse
The research reveals the structural entrenchment of “China sourcing” in Japan. About 85 percent of bicycles sold domestically are assembled in China, and this share has remained stable over the long term despite currency movements. Even among the remaining roughly 15 percent assembled in Japan, some important components depend on Chinese production. China has already become indispensable as a key node in the supply chain.
This structural entrenchment cannot be explained merely as an outcome of China’s reform and opening. From the end of the Cold War through China’s accession to the World Trade Organization, in the period from the 1990s to the early 2000s, the world economy itself chose and supported China’s rise, creating a relationship of dependence that cannot easily be reversed. Japan, meanwhile, made that choice amid the prolonged Heisei recession following the collapse of its bubble economy. This is Professor Komagata’s interpretation.
What, then, was happening on the Chinese side? China combined enormous domestic demand and population, the repurposing of an industrial base built during the planned-economy era, gradual marketization, skillful adoption of foreign capital and technology, and intense competition among a large number of actors—especially Chinese firms. Its vast territory, diversity, and degree of local autonomy allowed room for experimentation. New industries such as electric bicycles, low-speed EVs, and bike-sharing emerged and spread—industries that might have been difficult to create under stringent central regulation.
As a result, the previously assumed principle that industries move sequentially from advanced to late-developing countries is being unsettled. China absorbs production as a global source of supply and releases only the surplus abroad. Through this concentrated structure, the international division of labor and the order of the world economy are being reorganized.
What can bicycles reveal? Looking at Japan through China
Since graduate school, Professor Komagata has consistently examined “China’s economic system” in connection with the concrete forms of industry. Yet his choice of object has always been grounded in field realities and particular circumstances. Rather than adhering to bicycles as such, he places at the center the question of “what can be seen through bicycles?” Thus, even as the object of study changes, the underlying concern remains constant.
Field observations accumulated in Tianjin in 1989 formed the core of his method and eventually led to a reciprocal perspective: “looking at Japan while looking at China.” His academic norm derives from the teaching of the late Hiroyuki Kato: do not remain confined to a narrow field; draw larger questions from particular objects. Professor Komagata values extracting messages that can be generalized beyond proper names and individual cases.
What Remains Unknown after the Book Is Finished
Each episode asks a recurring question: not what the book has clarified, but what it has failed to clarify, and what important task remains. The central issue Professor Komagata identifies is whether China’s rise can continue. When he wrote the book, this was still a question that could not be adequately tested.
In the bicycle industry, competitive strength is increasingly shaped not only by machining and metalworking but also by electronic technologies. Machining has become an area in which firms can catch up to some extent simply by introducing equipment. In fields where electronics and software work in combination, however, China has growing room—as already seen in other industries—to catch up and, in some cases, overtake others. Advances in electrification and digitalization, such as AI-assisted gear-shift control, may further strengthen the impact of China’s supply capacity on the world.
This is not only a question for the bicycle industry. It points to a possible direction for industries within individual countries and across the world. The bicycle is the example through which Professor Komagata identifies that direction.
The key question is whether China can sustain its capacity to generate new things. Can competition among many actors be maintained? Will capital continue to be supplied? Will the consumer market remain sufficiently deep? Will new products continue to emerge from combinations of existing technologies? Will new technologies continue to be incorporated rapidly into products? Whether these five conditions will continue to operate is also crucial to assessing the trajectory of institutional competition between China’s distinctive socialist market economy and existing market economies.
Decoupling from China is difficult: making value-creating circulation part of economic security
What about Japan? It must first recognize the structural difficulty of decoupling from China. When Chinese cities were locked down during the COVID-19 pandemic, Japan faced product shortages during the spring sales season. Economic security must be redesigned urgently to prepare for such supply disruptions.
The answer is not simply to hold more inventory. Japan needs to develop, through both institutions and markets, mechanisms of recycling, reuse, and sharing—forms of use not based on ownership and systems in which circulation creates value—and make them buffers against supply shocks. Professor Komagata’s current work includes empirical research, particularly on reuse, where the actual situation remains insufficiently understood, and the design of policies that position circular models as part of Japan’s economic security.
What comes into view when one rides a bicycle is not only the mechanism behind the development of Chinese industry. It is also Japan, seen through China. The question continues beyond a single paperback volume.
