The was an industrial conglomerate, or zaibatsu

Zaibatsu

is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...

, in the Japanese

Empire of Japan

The Empire of Japan is the name of the state of Japan that existed from the Meiji Restoration on 3 January 1868 to the enactment of the post-World War II Constitution of...

 controlled Empire of Manchukuo

Manchukuo

Manchukuo or Manshū-koku was a puppet state in Manchuria and eastern Inner Mongolia, governed under a form of constitutional monarchy. The region was the historical homeland of the Manchus, who founded the Qing Empire in China...

, established at the instigation of the Imperial Japanese Army

Imperial Japanese Army

-Foundation:During the Meiji Restoration, the military forces loyal to the Emperor were samurai drawn primarily from the loyalist feudal domains of Satsuma and Chōshū...

 to further in industrialization of Manchukuo, and in particular, to make it self-sufficient in strategic heavy industries

Heavy industry

Heavy industry does not have a single fixed meaning as compared to light industry. It can mean production of products which are either heavy in weight or in the processes leading to their production. In general, it is a popular term used within the name of many Japanese and Korean firms, meaning...

.

History

Following on the economic success of the South Manchurian Railway Company, and its various subsidiaries, such as the Showa Steel Works

Showa Steel Works

The was a Japanese government-sponsored steel mill that was one of the showpieces of the industrialization program for Manchukuo in the late 1930s....

, ideological and economic planners from the Kwantung Army developed a comprehensive plan for the future economic and industrial development of Manchukuo per a state socialist model with a command economy. Prominent Japanese entrepreneur and technocrat, Yoshisuke Aikawa

Yoshisuke Aikawa

-External links:*...

, the founder of the Nissan zaibatsu was invited to Manchukuo and asked to establish the Manchukuo Industrial Development Company, a joint venture

Joint venture

A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...

 owned 50% by Nissan and 50% by the Manchukuo government, which would oversee the central plan.

The original plan under Naoki Hoshino

Naoki Hoshino

was a bureaucrat and politician who served in the Taishō and early Shōwa period Japanese government, and as an official in the Empire of Manchukuo.-Biography:Hoshino was born in Yokohama, where his father was involved in the textile industry...

 and other Army planners envisioned a syndicalist economy, with the military allocating monopolies of one firm per industry. From 1932, the Japanese military had created 26 new companies, ranging from automobiles, aircraft, oil refining, shipping, etc.

Aikawa countered that this policy was unrealistic given the undeveloped state of Manchukuo's resources and industrial infrastructure, and persuaded the military leaders that there should be a single state-controlled entity to manage all of resource development and heavy industry. Aikawa argued that the automotive industry

Automotive industry

The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....

 and aircraft industry

Aircraft industry

The aircraft industry is the industry supporting aviation by building aircraft and manufacturing aircraft parts for their maintenance. This includes aircraft and parts used for civil aviation and military aviation. Most production is done pursuant to type certificates and Defense Standards issued...

 both required a large number of subcontractors, few of whom where present in Manchukuo. To develop these strategic industries, would be necessary to develop all related machinery industries simultaneously.

In October 1937, Aikawa was given his way, and the Manshū Jukōgyō Kaihatsu Yoko (Manchurian Heavy Industrial Development Corporation) was established under the aegis of Nissan, which also moved its headquarters to Hsinking, Manchukuo. Aikawa was guaranteed loans from the Industrial Bank of Japan

Industrial Bank of Japan

The , based in Tokyo, Japan, was one of the largest banks in the world during the latter half of the 20th century.It combined with Dai-Ichi Kangyo Bank and Fuji Bank in 2002 to form Mizuho Financial Group.- History :...

, Bank of Japan

Bank of Japan

is the central bank of Japan. The Bank is often called for short. It has its headquarters in Chuo, Tokyo.-History:Like most modern Japanese institutions, the Bank of Japan was founded after the Meiji Restoration...

 using the natural resources

Natural Resources

Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...

 of Manchukuo as collateral

Collateral (finance)

In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.The collateral serves as protection for a lender against a borrower's default - that is, any borrower failing to pay the principal and interest under the terms of a loan obligation...

, and was granted exemption from dual taxation. The South Manchurian Railway Company, Showa Steel Company and other major industrial concerns in Manchukuo were tied into the new company through cross-holding of shares.

In its initial phases, the new conglomerate was a tremendous success, pulling investment into Manchukuo at a tremendous rate. New industries were created along the transportation routes established by the South Manchurian Railway, and the industrial output of Manchukuo began to outstrip Japan in certain sectors by the end of the first Five Year Plan. However, Aikawa faced numerous difficulties partly due to issues with his politics (which were often at odds with the Kwantung Army leadership), and partly due to interference in the operations of Mangyō by members of the Manchukuo civil government. Aikawa resigned in 1942, and moved back to Japan. He was replaced by Tatsunosuke Takasaki; however, with the growing demands of the military due to World War II

World War II

World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

 and the ongoing quagmire for the Japanese military in China, Mangyō faced severe problems in raw materials, labor, and the subordination of its production into military requirements.

Mangyō was dissolved with the destruction of Manchukuo by the Soviet

Soviet Union

The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

 Red Army

Red Army

The Workers' and Peasants' Red Army started out as the Soviet Union's revolutionary communist combat groups during the Russian Civil War of 1918-1922. It grew into the national army of the Soviet Union. By the 1930s the Red Army was among the largest armies in history.The "Red Army" name refers to...

 in the invasion of Manchuria at the end of World War II.