The Emergence of Japan as the Dominant Force - Case Study Example

The Possible Emergence of Japan as the Dominant Force in the East Introduction At the turn of the twentieth century world history entered a new phase when Japan emerged as a new power. Japan was the first of a series of non-western nations to emerge and challenge the position held by European powers in global affairs (Howard & Louis, 1998: 139). “World War I made Japan dominant in the Far East” (Olson et al, 1991: 23). World War I effectively removed most of the advanced industrialized nations from competition in world markets as well as in the Japanese market. This provided Japan with the opportunity to substitute domestically produced goods for imports, and helped to increase the export of manufactured goods, in spite of the comparative lack of advanced technology in its manufacturing sector. Consequently, there was an unprecedented boom in which all sectors of the economy benefited (Duus & Hall, 1988: 388). Other than factors related to the economy of Japan, its military build-up and acquisition of advanced technology have also played crucial roles in its development. This paper proposes to discuss the possible emergence of Japan as the dominant force in the East, by focusing on the economy, the armed forces, the acquiring of technology and other factors that have impacted the growth and development of the country. Discussion Through the twentieth century, Japan imported crucial raw material from the west; it depended on advanced western technology for developing its own; and during the post-World War I period the country depended on the United States for defense and military technology. Until the 1960s, Japan did not develop markets or close linkages in East and South East Asia. The Korean War with its demands accelerated Japan’s progress towards industrial strength and capabilities, thus crucially raising the country’s economy. In the postwar period, Japan has been a workshop of the world economy, was a compliant partner to the United States, and was shorn of its prewar military and political clout (Katzenstein & Shiraishi, 1997: 145, 152-153). The attempt by Japan to create an exclusive economic sphere in East Asia to counteract its dependency on the West was self-contradictory. Japan could not hope to become economically independent without the import of technology, critical raw materials especially oil and natural gas, and producer durables from the advanced western economies or their colonies. Japan lacked the naval strength to protect the autonomous economic sphere that it sought to create in East and South East Asia (Duus & Hall, 1988: 27). Japan’s Technology Acquisition One of the few areas in which Japan could seek autonomy during the postwar period was the technology regime. Since autonomy was off-limits, this “resource bereft island nation” (Katzenstein & Shiraishi, 1997: 156) was denied autonomy in the area of resources. Therefore, Japan followed the path of least resistance, painstakingly acquiring and managing technology from the 1950s to the present time. Thus the country achieved mixed results in its attempt to master advanced technology: gaining the number one position in a particular field, number two in another, and number three in a different domain. The United States did not share its best technologies with Japan, just like Japan kept its Asian neighbours dependent on itself for technological development. However, it is considered to be difficult for Japan to surge ahead of the United States in the area of technological development because of certain critical Japanese weaknesses such as “having a weak scientific tradition, few Nobel prizewinners, and significantly low levels of expenditure on research and development” when compared to the United States (Katzenstein & Shiraishi, 1997: 157). It is seen that Japan has done well in the “exposed” technological culture where technical acquisition and product innovation rather than discovery of new technologies is the key. Since multinational companies command increasingly large shares of production, manufacturing was being organized on a global scale. From the 1950s to the 1970s, the most important was the emergence of Japan as one of the leading manufacturing countries of the world, competing with the United States of America as a world economic superpower. Most adversely affected were countries of western Europe particularly the United Kingdom, and also the United States, whose manufacturing output declined on a global level. One of the reasons for this global shift is the concept of comparative advantage: areas will produce those items in which they have the greatest ratio advantage over other areas. In the 1960s and 1970s comparative advantage changed in the direction of Japan, and away from other advanced industrialized countries. Newly industrializing countries have some advantages over older industrialized nations, such as “lower production costs, lower labour costs, cheaper sites, lower business taxation rates, and more relaxed environmental controls” (Carr, 1997: 271). These lower costs combined with foreign capital investment and know-how particularly favoured the setting up and transfer of labour intensive industries to these countries, for example the assembly-line method of production in some consumer durable industries such as television manufacture. New technology leads to several new industries and products which form the cutting edge of the new industrial revolution. In these new industries, advanced countries have a comparative advantage over the newly industrializing countries. The rate of growth in these new industries is appreciably greater than in other manufacturing industries. Further, there is rapid expansion of services leading to services replacing manufacturing as the core function of the economy in advanced countries. (Carr, 1997: 271). After World War I, Japan strove to improve the export market and invested in commerce and trade. Those industries which were in the forefront of modern development like engineering, ship building, machine tools, and electrical engineering progressed at the greatest rate. Though there was a post-war slump and continuous economic setbacks throughout the 1920s, the “World War I boom firmly established the viability of modern industry in Japan” (Duus & Hall, 1988: 388). Japan’s Emergence as the Dominant East Asian Economic Power Although the bulk of output and employment in Japan were produced by the traditional sectors of agriculture and small business, by 1920 it was obvious that the economy’s future growth lay with the modern sector. The small modern industrial system interacted with the existing economy, maintaining a complementary rather than a competitive relationship. However, by World War I, the demands of the modern sector increasingly conflicted with the needs of the traditional sector which supplied most of the needs of the consumers. This resulted in the creation of a dual or differential economic system that included a wide range of technology, productivity, wages, scales of production, profit rates, management practices and forms of industrial organization. Also, there were inherent differences in the nature of the markets in which products were sold (Duus & Hall, 1988: 388). In the long term, the policy of encouraging the growth of modern industry made Japan the advanced industrialized country that it is today. However, government policies accorded greater significance to armaments, investment goods and exports, over goods for consumption, hence the living standards of most Japanese were kept lower than they would have been; and contributed to the social and political strains of the unstable 1930s, 1940s and later (Duus & Hall, 1988: 389). Because of the NAFTA (North American Free Trade Agreement), the United States which had been the traditional market for the most part of East Asia’s exports, switched to exports from Canada and Mexico. This gave rise to growing economic insecurity in East Asia, until substitute markets could be found for their manufactured goods. Concurrent with reduced access to the American market for the East Asian economies, there has been a comparative reduction in annual United States’ investment in East Asia. Throughout much of the Cold War, the United States’ investments in East Asia had been the chief source of hard currency and investment capital for the East Asian economies. By the 1970s, Japan had begun to assume America’s role as the dominant regional economic power as the primary source of new investment capital. In the 1980s the country became the main external source of industrialization in Indonesia, Thailand and Malaysia. Further, Japan has been a significant economic partner of South Korea, a chief source of Chinese investment capital, and its role in the Indochinese economies is likely to grow with increasing economic reforms in these countries (Ross, 1995: xv). Towards the end of the twentieth century, the expansion of Japan’s regional economic presence consequently gave the country greater influence over the security and foreign policy decisions of its neighbours. Attitudes towards Japan throughout the region varied from deep suspicion to warm reception. The manner in which Japan conducted its affairs, utilized its increasaed economic influence, and the reaction of Japan’s neighbours to its expanded regional authority were crucial factors that determined the post-Cold War political environment in East Asia. While the regional strategic order was becoming multipolar, East Asia was also becoming economically more complex with the phenomenal growth rate of the Chinese economy and high per-capita GNP figures achieved by South Korea, Taiwan and Singapore (Ross, 1995: xvi). The strategic and economic transitions taking place in East Asia had implications for constructive developments taking place, with China providing an expanding market and promoting the sustained growth of the local economies. Further, the development of South Korean, Taiwan and Singaporean capital for foreign investment may have indicated reduced regional dependence on Japanese direct foreign investment and development loans. Conversely, with regional dependence on the Chinese market, there could be anxiety over the corresponding expansion of Chinese political power. The distribution of economic power could weaken the economic authority necessary “to create a stable economic order based on region-wide compliance to common rules of behaviour” (Ross, 1995: xvi). That is, the possiblities for continued economic growth and for forging political alignments would become uncertain. Since 1945, Japan has successfully recreated its industrial structure twice, which is an unmatched feat by any other industrially advanced nation. Simultaneously, Japan has been governed by the same political party without interruption since 1955, which is a record that has also not been broken by any other major democracy in the world. Japan’s flexible industrial structure and inflexible political structure are integrated in adaptable public policies. Energy and public spending are good examples. These two issues posed serious challenges to Japan and other countries in the 1970s and 1980s. Through a number of deliberate policy choices in the 1970s, Japan successfully established a foundation for future economic growth without increasing energy consumption. Similarly, in the 1980s, Japan succeeded in radically stopping its debilitating public deficit (Mendl, 2004: 194). The emergence of Japan as a leading industrialized nation is explained through the concept of the “flying geese” hypothesis. The East Asian nations are visualized as following the leader Japan in a V-formation, and the increasing progress made by all the participating nations together is symbolized by the birds flying together in the same formation. Restructuring of the Japanese economy moved Japan towards more sophisticated activities and left markets for labour intensive products to East Asian newly industrializing economies (NIEs). This is a major factor for the success of the East Asian NIEs. For example, in the 1950s, Japan was a large exporter of textiles. “As real wages rose rapidly Japan increasingly lost its competitive advantage in textiles and other labour intensive products” (Chowdhury & Islam, 1993: 101). It restructured its manufacturing sector during the 1960s, relocating its labour intensive activities to Korea and Taiwan. Expansion of exports by the East Asian NIEs was obtained not by an increase in demand for these products in developed countries, but by their taking over markets both in developed and in other developing countries, to which Japan had exported earlier. Japan as an Asia-Pacific Power In the 1990s, the most important change in Japanese foreign policy was the increasing emphasis on the Asia-Pacific region for agreement on security matters, economic cooperation and promotion of mutual understanding. Diplomatic initiatives were taken to liberate Japan from the shackles of its historic imperialist past, and “establish the political foundations for a more significant regional role” (Mochizuki, 1995: 124). The new inclination towards Asia was considered to be due to several reasons: for instance, the problematic future of the United States – Japan relations for which East Asia served as a support. Bilateral relationship with the Asia-Pacific community was expected to provide relief to Japan from dependence on the United States, and also help to reduce America’s capacity to act unilaterally against Japanese interests. Further, with the end of the Cold War (1947-1989), there were changes in long-standing discrepancies in East Asian international relations. For example, there was normalization of relations of Seoul with Moscow and Beijing, Russia with China, and Hanoi with other Asian capitals as well as Tokyo and Washington to forge greater economic integration with the region. “This diplomatic fluidity is finally pushing Japan to emerge from its foreign policy conservatism and consider greater activities in East Asian affairs” (Mochizuki, 1994: 125). Further, Japan was compelled to look closely at Asia due to the positive economic trends. The creation of an integrated European market and the signing of the North American Free Trade Agreement (NAFTA), have fuelled the move towards economic cooperation in the Asia-Pacific region more forcefully, in order to discourage European and American exclusionary policies. Japanese direct investments in East Asia were more profitable due to lower labour costs, as compared to the United States, Canada and Western Europe. Also, with their rapid growth rates the nations of East Asia were the most promising partners for further Japanese economic expansion. Another reason for the move towards integrating with the Asia-Pacific region was Japan’s efforts towards new security cooperations. At the end of the Cold War, the regional security environment had become uncertain and possibly more threatening. Over the long term, formidable diplomatic and security challenges could crop up with the growth of Chinese power and the emergence of a reunited Korea. Military budgets and technological modernization of military forces could be stepped up by countries in the region, due to mutual distrust prevailing among them (Mochizuki, 1995: 126). With the passage of several decades since the end of the Pacific War, the Japanese were now less reluctant to acknowledge their cultural affinity with other East Asians. Other East Asian countries, although still suspicious about Japanese power were inspired by Japan’s economic miracle and were keen to follow Japan’s example. Being considered as a role-model gave Japan a greater sense of self-confidence about its ability to provide regional leadership. At the same time, Japan continued to maintain its bilateral alliance with the United States, and modified its foreign policy towards security initiatives. Japan grew increasingly influential in the region especially in the economic domain, while re-adjusting its previous policies to create an improved strategic environment (Mochizuki, 1995: 126). Japan in trying to prevent America from being protectionist or pursuing managed trade, would more likely push the United States towards reaching out to other countries in East Asia that considered liberal access to the U.S. market as a better option than limited access to the Japanese market. This was a distinct possibility as indicated by America by excluding Japan from being a possible partner in trans-Pacific free-trade agreements. This U.S.- Japanese conflict could overflow into the security aspect. Hence, forums like the Asia-Pacific Economic Cooperation (APEC) would be used to promote greater imports by Japan and the East Asian newly industrializing economies (NIEs) (Ross, 1995: 141). The Political-Military Dimension A unique combination of strength and fragility underlines Japanese national security. This contradictory combination is due to three factors: a geographic position that makes it extremely vulnerable to being cut off from foreign markets and supplies of crucial resources, high levels of sensitivity both domestically and internationally to any increases in Japanese military strength: based on historical events, and a “geostrategic environment that makes Japan highly dependent on the United States for security while at the same time encouraging the U.S. to avoid involvement in external security affairs” (Kim, 2003: 138). To maintain access to raw materials and world markets, Japan could develop its politcal-military capabilities and take up a greater security role in the Asian region and beyond. In the pre-1945 period, this was the precise strategy that Japan had employed. At that time, it confronted the outside world powerfully, builing a strong military and creating a vast empire in Asia. This method however resulted in failure, bringing Japan into conflict with much of the rest of the world and resulting in its devastating defeat in World War II. As a result, after 1945, Japanese leaders have tried to obtain access to outside markets by non-military methods such as diplomacy, trade and foreign aid. Japan has a history of imperial expansion between 1890 and 1945 that left bitter memories in most part of Asia especially in Korea which was under Japanese colonial rule for thirty five years, and in China where twenty million people are believed to have died due to the Japanese invasion beginning in 1937. This history has contributed to a common perception of Japan as an aggressive and militaristic society, that may revert to its previous ways. If Japan were to increase its military power significantly, China, South Korea and its other Asian neighbours “may well undertake a military build-up of their own, sparking a general arms race in the Asian Pacific region” (Kim, 2003: 140). During the Cold War period, the security arrangements in the Asia-Pacific region was quite stable, and provided a firm basis for Japanese security policy. The United States as part of its containment strategy formed a network of alliances across the Pacific, of which the security treaty with Japan was a vital part. “Since it was in America’s strategic interest to protect Japan against possible threats from continental east Asia, mainly the Soviet Union” (Mochizuki, 1995: 142), Japan could afford to have a comparatively relaxed attitude towards its security arrangements. Hence, Japan’s domestic debates about defence policy tended to focus on constitutional and ideological questions, with very little attention given to geopolitical factors. On the other hand, United States’ attempts to forge a security relationship with China against the Soviet Union was met with scepticism on the part of Japanese leaders. To counter the increased deployment of Soviet troops in East Asia, Japan modernized its military forces and promoted defence cooperation with the United States. Thus Japan gradually changed into an active ally of the United States (Mochizuki, 1995: 142). Since the Soviet threat and the Cold War provided the main geopolitical reasons for the United States – Japan alliance, the Soviet collapse and the end of the Cold War would impact Japan’s security policy. Though the end of the Soviet-American conflict removed the possibility of Japan becoming embroiled in a global military conflict; Japanese security was still in a difficult position. Though not directly threatening, the regional security environment was not completely safe. The United States wanted to concentrate on domestic economic renewal by reducing its military forces in East Asia as well as Western Europe. The moderate military retrenchment plan as outlined by the Pentagon was acceptable to Japan, the only concern was about the sustainability of the plan at a time when the U.S. was seeking to cut the budget deficit. Tokyo’s appeal to the United States to maintain sizable security arrangements would not be complied with by the U.S. because of Japan’s extensive trade surplus with America and its modest security burden (Mochizuki, 1995: 142). In the period of the Cold War, Japan created a highly sophisticated military estalishment, the Japan Self Defense Force (SDF) with 2,50,000 highly trained personnel armed with technologically advanced weapons systems. Historically explained domestic and international pressure about the SDF, resulted in Japan placing the SDF “under a highly restrictive system of safe-guards” (Kim, 2003: 140). This was to be a front line of defense, with expected security support to arrive from the United States. The security alliance with the U.S. was a mutually beneficial one, as Japan provided America with bases which were required for containing communism. Agencies to control and monitor the armed forces were created, and other limitations were placed. Japan also developed an extensive arms industry, in order to be completely self-reliant for arms supplies. The Japanese government quickly modernized its army by replacing its traditional weapons with modern ones; later the Japanese themselves manufactured them. The Japanese armed forces learned the modern techniques of war from the west, by mutual exchange programs. Japanese independence was safeguarded by modernization of the army, and the country was also enabled to invade neighbouring countries Korea and China. The Japanese successfully colonized Korea, Manchuria and Taiwan. While Japan became imperialistic, many of the Southeast Asian countries were western colonies. The Southeast Asian people had to accept western ideologies regardless of their personal feelings or domestic needs. Many Southeast Asian people such as the Thais did not accept western ideology and did not make use of it (Mendl, 2001: 156). During the first half of the twentieth century, the Japanese military position was similar to that of its Southeast Asian counterparts. While other parts of Southeast Asia lost their resources to the imperialists, Japan obtained natural resources from its colonies. The Japanese government sent labour forces to its colonies when unemployment was a problem in Japan, while simultaneously compelling Korean workers to Japan for cheap labour. The huge market in China that was highly influenced by the Japanese government was also taken advantage of by Japan. The political conditions being different between Japan and Southeast Asia prior to World War II is the chief reason for the different levels of economic development existing in the two regions today. Presently, though all Southeast Asian countries have been granted political independence, they are compelled to struggle very hard to achieve independence economically and culturally (Mendl, 2001: 156). Japan’s leading position in the east is the outcome of all the above factors. Conclusion This paper has highlighted the emergence of Japan as the dominant force in the east. It has been identified that several crucial factors such as the country’s maintenance of its armed forces, security strategies with the United States, the economic and trade build-up, and acquisition and development of advanced technology help Japan to evolve as the leading power in the east. From earlier times, Japan has been a significant force in the area, and the country further developed after World War I by enhancing its export potentials for the use of economically advanced nations. Also, strategic security and commercial alliances helped Japan to progress towards a powerful political status in the East Asia region. References Carr, M. 1997. New patterns, process and change in human geography. United Kingdom: Nelson Thornes. Chowdhury, A. & Islam, I. 1993. The newly industrializing economies of East Asia. London: Routledge. Duus, P. & Hall, J.W. 1988. The Cambridge history of Japan. United Kingdom: Cambridge University Press. Howard, M.E. & Louis, W.R. 1998. The Oxford history of the twentieth century. Oxford: Oxford University Press. Katzenstein, P.J. & Shiraishi, T. 1997. Network power: Japan and Asia. The United States of America: Cornell University Press. Kim, S.S. 2003. The international relations of northeast Asia. United Kingdom: Rowman & Littlefield. 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