Abstract: In the 1970s, in order to cope with the two oil crises, stagflation, and domestic economic downturn, Japan implemented the “external demandoriented” economic development strategy, which led to the fierce trade friction between Japan and the United States. Under the internal and external pressure, Japan has been committed to the reconstruction of the “domestic demandled” economic development strategy since the 1980s. It not only formulated the strategic goal of promoting the “domestic demandled” economic development, but also implemented a series of macroeconomic policies to expand domestic demand, that is, to optimize the industrial structure through technological innovation, improve the quality of economic growth and so on. However, Japan has not been able to turn to the “domestic demandoriented” economic development because of the lagging reform of the “domestic demandoriented” economic structure, the repeated mistakes of macroeconomic regulation and control policies, and the decline of international competitiveness. Obviously, Japans economic “structural reform paradox”has important reference significance for China to build a “double circulation” development pattern.

Key words: Japan, “domestic demand-oriented”, economic structure, reform paradox