Japan’s New Imperialism

Although the current worldwide depression was first felt in Japan along with the ‘oil shocks’ of the 1970s, to the outside world Japanese society remained immune from the worst of it. Indeed, Japan has been seen as an example of how to avoid the economic, social and political breakdown that a faltering capitalism has elsewhere left in its wake. One reason for this myth is that most scholars who write about Japan tend to present its institutions, particularly its factories, as models for the rest of the world. Many have shared the interests of Japanese capital, which has continually shifted the burden of the crisis onto less vocal workers at home, particularly part-time women, and abroad, mainly in Asia and Latin America. The focus of this book is on the latter displacement: Japan’s new imperialism in Southeast Asia.

The overall response of Japanese exporters to the rise of the yen was to cut costs rather than raise overseas prices. In fiscal 1986, declining raw material (particularly oil) prices enabled them to recover a full 60 per cent of lost revenue, and they got back about 50 per cent of similar revenue in fiscal 1987. Through a variety of other cost cutting measures, most of which were at the expense of their workers, they managed to limit the fall in the volume of their exports in 1986 to a mere 3.2 per cent. As far as the capitalist class was concerned, the endaka fukyō bottomed in the last quarter of fiscal 1986, and production was once again on the rise in 1987 (JEJ, 15 August 1987, p. 11; Keizai kikakuchō, 1987a–1988a, p. 442).

The movement abroad by Japanese capital is essentially the extension of a social relation, in which the Japanese bourgeoisie forms alliances with foreign ruling classes against both the Japanese and foreign working classes. There are thus two general types of assistance which the imperialist move provides: first, access to extra workers (or rent earning raw materials), who can be played off against one another and who help ensure that somewhere or other the conditions which Japanese capital has to offer are accepted; and secondly, the opportunity to bring the weight of the foreign ruling classes to bear on Japanese workers, as occurs when cheap imports are brought into Japan. If the movement is to an underdeveloped country, the neo-colonial ruling classes do not get the same benefits in return from the alliance, since while they do receive help from Japanese capital in their domestic struggles, they do not get an equal crack at Japanese workers. Only when two imperialist powers come together, such as Japan and the US, are the benefits of the alliance more reciprocal. However, there is often a lot of conflict before the spoils are evenly divided, although eventually both sides do normally get equal access to each other’s domain.

Although the details of Japanese capital’s entire current global strategy are beyond the scope of this study, I found it impossible to make sense of the new imperialism in Southeast Asia without grasping some of the finer points behind its strategy in the advanced capitalist countries of Europe and America. Here as elsewhere there are major regional and industrial concentrations: particular countries and groups of countries have specific roles to play in Japanese capital’s emerging worldwide strategy. Its broad outlines were revealed in a survey of 1702 non-financial quoted companies carried out in January 1987. Of those intending to invest in the US in the next three years, 53.2 per cent aimed at sales outlets, 50.2 per cent in the production of finished products, and 26 per cent in the production of components and intermediary goods. Investment plans in Asia had almost the opposite priorities: 57.9 per cent aimed at finished articles, 41.2 per cent components and intermediary goods and only 39.4 per cent sales outlets (Keizai kikakuchō, 1987b, p. 45).

We have seen how inter-imperialist rivalry has been giving way to cooperation as Japanese transnational tie-up with their American and European counterparts and shift high-tech production to the advanced countries. But this is producing new contradictions, since Japanese companies are confronting more technically backward capital in Asia not as equal partners — they already have those in Europe and America — but with offers to produce low value added products or simply to assemble components brought in from elsewhere.

When Japanese capital first responded to the rise of the yen by favouring the NICs as suppliers of low-cost components for its machinery industries, its interest in ASEAN seemed to fall together with declining commodity prices. By mid-1987, however, the situation had changed, as the higher yen combined with revalued currencies and rising wages in the NICs to force Japanese companies to look for cheaper labour. There was thus a shift from the NICs towards ASEAN, where totally different wages offered opportunities to recapture the competitive power Japanese capital had lost. DFI has thus been flowing into ASEAN in torrential proportion, and double-figure rates of growth are being anticipated.

Although Indonesia and the Philippines are in many ways very different, Japanese capital has increasingly thrown them into the same (sinking) boat. Both were primary targets of Japan’s raw material scramble in the 1970s, and Japanese capital’s primary interest in both remains in food production and raw materials. In spite of offering the lowest wages in ASEAN, neither Indonesia nor the Philippines has been able to rekindle much interest from Japan following their crises in the mid-1980s, resulting respectively from the slump in oil prices and the growing political-economic crisis that ended in the fall of Marcos. Both countries have thus been excluded from the surge of interest in ASEAN that started in 1987. Instead, Japanese capital has remained cautious, apparently still licking some of the wounds resulting from its excessive zeal in the 1970s and early 1980s, when it led rather than followed the example of the other powers.

To grasp the connection between Japan’s countless DFI projects throughout the world and the new imperialism requires looking at them through a different window, one with a global view. I have selected trade to serve this purpose, because the rise of the yen resulted from the problem first manifesting itself at this level, and because it is a window through which the realities of capitalism are normally the least visible. In the case of Japan’s new imperialism, however, this window is singularly illuminating.