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July 197
t
reparations from Japan at the end of
the second World War.
But economic reality must ultimately
win out. Japan's trade with Taiwan -
$950
mi llion a year - is nearing its
saturation point.
A market of
14,000,000
in a semi–
developed nation simply can't compare
with a potential market of perhaps one
bill ion humans, even though it might be
a lesser-developed, nearly self-sufficient
economy.
Japanese industry is very willing to
extend long-term loans at low interest.
It is wílling to make nearly anything
that China should ever desire. The
1,500
Japanese salesmen who fl.ocked to the
semi-annual Chinese trade fair in
Canton in Ap ril displayed their nation's
aggressive desire to sell anything and
everything.
But can China afford a large increase
in foreign trade? Aren't its foreign ex–
change holdings and gold reserves too
small, as many economists believe?
Not necessarily. Some economists
who have taken the time to study
Peking's trade picture since
1949
con–
tend that China's convertible reserves
are much greater than generally be–
lieved - or even admitted by the
Chinese themselves.
"Peking's reserves," notes inter–
national business expert S. J . Rundt,
"are probably larger than the
$4.85
bil–
lion of Canada; they surely exceed the
overall international monetary assets of
Belgiwn, Holland or Switzerland ;
and
they cordd be cloJe to Japan'J $6
biJJion."
This figure is admittedly small for a
nation China's size. West Germany,
for example, has reserves of about
$20,000,000,000.
But West Germany
is a much greater trading nation,
whereas China has historically followed
the policy of "autarchy" or national
self-sufficiency.
Making Peking's potential foreign
trade picture even rosier is the fact that
China has
no foreign debtJ
except for
current trade obligations. "Plainly:
If
Peking is dead-set on buying something
abroad,'' writes Mr. Rundt, "it can
definitely do so because it has the
means."
The potential for Japanese-Chinese
trade therefore
is
quite significant.
The
PLAIN TRUTH
Within a few years, the China market
could be worth
$7,000,000,000
oc
more
annually to Japan.
The Shifting Quadraogle
China, Japan, the Soviet Union and
the United States are all deeply in–
volved in a curiously shifting quad–
rangular situation. Much depends on
how much the historically independent
Chinese deem it necessary in thei r own
interest to open up increased markets to
Japaoese industry - without becoming
economically and politically dependent
on Tokyo.
•At the same time, Communist China's
leaders may decide to extend trade bait
to Tokyo in return for Japan's com–
mitment to overall peace and stability in
Asia - and to prevent any possible eco–
nomic liaison betwcen Japan and arch–
enemy Russia. The Soviets have dangled
before the Japanese the possibílity of
exploiting the enormous mineral wealth
buried beneath the permafrost vastness
of Siberia.
Another big key is the future of Japa–
nese exports to the United States. Given
a stagnation - or worse yet, a cutback
in sales because of U. S. protectionist
measures - the "vast China market" is
going
to
Ioom still larger in the eyes of
the Japanese.
To Japan it would either be a massive
sales drive in China - or forever forget
the goal of becoming the world's fore–
most economic superpowcr by the end
of the century.
Wars ... and Rumors of Wars
The scene is thus being set for a
potentially grave situation in the Asia–
Pací fic area.
Four of the biggest powers on earth
are jockeying for political and economic
advantage.
The complex equation is intensified
by historical and near-ncurotic fears
and deep-seated suspicions. The Chinese
fear "encirdement" by big powers.
Most specifically they deeply suspect So–
viet intentions.
Tbe Russians are anxious over the
possibility of closer Chincse-American
relations. Will Washington "side" with
China and tip the balance of power
against Moscow?
The Soviets also distrust Japanese
29
motives in striving for increased China
trade. The Russians stiU deeply rcsent
the loss of MandlUria to the Japanese
in
the war of
1905.
Russian political
writers conti nue to harp on the "Tanaka
Memorial" to the Japanese emperor in
1927.
Even though of doubtful authen–
ti city, the Tanaka Memorial never–
theless states: " In order to conquer
China we must just conquer Manchuria
and Mongolia. In order to conquer the
world we must begin by conquering
China."
Present-day Japanese, of course, de–
nounce the words of the memorial, a
left-over from the days of Japanese
geopoli tical militarism.
What do the Japanese fear? First,
cutback in trade with the United States
and inability to penetrate the China
market. Secondly they wonder what will
happen between their two neighboring
rivals each brandishing nuclear weapons.
Even a war between the two Red
giants with Japan on the sidelines
would not leave the Japanese isles unaf–
fected. Radioactive fallout would likely
rain more heavily on Japan than on
other noninvolved nations.
Then there is the United States at the
other side of the Pacific Basin. Futurc
U. S. policy is perhaps the most crucial
element in Asia's intemational poli tics.
Will America still use its formidable
política! leverage to solve smoldering
disputes in Asia by peaceful means?
Or does Washington's present "low
profile" image and slow retrenchment
from a world role signify abdication of
infiuence in Asia affairs?
Former American Ambassador to
Japan Edwin Reischauer frankly told
Japanese delegates to the Santa Barbara
conference:
"My great fear is the possible Japa–
nese reaction to America's suddenly
moving out of the Far East. Today most
Japancsc are overwhelmingly against
rearmament. But if the Seventh Fleet
were withdrawn, and with it all Amer·
ican intercst in that part of the world,
1
can forescc
a
Jlldtien
change
in Japa–
nese popular attitudes and an
immediate
demand
for
Japan's remilitarization."
Only time will tell. The corning years
will rcveal whcther the power strugglc
in the Pacific will degenerate into an
Asían nuclear holocaust. O