A142 Yes. Following economic reforms and its adoption of an open-door policy, China became the world's factory and Japanese companies, one by one, entered the Chinese market, recognizing the limited merit in manufacturing products at domestic factories where wages were high. Companies that had continued to support the lifetime employment system started to reduce hiring to cut costs. This caused the ratio of job openings to applicants to decline, making it difficult for university graduates to find work at the companies of their choice. This, in turn, created an employment ice age. Deflation, caused by an increase in low-priced products imported from China and other countries, together with decreased domestic demand, become an acute problem.

This caused companies that faced increasing deterioration in their financial performance to introduce early retirement programs and voluntary redundancy schemes, enabling them to abandon their support for surplus staff.

In 1997, major banks and stockbrokerages began to fail and the sense of crisis grew among companies. This led to an increase in the number of companies that introduced results- and merit-based systems to appraise staff. The lifetime employment and seniority systems started to crumble, and many people lost their jobs before reaching retirement age. The sense of loyalty to companies declined. Many young people began to think it was better

Japan's low unemployment to take a chance, by changing companies-in order to work for an enterprise at which one's abilities could be put to good use-and aiming for higher wages, rather than to work at the same company for a long time.