Could the China-Japan tensions initiate an economic boom for Japan?



Just a couple of months back, the entire global media fraternity was talking about the next probable war between China and Japan over the issue of a small group of islands in the East China Sea. Just when people thought that the issue was cooling down, last month, a delegation of former US officials submitted a report to Hillary Clinton that the dispute could spin out of control and result into a military confrontation; add to that China’s recently declared intentions to deploy marine surveillance drones to track maritime activity around the cluster of islands from where the conflict originated. The entire issue is certainly far from over, with both the nations in no mood to step back.

There is, of course, nothing new in the conflict between Japan and China. Through centuries, these two Asian neighbours have been brutal to each other – politically, economically and militarily. The Japanese monarchy before World War II was notable for their imperialistic intentions – they invaded China in 1931 to mark the beginning of a violent, 14-year occupation of the land, finally retreating only after the World War II reversals in 1945. However, in the post-World War geopolitics, the foreign policy trajectory between the two nations has swapped its direction. Since the past few decades, Japan has sought to maintain a nice-guy image, while on the other hand, China has wanted to treat Japan slightingly. Japan’s cooperative and accommodative foreign policy acted as a silver bullet for its economy, which saw an unprecedented growth from 1950s till 1980s. That period saw Japan barging into the elite club of developed nations (the only Asian country to accomplish the feat then) and becoming a part of G-7, or the seven most industrialized states in the world. That’s a remarkable accomplishment, considering the fact that this was the same country that had literally been reduced to ruins in the Second World War and also the fact that none of its Asian counterparts could mirror Japan’s subsequent economic achievements. China, like Japan, started a new journey from 1949, when the Mao Tse Tung-led Communist Party of China overran the country and gained control on its governance. But unlike Japan, China, in the first three decades, emphasized largely on a military buildup. Amidst this journey of these two Asian giants, one thing represented permanency – that these two nations won’t walk hand in hand.

Interestingly, Japan’s ruling Liberal Democratic Party had promised before the 2009 election that Japan would be more muscular in its foreign policy and had hinted then on a shift from being a US-backed nation to being one with a more Far East integration, including with China. However, that didn’t happen. The recent happenings have in fact worsened the situation. The first, significant barrage came from the Japanese government in early September 2012, when they revealed their intentions to purchase three disputed islands in East China Sea – a move that led to their fragile relationship with China nose-diving in no time. China pledged to thwart Japan’s intentions, and in response, sent three fishery surveillance ships to the territorial waters near Senkaku, the group of islands in contention. In return, Japan adopted an aggressive foreign policy stance and announced that they would take the Chinese bull by the horn – by mid September, Japan had officially bought the islands.

This one issue over the group of islands has now been raising a fear that the machinery of foreign policy discourse may fail, leading to an all-out confrontation. A military confrontation between the second-largest and the third-largest economy can, of course, not only lead to massive disturbances in the region, but also destroy the current global power equation! An all-out war could destroy the economies of both the nations; not just that, the entire world would be a poorer place if by chance Japan and China fail in maintaining regional stability. Given the fact that both the countries have traversed through extended periods of sufferance in the last century which still haunts the souls of their citizens, it is important for them to pay heed to the destruction the probable military confrontation could bring.

China is talking of deploying drones and has never been a soft state. At the same time, Japan has always been a soft power, and they were quite content with such an image – because their economic glory was enough for them to brandish to the world. Japan’s post-World War II Constitution, in its Article 9, too promises never to maintain land, sea and air forces. Even though Article 9 has not been changed in principle, its interpretation has changed over the years! The overhauling of this contentious Article requires a two-third majority, which is becoming more and more probable. Some of the steps the current government has taken in this direction suggest the same. The government has eased a long-standing ban on weapons sale and has passed new laws permitting the launch of military space satellites. Further, Japan’s armed forces are more potent now in undertaking military exercises, which they frequently perform along with nations like the United States.

Despite the aggressive posturing by both the nations, one has to accept that an armed conflict between Japan and China has a remote possibility. What might in fact actually happen is that Japan’s assertion (and China’s equally aggressive response) can escalate an economic race in Asia. What could be in the pipeline might be a war of nations surely – but not a military war, rather an economic one. Japan’s aggressive intent, in all probability, is a figment of its two decades of economic stagnation and the eroded pride of its people. The robust manoeuvring of its foreign policy and the current sparring over the particular group of islands can bring back the spotlight on Japan; a clear message that Japan will not anymore step back and watch China overtaking it! Until a really immature step is taken by either nation, which might result into a real possibility of a war, a healthy competition between China and Japan should actually attract optimism instead of scepticism. Japan’s aggressive posturing and ongoing resilience should invite companies and investors to this nation and could eventually help in awakening the economic giant once again.

Thus, the economic race between these two powerhouses can shape up a rosy picture for the entire world. A booming Japanese economy can work wonders not only for the developing and emerging economies in Asia, but also for the entire world. It can portend Japanese FDI populating economies like ours, and even developed countries like America would experience the get-out-of-the-mess signals with its fourth-largest trading partner riding the crest. Even China could well be recipient of FDI largesse from Japan if the nation rises again. In other words, a renewed Japanese economy not only has the possibilities of increasing global economic and technological growth and competition, but could also open up new avenues of trade and commerce for the entire world. Of course, a non-consensus stage between China and Japan may lead to a full-blown war, but with mature economies around, war is something that is least likely to happen. And what is most likely to happen is the resurgence of the Land of the Rising Sun. And that is something the entire world awaits eagerly!.