Guest Post by Oliver Lough: Asia’s Britain, Asia’s Canada…Asia’s Brussels?

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The Alien takes office.jpg
“The Japanese,” writes Masaru Tamamoto, “are a people who endlessly and fruitly ask who they are.”
If this is the case, then the dramatic re-shaping of their political landscape has provided the Japanese (and everybody else) a rich new opportunity to indulge in their national pastime.
The country’s new prime minister Yokio Hatoyama (a.k.a. “the alien“) and his Democratic Party of Japan (DPJ) elbowed their way past the country’s half-century old political status-quo to seize power with an overwhelming mandate in last month’s election.
With America’s political and economic influence on the wane, China on the rise, and the global economic system still in a state of tentative rehab, the new administration finds itself presented with an intriguing opportunity to re-define (or at least, restate) its regional and international role.
For virtually its entire post-war history, Japan has been a paragon of what would now be termed “responsible global stakeholdership,” albeit one nestled securely under the wing of American protection. Anti-war, anti-proliferation, pro-market, the country threw its weight firmly behind developing a system of global norms and institutions at a time when most countries were more busy squaring off on opposite sides of the iron curtain.
But at a time when the importance of a truly internationalized global order is more clear than ever, Japan’s role as its main trailblazer is looking a little wobbly. Junichiro Koizumi’s decision to support America’s 2003 invasion of Iraq without a UN mandate marked the start of a gradual shuffle in the direction of becoming a more unilateral, interest driven, “normal” country. The Bush administration talked hopefully of turning the country into “Asia’s Britain,” while at the fringes of domestic politics, a long-dormant brand of chauvinist nationalism began to carve a niche for itself once more.
Unfortunately, assertiveness abroad has been matched with apathy back home. China’s rapid expansion has led some to suggest that the best the country can hope for is to retire gracefully as the region’s Canada. But years of indifferent and sometimes outright catastrophic economic performance have left many Japanese with much gloomier expectations; according to one recent survey, Japan’s business executives are the most pessimistic in the world when appraising their future prospects.
Although they have been criticized by some for being a little fuzzy round the edges, there is hope that the Hatoyama administration’s fresh set of policy offerings could go some way toward arresting this sense of drift. An ambitious program of expanding the country’s safety net should give domestic consumption the required kick in the pants, while a more integrationist approach in Asia is back in step with the fine Japanese tradition of institution-building, albeit in a new and more local guise.
It’s too early to say where all this will end up. Without anybody to fill its boots, U.S. military influence in the Pacific is likely to remain a deciding factor in regional geopolitics for some time to come. Still, the prospect of a regional free trade pact raised at this week’s meeting between China, Japan and Korea is an encouraging step. In an increasingly multipolar world, Japan could certainly do worse that end up as Asia’s Brussels.
Japan’s future international role will be the subject of an event at the New America Foundation tomorrow Monday, October 12 from 12:15pm – 1:45pm featuring David Shorr, Weston Konishi and Steve Clemons.
The speakers will discuss Japan in the context of Powers and Principles: International Leadership in a Shrinking World, a new book on global governance.
This event will stream live here at The Washington Note.
— Oliver Lough

Comments

5 comments on “Guest Post by Oliver Lough: Asia’s Britain, Asia’s Canada…Asia’s Brussels?

  1. Dan Kervick says:

    “The other flaw in my argument that I fully realize is that with Japan’s dwindling population, economic growth of any magnitude may prove increasingly difficult to achieve unless workers are imported which is something Japan has been loathe to do.”
    Yes, dwindling and aging, which is a challenge many of the world’s economies are facing. But I think we are all going to have to think harder about how to sustain prosperous and rewarding ways of life that aren’t so dependent on dynamic material growth, and that find innovative ways of employing the knowledge and skills of seniors in new markets in which they provide services to one another, and to everyone else.

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  2. WigWag says:

    I don’t disagree, Dan. I think China is on its way to becoming a superpower of sorts although I think it may take somewhat longer for China to achieve this status that some people think.
    My only point is that even with all the pessimism in Japan, China is not likely to become a wealthier nation than Japan (measured strictly by living standards of ordinary citizens) any time soon.
    The other flaw in my argument that I fully realize is that with Japan’s dwindling population, economic growth of any magnitude may prove increasingly difficult to achieve unless workers are imported which is something Japan has been loathe to do.
    Japan, like Germnay and China also has an export driven model of economic growth. That makes all of these nations particularly vulnerable to the world economy and economic decisions of other countries like the United States. It is my understanding that despite all its efforts, Japan has not succeeded in expanding domestic demand all that much; that’s why the government has been forced to incur one of the largest deficits and government debts in the world.
    It is entirely possible (perhaps likely) that China will have a much easier time expanding domestic demand which should give its economy a leg up over Japan’s.
    Overall, my instinct is that things are optimistic for China but not quite as optimistic as the prevailing wisdom assumes and things are somewhat bleak for Japan but not quite as bleak as some people, especially the Japanese businessmen Oliver Lough refers to, believe.

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  3. arthurdecco says:

    Geez, Dan! You’re smokin’ hot just now, aren’t ya?
    Been takin’ lots of vitamins and enzyme supplements, have ya?

    Reply

  4. Dan Kervick says:

    “In 2008, Japan’s per capita GDP was $34,116; during the same year, China’s per capita GDP was $5,970.”
    WigWag, I think being a superpower is more about overall GDP than GDP per capita. Qatar and Luxembourg have almost twice the GDP per capita of the US, but aren’t threatening to displace US power anywhere that I know of.
    But you are probably right about the leveling off of Chinese growth. I suspect there are hard limits on growth in every period based on the world’s current levels of technological advancement. There is only so much product you can squeeze from current resources, labor and productive technologies. When a country is still developing, it can follow a rapid growth strategy by planning much of their economy around the task of satisfying the established desires of the consumers of wealthier countries. But once it hits the big time itself, has absorbed most of the technologies the world has to offer, and has raised the standard of living and expectations of its own workers, that growth is bound to level off. It’s future growth then depends more on marginal improvements in efficiency and wise assimilation of broad technological innovations from the entire world trading system, and their fortunes are yoked more tightly to that system and move ahead or back in parallel to it.
    Anyway, I’m interested in Hatoyama. I think he represents an emerging school of global middle class populism, one that is hostile to entrenched, stagnant and increasingly obsolete stakeholders in *both* the established corporate power structure *and* the established welfare state, and that aims to preserve and promote healthy communities, to resist the destructive and atomizing impacts of the extreme form of capitalism practiced on the US model, and to chart more sustainable, community-based and self-reliant forms of growth that preserve the cultural and physical environment that constitute people’s sense of home and place. I sense there is a new emerging global ethos afoot that rejects the paternal, statist form of welfarism that expects a knowing, technocratic elite to provide for the “rights” and “entitlements” of politically passive, dependent and under-educated masses; but which is also very vigorously egalitarian, and which understands and accepts the socialist analysis of the way in which the powerful and wealthy few wastefully and antisocially exploit the value produced by the many. The emerging ideal is a vibrant new democratic ideal of self-governing and self-reliant communities of genuine equals, bound together by a contract of mutual obligation, hard work and equal share in the reward.

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  5. WigWag says:

    “China’s rapid expansion has led some to suggest that the best the country can hope for is to retire gracefully as the region’s Canada. But years of indifferent and sometimes outright catastrophic economic performance have left many Japanese with much gloomier expectations; according to one recent survey, Japan’s business executives are the most pessimistic in the world when appraising their future prospects.” (Oliver Lough)
    The Japanese may be pessimistic, but I wouldn’t conclude too quickly that China will be overcoming Japan as the economic superpower of Asia any time soon.
    In 2008, Japan’s per capita GDP was $34,116; during the same year, China’s per capita GDP was $5,970.
    Assume for the moment that neither nation experiences population growth. If China is able to maintain the average GDP growth rate it has achieved for the past 5 years (9 percent)and Japan continues to experience anemic growth (let’s say it averages 2% anually)then China won’t catch up to Japan in terms of per capita GDP for 29 years; that’s 2038.
    But actually the news is worse for China. The liklihood that China will be able to maintain an average compound growth rate of 9 percent for almost 3 decades is vanishingly small; the liklihood that Japan’s growth will continue to be as anemic for the next three decades as it’s been for the past two decades also seems remote.
    The other problem China has in exceeding Japan in national wealth is that despite it’s one child policy and the fact that it now has one of the slower population growth rates in the world, China’s population is still going up (albeit slowly); at the current rate, China’s population will double in about 90 years. (According to the CIA World Factbook, China has an annual population growth rate of +0.63)
    Japan’s population is actually declining (-0.14 annually) Only Russia, Zimbabwe and a few former Soviet satellites and republics have populations declining as fast as Japan’s.
    The net result of all of this is that Japan is likely to remain a far wealthier nation than China far into the future; at least for the next 50-100 years.
    None of this means that China won’t become a military superpower, a diplomatic superpower or a somewhat wealthy nation. It just means that it will be along time before the average Chinese citizen is as wealthy as or has a lifestyle that approaches that of the average Japanese citizen.

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