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Economic Analysis of the Steel Industry

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Growth Mechanisms and
Sustainability
Economic Analysis of the
Steel Industry in East Asia
Edited by
Jun Ma
Masashi Yamamoto
Growth Mechanisms and Sustainability
Jun Ma · Masashi Yamamoto
Editors
Growth Mechanisms
and Sustainability
Economic Analysis of the Steel Industry in East Asia
Editors
Jun Ma Masashi Yamamoto
School of Economics School of Political Science
Center for Far Eastern Studies and Economics
University of Toyama Tokai University
Toyama, Japan Hiratsuka, Kanagawa, Japan
ISBN 978-981-16-2485-8 ISBN 978-981-16-2486-5 (eBook)

https://doi.org/10.1007/978-981-16-2486-5
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Preface
This book is a compilation of the research conducted under the project

“Evolution of International Specialization and Sustainable Utilization of
Resources in Northeast Asia: Challenges and Prospects” in the Center for
Far Eastern Studies, University of Toyama, Japan. The research project
was launched in 2016 as part of the network-based projects: NIHU Area
Studies “Regional Structure and Its Change in Northeast Asia: In Search
of the Way to Coexist from the Point of View of Transborderism” in
collaboration with the Center for Northeast Asian Studies at National
Museum of Ethnology of National Institutes for the Humanities (NIHU)
and five other leading research institutes in Japan.
Our project focuses mainly on the following two issues. The first issue
concerns resources and how the evolution of the international division
of labor and international cooperative relations can contribute to the
economic growth and social development of the Northeast Asian region
in the future. In the second issue, the international division of labor is
investigated to examine the limits of the competitive growth model for
gaining international comparative advantage through competition over
resources and technological innovation from both the macro- and micro-
perspectives and consider how a win-win relationship can be achieved
among the countries of Northeast Asia and how to construct an optimal
symbiotic growth model for the entire region.
Since 2018, we have investigated the steel industry, which has a signifi-
cant impact on economic and social activities, and have mainly studied the
v
vi PREFACE
utilization of iron ore resources, international specialization, trade rela-

tions, and environmental issues in the steel industry of this region. We
have worked together with researchers from other research institutes in
Japan and overseas, including China and Korea, to organize seminars and
conduct field research.
To write this book, we have collected various data sets related to the
steel industry while conducting field studies on major steel manufacturers
and institutes in Japan, the Republic of Korea, and China for the past three
years. Based on the results of the surveys and research, we completed this
book after holding a conference to discuss various issues related to the
growth of the steel industry in East Asia in March 2020.
We would like to express our deepest gratitude to Nippon Steel Corpo-
ration, POSCO, China Metallurgical Industry Planning and Research
Institute, HBIS Group Hansteel Company, and other related organi-
zations in Japan, the Republic of Korea, and China for their cooper-
ation in the field research. We would particularly like to thank Ken
Kosugi (General Manager, Head of Department Environment Relations
Dept. Environment Div. Nippon Steel Corporation, Japan), Prof. Hyun-
chul Kim (Graduate School of International Studies, Seoul National
University, Republic of Korea), Dongwook Kim (Senior Vice Presi-
dent, Business Coordination Team, Hyundai Motor Group, Republic of
Korea), Taehyuk Yim (Department Manager, Corporation Support Divi-
sion Management Planning Dep, POSCO Japan), Shuping Ma (Research
fellow, Vice-Director of Research Office, Enterprise Research Institute, at
the Development Research Center of the State Council, China), and Prof.
Erbiao Dai (Research Director, Asian Growth Research Institute (AGI),
Japan) for their valuable advice during the research.
We are grateful to the anonymous referees, who offered many valu-
able comments to make our book more complete, to our publisher,
Palgrave Macmillan, and in particular, to our editors Jacob Dreyer and
Arun Kumar, for keeping us on track toward the publication of this book.
In addition, we would like to thank the NIHU and the University of
Toyama for their support not only in terms of funds but also in many
other ways.
PREFACE vii
Finally, we would like to welcome any comments from researchers and

practitioners in the steel industry upon reading this book, and we hope
that general readers interested in this field will also read this book.
Toyama, Japan Jun Ma

Hiratsuka, Japan Masashi Yamamoto
Contents
1 Introduction 1
Jun Ma
Part I The Process of Growth

2 How Does State Policy Shape East Asia’s Steel
Industry? A Selective Review 11
Jie Yang
3 Changes in the Competitive Environment
and Division of Labor Structure in Northeast Asia:
A Focus on the Iron and Steel Industry 43
Bong-gil Kim
4 Changes in the Trade Structure of the Metal
Products Industry in East Asia from the Perspective
of the International Division of Labor 75
Dan Jin
Part II The Mechanism of Growth

5 Natural Disaster Shocks and Raw Material Prices
in the Steel Industry 97
Kaori Tembata
ix
x CONTENTS
6 Technology Transfer Management in the Steel

Industry: Transfer Speed, Recognition Lag
and Learning Lag 123
Sungwoo Byun
7 Decomposing the Energy Impact of the Steel Industry
in the Manufacturing Sector: Evidence from Japan
and China 147
Saifun Nahaer Eva, Takashi Sekiyama,
and Masashi Yamamoto
8 The Impact of Imports, Technological Progress
and Domestic Demand on the Growth
of and Structural Changes in China’s Steel
Industry 175
Jun Ma and Naoki Kakita
Part III The Impact of the Growth of China’s Steel

Industry
9 Effectiveness and Policy Analysis of International
Capacity Cooperation of China’s Steel Industry 207
Zhongyuan Zhang and Guoqing Zhao
10 Labor Productivity and Surplus Labor in Chinese
Iron and Steel Firms 239
Xinxin Ma
11 On the Electoral Consequences of Increasing Chinese
Imports: Insights from the Japanese Lower House
General Elections, 2009–2017 259
Gaku Ito
Part IV Closing Remarks

12 Closing Remarks: Toward Sustainable Growth
of the Steel Industry in East Asia 275
Masashi Yamamoto and Jun Ma
Index 279
Notes on Contributors
Sungwoo Byun is an Associate Professor in the Faculty of Business

Administration, Kindai University, Japan. After studying at the University
of Tokyo’s Graduate School of Economics, he worked for years at that
university’s Manufacturing Management Research Center. Before joining
the University of Tokyo, he worked for Pohang Iron and Steel Company
(POSCO) in South Korea. His research interests include manufacturing
process integration, production strategy, and global supply chain manage-
ment in process industries, including the steel industry. His articles have
been published in Annals of Business Administrative Science, Interna-
tional Journal of Technology Management, and International Journal of
Productivity and Quality Management.
Saifun Nahaer Eva is a Research Associate at the Center for Far Eastern
Studies (C-FES), University of Toyama. Her main research field is envi-
ronmental pollution, biodiversity loss, molecular ecology, and conserva-
tion genetics. Her main publications include “What effect reduces plastic
waste most? The case of Japanese manufacturing,” Technical Report,
Faculty of Economics, University of Toyama, 332:1–19. https://doi.org/
10.15099/00020129 (2020) (with M. Yamamoto), “Population Struc-
ture, Admixture, and Migration Patterns of Japanese Sika Deer (Cervus
Nippon) Inhabiting Toyama Prefecture in Japan,” Zoological Science,
36(2):128–135. https://doi.org/10.2108/zs180114, (2019) with Y.
Yamazaki, and “Hybridization between native and introduced individuals
of sika deer in the central part of Toyama prefecture,” Mammal Study,
xi
xii NOTES ON CONTRIBUTORS
43(4):269–274. https://doi.org/10.3106/ms2018-0006 (2018), with

Y. Yamazaki.
Gaku Ito is an Assistant Professor at the Graduate School of Humani-
ties and Social Sciences, Hiroshima University, Japan. His main research
field is international relations, and his research interests include armed
conflict and the long-run effects of historical events and institutions. His
recent publications include “Why Does Ethnic Partition Foster Violence?
Unpacking the Deep Historical Roots of Civil Conflicts,” Journal of Peace
Research (Forthcoming), and “Battle Diffusion Matters: Examining the
Impact of Microdynamics of Fighting on Conflict Termination,” Journal
of Conflict Resolution 64(5) (2020), with Kaisa Hinkkainen Elliot.
Dan Jin is an Assistant Professor at the Center for Northeast Asian
Studies, Tohoku University, Japan. Her main research fields are urban
environmental pollution issues, the international division of labor, and
interdependence in East Asia. Her main publication is “Interregional
Industrial Cooperation and Balanced Development” (in Chinese), written
together with other authors and published by Hong Qi’s publishing house
in 2020.
Naoki Kakita is a Professor of Economics at the School of Economics,
University of Toyama, Japan. His research interest is trade policy under
imperfect competition. His publications include “Welfare Effect of Inter-
national Technology Transfer Using a Trade Model with Imperfect
Competition” in Naoki Kakita (et al.) (eds.) Mutualism from An Envi-
ronmental Perspective, pp. 98–112, 2013, University of Toyama (in
Japanese), “Optimal Pigouvian Intervention in Waste Management with
Urban Unemployment,” Management Science and Economic Review,
Vol.1, No. 1, pp. 28–42 (2010), with Kazuyuki Nakamura, and “Trade
Policy and Welfare under Oligopoly,” Kobe Gakuin Economic Papers, vol.
27, No.3, pp. 65–74,1995 (in Japanese).
Bong-gil Kim is a Professor at the School of Economics and the Center
for Far Eastern Studies (C-FES), University of Toyama, Japan. His main
research interests are the international division of labor, trade, and devel-
opment policies. His recent work has dealt with the industrial structure,
global supply chains (GVCs), and regional trading agreements in the East
Asia and Asia Pacific areas. He has been engaged in research to measure
NOTES ON CONTRIBUTORS xiii
trade in value-added terms to provide a more accurate view of the under-

lying economic importance of trade. His book Competition and Coopera-
tion in East Asia (in Japanese), written together with other authors, was
published in 2013.
Jun Ma is a Professor of Management at the School of Economics and
the Center for Far Eastern Studies (C-FES), University of Toyama, Japan.
His research interests include HRM, labor economics, and industrial
organization. His recent work is on the international division of labor
and the industrial structure in East Asia. His recent main publications
include “Foreign Direct Investment Strategies on Managerial Decisions
and Corporate Performance in Japan: An Analysis Based on Corporate-
Level Microdata” in Have Japanese Firms Changed? The Lost Decade,
H. Miyoshi and Y. Nakata (eds.), Macmillan, published in 2011, and
the book Sustainable Utilization of Forest Resources in East Asia: An
Economic Approach (in Japanese, Nourin Toukei Kyoukai), edited with
H. Imamura and S. Tachibana, published in 2018 (funded by NIHU).
He is currently the base leader for the National Institutes for the Human-
ities (NIHU) project “Transformation of the areal structure in North-
east Asia: Symbiosis considered from a trans-border point of view of the
trans-border” at the Center for Far Eastern Studies (C-FES), University
of Toyama.
Xinxin Ma is a Professor at the Faculty of Economics, Hosei University,
Japan. She is a Fellow of the Global Labor Organization (GLO). She has
been an executive board member of the Japanese Association for Chinese
Economy and Management from 2018 to the current. She has been
the editor of Japanese Journal of Comparative Economics, Asian Studies,
and Journal of Chinese Economics. Her current research project focuses
on economic transition and labor market segmentation in China, social
security reform, and income inequality in China. Her new books (forth-
coming) are Female Employment and Gender Gap in China (Springer
Nature, April 2021) and Employment, Retirement and Lifestyle in Aging
East Asia (edited by Xinxin Ma, Palgrave Macmillan, June 2021).
Takashi Sekiyama is an Associate Professor at the Graduate School of
Advanced Integrated Studies in Human Survivability (GSAIS), Kyoto
University, Japan. His main field of research is the international polit-
ical economy. His recent publications include “Environmental Security
and Japan,” Security Studies, 2 (1), 65–80 (2020), “Solar Sharing for
xiv NOTES ON CONTRIBUTORS
Both Food and Clean Energy Production,” Environments, 6 (6), 65–77

(2019), and The Economics of Waste Management in East Asia, with M.
Yamamoto, E. Hosoda, et al., published by Routledge (2016).
Kaori Tembata is an Associate Professor in the Graduate School of
Humanities and Sustainable System Sciences, Osaka Prefecture Univer-
sity, Japan. Her research interests are in the field of environmental and
resource economics, especially the economic impacts of natural disas-
ters and climate change. Her recent publications include “Floods and
Exports: An Empirical Study on Natural Disaster Shocks in Southeast
Asia,” Economics of Disasters and Climate Change, vol. 3, pp. 39–60,
2019 (with Kenji Takeuchi; funded by JSPS) and “Don’t Rely Too Much
on Trees: Evidence from Flood Mitigation in China,” Science of the Total
Environment, vol. 732, 2020 (with Yuki Yamamoto, Masashi Yamamoto,
and Ken’ichi Matsumoto; funded by NIHU).
Masashi Yamamoto is a Professor at the Center for Far Eastern Studies
(C-FES), University of Toyama, Japan. His main research interest is envi-
ronmental and resource economics from both theoretical and empirical
perspectives. Although most of his early works are in the waste manage-
ment and recycling field, his recent papers analyze more diverse natural
resource management issues, such as fisheries and forest management. His
major publications include “Socially Optimal Recycling Rate: Evidence
from Japan,” Journal of Environmental Economics and Management, vol.
60, pp. 55–70, 2014 (with T. Kinnaman and T. Shinkuma; funded by
JSPS) and “Don’t Rely Too Much on Trees: Evidence from Flood Mitiga-
tion in China,” Science of the Total Environment, vol. 732, 2020 (with K.
Tembata and K. Matsumoto; funded by NIHU). He has experience in the
role of coediting a book through his work on Economics of Waste Manage-
ment in East Asia (Routledge Studies in the Modern World Economy)
published by Routledge in 2016, an outcome of a project funded by
the Japanese Ministry of Environment. He is also a member of several
national-level committees to revise environmentally related laws in Japan,
such as the Construction Waste Recycling Law and the Home Appliance
Recycling Law.
Jie Yang is an Assistant Professor at the Center for Far Eastern Studies
(C-FES), University of Toyama, and the Center for Transdisciplinary
Innovation, Japan. Her main field of research is environmental economics.
Her main publication is “Does Drought Increase Carbon Emissions?
NOTES ON CONTRIBUTORS xv
Evidence from Southwestern China,” Discussion Papers, 2015, Grad-

uate School of Economics, Kobe University, with Yijing Huang and Kenji
Takeuchi.
Zhongyuan Zhang is the Associate Research Fellow and Director in the
Department of International Economic Relations, National Institution
of International Strategy (NIIS), Chinese Academy of Social Sciences
(CASS). He recently studied the capacity cooperation between China
and the economies along the Belt and Road Initiative and engaged
in the analysis and evaluation of the terms of regional trade agree-
ments. He has published more than 50 papers in academic journals such
as World Economics and Politics, Journal of Contemporary Asia-Pacific
Studies, Journal of Quantitative & Technical Economics, China Indus-
trial Economics, and Journal of International Trade. His recent publi-
cation includes “The Impact of Environmental Regulation on Spillover
Effects from Foreign Capital Inflows: A Cross-Provincial Study,” China
Economist, 2012, 7(4), pp. 62–73, and “Yanchi’s Targeted Measures for
Poverty Relief and Its International Implication,” China Social Sciences
Press, 2018.
Guoqing Zhao is a Professor at the School of Economics, Renmin
University of China. Professor Zhao obtained his Ph.D. in Economics
from Kyoto University. His research interests are econometrics and
applied econometrics. He has published more than 70 papers in peer-
reviewed journals, including Journal of Business & Economic Statistics,
International Journal of Production Economics, Journal of Forecasting,
Journal of Quantitative & Technical Economics, and Statistical Research.
His recent publications include “Uncovering the Relationship between
FDI, Human Capital and Technological Progress in Chinese High-
Technology Industries,” China & World Economy, Vol. 18, 2010, No. 1,
and “Environmental Regulation and Pollution Haven? An Empirical Anal-
ysis Based on Panel Threshold Regression of Chinese Provincial Data,”
Economic Theory and Business Management, (2017), with Wei Hui.
List of Figures
Chapter 2
Fig. 1 Apparent use of finished steel products in million tons
(Note C.I.S. indicates Commonwealth of Independent
States. This figure presents the change in the apparent use
of finished steel products from 2009 to 2018 for nine
of the world’s largest steel-consuming economies in Asia,
Europe, the CIS region, North America, and South America,
which together account for more than 90% of global steel
demand. Steel demand in China is presented separately
to explain the dramatic growth in Asia. Source World Steel
Association [1967–2019]) 12
Fig. 2 Energy efficiency in steelmaking by country (2015) (Note
This figure illustrates international comparisons of energy
efficiency [sectors of electricity generation, iron, steel,
and cement] and indexes with Japan set at 100. The original
Japanese translation data and numerical values were provided
by the Japan Iron and Steel Federation. Source This dataset
is collected from the Nippon Steel Sustainability Report
2020, and the original source is the Research Institute
of Innovation Technology for the Earth [RITE]) 13
xvii
xviii LIST OF FIGURES
Fig. 3 Trend in total crude steel production in Japan, 1967–2019

(Note Data on GDP are in constant 2010 U.S. dollars
and converted from domestic currencies using 2010 official
exchange rates. Source The crude steel production dataset is
from World Steel Association [1967–2019], and the GDP
dataset is from World Bank [1967–2019]) 15
Fig. 4 Trend in total crude steel production in the Republic
of Korea, 1967–2019 (Note Data on GDP are in constant
2010 U.S. dollars and converted from domestic currencies
using official 2010 exchange rates. Source The crude
steel production dataset is from World Steel Association
[1967–2019], and the GDP dataset is from World Bank
[1967–2019]) 18
Fig. 5 Trend in total crude steel production in China, 1967–2019
(Note Data on GDP are in constant 2010 U.S. dollars
and converted from domestic currencies using official
2010 exchange rates. Data on total crude steel production
from 1967 to 1971 were estimated by World Steel.
Source The crude steel production dataset is from World
Steel Association [1967–2019], and the GDP dataset is
from World Bank [1967–2019]) 21
Fig. 6 Trend in carbon emission intensity in Japan, the Republic
of Korea, and China (Note CO2 intensity of the three East
Asian economies measured in kilograms of CO2 per dollar
[kg/$] of GDP [measured in international dollars in 2011
prices]. Source This dataset is sourced from Our World
in Data [1950–2016]. Data have been converted by Our
World in Data from tons of carbon to tons of carbon dioxide
[CO2 ] using a conversion factor of 3.664) 28
Fig. 7 Excess capacity in East Asia’s iron and steel industry
(Note This figure shows the trend in excess capacity
in Japan, the Republic of Korea, and China from 2000
to 2019. Excess capacity in this study is calculated based
on the following equation: excess capacity = steelmaking
capacity-total production of crude steel. Source This dataset
is sourced from OECD [2000–2019] and World Steel
Association [1967–2019]) 31
LIST OF FIGURES xix
Fig. 8 The concentration ratio (CR2) in East Asia’s iron and steel
industry (Note The top two steelmakers in Japan are
Nippon Steel and Sumitomo Metal Corporation [NSSMC]
and JFE Steel Corporation. In the Republic of Korea,
they are POSCO and Hyundai Steel Company. In China,
they are Baowu Steel Group and Hebei Iron and Steel
(HBIS) Group. The crude steel production of the NSSMC
includes Nippon Steel only before 2012, and the crude steel
production of the Baowu Steel Group includes the merged
production data of the Baosteel Group and Wuhan Iron
and Steel Corporation. Source This dataset is sourced
from the top steelmaker list developed by Metal Bulletin
[2010] and the World Steel Association [1967–2019]) 34
Chapter 3
Fig. 1 Trend of global steel overcapacity (unit: million tons) (Source
Compiled by the author based on the database from OECD
[2000–2020] and World Steel Association [1980–2020]) 67
Chapter 4
Fig. 1 Supply and demand by sector in Japan, China, and the ROK
(unit: %) (Source ReCESSA, prepared by the author) 84
Fig. 2 Supply from the “metal products” sector to other sectors
in the same country (unit: %) (Source ReCESSA, prepared
by the author) 87
Fig. 3 Supply from the “metal products” sector in a country
to other sectors in other countries (unit: %) (Source
ReCESSA, prepared by the author) 88
Fig. 4 Demand of the “metal products” sector in a country
for other sectors in other countries (unit: %) (Source
ReCESSA, prepared by the author) 89
Chapter 5
Fig. 1 Trends in global production of iron ore (Source World Steel
Association [2008, 2018]) 101
Fig. 2 Trends in China’s iron ore imports and crude steel
production (Source World Steel Association [2008, 2018]) 102
Fig. 3 Trends in iron ore prices (Note The values are in nominal
US dollars. Source World Bank [2020]) 103
xx LIST OF FIGURES
Fig. 4 Top 10 iron ore-exporting countries (exports to China,

2006) (Source United Nations [2020]) 107
Fig. 5 Dynamic effect of natural disasters on the iron ore price
(Note The solid lines represent the estimated effects,
and the dashed lines represent the 90% confidence interval.
The estimated model includes 12 lags of the disaster variable) 114
Chapter 6
Fig. 1 Adding steel production processes 136
Fig. 2 Selecting and combining operational parameters 137
Fig. 3 Characteristics of technology and technology recognition 141
Chapter 7
Fig. 1 Changes in Scale, Composition and Technique Effects of All
Manufacturing Subsectors in Japan (Source Authors’ own
calculations and the original sources are METI [2020]
and GIO [2020]) 157
Fig. 2 Changes in Scale, Composition and Technique Effects
in Japanese Manufacturing Excluding the Iron and Steel
Industry (Source Authors’ own calculations and the original
sources are METI [2020] and GIO [2020]) 158
Manufacturing Subsectors in China (Source Authors’ own
calculations and the original sources are National Bureau
of Statistics of China [2005–2017], Shan et al. [2018; 2020]) 162
in Chinese Manufacturing Excluding the Iron and Steel
Industry (Source Authors’ own calculations and the original
sources are National Bureau of Statistics of China
[2005–2017] and Shan et al. [2018; 2020]) 162
Fig. 5 Summary of Changes in Scale, Composition and Technique
Effects in All Manufacturing Subsectors (Source Authors’
own calculations and the original sources are METI
[2020], GIO [2020], National Bureau of Statistics of China
[2005–2017] and Shan et al. [2018; 2020]) 164
Manufacturing Subsectors (2011–2017) in Japan (Source
Authors’ own calculations and the original sources are METI
[2020] and GIO [2020]) 165
LIST OF FIGURES xxi

in Japanese Manufacturing Excluding the Iron and Steel
Industry (2011 to 2017) (Source Authors’ own calculations
and the original sources are METI [2020] and GIO [2020]) 165
Fig. 8 Changes in the Iron and Steel Industry within Japanese
and Chinese Manufacturing over the Sample Periods (Source
Authors’ own calculations and the original sources are METI
[2020], GIO [2020], National Bureau of Statistics of China
[2005–2017] and Shan et al. [2018; 2020]) 167
Chapter 8
Fig. 1 Steel Import Rates of China from Japan, the ROK
and the USA (Source Created by the author based on data
from the United Nations [1980–2018]) 178
Fig. 2 Steel Export Rates from China to Japan, the ROK
and the USA (Source Created by the author based on data
from the United Nations [1980–2018]) 178
Chapter 9
Fig. 1 Sales revenue and profits of CISA members (2002–2019)
(unit: 100 million yuan) (Source CEIC database. The 2019
data are from January to October) 210
Chapter 10
Fig. 1 Annual sales values of iron and steel firms by ownership type
(unit: yuan) (Source Created by the author based on data
from the CLMMS for 2004–2007) 245
Fig. 2 Number of employees of iron and steel firms by ownership
type (Source Created by the author based on data
from the CLMMS for 2004–2007) 246
Fig. 3 Average productivity of labor of iron and steel firms
by ownership type (unit: thousand yuan) (Source
Created by the author based on data from the CLMMS
for 2004–2007) 247
Fig. 4 Average wage of iron and steel firms by ownership type
(unit: thousand yuan) (Source Created by the author based
on data from the CLMMS for 2004–2007) 247
List of Tables
Chapter 2
Table 1 Policies on emission reduction and energy savings in Japan
and the Republic of Korea 24
Table 2 Policies and standards on emission reduction and energy
savings in China 26
Table 3 Policies for capacity reduction in Japan 32
Table 4 Policies for capacity reduction in China 36
Chapter 3
Table 1 Trend of crude steel production and consumption in KJC
(unit: billion tons) 46
Table 2 Global trade balance of the ROK, Japan, and China (2017)
(unit: million dollars) 49
Table 3 Intraregional steel trade in KJC (2017) (unit: million
dollars, %) 52
Table 4 Intraregional trade dependence in KJC (unit: %) 55
Table 5 Global trade specialization coefficient of KJC 58
Table 6 The ROK’s trade specialization coefficient in relation
to Japan and China 61
Table 7 Trade remedy measures by industries (1995–2018) 65
Table 8 Crude steel production capacity and operating conditions
by country (2018) (unit: million tons) 69
xxiii
xxiv LIST OF TABLES
Chapter 4
Table 1 Change in intermediate goods imported
from within and outside East Asian countries
(regions) (unit: %) 78
Table 2 Sectoral integration in the Asian international input–output
table 84
Chapter 5
Table 1 Descriptive statistics of variables 108
Table 2 Dynamic causal effect of natural disasters on the price
of iron ore 109
Table 3 Cumulative effect of natural disasters on the price of iron
ore 113
Table 4 Cumulative effect by disaster type 116
Chapter 6
Table 1 Top-15 steel makers in 2019 (in million metric tons) 127
Table 2 Main equipment suppliers of Pohang Steel Works 130
Table 3 Main equipment suppliers of Gwangyang Steel Works 132
Table 4 POSCO’s production capacity for automotive steel sheets
(unit: thousand tons) 133
Table 5 Examples of tolerance settings used in steelmaking processes 138
Chapter 7
Table 1 Scale, Composition and Technique Effects for Japanese
and Chinese Manufacturing 158
Table 2 Cleanup of CO2 in Japanese (2008–2017) and Chinese
(2005–2017) Manufacturing 159
Table 3 Scale, Composition and Technique Effect in Japanese
Manufacturing (2011–2017) 166
Table 4 Cleanup of CO2 within Japanese Manufacturing
(2011–2017) 166
Table 5 Changes in the Iron and Steel Industry (Japan and China) 168
Chapter 8
Table 1 Results of the comparative statics 183
Table 2 Name, code and definition of steel products based
on the CTD and CISY 185
LIST OF TABLES xxv
Table 3 Estimation results of the impact on the import price

of steel products from Japan and the ROK 188
Table 4 Estimation results of the impact of the import quantity
of steel products from Japan and the ROK 190
Table 5 Estimation results for steel product production in China 192
Table 6 Estimation results for the impact of the import of steel
products from Japan on the production of Chinese
steel-related final goods 195
Table 7 Estimation results for the impact of the import of steel
products from the ROK on the production of Chinese
steel-related final goods 197
Table 8 Descriptive Statistics 201
Chapter 9
Table 1 Overview of China’s steel industry 209
Table 2 Capacity of main products of members of the China iron
and steel sssociation (2013–2017) (unit: 10,000 tons) 210
Table 3 Merger and restructuring plans for the top 10 crude
production provinces 217
Table 4 Exports by country or region (2016–2017) 225
Table 5 Iron ore import by source country (2016–2017) 228
Chapter 10
Table 1 Distribution of the number of iron and steel firms
by ownership type 244
Table 2 Production function results for Chinese iron and steel firms
(OLS model) 249
(FE, RE and GMM models) 250
by ownership type (FE model) 253
by ownership type (GMM) 254
Table 6 MPL and wage of Chinese iron and steel firms
by ownership type 254
Table 7 MPL and wage of Chinese SOE iron and steel firms 255
xxvi LIST OF TABLES
Chapter 11
Table 1 Chinese imports and the change in the ruling coalition’s
vote share, 2009–2017 267
Table 2 Chinese imports and the change in the LDP’s vote share,
2009–2017 268
CHAPTER 1
Introduction
Jun Ma
The steel industry is one of the oldest traditional industries. It is also

among the industries that have grown most sustainably since the First
Industrial Revolution, becoming a pillar of the global economy. After
World War II, the steel industries of the East Asian countries expanded
remarkably in tandem with these countries’ strong overall economic
growth, and the center of modern global steel production shifted to East
Asia.
In 2019, China’s crude steel production (996.34 million tons)
accounted for the largest share of global crude steel production (totaling
1,875.2 million tons). Japan ranked second (99.3 million tons), and the
Republic of Korea ranked sixth (71.4 million tons). These three East
Asian countries together represented 62% of world crude steel produc-
tion. The apparent consumption of crude steel in these three countries is
the world’s highest, accounting for half the global total.1
1 Calculated by referring to the World Steel Association (2021).
J. Ma (B)
School of Economics, Center for Far Eastern Studies, University of Toyama,
Toyama, Japan
e-mail: majun@eco.u-toyama.ac.jp
© The Author(s), under exclusive license to Springer Nature 1

Singapore Pte Ltd. 2021
J. Ma and M. Yamamoto (eds.), Growth Mechanisms and Sustainability,
https://doi.org/10.1007/978-981-16-2486-5_1
2 J. MA
This book presents a broad investigation of various issues in East Asia’s

steel industry since the 1980s based on an economic approach. Topics
include the sustainable use of resources, international specialization, trade
relations, technological innovations, and environmental mitigation, in
addition to a consideration of the rapid growth of the Chinese steel
industry.
1 Issues Examined in This Book

As a country’s level of economic development increases, there is a general
tendency for firms in sectors such as the automobile and electrical appli-
ance industries to relocate to countries with lower levels of economic
development. However, a different trend has been observed in the steel
industry. Since World War II, the scale of production in the steel industry
in the East Asian countries has increased significantly, while steel produc-
tion in Western countries has not significantly decreased. As a result,
world crude steel production increased tenfold in the immediate postwar
period. There have also been dramatic changes in international specializa-
tion in the steel industry in terms of its relation to other industries. The
widespread downstream use of steel products has led to segmentation
in the steel industry, with international vertical and horizontal divisions
occurring simultaneously. In contrast, upstream exporting and importing
countries are clearly distinguished: while countries such as Australia and
Brazil have become net exporters of steel resources, East Asian coun-
tries have become net importers of steel resources. Competition among
countries for resources has become more intense over time.
As a result of technological innovations in the steel industry, the reuse
of steel resources, the efficiency of the steel production process, and
environmental improvements in the steel industry have increased to hith-
erto unimaginable levels. However, in certain countries, environmental
problems caused by the steel industry remain serious.
The drivers of these changes include technological development in
fields such as production, transportation, and information; restructuring
in the international division of labor, trade structures and resource supply
and demand; adjustment in national trade and industrial policies as well
as in corporate behavior patterns in individual countries; and interaction
among all these factors.
The steel industry in East Asia has not only expanded its scale of
production but also undergone significant structural changes in the
1 INTRODUCTION 3
postwar period. However, systematic empirical research on the inter-

national division of labor, resource use, and environmental issues in
the regional steel industry is scarce compared to the literature on the
automotive, electronics, electrical appliance, and IT industries.
Focusing on the steel industry and adopting an economic approach,
the aim of this book is to analyze multiple aspects of the steel industry in
East Asia over the past 40 years while attempting to answer the following
questions. How has the industry grown? How have its industrial struc-
ture and international specialization changed? What innovations have
occurred? How have resource and environmental problems been resolved?
Which problems remain unsolved? What solutions to such problems can
be considered?
2 This Book in Relation to the Literature

on the East Asian Steel Industry
Hudson and Sadler (1989) survey the various factors that have
contributed to the decline of the international steel industry, such as
changes in production strategies, in demand and world trade, and in
regional production trends in the steel industry, through the 1980s. Their
study also examines the impact of the decline on steelmaking communi-
ties and considers local, national, and international initiatives to assist the
affected areas and how these initiatives were devised and implemented.
Drawing on case studies on the steel industry in the US, Japan,
South Korea, Brazil, and India, D’Costa (1999) explains how and why
the steel industry has shifted from advanced capitalist countries to late-
industrializing countries. D’Costa also examines the relationship between
industrial change and institutional responses to technological diffusion
and finds that governments’ and firms’ differing responses to innovations
result in an uneven diffusion of technology and industrial reorganization.
Moreover, when it becomes clear that existing institutional arrangements
no longer serve the industry well, new arrangements are created that allow
for innovative behavior. This phenomenon has often created opportunities
for technological “leapfrogging” and the emergence of new technologies
in unexpected locations.
In a study on resource networks in the Asia-Pacific steel industry,
Wilson (2013) adopts a political economy perspective to investigate the
contributions of states and firms to the governance of global production.
4 J. MA
Li (2020) examines the principles of supply-side structural reform

and current practices in the Chinese steel industry. Focusing on the
general requirements for high-quality development, Li’s study reviews the
evolution of the global and Chinese steel industries in terms of capacity
reduction, innovation, and transformation.
Compared to these studies, this book is unique in the following four
ways.
First, it focuses on production and demand, trade relations within
and outside the East Asia region, and the environmental impact of
the regional steel industry in analyzing the industry’s growth process,
structural changes, and technological innovation from the 1980s to the
present. The research in this book differs in subject and period of focus
from Hudson and Sadler’s (1989) analysis. Accordingly, the results of our
research could provide more useful information for policymakers in the
present-day steel industry.
Next, we take into account the technological “leapfrogging” empha-
sized in D’Costa (1999) while discussing the innovation characteristics
and processes of Japanese and Korean steel manufacturers. However, our
study demonstrates through statistical analysis that technological innova-
tions not only impact the increase in production scale but also industrial
structure change (Chapter 8) and solutions to environmental problems
in the region (Chapter 7). We also emphasize the importance of inter-
processes/interorganization of company coordination across equipment
and processes (Chapter 6). The most significant feature of our research is
that it elucidates the mechanisms of growth through econometric analysis
based on large data sets and case studies based on a detailed survey of
companies.
Wilson (2013) analyzes the trade relations and global production
networks between Asia and the Pacific from the perspective of resource
interdependence. In contrast, this book mainly analyzes the charac-
teristics of the international division of labor and trade (Chapters 3
and 4), sustainable resource utilization (Chapter 5), and environmental
protection (Chapter 7) in the growth of the East Asian steel industry.
Finally, in contrast to Li (2020), this book considers the growth of
China’s steel industry while focusing on East Asia and investigates the
issues connected with the growth of the steel industry in this area. In
the book, we are of course aware of the rapid growth of the Chinese
steel industry. However, we concentrate on elucidating growth mecha-
nisms and examining the essential aspects of the problems of the Chinese
1 INTRODUCTION 5
steel industry (Chapters 9 and 10) and their impact on other countries
(Chapter 11) based on a political economics approach.
3 Structure of This Book

In each of the three countries of East Asia, the steel industry has been
a driver of rapid economic growth. This phenomenon is common in
Western countries. However, the economic growth model of East Asian
countries is of the catch-up type, with a target of reaching the level of
advanced countries in Europe and America within a short time period.
Thus, the government intervenes through policies to promote the rapid
development of the steel industry. At the same time, the problem of over-
production and surplus inevitably arises. As a result, the steel industry
in these East Asian countries not only supports the domestic economic
infrastructure but also causes significant changes in the vertical and hori-
zontal division of labor within the industry. This has resulted in a major
restructuring of the global steel industry.
Focusing on the noted characteristics, in Part I, we discuss the
changing processes of the policies, industrial structure, and the inter-
national division of labor in the steel industry of the three East Asian
countries. This part includes three chapters.
In Chapter 2, to help the reader better understand the issues this book
discusses, we first outline the growth of, challenges to, and government
policies regarding the steel industries of Japan, the Republic of Korea, and
China. Then, other two studies focus on changes in international special-
ization, trade relations, and industrial structure in the growth of the steel
industry in East Asia. Chapter 3 examines the ideal ways in which the
intraregional division of labor can overcome the current difficult busi-
ness environment and strategic challenges to survive in the future. In
Chapter 4, we analyze the intraregional and interregional structures of
the international division of labor and the interdependence of interme-
diate goods and final goods (“metal products”) by sector and time series
in the East Asia region.
Following the unprecedented quantitative expansion at the macro-
level, there has been significant qualitative development in East Asia
due to national industrial growth policies and continual innovation
at the firm level. Originally basing their development on innovations
from Western countries, the Republic of Korea and Japan have both
succeeded in creating new steel products with high value added in recent
6 J. MA
decades, and substantial efforts have been made by the steel industry to
promote the sustainable use of resources and energy as well as to mitigate
environmental damage.
In Part II, we focus on elucidating the mechanisms of growth of the
steel industry in East Asia. As an industry that consumes large amounts
of natural resources and energy, its growth requires not only effective
use of resources and energy but also solutions to the problems of natural
disasters and environmental destruction. The steel industry in East Asia
has faced the challenge of environmental protection and the evolution of
its industrial structure as well as the expansion of its scale. In this part, we
analyze how the three East Asian countries have solved these problems.
This part consists of four chapters.
In Chapter 5, we focus on the contemporaneous and dynamic effects
of disasters and consider the persistence of disaster shocks using data on
iron ore employed in making crude steel. We also investigate whether the
occurrence of natural disasters causes price fluctuations in the iron ore
market.
Chapter 6 focuses on management issues that occur when adopting
“new” technology from the outside and uses a case study on POSCO to
reveal that the perception of a new technology can be a critical factor for
success in technology transfer when a company adopts such a technology.
In Chapter 7, our study postulates that, after excluding emissions from
the iron and steel industry, the composition effect actually increases pollu-
tion emissions. Significant reduction in CO2 emissions is accelerated by
innovative improvements to production driven by technology and/or
regulations of Japanese and Chinese manufacturing.
Based on theoretical analysis, in Chapter 8, we collate panel data by
steel product to demonstrate how various factors, especially the techno-
logical progress in crude steel production, imports of steel products from
Japan and the Republic of Korea, and demand for final goods, affected
the domestic production of steel products and final goods that are closely
related to steel products in China.
To properly understand the growth characteristics of the steel industry
over the past 40 years in East Asia, it is vital to illuminate the growth
mechanisms of China’s steel industry, which has had a significant impact
on the development of the global steel industry. Because it regards the
steel industry as a pillar industry for economic growth, the Chinese
government has launched various policies to make the steel industry
grow quickly, which has led to remarkable growth. However, this growth
1 INTRODUCTION 7
has been accompanied by overproduction. This problem has increased

China’s dependence on foreign markets and had a significant impact on
the international structure of trade in steel products. When the relation-
ship between China and major overseas markets is strained, the impact on
the domestic steel industry and other countries is significant.
Therefore, in Part III, we focus specifically on the Chinese steel
industry, which has grown remarkably over the last 40 years, and further
analyze the problems and impacts of growth characteristics of China’s
steel industry. This part consists of three chapters.
Chapter 9 examines the problem of overcapacity and the role of the
government and the market in resolving this issue in China’s steel industry
as the economy shifts from a growth orientation to a quality orientation.
Using data from large and medium-sized Chinese manufacturing enter-
prises from 2004 to 2007, Chapter 10 investigates labor productivity and
surplus labor in Chinese steel firms based on a fixed effects model, a
random effects model, and GMM.
Chapter 11 examines the impacts of increasing Chinese imports from
and Chinese exports to Japan (in terms of steel industry-specific increases
and increases in all manufacturing sectors) on the outcomes of the four
national Lower House (Shūgiin) General Elections in Japan between
2009 and 2017.
Finally, based on the preceding analysis, we propose policies to
promote sustainable future growth for the steel industry in East Asia.
References
D’Costa, A.P. 1999. The global restructuring of the steel industry: Innovations,
institutions and industrial change. Routledge.
Li, X.C. 2020. The road map of China’s steel industry: Reduction, innovation and
transformation. Springer.
Hudson, R., and D. Sadler. 1989. The international steel industry: Restructuring,
state policies and localities. Routledge.
Wilson, J.D. 2013. Governing global production: Resource networks in the Asian-
Pacific steel industry. Palgrave Macmillan.
World Steel Association. 2021. Steel statistical yearbook 2020 (concise version).
https://www.worldsteel.org/en/dam/jcr:5001dac8-0083-46f3-aadd-35a
a357acbcc/Steel%2520Statistical%2520Yearbook%25202020%2520%2528co
ncise%2520version%2529.pdf. Accessed 22 February 2021.
PART I
The Process of Growth

CHAPTER 2
How Does State Policy Shape East Asia’s Steel

Industry? A Selective Review
Jie Yang
1 Introduction
Steel is the most widely used metal and the most recycled material in
the world. The steel industry employed more than six million people
worldwide in 2017, and the total added value of its production processes
reached almost 500 billion dollars (Oxford Economics 2019). U.S. firms
dominated steel production in the first half of the twentieth century,
but leadership1 in the steel industry shifted to Japan in the late 1970s
and then possibly to the Republic of Korea or China (Lee and Ki
2017; Lee and Malerba 2017). Since the beginning of the 2000s, the
major Asian economies—Japan, the Republic of Korea, and China—have
1 Lee and Malerba (2017) define “leadership” as industrial leadership in terms of the
domination of global markets in an industry, with such domination being assessed through
a combination of measured market share and industry expert evaluations.
J. Yang (B)
The Center for Far Eastern Studies, University of Toyama, Toyama, Japan
e-mail: yangjie@ctg.u-toyama.ac.jp
Center for Transdisciplinary Innovation, University of Toyama, Toyama, Japan
© The Author(s), under exclusive license to Springer Nature 11

Singapore Pte Ltd. 2021
J. Ma and M. Yamamoto (eds.), Growth Mechanisms and Sustainability,
https://doi.org/10.1007/978-981-16-2486-5_2
12 J. YANG
accounted for more than one-third of the world’s crude steel production
and apparent consumption of either crude steel or finished steel products
(Lee et al. 2005). According to Fig. 1, the apparent use of finished steel
products in Asia grew by 52% to approximately 1,169 million tons from
2009 to 2018, mostly driven by China’s rapid growth in steel demand
(51.4%). China, Japan, and the Republic of Korea are also the major steel
exporters, accounting for 30% of 2018 global steel exports measured by
quantity (World Steel Association 1967–2019).
The iron and steel industry presents one of the most energy-intensive
sectors within East Asian economies, especially in emerging economies
such as China. Since the first oil crisis in 1973, Japan’s steel industry
has intensively invested in technology for better energy conservation
in production processing and to collect energy, allowing Japan’s steel
Asia
China
European Union (28)
North America
Middle East
C.I.S.
Africa
South America
Other Europe
2009
Oceania 2018
0 200 400 600 800 1,000 1,200
Fig. 1 Apparent use of finished steel products in million tons (Note C.I.S.
indicates Commonwealth of Independent States. This figure presents the change
in the apparent use of finished steel products from 2009 to 2018 for nine of
the world’s largest steel-consuming economies in Asia, Europe, the CIS region,
North America, and South America, which together account for more than 90%
of global steel demand. Steel demand in China is presented separately to explain
the dramatic growth in Asia. Source World Steel Association [1967–2019])
2 HOW DOES STATE POLICY SHAPE EAST ASIA’S … 13
industry to achieve significant energy conservation and energy effi-

ciency (Nippon Steel Corporation 2020). Figure 2 presents international
comparisons of energy efficiency in 2015, with Japan assigned the world’s
highest energy efficiency, followed by the Republic of Korea, Germany,
and China. However, the global steel industry is facing increasing pressure
to reduce its significant emissions. In 2019, the steel and cement sectors
accounted for approximately 17% of total CO2 emissions from energy and
industrial sources, which are difficult to decarbonize because of technical
and political economy barriers (United Nations Environment Programme
2019). The Paris Agreement 2-degree scenario requires the iron and steel
industry to reduce CO2 emissions by 50 Gt cumulatively through 2050,
150
128 130
119 122 123
116 117
120 109
100 103
90
60
30
0
a
SA
n
il
az
an
nc
di
si
pa
re
U
hi
us
In
U
Ko
Br
m
a
Ja
Fr
R
er
of
G
lic
ub
ep
R
Fig. 2 Energy efficiency in steelmaking by country (2015) (Note This figure

illustrates international comparisons of energy efficiency [sectors of electricity
generation, iron, steel, and cement] and indexes with Japan set at 100. The
original Japanese translation data and numerical values were provided by the
Japan Iron and Steel Federation. Source This dataset is collected from the Nippon
Steel Sustainability Report 2020, and the original source is the Research Institute
of Innovation Technology for the Earth [RITE])
14 J. YANG
thereby contributing the largest share (35%) of carbon emission reduc-

tions among all industrial sectors (Tian et al. 2018). The production level
and the technologies employed are decisive factors for energy use and
carbon emissions, while policy settings affect structures and efficiencies
within the steel sector.
Issues of productivity growth, structural composition, and the role of
technological change in the iron and steel sectors have been discussed
from various perspectives in the previous literature. This chapter focuses
on key policy changes in East Asia’s steel industry. The governments
of Japan, the Republic of Korea, and China have always attached great
importance to the development of the iron and steel industry. The guid-
ance and intervention of institutional policies in East Asia’s iron and steel
industry are considered to be highly targeted and efficient. To under-
stand the growth mechanisms and barriers in East Asia’s steel industry,
the similarities and differences between the institutional policies in Japan,
the Republic of Korea, and China and their relationship with current
issues are discussed, which may help identify potential future development
strategies that lead to a more sustainable development path.
2 Key Policy Drivers of Productivity Growth

2.1 Drivers of Productivity Growth in Japan
The postwar economic achievements of Japan and the Republic of Korea
have received considerable attention, and extensive economic research has
been conducted on the factors influencing Asian catch-up at the country
and industry levels. Lee and Malerba (2017) build on the previous
literature and propose a conceptual framework of technology windows
(technology and knowledge), demand windows (demand conditions and
business cycles), and institutional windows (public policy and institutional
settings) that are related to changes in a sectoral system. In terms of the
steel industry, Lee and Malerba (2017) note in their study that the steel
industry experienced two catch-up cycles. The first was from the United
States to Japan in the late 1970s and early 1980s, and the second was
from Nippon Steel to POSCO in the Republic of Korea during the late
1990s. The leadership shift from the United States to Japan involved tech-
nological and institutional windows. Japanese firms adopted the Austrian
innovation of the basic oxygen furnace (BOF) method at an early stage
and further improved this method through follow-on innovations (Lee
and Ki 2017). The Japanese government was also involved by estab-

lishing an approval system for licensing foreign technology, which helped
Japanese steelmakers engage in the BOF method at a low cost (Elbaum
2007). Furthermore, the demand for steel was driven first by postwar
reconstruction and then by Japan’s rapid urbanization and construction
and export of steel-intensive products.
Figure 3 shows the growth in crude steel production and GDP since
the Second World War. Postwar steel production in Japan can be divided
into two phases: a high increasing stage (1965–1973) and a fluctuation
and reduction stage (1973–now). Japan’s steel industry experienced the
expansion of crude steel production and improved ironmaking between
1967 and 1973, which is the high increasing stage, as shown in Fig. 3.
During the first phase, crude steel production exhibited annual increases
of more than 10%, exceeding GDP growth (Smil 2016). Both Wilson
(2013) and Smil (2016) emphasize the influence of the three rationaliza-
tion plans by the Ministry of International Trade and Industry (MITI)
Total production of crude steel (thousand metric tons)
120,000 High
6000
increasing
stage
GDP (constant 2010 US$, billion)

5000
100,000
4000
3000
80,000
2000
Fluctuation stage: steel production affected by oil shocks in 1970s,
high value of yen after 1986, financial crisis in 1997 and 2008, the
rise of steelmakers in the Republic of Korea and China
60,000 1000
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Total crude steel production in Japan GDP in Japan
Fig. 3 Trend in total crude steel production in Japan, 1967–2019 (Note Data
on GDP are in constant 2010 U.S. dollars and converted from domestic curren-
cies using 2010 official exchange rates. Source The crude steel production dataset
is from World Steel Association [1967–2019], and the GDP dataset is from World
Bank [1967–2019])
16 J. YANG
between 1951 and 1965, which guided the postwar development of

the Japanese steel industry. The first two rationalization waves of the
1950s concentrated investments in upgrading rolling mills to new inte-
grated mills, which reduced coke inputs and boosted productivity (Wilson
2013). Furthermore, MITI also shared information with firms on foreign
markets, technology, and plans for domestic economic expansion, making
it easier for Japanese firms to acquire foreign technology at a low cost
and contributed to industry competitiveness (Elbaum 2007). During the
third rationalization plan in 1960, MITI started to instruct steel firms to
develop investment plans largely on their own, and its role in this process
was limited to assisting with firm negotiations (Wilson 2013). Moreover,
to sustain interfirm coordination, significant concentration was achieved
through the establishment of the Nippon Steel Corporation2 in 1970
and was immediately recognized as the world’s largest steel firm. Nippon
Steel also became the industry price leader and established a system of
price coordination and promoted the consolidation of the Japanese steel
industry. In 1973, crude steel output in Japan reached 100 million tons,
and Japan ranked first in the world in 1995 (World Steel Association
1967–2019). The new Nippon Steel Corporation3 was formed from the
merger of the old Nippon Steel and Sumitomo Metal in 2012, further
increasing the steel industry’s concentration, and the company has been
one of the top 5 steel producers in the world for the last two decades.
Japan’s long record of industrial policy intervention and its industrial
coordination pattern of state-firm and firm-firm cooperation were crit-
ical factors in the rapid growth of the steel industry and contributed to
shaping mineral resource networks abroad (Elbaum 2007; Wilson 2013;
Smil 2016).
The Japanese economy took a sudden turn and entered a stagna-
tion period after the first oil shock in 1973, and crude steel showed the
same downward trend as the economy. Japan’s postwar steel production
first peaked in 1973 and then fluctuated mainly between 95 and 110
million tons because of the oil shocks of the 1970s, the high value of the
yen after 1986, and the rise of Chinese steelmaking in the 1990s (Smil
2016). During this period, iron and steel development in Japan was highly
2 The Nippon Steel Corporation was established in 1970 from the merger of Fuji Iron
& Steel and Yawata Iron & Steel.
3 The new Nippon Steel Corporation is called Nippon Steel and Sumitomo Metal
Corporation (NSSMC).
focused on technology introduction and innovation for energy savings

and production efficiency improvement, which promoted a rapid increase
in the competitiveness of Japan’s iron and steel industry. Furthermore,
tremendous effort was invested in the supply of high-value products in
response to the requirements of the automobile industry (Smil 2016).
Despite the fluctuation and decline during the second phase, the Japanese
steel industry remains the most competitive in the world. In addition to
technology improvements and demand for high-quality steel products,
a series of highly targeted policies since the 1970s have also played a
decisive role in promoting the downsizing of operations and improving
profitability through the elimination of excess and inefficient capacity
and the accompanying reductions in employment. Section 5 provides an
overall review of the reduction policies in Japan, the Republic of Korea,
and China.
2.2 Drivers of Productivity Growth in the Republic of Korea

By the 1990s, the Republic of Korea was a major player in the global
economy. Together with this economic achievement, the steel industry
grew dramatically. Figure 4 shows the trend in total steel production and
GDP in the Republic of Korea from 1965 to 2019. The steel industry
contributed to shaping the Republic of Korea’s rise from a low wage, light
industry base to a world leader in advanced industries (Shin and Ciccantell
2009). Figure 4 shows that the catch-up cycle for the steel industry in the
Republic of Korea, which is the industry’s second postwar catch-up cycle,
is divided into four phases. The first is the entry stage (1968–1972), when
the steel industry’s development was fueled largely by government poli-
cies. Pohang Iron and Steel Company (POSCO) was established in 1968
by the government, and it received extensive government support from
the beginning. The “Steel Industry Promotion Law”4 of 1970 granted
POSCO numerous benefits, including low-cost and long-term foreign
capital, discounts for electricity and rail transport, and limits on steel
imports (Shin and Ciccantell 2009).
The second phase is the gradual catch-up stage (1973–1986), in
which Pohang Steelworks began producing steel in 1973 and expanded
4 The Republic of Korea’s policy to promote heavy industries in the early 1970s included
iron and steel, shipbuilding, nonferrous metals, chemicals, general machinery, electrical
equipment, and electronics.
18 J. YANG

80,000 Entry stage: Catch-up stage: Forging ahead Reduction stage: 1500
POSCO was opportunities from stage: POSCO s financial crisis in 1997,
built in 1968, two oil shocks, fast technology privatization of
Steel Industry heavy industrializa- development, steel POSCO, reducing

Promotion Law tion policies, demand driven by capacity and
60,000 was enacted in POSCO expansion urbanization and restructuring
1970 the boom of the
automobile and 1000
shipbuilding
industries
40,000
500
20,000
0 0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Total crude steel production in Republic

South Korea
of Korea GDP in Republic
South Korea
of Korea
Fig. 4 Trend in total crude steel production in the Republic of Korea, 1967–
2019 (Note Data on GDP are in constant 2010 U.S. dollars and converted from
domestic currencies using official 2010 exchange rates. Source The crude steel
production dataset is from World Steel Association [1967–2019], and the GDP
dataset is from World Bank [1967–2019])
production capacity through 1983 (Chung and Sa 2017). During this

phase, which followed two oil shocks, POSCO was able to purchase
and import new technologies at a low cost from Japan and consequently
obtained comparative competitiveness (Lee and Malerba 2017). Policies
were implemented to nurture heavy industries,5 which significantly drove
up steel demand. The government also provided various administrative
supports, including domestic loans, foreign borrowing, special deprecia-
tion allowances, and very low tax rates (Chung and Sa 2017). As a result,
POSCO secured international loans with low interest rates to construct
a second steel mill at Kwangyang in 1981. After four expansions, the
Kwangyang mill had a capacity of 11.4 million tons of steel, bringing
POSCO’s total capacity to 20.5 million tons (Shin and Ciccantell 2009).
5 These policies focused on six sectors, including steel, petrochemicals, machinery,

shipbuilding, electronics, and nonferrous metal.
The third phase is the forging ahead stage (1987–1997)—a period

of rapid development for POSCO at the technology level, and POSCO
secured a greater cost advantage (Chung and Sa 2017). As a large
state-owned firm, POSCO required frequent involvement and subsidies
from the government, as before, to support massive capital investments
and technological innovation. During this phase, POSCO’s supply of
domestic steel experienced a tremendous rate of increase of 9.8%, which
supported the continuous growth of the economy (World Steel Associ-
ation 1967–2019). POSCO continually expanded its capacity, and the
steel industry supported the development of a number of complemen-
tary industries, such as automobiles, shipbuilding, containers, railroads,
construction, and appliances, spurring a virtuous cycle of economic
growth during the last three decades (Shin and Ciccantell 2009). For
instance, the automobile industry in the Republic of Korea produced
approximately 2.8 million vehicles (more than 1.5 million were exported)
by 1999, and POSCO sold approximately 3.5 million tons of steel to the
industry (Shin and Ciccantell 2009). Moreover, the appliance industry
produced various home appliances during the urbanization period and
consumed significant amounts of steel. Projects in the construction
industry, including building infrastructures, such as highways and bridges,
commercial building construction, and residential construction, also use
huge amounts of steel. Furthermore, important to mention is that to
secure the expanded use of imported raw materials, the Republic of
Korea’s steel industry adopted strategies similar to those of the Japanese
steel industry by constructing larger steel mills equipped with the newest
facilities and technologies to obtain economies of scale. Long-term
contracts, multiple raw material sources, and international joint invest-
ments were developed as well to secure raw materials use (Shin and
Ciccantell 2009; Wilson 2013).
The fourth phase is the reduction stage (1998–now), when steel
production began to slow. Lee (2003) considered the Asian financial crisis
in 1997 as one of the most important turning points for the steel industry
in the Republic of Korea. Although the steel industry was not hit hard by
this crisis, the government recognized the limitations of government-led
operations in expanding the economy and attempted to shift to a more
market-led economy. After this crisis, the government enacted substantial
restructuring in the financial, corporate, labor, and public service sectors,
although the total production capacity continued to increase immediately
20 J. YANG
after the crisis. One of the big moves in the steel industry was the privati-
zation of POSCO in 1998, a transformation that was completed in 2000.
The detailed capacity reduction measures taken by the government and
steelmakers are introduced in Sect. 5.
In summary, during the entire growth process of the steel industry
in the Republic of Korea, the government’s role has been crucial as a
guide and director in planning, financing, and evaluating for the industry;
these activities included its export-oriented growth policy, the monopo-
listic position of POSCO in the industry and economy, the support of
extensive technological and organizational innovations, and securing raw
materials (Shin and Ciccantell 2009).
2.3 Drivers of Productivity Growth in China

China’s rise has been the most important change in the global steel
industry in the last two decades, and institutional changes have occurred
in the Chinese steel industry. In terms of scale, China’s iron and steel
industry has already quantitatively caught up but remains far from
achieving the qualitative leap needed to catch up and lead in competitive-
ness (Li 2020). Similar to Japan and the Republic of Korea, government
policies have had a crucial impact on the steel industry’s development
course in China. As shown in Fig. 5, the development of China’s steel
industry also experienced four phases that accompanied rapid economic
growth. The first phase is the exploration stage (1965–1979), and the
second phase is the stable development stage (1979–1996). This period
represented the start-up stage of China’s iron and steel industry, which
then showed stable development for more than 20 years.
Since the introduction of market-based economic reforms in 1978, the
Chinese economy has grown strongly, recording average annual growth of
approximately 10% (World Bank 1967–2019). During this second phase,
Chinese steel production also expanded rapidly, growing at an average
of 7% annually during the 1980s, 10% during the 1990s, and close to
20% in the 2000s (Li 2020). Meanwhile, China’s crude steel output
broke through 100 million tons in 1996, reaching 10.12 million tons,
and China became the largest steel producer in the world (World Steel
Association 1967–2019). China’s economy developed rapidly, leading to
constantly increased demand for iron and steel, and the reform removed
some of the previous institutional and systematic obstacles, the plan-
ning system gradually shifted to the market system, and productivity

1,000,000 Exploration stage: Stable development Leapfrog development 15000
three large steel stage: reform and stage: accessing to
bases Anshan opening-up policy was WTO, net importer to
steel, Wuhan steel established, Baosteel exporter, steel demand

800,000 and Baotou steel was built in 1978, driven by fast
were built traditonal manage- urbanization and
ment to modern style industrialization
10000
600,000
400,000
5000
200,000
Reduction
stage
0 0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Total crude steel production in China GDP in China
Fig. 5 Trend in total crude steel production in China, 1967–2019 (Note Data
on GDP are in constant 2010 U.S. dollars and converted from domestic curren-
cies using official 2010 exchange rates. Data on total crude steel production from
1967 to 1971 were estimated by World Steel. Source The crude steel production
dataset is from World Steel Association [1967–2019], and the GDP dataset is
from World Bank [1967–2019])
was released (Li 2020). Furthermore, the industrial policy of “grasping

the large and letting go of the small” in 1996 involved a consolida-
tion process under ongoing state ownership for strategic industries, such
as the steel industry. The Chinese government has developed the four
leading steel enterprises, Baosteel, Shousteel, Ansteel, and Wusteel, into
large-scale conglomerates in the form of state sole-funded corporations.
Each had an annual output of more than six million tons in 1997 and
accounted for 28% of China’s total steel output (Nolan and Yeung 2001).
Among these four enterprises, Baosteel was built in 1978 to solve the iron
shortage problem that plagued the iron and steel industry of Shanghai
and, meanwhile, to help the Chinese steel industry realize modernization
and further promote economic development. The completion of Baos-
teel effectively compensated for the shortage of iron and steel varieties
and quality in China and satisfied the urgent demand for high-end steel
products by downstream industries, such as automobiles, petroleum, and
22 J. YANG
shipbuilding (Li 2020). These two rounds of reforms led to a boom in

the steel industry starting in approximately 2000.
The third stage for the development of China’s modern iron and steel
industry began at the beginning of the twenty-first century and lasted
until 2014. This stage represented leapfrog development for the Chinese
steel industry according to the analysis of Li (2020), and a new round of
economic growth brought a dramatic development of the iron and steel
industry after the impact of the Asian financial crisis gradually subsided,
along with upgrading the domestic consumption structure and China’s
accession to the WTO. Despite the impact of the international financial
crisis during that period, China’s crude steel output generally main-
tained rapid growth, from 128.5 million tons in 2000 to 822.7 million
tons in 2014 (World Steel Association 1967–2019). Product variety and
quality improved significantly, allowing China to transform from a net
importer into a net exporter during this phase. China’s dominance in
Asia became even more pronounced, accounting for 77% of regional steel
production in 2011 (Wilson 2013). Although the initial reforms in the
Chinese steel industry were heavily state-led, reforms during the 1980s
and 1990s led in the direction of favoring indirect regulatory functions
and granting limited autonomy to steel firms to improve their competi-
tiveness. However, during this stage, the Chinese steel industry had poor
firm-level concentration, and the top-tier steel firms that met high global
technological standards accounted for only one-third of the national
industry (Li 2020). As a result, the Chinese steel industry lacked the
ability to produce high-value steel products to meet the increasing need
from China’s automobile and machinery sectors. To achieve rationaliza-
tion and technology upgrading, a consolidation process began during this
stage. In 2009, Baosteel and Hebei Iron & Steel merged to become
the largest steelmaker in the East Asia region and one of the top three
steelmakers in the world.
According to the crude steel production data from World Steel Associa-
tion (1967–2019), in 2014, Chinese steel demand began to shrink for the
first time since 2000. In 2015, China’s crude steel output was 804 million
tons, a decrease of 2.3% compared with the previous year and marking
the first decline since 1982. The declines in steel demand and crude steel
output indicate that China’s iron and steel industry has entered the devel-
opment stage of reduction. Although the government has been promising
to reduce excess capacity, and consolidation has been promoted in the
steel industry since 2005, the effects did not begin to appear until 2015.
The capacity reduction policies in China are introduced in Sect. 5.
3 Energy-Saving Policies
and Environmental Regulations
Furthermore, iron and steel products consume a large amount of energy
and discharge a significant quantity of pollutants, making them one of
the most important causes of regional air pollution problems. In the
face of increasingly stringent environmental laws and regulations, green
growth has become an inevitable choice for the iron and steel industry (Li
2020). Energy conservation in steelmaking is crucial to ensure industry
competitiveness and to minimize environmental impacts, including water
pollution, SOx emissions, NOx emissions, and greenhouse gas emissions.
In the last two decades, policies related to energy and the environment
in East Asia’s steel industry have shown similar trends to emphasize the
compatibility between environmental protection and economic growth
through the utilization of energy-saving technologies. The main policies
on emission reduction and energy savings in Japan and the Republic of
Korea are presented in Table 1.
Japanese industries, beginning with the steel industry, have imple-
mented energy-saving and CO2 reduction measures in their manufac-
turing processes and now possess the world’s highest level of energy-
saving technologies (Nippon Steel Corporation 2020). During the two
oil shocks, the Japanese steel industry invested 3 trillion to support envi-
ronmental conservation and energy savings by introducing large-scale
energy-saving equipment; thereby, 20% energy savings were achieved
(Shigeru et al. 2014). As the 5th CO2 emissions producer in the world,
Japan faces increasing political sentiment and demanding CO2 reductions
(Iron and Steel Institute of Japan 2020). Further reduction measures
continue to be required in the Japanese iron and steel industry. The
Voluntary Action Programme for the Iron and Steel Industry, in force
since 1997, was enacted to promote the spread of existing energy-efficient
technologies, and the COURSE 50 initiative was announced in 2007 to
further reduce CO2 emissions on a global scale through innovative tech-
nology development. Furthermore, the top two steelmakers, Nippon Steel
and JFE Steel, adopted a Voluntary Action Program in 1997 and Eco-
Processes following the Commitment to a Low Carbon Society proposal
by the JISF (Japan Iron and Steel Federation) in 2013.
24 J. YANG
Table 1 Policies on emission reduction and energy savings in Japan and the
Republic of Korea
Name Release date
Japan
Voluntary Action Programme for the Iron and Steel Industry (JISF) 1997
Target: Reduce total energy consumption by 10% in iron and steel
industry by 2010 compared to 1990
COURSE50: CO2 Ultimate Reduction in Steelmaking Process by 2007
Innovative Technology for Cool Earth 50 (NEDO)
Commitment to A Low Carbon Society (JISF) 2013
Four central components: eco-process, eco-product, eco-solution,
development of innovative technologies
Target: Reduce GHG emissions, targeting fiscal year 2030
The Plan for Global Warming Countermeasures (the Cabinet) 2016
JISF long-term vision for climate change mitigation: A Challenge toward 2018
Zero-Carbon Steel (JISF)
Target: Provide long-term vision for climate change mitigation in
Japanese steel industry
Republic of Korea
Framework Act on Environmental Policy 1990
Sustainable Development Act 2007
First and Second National Energy Master Plan (MTIE) 2008; 2014
Industry Target: Develop technologies for CO2 free steelmaking and
promote ICT-based energy management systems
Framework Act on Low Carbon Green Growth 2010
Target: Build a low-carbon society and green industry
2030 Roadmap to Achieve National GHG Reduction Target 2016
Target: Set sectoral reduction targets
Phase 3 Allocation Plan 2021–2025 2019
Target: Achieve the 2030 national GHG reduction target
Note The policy sources are in parentheses. JISF indicates Japan Iron and Steel Federation. NEDO
indicates New Energy and Industrial Technology Development Organization. MTIE indicates Ministry
of Trade, Industry and Energy (Republic of Korea)
Source Ministry of Trade, Industry and Energy (2014), Iron and Steel Institute of Japan (2020),
Lee and Woo (2020), Nippon Steel Corporation (2020), Republic of Korea (2020)
As previously mentioned in Sect. 2 (see Fig. 4), economic development

in the Republic of Korea depends heavily on energy-intensive industries,
such as steel and manufacturing, and approximately 95% of the primary
energy used is imported (Hong et al. 2019). The Republic of Korea
embraced the notion of sustainable development as a guiding principle
since 1990 (Framework Act on Environmental Policy) and the Sustainable
Development Act was enacted in 2007 to provide institutional support for
Another random document with
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Good-bye little song-bird. Some day I hope to hear you sing again. Don't
forget—"
"LAURA DAWSON."
"That's not very likely," thought the little girl, "no, indeed. What can she be going to give
me for a Christmas-box?"
"Rose, is that you?" she called out, as she heard light footsteps approaching the door.
"Oh, do come in and listen to all my news!"
Then, as Rose came in, her blue eyes fall of curiosity, she continued excitedly, "I've had
such a dear, dear letter from mother, and she's sent me a pound for my very own, to
spend as I like. You'll help me about getting Christmas presents for every one, won't you?"
"Of course I will," agreed her cousin. "How is Aunt Margaret?"
"Oh, very well; she has written so brightly. Miss Dawson is ever so much better, and I have
had a little note from her. You shall hear what she says."
And Mavis read aloud the few lines Miss Dawson had sent her.
"I am wondering what the Christmas-box will be," she remarked afterwards.
"I expect it will be a nice present, and I hope it will be something you will like," said Rose.
"By the way, I came up to tell you that Mr. Moseley has been here, and he has got mother
to consent to your singing at his concert—it's not to be till New Year's Eve. Mother was
against the idea at first, but father said he was certain Aunt Margaret would have no
objection to it, and so she gave in. Mr. Moseley is very pleased, she says, and I think she's
glad now that you're going to take part in the concert. We shall all go to hear you sing. I
expect nearly every one in the village will be there. Shall you feel nervous?"
"I am afraid so, Rosie. I only hope I shall not break down."
"Oh, I don't fancy you'll do that. I envy you your voice, Mavis—at least, I don't envy it
exactly, but I wish I had a talent of some sort. I'm so very stupid; I can't do anything to
give people pleasure."
"Oh, Rosie, I am sure that is not true. Miss Matthews said the other day that you were the
kindest girl in the school. I told Aunt Lizzie that; she was pleased, though she didn't say
much. How can you be stupid, when you always manage to find out how to make people
happier by doing little things to please them?"
"Oh, that's nothing," exclaimed Rose. The colour on her cheeks had deepened as she had
listened to her cousin's words. "It would make me very unhappy to be unkind to any one,"
she added.
"I am certain it would."
"But I wish I had just one talent," Rose sighed. "If God had given me only one, I would
have been content."
Mavis looked troubled for a minute; then her face brightened as she responded hopefully—
"I think you're sure to have one, Rosie, only you haven't found it out."
CHAPTER IX
CHRISTMAS TIME
"THERE, now I have all my presents ready," Mavis declared in a satisfied tone, one
morning a few days before Christmas, as she dropped great splashes of red sealing-wax on
the small parcel she had already secured firmly with cord. "I do hope Miss Tompkins will
like the handkerchief sachet I'm sending her."
"I should think she will be sure to like it," said Rose, who was standing looking out of the
parlour window at the birds she had been feeding with bread-crumbs. "I wonder when Miss
Dawson's Christmas-box will arrive, Mavis."
"Soon, I expect. I should not be surprised if it came at any time now, for it's getting very
near Christmas, isn't it?"
The little girls' holidays had commenced two days before, and since then, they had been
very busy preparing for Christmas. Mr. Grey had kindly driven them into Oxford, one
afternoon, to make their various purchases, and but a shilling or so remained of Mavis'
pound, the rest having been spent in presents which were hidden in the bottom of her
trunk in her bedroom, to be kept secret from every one but Rose, until Christmas Day. For
kind Miss Tompkins she had bought a pink silk handkerchief sachet with birds painted on it,
and this, with a carefully-written note, she had packed in readiness to send off that
evening.
"I wonder what mother is doing in the kitchen," remarked Rose, presently. "She said at
breakfast she would have a leisureable day, as the puddings are boiled and the mincemeat
is made, and we're to have a cold dinner. But I've heard her bustling about as though she's
very busy. Let us go and see what she's doing."
Accordingly, the little girls repaired to the kitchen, where they found Mrs. John in the midst
of packing a hamper with Christmas cheer.
"I dare say I'm very foolish to do this," she was remarking to Jane, who was watching her
with a half-smile on her countenance, "but it's your master's wish, and I won't go against
him in the matter. There'll be ten shillings' worth in this hamper, if a penny, what with that
nice plump chicken, the pudding, a jar of mincemeat, a pound of tea, a pound of butter,
and—well children?" she said inquiringly, as the little girls came forward.
"Who is that hamper for, mother?" asked Rose, her curiosity alive in a moment.
"For Richard Butt's wife," was the brief answer.
"Oh, how kind of you, Aunt Lizzie!" cried Mavis. "How pleased she will be, won't she?"
"It's to be hoped so, and I dare say she will. But the kindness is not mine, child, it's your
uncle's. 'Fill in the corners of the hamper, Lizzie,' he said, and you see I'm doing it."
"I should like to be looking on when that hamper's opened," observed Jane, as her
mistress placed down the cover and began to cord it. "It'll arrive as a blessing, I reckon.
Butt was talking to me about his wife and child yesterday, and—"
"His child, Jane? I didn't know he had one," broke in Mrs. John, greatly astonished.
"The baby's only a fortnight old, ma'am. I didn't know there was one myself till yesterday."
"Is it a girl or a boy?"
"A boy, a fine healthy little chap, so Butt's mother-in-law has written to tell him."
"How he must wish to see the baby!" exclaimed Mrs. John, with a softening countenance.
"He's hoping to, before long, ma'am, for there'll be a cottage vacant in the village at
Christmas, and he means to take it. Then, as soon as he possibly can, he's going to ask
master to allow him a couple of days' holiday to fetch his wife and baby."
"He appears to have taken you into his confidence, Jane."
Jane nodded. The hamper was corded by this time, and all that remained to be done was
to address a label.
Mrs. John glanced out of the window, then turned to Rose.
"There's Butt in the yard now; he's going into Oxford with the waggon presently, so he can
send off the hamper himself from the station. Tell him I want him."
Rose went to do her mother's bidding, and a few minutes later returned, followed by
Richard Butt, who had greatly improved in appearance since the afternoon he had begged
from Mavis, and she had impulsively sent him around to the back door. Then he had looked
ragged, cold, and dispirited; now he was comfortably clad, and held his head erect once
more.
"What is your wife's address, Butt?" inquired Mrs. John.
"My wife's address, ma'am!" the man exclaimed, in amazement.
"Yes. This hamper is to go to her; it contains a chicken, and a pudding, and a few other
things, and you're to send it off from Oxford. Here's the money to pay the carriage. Tell me
the address."
He did so, and Mrs. John wrote it on the label, which she proceeded to affix to the hamper.
"Ma'am, I can never thank you properly," the young man stammered, quite overcome with
gratitude and surprise. He looked at the shilling Mrs. John had given him, then at the
hamper. "God bless you for your goodness!" he added fervently.
"It's your master's doing. It's nothing to do with me. There, take the hamper away with
you. By-the-by, I hear you've a little son, Butt; I hope his father will be a good example to
him."
The tone in which this was said was more cordial than the words, and Butt carried off the
hamper with a radiant countenance.
"I think I never saw any one look more pleased," observed Jane. "Who comes now?" she
exclaimed, as there was a loud knock at the back door.
She went to see, and reappeared bearing a large wooden box which she deposited on the
kitchen table, saying—
"It's come by the railway van, and it's directed to you, Miss Mavis. There's nothing to pay,
but you must please sign this book, to show it's been delivered safely."
"Oh, it's Miss Dawson's Christmas-box, for certain!" cried Rose.
Whilst Mavis, feeling very important and excited, signed the delivery book under Jane's
directions.
"Oh, Mavis, open it quickly and see what's inside! Here's a knife to cut the cord."
"Not too fast, Rose," said her mother. "Better untie the knots, then the cord will come to
use again—it's a good strong piece. Here, let me help," and she effected the task herself.
"There, Mavis, now you can set to work and unpack."
Mavis lifted the lid of the box, her hands trembling with excitement, and drew out several
packages, which, upon examination, proved to contain preserved fruits and sweetmeats in
pretty boxes, such as she had often seen in the shops at Christmas-time, but had never
dreamed of possessing. Then came a beautifully bound and illustrated story-book, and
several new games, at the sight of which Rose expressed much gratification, and, last of
all, a cardboard box, which, upon being opened, revealed to sight a seal-skin cap and a
muff to match.
"Oh!" exclaimed Mavis, quite incapable of finding words in which to express her delight.
"Put on the cap, Miss Mavis," said Jane. "Let us see how you look in it."
So Mavis placed the cap on her curly head, and glanced from one to the other with the
happiest of smiles on her pretty, flushed countenance.
"Yes, it suits you capitally," declared Jane. "Doesn't it, ma'am?" she questioned, turning to
her mistress.
"Yes, indeed," agreed Mrs. John. "I think, Mavis, that you are a very fortunate little girl,"
she proceeded, as she took up and examined the muff. "It is real seal-skin, I see, and
must have cost a pretty penny."
"There's Bob!" cried Rose, catching the sound of her brother's footsteps in the passage.
"Come and see Mavis' Christmas-box," she said, as he opened the door and entered the
kitchen. "Look at her seal-skin cap and muff, and all the rest of the presents she has had
sent her."
"What will you do with them all, Mavis?" asked Bob, as he came to the table and stood
with his hands behind his back, not liking to touch anything.
"We'll share all the sweeties, Bob," said Mavis; "of course we shall do that. I only want one
box of preserved fruit for myself, to give to Mrs. Long, and the rest I should like Aunt Lizzie
to put with the nice things she has bought for Christmas."
"Very well," Mrs. John agreed, pleased at the suggestion, "I will do so. You shall have some
of the fruit on Christmas Day and the rest later on, or we shall be having all the good
things at once. By the way, what makes you wish to give a present to Mrs. Long, Mavis?"
Mrs. Long was the stout, rosy-cheeked washerwoman Mavis had first seen on the day she
had said good-bye to her mother. On subsequent occasions, the little girl had held
conversations with her, but Mrs. John did not know that.
"She has been very kind to me, Aunt Lizzie," Mavis answered.
"Oh, I don't mean that she's done anything for me, you know," she continued, as she met
her aunt's glance of surprise, "but she's spoken to me so nicely about mother that I quite
love her. She says she knows what it is to be separated from some one, one loves very
dearly, for her only daughter married and went to New Zealand, and her husband's dead,
so that now she's all alone. I should like to give her a little present for Christmas, if you do
not mind."
"Of course I do not mind, child. All these things are your own, to do as you like with."
"I want other people to enjoy them too," Mavis said earnestly. "I never had anything to
give away before this Christmas."
She selected one of the prettiest of the boxes of preserved fruits, and, later in the day, she
and her cousins called at Mrs. Long's cottage in the village and presented it to the kind-
hearted washerwoman, who, needless to say, was exceedingly pleased.
What a happy Christmas that was, and yet how Mavis had dreaded it! It brought her
nothing but joy from the moment she opened her eyes on Christmas morning till, wearied
out, she closed them at night.
Afterwards, she wrote to her mother all about it, and told her how rich she was in
presents, for, besides Miss Dawson's Christmas-box, she had received remembrances from
every member of the household at the Mill House, and from Miss Tompkins too, as well as
Christmas cards from several of her schoolfellows.
"I have so many friends now," she wrote, "and last Christmas I had so few. When we meet
I shall have such a lot to tell you, dear mother. I can't write everything. I believe Aunt
Lizzie has written and told you that I am to sing at a concert on New Year's Eve; I am to
sing your favourite psalm. Mr. Moseley says my voice is a great gift. He is a very nice man,
and has been very kind to me—I think there are a great many kind people in the world."
Mavis had never so much as hinted to her mother that she was not on such cordial terms
with her aunt as with her other relations, for she could not explain why that was the case,
and, lately, she had got on with her rather better. Mrs. John had been obliged to admit to
herself that Mavis was not selfish, that she did not try to put herself before her cousins in
any way, and that she was quick to show gratitude for a kindness, and to respond to
affection. But what she did not understand in the child, was her capability of laying aside
trouble.
"She has just the nature of a song-bird," she would think, when Mavis' voice, lilting some
simple ditty, would fall upon her ears. "She's such a light-hearted little thing."
The concert, which was held in the village schoolroom on New Year's Eve, proved a very
great success. The performers were all well-known inhabitants of the parish, in whom the
audience—composed mostly of the labouring classes—took great interest.
Mavis' part of the programme did not come till nearly the conclusion of the concert, and
when the Vicar took her by the hand and led her on the platform, she felt it would be quite
impossible for her to keep her promise, and she was inclined to run away and hide. But, a
moment later, she had overcome the impulse which had prompted her to go from her
word, and looking above the many faces which were smiling up at her encouragingly, she
summoned up her courage and commenced to sing. Her voice was rather tremulous at
first, but it gained strength as it proceeded. She forgot the people watching her, forgot her
fear of breaking down, and thought only of what she was singing, of "pastures green" and
the Good Shepherd leading His flock by streams "which run most pleasantly." As her
sweet, clear voice ceased, there was a murmur of gratification from the audience, which
swelled into rounds of applause.
"Sing us something else, do, missie!" she heard some one shout from the back of the
schoolroom, and, looking in the direction from whence the voice came, she recognized
Richard Butt.
The rest took up the cry, and from all sides came the demand, "Sing us something else!"
"What else do you know, Mavis?" the Vicar hastened to inquire, when he saw she was
willing to comply with the general request.
"I know some carols," she replied. "Shall I sing one of those?"
"Yes, do," he said, as he moved away.
She was not feeling in the least nervous now. Her heart throbbed with happiness, as she
realized her capability of giving pleasure, and a brilliant colour glowed in her cheeks, whilst
her hazel eyes shone brightly.
The carol she sang was one she had heard in the little mission church in London during the
previous Christmas season, but it was new to her audience.
"'When shepherds were abiding,

In Beth'lem's lonely field,
They heard the joyful tidings
By the heavenly host revealed.
At first they were affrighted,
But they soon forgot their fear,
While the angel sang of Christmas,
And proclaimed a bright new year.'"
That was the first verse; several others followed, concluding thus—
"'When he who came to Bethlehem

Returns to earth again,
Ten thousand thousand angels
Shall follow in His train:
Then saints shall sing in triumph,
Till heaven and earth shall hear;
The year of His redeemed shall come,
A bright immortal year.'"
The carol was as successful in pleasing as had been the psalm, and Mavis stepped from the
platform and returned to her seat with the Mill House party, hearing commendatory
remarks on all sides.
"Oh, Mavis," whispered Rose, "you sang beautifully, you did indeed!"
And she expressed the opinion of the whole room, including Mrs. John, who, for the first
time, acknowledged that really Mavis owned a very sympathetic voice, and that the words
she had sung had seemed to have come from her heart.
CHAPTER X
SICKNESS AT THE MILL HOUSE
"OH, Mavis! Oh, Bob! Mother's very ill! Oh, isn't it dreadful? The doctor's going to send a
hospital nurse to take care of her, for he says she'll be ill for weeks, if—if she recovers!"
And Rose finished her sentence with a burst of tears.
The scene was the parlour at the Mill House one afternoon during the first week of the new
year. Rose had crept quietly into the room with a scared look on her face, having
overheard a conversation between her father and the village doctor, the latter of whom
had been called in to prescribe for Mrs. John, who had been ailing since the night of the
concert, when she had taken a chill.
No one had thought her seriously ill until that morning, when she had declared herself too
unwell to rise, and had been unable to touch the breakfast which her little daughter had
carried upstairs to her. Then it was that her husband had become alarmed, and the doctor
had been sent for. The medical man's face had worn a grave expression as he had left the
sick-room, and he had immediately informed Mr. Grey that his wife was seriously ill with
pneumonia, the result of a neglected cold.
"If she recovers?" echoed Bob, questioningly. "What do you mean, Rose? It's only a cold
that mother has, isn't it?"
"No, it's something much worse than that—pneumonia. Mrs. Long's husband died from
pneumonia." And poor Rose's tears and sobs increased at the remembrance.
"Oh, don't cry so dreadfully, Rosie," implored Mavis. "People often recover from
pneumonia, indeed they do! Mother has nursed several pneumonia patients since I can
remember, and not one of them died. You mustn't think Aunt Lizzie won't recover."
"But she's very ill—the doctor said so," returned Rose, nevertheless checking her sobs, and
regarding Mavis with an expression of dawning hope in her blue eyes. "He said she would
require most careful nursing, and he couldn't tell how it would go with her."
"Doctors never can tell," said Mavis, sagely. "Mother says they can only do their best, and
leave the result to God. Poor Aunt Lizzie! How sorry I am she should be so ill!"
"The doctor says we are not to go into her room again," sighed Rose. "I heard him say to
father, 'Don't let the children into her room to worry her; she must be kept very quiet.'"
"As though we would worry her!" cried Bob, in much indignation. He felt inclined to follow
his sister's example and burst into tears. But he manfully, though with much difficulty,
retained his composure.
Before night, a trained nurse from a nursing institution at Oxford was installed at the Mill
House, and took possession of the sick-room. And during the anxious days which followed,
the miller's wife approached very near the valley of the shadow of death, so that those
who loved her went in fear and trembling, and stole about the house with noiseless
footsteps and hushed voices.
But at length, a day arrived when the patient was pronounced to have taken a turn for the
better. And after that, she continued to progress favourably until, one never-to-be-
forgotten morning, the doctor pronounced her life out of danger.
"We shall be allowed to see her soon now, father, shan't we?" Rose inquired eagerly, after
she had heard the good news from her father's lips.
"I hope so, my dear," he answered. "It will not be long before she will be asking for you, if
I'm not mistaken. But she's been too ill to notice anything or any one. You won't forget to
thank God for His goodness in sparing your mother's precious life, will you, Rosie?"
"No, indeed, father," she responded, earnestly. "We prayed—Bob, and Mavis, and I—that
God would make dear mother well again, and you see He is going to do it. I felt so—so
helpless and despairing, and there was only God who could do anything, and so—and so—"
"And so you were driven to Him for help and consolation? Ah, that's the way with many
folks! They forget Him when things go smooth, but they're glad to turn to Him when their
path in life is rough. But His love never fails. You found Him a true Friend, eh, my Rose?"
"Yes, father, I did. Mavis said I should; she said I must remember that Jesus Himself said,
'Let not your heart be troubled, neither let it be afraid,' and that I must trust in Him. And I
tried not to be afraid. I couldn't do anything but pray; and after a while I began to feel that
God really did hear my prayers, and I don't believe He'll ever seem quite so far off again."
Mr. Grey had guessed rightly in thinking his wife would soon desire to see her children, for
the day following the one on which the doctor had pronounced her life out of danger, she
asked for them, and they were allowed into the sick-room long enough for each to kiss her
and be assured, in a weak whisper from her own lips, that she was really better.
The next day, they saw her again for a longer time, but she did not inquire for Mavis, a
fact which hurt the little girl, though she did not say so, and strengthened her previous
impression that her aunt did not like her.
Before very long, Rose was allowed in and out of the sick-room as she pleased, and was
several times left in charge of the invalid. She proved herself to be so helpful and reliable
that, on one occasion, the nurse complimented her upon those points, and she
subsequently sought her cousin in unusually high spirits.
"Mavis, what do you think?" she cried, in great excitement. "Nurse says she is sure I have
a real talent for nursing! Fancy that! But for mother's illness, I should never have found it
out, should I? Oh, I'm so glad to know that I really have a talent for something, after all!"
Meanwhile, Mrs. John was gaining strength daily. Although she had not expressed a wish
to see Mavis, she thought of her a good deal, and she missed the sound of her voice about
the house.
"Where is Mavis?" she asked Rose, at length. Then, on being informed that the little girl
was downstairs in the parlour, she inquired, "How is it I never hear her singing now?"
"Oh, mother, she would not sing now you are ill," Rose replied.
"She would not disturb me—I think I should like to hear her. It must be a privation to her
not to sing."
"I don't think she has felt much like singing lately. We've all been so troubled about you—
Mavis too. Oh, I don't know how I could have borne it whilst you were so dreadfully ill, if it
had not been for Mavis!"
"What do you mean, Rose?"
"She kept up my heart about you, mother. And she's been so good to us all—helping Jane
with the housework, lending Bob her games and keeping him amused, and doing
everything she could to cheer us up. Wouldn't you like to see her?"
"Yes," assented Mrs. John, "to-morrow, perhaps."
So the following day found Mavis by her aunt's bedside, looking with sympathetic eyes at
the wan face on the pillow.
"I'm so glad you're so much better, Aunt Lizzie," she whispered softly. "You'll soon get
strong now."
"I hope so, Mavis. My illness has spoiled your holidays, I fear. You must have had a very
dull time."
"A very sad, anxious time," Mavis said gravely; "but never mind—that's past."
"And you will soon forget it," her aunt remarked, with a faint smile.
"Oh no, Aunt Lizzie, I'm not likely to do that! But I'd so much rather look forward to your
being well again. We were all so wretched when you were so terribly ill, and now God has
made us happy and glad. Why, I feel I could sing for joy!"
"I think you rarely find difficulty in doing that, Mavis; you are so light-hearted."
"Not always, Aunt Lizzie; but I do try to be."
"Why?" Mrs. John inquired, in surprise.
"Because Jesus said, 'Let not your heart be troubled, neither let it be afraid,'" Mavis
answered, seriously. "I try not to be troubled or afraid," she continued; "but it's very, very
hard not to be sometimes. I found that when mother went away; nothing seemed to
matter much when we were together, but after she'd gone—oh, then it was different. I felt
my heart would break, it ached so badly, but—are you sure I am not tiring you, Aunt
Lizzie?"
"No; I like to hear you talk. Go on—tell me all you felt when your mother went away."
Mavis complied. She would have opened her heart to her aunt before, if she had ever had
the least encouragement to make her her confidante. By-and-by, she became aware that
there were tears in the sunken eyes which were watching the varying expressions of her
countenance, and she ceased speaking abruptly.
"You must have been very lonely and sad, child," Mrs. John said. "I never realized you felt
the parting from your mother so much. I wish I had known; but I thought—"
She paused, and did not explain what she had thought. She was beginning to understand
that she had misjudged Mavis, and the knowledge that she had done so humiliated her,
whilst she was conscious that she had allowed her jealous heart to prejudice her against
the child. "I might have been kinder to you, my dear," she admitted, with a sigh.
"Oh, Aunt Lizzie, you have always been kind to me," Mavis said gratefully, unaware that
Mrs. John's conscience was reminding her not so much of actions as of thoughts.
"I don't know what I have said to make you cry," she added, as a tear ran down her aunt's
pale cheek. She wiped the tear away with her handkerchief as she spoke, and kissed the
invalid. She had never felt greatly drawn towards her before, always having been a little in
awe of her, but at that moment the barrier of misunderstanding which had stood between
them was swept aside.
"I have not heard you singing lately," Mrs. John remarked, by-and-by. "Rose tells me you
have been fearful of disturbing me. You need not be now, for I believe it will cheer me
greatly to hear you singing again. Our song-bird has been silent long enough."
Mavis smiled, and kissed her once more, and shortly after that, the nurse, who had been
absent, returned, and confidential conversation was at an end.
The young people had been back to school for several weeks before the mistress of the Mill
House was about again, and it was some time before she was well enough to undertake
her accustomed duties. But with the lengthening days, she gained strength more rapidly,
and the doctor said she needed only the spring sunshine to make her well.
In the meanwhile, Mavis continued to receive cheering news from her mother, who wrote
every mail. Miss Dawson was much better, and there was now every reason to hope that
she would return to England completely restored to health. But when that would be, Mrs.
Grey had not yet said, though in one letter she had remarked that perhaps it would be
sooner than Mavis expected. The little girl's heart had thrilled with happiness when she
had read that.
Almost the first news Mrs. John was told when she was about again after her illness, was
that Richard Butt, who had taken a cottage in the village, had been allowed a few days'
holiday, and the loan of a waggon, on which he had conveyed his household furniture and
his wife and baby from Woodstock to their new home.
"They're comfortably settled in now, ma'am," said Jane, who had explained all this to her
mistress. "I've been to see them. Mrs. Butt seems a nice, well-mannered young woman,
and the child's as fine a baby as you ever saw in your life."
"Yes," joined in Rose. "And father's very pleased with Butt, because he's so careful of the
horses, and he hasn't had the least cause of complaint against him yet. Aren't you glad to
know that, mother?"
"Butt thinks a great deal of father," Bob said, eagerly, "and no wonder! He told me he was
almost despairing when father gave him work. He said father was one of the few people
who wouldn't hit a man when he's down. I know what he means, don't you, mother?"
"Yes," was the brief assent.
"So do I," said Mavis. "I think the Good Samaritan in the parable must have been very like
Uncle John."
There was one piece of news which Rose had refrained from mentioning to her mother as
yet, and that was that she and Mavis were now in the same class at school. She dreaded
telling her this, and it was a decided relief when she learnt that it was not necessary for
her to do so, as Mavis had forestalled her.
Mavis had also told her aunt, how greatly Rose was troubled on account of her slowness in
learning, and how really painstaking she was, and this, coupled with Miss Matthews' report
that Rose was patient and industrious and always desirous of doing her best, caused Mrs.
John to reflect that she had been a little hard on her daughter.
"Although she's not quick like her cousin, she has many good qualities," she thought to
herself. "God does not endow us all with gifts alike, and I have been unwise to make
comparisons between the children."
So she spoke kindly and encouragingly upon the matter to Rose, who exclaimed, with a
ring of glad surprise in her voice—
"Oh, mother, I so feared you would be angry with me for allowing Mavis to catch up to me
in her lessons! Indeed, indeed, I have done my best. I know I'm slow and stupid in many
ways; but God has given me one talent, and, now I know that, I don't mind. Nurse said I
had a real talent for nursing, so I mean to be a nurse when I grow up. Mavis will be a
great singer, I expect, but I shall be quite content to be a nurse."
Mrs. John made no response, but she pressed a warm kiss on Rose's lips, and her little
daughter saw she was pleased, and added ingenuously—
"I asked God to make you understand I'd done my best, and He has."
CHAPTER XI
HAPPY DAYS
IT was a beautiful afternoon in May. The lilac and laburnum trees were in full bloom in the
Mill House garden. And fritillaries—snakes' heads, as some people call them—were plentiful
in the meadows surrounding W—, lifting their purple and white speckled heads above the
buttercups and daisies in the fresh-springing green grass.
"I think they are such funny flowers," said Mavis, who with Rose, had been for a walk by
the towpath towards Oxford, along which they were now returning. She looked at the big
bunch of fritillaries she had gathered, as she spoke. "And though they are really like
snakes' heads, I call them very pretty," she added.
"Yes," agreed Rose. "Look, Mavis, there's Mr. Moseley in front of us. He's been sending Max
into the water. I expect we shall catch up to him."
"And then I shall be able to tell him my news!" Mavis cried delightedly. "Oh, Rosie, I don't
think I was ever so happy in my life before as I am to-day!"
A few minutes later, the two little girls had overtaken the Vicar. And, after they had
exchanged greetings with him, Mavis told him her news, which she had only heard that
morning, that her mother and Miss Dawson were returning to England, and were expected
to arrive before midsummer.
"No wonder you look so radiant," he said, kindly.
Then, as Rose ran on ahead with Max, who was inciting her to throw something for him to
fetch out of the river, he continued: "I remember so well the day I made your
acquaintance, my dear. You were in sore trouble, and you told me you did not think you
could be happy anywhere without your mother. Do you recollect that?"
"Oh yes," Mavis replied. "And you said if there were no partings there would be no happy
meetings, and that we must trust those we love to our Father in heaven. And you asked
me my name, and, when I had told it, you said I ought to be as happy as a bird. I felt
much better after that talk with you, and I have been very happy at the Mill House—much
happier lately, too. I don't know how it is, but Aunt Lizzie and I get on much better now."
"You have grown to understand each other?" suggested the Vicar.
"Yes—since her illness," Mavis replied.
The Vicar was silent. He had visited Mrs. John during her sickness, and knew how very
near she had been to death's door. And he thought very likely her experience of weakness
and dependence upon others had softened her, and taught her much which she had failed
to learn during her years of health and strength.
"Mother says Miss Dawson is quite well now," Mavis proceeded. "I am looking forward to
meeting her again; I do wonder when that will be!"
She glanced at her companion as she spoke, and saw he was looking grave and, she
thought, a little sad.
"Is anything amiss, Mr. Moseley?" she asked, impulsively.
"No, my dear," he replied. "I was merely thinking of two delicate young girls who were
very dear to me. They died many years ago; but their lives might have been saved, if they
could have had a long sea voyage and a few months' sojourn in a warmer climate.
However, that was not to be."
"They did not go?"
"No. Their father was a poor man, with no rich friends to help him, and so—they died."
"Oh, how very sad!" exclaimed Mavis, with quick comprehension. "A trip to Australia and
back costs a lot of money, I know. Oh, Mr. Moseley, how dreadful to see any one die for
want of money, when some people have so much! How hard it must be! Didn't their poor
father almost break his heart with grief? I should think he never could have been happy
again."
"You are wrong, my dear. He is an old man now, with few earthly ties, but he is happy.
Wife and children are gone, but he knows they are safe with God, and he looks forward to
meeting them again when his life's work is over."
He changed the conversation then. But Mavis knew he had been speaking of himself, and
that the young girls he had mentioned had been his own children, and her heart was too
full of sympathy for words. Silently, she walked along by his side, till they overtook Rose.
When Max created a diversion by coming close to her and shaking the water from his
shaggy coat, thus treating her to an unexpected shower-bath.
"Oh, Max, you need not have done that!" cried Rose, laughing merrily, whilst the Vicar
admonished his favourite too.
But Max was far too excited to heed reproof. He kept Rose employed in flinging sticks and
stones for him to fetch, until the back entrance to the mill was reached, where the little
girls said good-bye to the Vicar, and the dog followed his master home.
The next few weeks dragged somewhat for Mavis. But she went about with a radiant light
in her eyes and joy in her heart. Would her mother come to her immediately on landing?
she wondered. Oh, she would come as soon as she possibly could, of that she was sure.
"I expect she wants me just as badly as I want her," she reflected, "for we have been
parted for nine months, and that's a long, long time—though, of course, it might have
been longer still."
So the May days slipped by, and it was mid-June when, one afternoon, on returning from
school, the little girls were met at the front door by Mrs. John, who looked at Mavis with
the kindest of smiles on her face.
"You have heard from mother!" cried Mavis, before her aunt had time to speak. "Has the
vessel arrived? Have you had a telegram or a letter?"
"Neither," Mrs. John answered; "but the vessel has arrived, and there's some one in the
parlour waiting for you, Mavis. Go to her, my dear."
Mavis needed no second bidding. She darted across the hall and rushed into the parlour,
where, the next moment, she found herself in her mother's arms, and clasped to her
mother's breast.
"Mother—mother, at last—at last!" was all she could say.
"Yes, at last, my darling," responded the dearly loved voice.
Then they kissed each other again and again, and Mavis saw that her mother was looking
remarkably well. And Mrs. Grey remarked that her little daughter had grown, and was the
plumper and rosier for her sojourn in the country. It was a long while before Mavis could
think of any one but themselves. But at last, she inquired for Miss Dawson, and heard that
her mother had left her in her own home in London that morning.
"I expect she's glad to be back again, isn't she, mother?" Mavis asked.
"Very glad, dear. You can imagine the joyful meeting between her and her father. I shall
never forget the thankfulness of his face when he saw how bright and well she was
looking. Poor man, I believe he had made up his mind that he would never see her again.
She does not require a nurse now, but I have promised to stay with her for a few months
longer, and during that time, Mavis, I want you to remain at the Mill House. Shall you
mind?"
"No," Mavis answered, truthfully. "But you are not going right back to London, mother, are
you?" she asked, looking somewhat dismayed.
"No, dear. I have arranged to stay a few days with you."

What a happy few days those were to Mavis! She was allowed a holiday from school, and
showed her mother her favourite walks, and spent a long afternoon with her in Oxford,
where they visited T— College and the haunts her father had loved. And oh how Mavis
talked! There seemed to be no end to all she had to tell about the household at the Mill
House, and the Vicar, and Richard Butt and his wife and baby, and kind Mrs. Long, to all of
which her mother listened with the greatest interest and attention.
"Why, how many friends you have made!" Mrs. Grey said, on one occasion when Mavis had
been mentioning some of her schoolfellows. "You will be sorry to have to say good-bye to
them; but I do not know when that will be, for I have not decided upon my future plans. I
hope we shall never be parted for such a long time again."
"Indeed I hope not," Mavis answered, fervently. "Shall we go back to live at Miss
Tompkins'?" she inquired.
"I don't know, dear," was the reply. "Perhaps we may—for a time."
Every one at the Mill House was very sorry when Mrs. Grey left and returned to town. Her
former visit had naturally been overshadowed by the prospect of separation from her little
daughter. But this had indeed been a visit of unalloyed happiness, with no cloud of
impending sorrow to mar its joy.
After her mother's departure, Mavis went back to school with a very contented heart, and
in another month came the summer holidays. Her feelings were very mixed when she
learnt that it had been arranged for her to stay at W— until the end of another term, for
Mr. Dawson had earnestly requested Mrs. Grey to remain with his daughter till Christmas,
and she had consented to do so. And she expressed her sentiments to her aunt in the
following words—
"I'm glad, and I'm sorry, Aunt Lizzie. Glad, because I can't bear the thought of saying
good-bye to you all, and sorry, because I do want mother so much sometimes. Still,
London's quite near; it isn't as though mother was at the other end of the world, and time
passes so quickly. Christmas will soon be here."
* * * * *
"I feel as though I must be dreaming," said Mavis, "but I suppose it's really, really true. I
can hardly believe it."
It was Christmas Eve, and a few days before the little girl had been brought up to town by
her uncle, who had delivered her to her mother's care. To her surprise, however, she had
not been taken to Miss Tompkins' dingy lodging-house, but to Mr. Dawson's house in
Camden Square, where she had received a hearty welcome from Mr. Dawson and his
daughter.
She was with her mother and Miss Dawson now, in the pretty sitting-room where, fifteen
months previously, she had made the latter's acquaintance. But there was nothing of the
invalid about Miss Dawson to-day; she looked in good health and spirits, and laughed
heartily at the sight of Mavis' bewildered countenance.
"What is it you can hardly believe, eh?" asked Mr. Dawson, as he entered the room.
"I have been telling her that you mean to build and endow a convalescent home in the
country for girls, as a thanks-offering to God for my recovery, father," Miss Dawson said,
answering for Mavis, "and that her mother is to be the matron, and she can scarcely credit
it. Still, I think she approves of our plan."
"Oh yes, yes!" cried Mavis. "It's just what I should wish to do if I were you," she proceeded
frankly, looking at Mr. Dawson with approval in her glance, and then turning her soft hazel
eyes meaningly upon his daughter, "and you couldn't have a better matron than mother—"
"Mavis! My dear!" interrupted Mrs. Grey.
"It's quite true," declared Miss Dawson. Then she went on to explain to Mavis that the
home was to be within easy reach of London, and it was to be a home of rest for sick
working-girls, where they would have good nursing.
"I think it's a beautiful plan," said Mavis, earnestly. She realized that it meant permanent
work for her mother, too; and turning to her she inquired, "Shall I be able to live with you,
mother?"
"Yes, dear, I hope so," Mrs. Grey answered, with a reassuring smile.
"Oh yes, of course," said Miss Dawson.
And the little girl's heart beat with joy.
She remained silent for a while after that, listening to the conversation of her elders, and
meditating on what wonderful news this would be for them all at the Mill House. Then her
mind travelled to Mr. Moseley, and her face grew grave, as she thought of those two
delicate girls so dear to him, who had faded and died. But it brightened, as she reflected
how nice it must be to be rich, like Mr. Dawson, to be able to help those not so well off as
himself.
She was aroused from her reverie by Miss Dawson, who asked her to sing a carol to them,
and she willingly complied, singing the same she had sung at the village concert at W—
nearly a year before. Afterwards, she gave them an account of the concert, and expressed
the hope that she would be a great singer some day.
"Why, Mavis, I never knew such an idea had entered your head!" exclaimed her mother,
greatly surprised.
"It never did, mother, until Mr. Moseley told me I had a great gift, and that God expected
me to use it for the benefit of others," the little girl replied, seriously.
"Surely he was right!" said Miss Dawson.
And with that Mrs. Grey agreed.
Later in the evening, when Mavis went to the window and peeped out to see what the
weather was like, she felt an arm steal around her shoulders, and Miss Dawson asked—
"What of the night? Are we going to have a fine Christmas?"
"I believe we are," Mavis answered. "The sky is clear and the stars are very bright. Look!"
Miss Dawson did so, pressing her face close to the window-pane. Then she suddenly kissed
Mavis, and whispered—
"God bless you, dear, for all you've done for me. I carried the remembrance of your sweet
voice singing, 'The Lord is only my support,' to Australia and back again, and it cheered
and strengthened me more than you will ever know. I wish you a happy Christmas, little
song-bird, and many, many more in the years to come."
THE END
PRINTED BY
WILLIAM CLOWES AND SONS, LIMITED,
LONDON AND BECCLES.

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Growth Mechanisms and Sustainability:

Economic Analysis of the Steel Industry

ISBN 978-981-16-2485-8 ISBN 978-981-16-2486-5 (eBook)

This book is a compilation of the research conducted under the project

utilization of iron ore resources, international specialization, trade rela-

Finally, we would like to welcome any comments from researchers and

Toyama, Japan Jun Ma

Part I The Process of Growth

Part II The Mechanism of Growth

6 Technology Transfer Management in the Steel

Part III The Impact of the Growth of China’s Steel

Part IV Closing Remarks

Sungwoo Byun is an Associate Professor in the Faculty of Business

43(4):269–274. https://doi.org/10.3106/ms2018-0006 (2018), with

trade in value-added terms to provide a more accurate view of the under-

Both Food and Clean Energy Production,” Environments, 6 (6), 65–77

Evidence from Southwestern China,” Discussion Papers, 2015, Grad-

Fig. 3 Trend in total crude steel production in Japan, 1967–2019

Fig. 4 Top 10 iron ore-exporting countries (exports to China,

Fig. 7 Changes in Scale, Composition and Technique Effects

Table 3 Estimation results of the impact on the import price

The steel industry is one of the oldest traditional industries. It is also

1 Calculated by referring to the World Steel Association (2021).

© The Author(s), under exclusive license to Springer Nature 1

This book presents a broad investigation of various issues in East Asia’s

1 Issues Examined in This Book

postwar period. However, systematic empirical research on the inter-

2 This Book in Relation to the Literature

Li (2020) examines the principles of supply-side structural reform

3 Structure of This Book

has been accompanied by overproduction. This problem has increased

The Process of Growth

How Does State Policy Shape East Asia’s Steel

© The Author(s), under exclusive license to Springer Nature 11

European Union (28)

0 200 400 600 800 1,000 1,200

industry to achieve significant energy conservation and energy effi-

Fig. 2 Energy efficiency in steelmaking by country (2015) (Note This figure

thereby contributing the largest share (35%) of carbon emission reduc-

2 Key Policy Drivers of Productivity Growth

and Ki 2017). The Japanese government was also involved by estab-

GDP (constant 2010 US$, billion)

Total crude steel production in Japan GDP in Japan

between 1951 and 1965, which guided the postwar development of

focused on technology introduction and innovation for energy savings

2.2 Drivers of Productivity Growth in the Republic of Korea

Total production of crude steel (thousand metric tons)

GDP (constant 2010 US$, billion)

Total crude steel production in Republic

production capacity through 1983 (Chung and Sa 2017). During this

5 These policies focused on six sectors, including steel, petrochemicals, machinery,

The third phase is the forging ahead stage (1987–1997)—a period

2.3 Drivers of Productivity Growth in China

Total production of crude steel (thousand metric tons)

GDP (constant 2010 US$, billion)

Total crude steel production in China GDP in China

was released (Li 2020). Furthermore, the industrial policy of “grasping

shipbuilding (Li 2020). These two rounds of reforms led to a boom in

Name Release date

As previously mentioned in Sect. 2 (see Fig. 4), economic development

"Oh, do come in and listen to all my news!"

"Of course I will," agreed her cousin. "How is Aunt Margaret?"

"I am certain it would."