Contention For Hegemony

Japan, China, America

Mohan Guruswamy

Japan became Asia's first world power when it defeated Russia in the 1904-5 Russo-Japanese war. This was the first major war of the 20th century and the first time a non-European power defeated a major European nation.

The war, which began the previous year in 1904 with the Imperial Japanese Navy laying siege to Port Arthur and with the Japanese Navy destroying the Russian Pacific fleet in a series of surprise attacks, ended with the climactic naval battle in the Tsushima straits between Korea and Japan.

Russia's Baltic Fleet, which set sail from St Petersburg eight months earlier to relieve Port Arthur, consisted of eight battleships, including four new battleships of the Borodino class, as well as cruisers, destroyers and other auxiliaries for a total of 38 ships. The Japanese Combined Fleet, which was commanded by the now legendary Admiral Heihachiro Togo, had originally consisted of six battleships, was now down to four (two had been lost to mines), but still retained its cruisers, destroyers, and torpedo boats.

These two fleets met on May 27-28 and the Russian fleet was virtually annihilated, losing eight battleships, numerous smaller vessels, and more than 5,000 men, while the Japanese lost three torpedo boats and 116 men. Only three Russian vessels escaped to Vladivostok. After the Battle of Tsushima, the Japanese army occupied the entire chain of the Sakhalin Islands to force the Russians to sue for peace.

Japan, which had modernized and had economically developed at a frenetic pace since the Meiji Restoration in 1868 was a modernized industrial power by the end of the 19th century. After it burst into the world scenario in 1905 the Japanese rise continued unabated and it seized Korea and Manchuria from China to assure itself of raw materials to drive its economic and accompanying military rise.

The structure of Japanese society, with the Emperor raised to near mystical levels and with government heavily influenced by the military, in turn imbued with a sense of manifest destiny, is uncannily similar to what prevails in China now. Instead of an Emperor, China has the Communist Party to bind it together and to inspire it.

This internal organization, with power vested in the hands of a few, needs a hostile external environment to require its people to make ever greater sacrifices and strive to make the motherland a great nation that can impose its will on its immediate region. Japan's rise was challenged by the USA, then another rising power, and over the next forty years till the end of WW2 pitted the USA and Japan in all spheres of international relations.

Ironically enough, it was the USA that had forced Japan to end its isolation and catalyzed a desire to modernize and become powerful so that such a rude intrusion into its affairs never happened again. On July 8, 1853 a US fleet commanded by Commodore Mathew Perry sailed into the Edo Bay and with a single cannon shot across the bay forced Japan to trade with then world.

This broad pattern can be seen in the US-China engagement. It was the USA that brought China out of its isolation. It was the US's trade engagement with China that turned it into an economic power, which in turn has transformed it into a somewhat bellicose world power. The military thrives in societies driven by deep nationalism and a sense of avenging the indignities of the past. It has happened in Japan and it is now happening in China.

If Japan's rise was propelled by a desire to wipe off the indignity of Commodore Perry's rude intrusion, China's anger of the past ascribed by it mostly to Japan for its occupations of various parts of China and for imposing its militaristic perversities on the Chinese people.

It took a climactic ending of WW2 to force change upon Japan and make it a near pacifist country almost entirely dependent on the USA for its security. But as China's assertiveness rises and the USA is gradually withdrawing from its self assumed role as the world's policeman and with global interests, Japan is beginning to bear the brunt of this assertiveness. It is as if history is repeating itself.

Japan is hence seeking new friends and with common interests. India alone in Asia has the heft and size to balance Chinese power. Japan realizes that India and ASEAN together are far bigger than China in economic terms and this is where its future interests lie. And besides India's formidable military power makes it doubly more attractive as a friend.

In 2010 China's GDP went past Japan, but Japan's per capita GDP is ten times more than Japan's and China's population is ten times greater than Japan's. In 2013 India's PPP GDP also surpassed that of Japan, but like China, India too is many times poorer than Japan in per capita terms.

While Japan seems to have reached the limits of GDP growth with an aging population and a concomitant decrease in consumption, Japan needs to make investments abroad to ensure an income stream. Much like a retiree lives on pension fund incomes. It is thus actively seeking investments that will pay to sustain among the highest living standards in the world.

This is at the core of Japanese power—really soft power. Its need and ability to invest, and to provide technology to developing country giants like China and India. As China turns increasingly bellicose towards Japan and seems looking more to "correcting" the past, the Japanese need to look to the future to keep the cash coming in.

However, for two countries that so distrust each other, they sure do a lot of business together. Total trade between China and Japan was almost $334 billion in 2012. China imports more from Japan than any other country, and many of those goods are indispensable to China's economic advance—high-tech components to fuel its export machine and capital equipment for its expanding industries. Yet the tensions are inflicting an economic toll. Trade between the two has been on the decline since 2012. In the first half of 2013, total trade dropped by 10.8% to $147 billion.

According to statistics from the Japan External Trade Organization (JETRO), Japanese direct investment into China plunged by nearly 37% in the first nine months of 2013, to only $6.5 billion while investment in Southeast Asia's four major economies—Indonesia, Malaysia, Thailand and the Philippines—surged by over 120% to almost $7.9 billion. In 2012 Japanese FDI in China was $13.48 billion having surged from $934 million in 2000. Since 2000 the total Japanese FDI has been almost $ I trillion of which $122.4 billion was in China. During the same period the total Japanese FDI in India was about $20.2 billion with $2.8 billion in 2012-13.

Much as they would like to believe there is little altruism and more realism in Japan's turn towards India. Japan needs India's hunger for technology and investment to sustain an aging Japan, while the youthful and fast expanding Indian economy is in dire need of investment and technology to make it more productive and competitive. It's as if India and Japan are now made for each other.

As India shrugs off its bureaucratic lethargy Japan seems to be shedding its fear of India's raucous and seemingly chaotic internal processes. In the next three decades India will see the greatest expansion of the middle class the world has ever seen. Almost 180 million Indian families will be middle income by 2050. That is the mother lode that makes India most attractive. And Japan is no longer hedging its bets on India. And it is betting big on India.

Vol. 49, No.33, Feb 19 - 25, 2017