The Japanese approach to Korea’s industrialization went through three more or less distinct phases. During the first decade of the colonial rule, Japan sought to protect the Korean market as an outlet for Japanese manufactured goods. Rules and regulations were thus created to inhibit the start up of new factories in Korea by both Japanese and Korean entrepreneurs; the fact that annual growth rates in the manufacturing sector during this decade still average a respectable 7%, reflected the very low starting base. This growth had several components. First, there were new public sectors investments in power, railways and other infrastructure. The private sectors growth originated mainly in food processing industries-especially rice mills that were initiated by Japanese migrants with the hope of selling rice back to Japan. Exchanging Japanese manufactured goods for Korean rice and other primary products was, of course, the initial colonial policy. The Government-General thus helped the Japanese entrepreneurs start up these mills by providing both financial and infrastructural support. Finally, some of this early growth also involved the participation of Koreans. Small-scale manufacturing did not require the permission of the Government-General; the incomes of landowning Koreans had started to rise and not all of their demand could be met by the Japanese imports. Koreans set up small industries (often called household industries in Japanese colonial documents they employed 10-20 workers) in such areas as metals, dyeing, paper making, ceramics, rubber shoes, knitted cotton socks and soy sauce; and the number of small factories were increased.