CHAPTER 8 - Japan Challenges America Again

Summary

Devastation and defeat, with the humiliation and hardships they involved, turned the Japanese against militarism, and the kind of regionalism that had gone with it. Their eyes moved again to the West, and particularly to America. Economic achievement presented itself as the only remaining way to catch up: the sort of effort that had gone into fighting the war was now devoted to rebuilding and developing the economy. The war in Korea provided the opportunity. It dramatised America's need for Japan's support in containing Communism, and sharply increased the demand for Japan's products. The economy began to grow fast, by exporting industrial products while restraining consumption at home. Dependence on America bred resentment, which led to riots in 1960, and the cancellation of a visit by President Eisenhower. But the Security Treaty was renewed, and came to be accepted as an essential part of the relationship with the United States. As Japanese goods penetrated the American market, protectionist pressures rose. The return of Okinawa failed to secure Japanese agreement to restrain textile exports, until President Nixon went to China, and then threatened to take unilateral action against Japan. The Japanese were harder hit by the Arab oil embargo. By exercising severe self-discipline they recovered quickly, and began to switch from heavy industries to those that were ‘knowledge-intensive’. By the 80s Japanese cars and computers were capturing American markets, and the United States' trade deficit with Japan was growing Public criticism of Japan was growing too: by 1989 it was seen as a bigger threat than the Soviet Union.

When the Peace Treaty restored Japan's formal independence in 1952, economic recovery was just getting under way The Dodge Mission had prepared the ground, by reducing inflation and increasing incentives, and the Korean War had stimulated demand, both internally and externally Production was growing, though it did not reach prewar levels until 1955 Even when American aid was no longer required, Japan continued to depend on the United States, for markets and for technology.