In postwar period, both Japan and France were characterized by statist intervention into the economy and severe ideological confrontation. These characteristics were drastically and commonly transformed in the last twenty years in their response to the Neo-liberal challenge in the context of intensified global economic competition and shift from the Fordist to the post-Fordist system. Up to the aid-eighties, the two nations showed strikingly parallel developments, cumulating in the adoption of neo-liberal programs by the Chirac (1986-88) and the Nakasone Cabinet (1982-1987). Then, the two diverged substantially, particularly in industrial relations. While the Japanese corporations have been reluctant to introduce neo-liberal prescriptions, the French have more faithfully followed them. In this research project, I will examine these developments in comparative perspective, and consider its implications for the future world order.