America’s 1980s Japanese Lesson for Today’s China

"The irony for America is that to counter Japan’s manufacturing might, US corporations practically offshored their entire manufacturing base to developing countries with low labour costs, chief of which was China"

One of the few advantages of ageing is that what younger people think is new is actually just repeated.

China’s techno-nationalism is nothing new, though some pundits pretend that it is. Before the Chinese, Japan had its own version. And the response from the United States was the same: outright hostility. It’s well worth remembering that particularly recent history to appreciate what is happening today.

Much has been said about how the Chinese Communist Party had learned from the collapse of the Soviet Union and Russian communism to survive and prosper. In recent years, though, many within the party are likely to have been studying the rise of Japan in the 1980s and Washington’s successful response to nip it in the bud.

American leaders like to portray their growing rivalry with China as one of ideologies – democracy vs authoritarianism. That was how US Secretary of State Antony Blinken made it out to be in his preface to the contentious first meeting in Anchorage, Alaska, between the Chinese and the new American leadership under Joe Biden. It irked foreign policy chief Yang Jiechi so much he went into a 17-minute rebuttal.

At bottom, he suggests, ideology and values are just a fig leaf to conceal the US drive to maintain its global dominance, in trade, technology and geopolitics.

If we recall how the US treated Japan, a close ally, there is much to be said about Yang’s criticism of the US. Granted, the American response to China has been much more militaristic and therefore far more dangerous. However, we should not underestimate the underlying economic competition.

In his influential 1987 textbook, The Political Economy of International Relations, the late Princeton University political scientist Robert Gilpin offers an extensive account of Washington’s reactions to the rise of Japan’s market dominance in hi-tech manufacturing and consumer electronics, with their ever higher-value supply chains. Originally, the US had encouraged Japanese economic development and merging much of the two economies together during the first few post-war decades. There was the Nichibei economy, much like the Chimerica coined by economic historian Niall Ferguson in the 2000s to describe the interdependence of the Chinese and American economies.

If you substitute “China” for “Japan”, and “Chinese” for “Japanese”, Gilpin’s account holds up pretty well for what’s going on today.

He is worth quoting at length:

“Throughout most of the post-war era, Japan’s economic strategy of following the product cycle and moving up the value-added curve worked remarkably well. A complementary relationship existed between its trade strategy and the foreign investment strategy of the United States. In the 1980s, the closing of the technological gap between it and the United States, in conjunction with the other structural changes, began to alter this favourable situation and increasingly brought Japan into conflict with the other advanced economies. With intensified Japanese competition in ever higher levels of technology, Americans and Europeans became more and more concerned over what they perceived to be Japanese industrial ‘targeting,’ the ‘dumping’ of goods abroad, and the ‘pirating’ of American innovations. Many Americans and West Europeans saw the Japanese as aggressively challenging the Western powers for the dominant position in the new era of the international political economy.

“The economic challenge of ‘Japan Inc’ began to raise disturbing questions about ‘the Japanese problem’. Few Westerners or other peoples were willing to tolerate what the Japanese themselves had begun to regard as the natural state of affairs … Despite rhetoric in praise of multilateralism and the Pacific community, Japan only slowly opened its market to the manufactured exports of its Asian neighbours … Japan’s export and import policies have intensified the pressures on the American market and stimulated further protectionist responses.

“With a rapidly expanding older population, [the Japanese] must save and repress present consumption. They have viewed foreign complaints and pressures for greater liberalisation, expansionary economic policies, and harmonisation of domestic economic structures as directed at cherished Japanese values and motivated by the fact that Japan, playing by the rules of the liberal international system of the West, has been winning the global economic competition.

“Japanese strength arises from its high degree of domestic consensus … Japan has found a more effective way to reconcile the domestic demand for equity and security with the international need for efficiency and competitiveness than has the West.

“The economic differences between Japan and its economic partners are not merely economic disputes; they result from a cultural clash of societies with different national priorities, social values, and domestic structures.

“There is a constant danger that the economic conflict between Japan and its trading partners, especially the United States, could deteriorate into political conflict.”

We all know how Washington responded. First there was the Plaza Accord in September 1985 to re-evaluate the dollar-yen exchange rate against Japanese exporters. Two years later, the Reagan administration imposed 100 per cent tariffs on a long list of key Japanese goods, supposedly in retaliation for the Japanese cornering the semiconductors market.

In the late 1980s, when I was a college student in the US, Japan-bashing was in full swing, just like China-bashing is today – except it was against one of its closest allies. Michael Crichton’s 1992 novel Rising Sun, and the Hollywood movie of the same name made a year later starring Wesley Snipes and the late Sean Connery, were products of that widespread hysteria and paranoia about Japan’s impending takeover of America. The first Die Hard movie that made Bruce Willis a household name was a violent literal rendition of such common financial terms as “hostile takeover” and “poison pill” about Japanese economic might against a hapless America referenced frequently in the US business press.

Well, we all know what happened in the three decades thereafter in Japan. In those days, in the US, the threats were Toyota, Honda, Sega, Nintendo, Sony, Canon, Toshiba and JVC.

These days, it’s Huawei Technologies, ZTE, ByteDance with its TikTok app, Alibaba, Tencent, Xiaomi, Didi Chuxing, DJI and Baidu, and the big Chinese telecoms firms.

Last year, China accounted for more than 60 per cent of imports of electronics into the US. In 2019, more than 25 per cent of flat-screen TVs shipped to North America were made by TCL, the electronics giant based in Huizhou.

The industrial policies of Japan and China are also strikingly similar. That’s not an accident because the Chinese Communist Party had studied the “Japan miracle” and the rise of the so-called Asian Tiger economies, as well as liberalisation in the former Eastern communist bloc.

Both Beijing and Tokyo promoted home-grown industrial champions to establish market dominance against foreign competition. The Japanese keiretsu system, with the corporate and banking cartels closely tied to the government, was a lot like the state-sponsored capitalist system presided over by the Chinese Communist Party and state-owned enterprises.

Indeed, post-war democratic Japan has been essentially a one-party state, dominated by the Liberal Democratic Party, except for some periods after the 1990s.

The irony for America is that to counter Japan’s manufacturing might, US corporations practically offshored their entire manufacturing base to developing countries with low labour costs, chief of which was China.

Having learned from Japan, China began with low-value products, then moved quickly up the value chain, often by copying US technology. The year 2011 marked China as exceeding the US as the world’s largest manufacturing nation.

Having slain the Japanese dragon, America helped create the Chinese one. This is a familiar story with the US. After getting rid of one challenger, another one comes up, usually one it had helped prop up.

To cite just one regional example, the Islamic revolution in Iran overthrew the tyrannical Shah Washington supported for decades. To contain revolutionary Iran, it befriended Iraq under Saddam Hussein. But when Saddam got too ambitious, he had to be overthrown. That in turn encouraged Iran’s regional hegemonic ambitions, which have to be contained today.

It is not that the US has been going against John Quincy Adams’ famous advice of not going abroad to look for monsters to slay, but that it has been, time and again, actively creating monsters after its own shadows.

China’s case is, perhaps, only unique in that it combines both the economic and military aspects of this endless but futile quest by America for total security and dominance around the world.

Contrary to Mike Pompeo, the former US secretary of state, wiser heads in Washington would not want the Chinese Communist Party to actually collapse and cause chaos not only across Asia but the world economy. The best outcome for them would be a Japanese-style, decades-long stasis, which would put a stop to China’s global and regional ambitions.

Unfortunately, Japan had to play ball because its security depended on the US. China can defend itself.

Source: South China Morning Post

  1. mijj says

    God has decided the free ride is over for the USA.

  2. Ron says

    For F#$k Sakes, the Chinese are doing what EVERY country has done in the past which is to practice Industrial Capitalism. The USA did this back in the day when it separated from the British. Invest in Industry, Infrastructure, Education etc.. and you will prosper. This is NOT a Japanese secret. The problem with the USA is that the Private Bankers (Cartel) have taken over the kakistocracy (the US Government) and what they have been pushing is Financial Capitalism. Investment in stocks, bonds, real estate etc…everything that does not produce tangible goods or long lasting jobs. Financial Capitalism enriches the wealthy and leaves everyone else behind with low paying service jobs. Wake up people….there is an old saying “all wars are bankers wars”.

  3. Josep says

    I always saw this 1980s anti-Japanese sentiment in the USA as an example of Anglo-American envy – that is, they get butthurt when another country that isn’t white, let alone Anglo-Saxon, does better at them on a particular level. Even Disneyland was part of it:
    As Kevin Perjurer would have it, “That casual racism is scarier than any jump scare [he] could come up with.” (Okay, not really racist per se, but still has a colonialist holier-than-thou vibe to it.)

    For context, ripped from this page:

    [This commercial] was made in 1983. The US was in a recession while Japan had grown into an economic powerhouse. Americans were buying Japanese cars, Japanese motorcycles, Japanese high-tech goods. Just a couple of years before this video, Reagan started to impose tariffs and other restrictions on Japanese goods. If you look at the media of the time, they tend to reflect the considerable economic anxiety that Americans felt at the time. Die Hard takes place in LA, but the building belongs to a big Japanese corporation. Blade Runner is set in LA, but a kind of dystopian futuristic LA that has largely been usurped by Japanese megacorporations—a theme so strong that it’s become a staple in a lot of modern cyberpunk even though the underlying sentiment has long subsided. Japan was threatening to become the new economic leader, and it wounded America’s collective ego.

    So the guy had a chip on his shoulder about Japan not buying American cars because America had. And that little jab at them “ignoring the events of WWII” is typical “but we kicked their ass back in WWII” make-yourself-feel-better rhetoric.

    IIRC Britain did the same with Germany pre-WWI when its manufacturing power began to outshine that of the British Empire. And now China is the new boogeyman.

    Even after the 1990s recession (that may or may not have coincided with the end of said anti-Japanese sentiment) Japan still has paid maternity leave, universal healthcare, decent public transport, and 1- and 5-dollar coins (neither of which are remotely present in the oh-so-Exceptional USA), so I’m not sure why the USA had to stop there.

    1. Eddy says

      Absoluetly spot on. I lived thru this period, and I’ll never forget the day I bought a HONDA motorcycle. My country is a Colonial plant, and think everything British is the best. Unfortunately for the British, and that acclaimed British engineering know how, we always hear so much about, they were incapable of designing a motorcycle that did not leak oil. It took the Japanese to show them how to do it. In the meantime, people turned away in droves from the British crap that was being flogged at exhorbitant prices. On a HONDA, you could cover thousands of miles without any issues at all. No one with a British bike was game enough to go further than the city limits. B.T.W. exactly the same scenario came about with the American Harleys in the 80-90’s. Every club that had Harleys, would also ensure a car and trailer came along on their outings, because sure as God made them lil apples, there’d be a Harley that broke down. That’s just M/C’s, cars were not much better. Funny thing today, you can get your hands on a good CHINESE manufactured car. How Ironic is that ?? L.O.L. I also have a prediction to make. The next nation that the U.S. will turn to for cheap manufacturing of their products will be INDIA. IF, they toe the line and reject Russian military equipment.

  4. Josep says

    Over a year ago this site (back when it was called Checkpoint Asia) ran an article on the bombing of Hiroshima and Nagasaki being part and parcel of the USA’s race war against Japan.

    Japan had been seen as a problem by the Western elites ever since its victory over Russia in 1905 catapulted it on to the world stage. Japan had emerged as a major capitalist power, but was never quite one of the club; it was not, in short, a white man. The notion of racial supremacy and the ‘White Man’s burden’ lay at the heart of the ideology and self-image of the Western imperialists. An Asian nation could not be allowed to sit freely at the top table of world affairs.

    The racial double standard in imperial politics was clearly demonstrated back at the Versailles conference which followed the First World War in 1919. While the Americans and the British affirmed their commitment to the new movements for national self-determination in Europe, they rebutted Japan’s attempt to include a clause on racial equality in the covenant of the new League of Nations (forerunner of the UN). As one account puts it, the rejected Japanese amendment was ‘palpably a challenge to the theory of the superiority of the white race on which rested so many of Great Britain’s imperial pretensions’.

    I don’t know if the 1980s Japan-bashing mentioned above had any racial aspect, but it does seem rather familiar.

    1. Eddy says

      As an Australian, living and growing up in Australia, I can say the racist attitude from Australians to the Japanese was always prevelant. In most cases, it was always excused as acceptable because they Bombed us during WW 2. The LIE, that went around during that period, that Japan was going to INVADE Australia, is still believed and accepted as gospel today, despite having been proven to be a LIE, impractical in the REAL World.

  5. Eddy says

    Good article, but I have serious reservations regarding the claim “That in turn encouraged Iran’s regional hegemonic ambitions, which have to be contained today.” Exactly what regional hegemonic ambitions are you talking about? I’m unawares of any actions Iran has taken that could be interpreted as you claim. Self defence, against outside aggression is not hegemonic ambitions in any language.

  6. Tahau Taua says

    Ever wondered why Japan was never a leader of computer technology ahead of Microsoft and Apple? As the worlds leader in electronics, it was a no-brainer, that Japan would also dominate computer technology. For that reason, the US made sure that Japan was shut out, by threatening massive import tariffs as well as, making the necessary raw materials needed, unavailable.

    1. Josep says

      It’s rather unfortunate especially at a time when Microsoft was (convicted of) abusing its monopoly position. It would’ve been interesting to see what Japanese computer systems would have competed, or whether they would have outlived Commodore, Atari and/or Acorn – anything that can offer a third option between Microsoft and Apple. Then again there’s also Microsoft’s anti-competitive behavior.

      Interestingly these tarrifs didn’t stop Japan from dominating at the video game home console market – case in point, the success of Nintendo’s NES and a particular Italian plumber managed to reverse the effects of the Video Game Crash of ’83 where Atari failed to deliver, and it would not be until 2001 when an American company (turned out to be Microsoft, speaking of which) would develop a console that could successfully compete with Sony and Nintendo (both Japanese), last the whole generation, and spawn successive generations.
      I can only assume at this point that during the 1980s video game home consoles were not as big of a trend as they are today, or as much as computers were during the same time frame. The next person’s guess is as good as mine.

  7. yuri says

    in anglophone nations–the most individualistic societies where there is no individuality, domestic consensus is impossible….it was Tocqueville that first observed that individualism produces a self-doubting, conformist, antagonistic and anxious peoples—amerikans the ideal type

  8. Jerry Hood says

    Pokiaĺ nebude ” veľký USAtan” a USrael porobený,na svete nebude pokoj a spolupráca narodov v mieri! No koniec USAtana sa blíži! Preto čoraz viac kope! A hystoria nás poúča: Najprv tam žili čierny Olmékovia…Po ich decimácii prišli kolonisti z Indie,ako Červený Indiáni…Po ich decimácii prišli biely,Európsky kolonisti…A Kódex Zkuche-Nuttal,strana 36,jasne poukazuje na odchod a decimaciu bielych kolonistov v Severnej Amerikr,ktorých nahradia Žltý kolonisti z Ďalekého Východu po roku 2033 až 2074!!!

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