BEIJING - The landslide victory on Sunday of the Democratic Party of Japan
(DPJ) over the Liberal Democratic Party (LDP) - which has ruled Japan almost
without interruption for the past six decades - is the latest signal of a
momentous transformation in Asia.
The past many decades, marked by Japan's political primacy and power in the
area, have really ended; and the more distant past, signified by China's
regional dominance, has returned.
In a way, history is repeating itself. Taro Aso, the LDP's outgoing premier,
who was crushingly defeated in Sunday's vote, is the great-great-grandson of
Toshimichi Okubo, one of the three men who led the Meiji Reformation in the
mid-1800s and who is widely regarded as a founding father of modern Japan. That
era has come to a close, and something else is about to start in Japan
and Asia - exactly a month before neighboring China proclaims a new beginning.
On October 1, Beijing celebrates the 60th anniversary of the founding of the
People's Republic of China. Sixty years is a celestial cycle in the Chinese
horoscope (12 signs per five elements), a fitting moment for President Hu
Jintao to sit at the Tiananmen rostrum and, as chairman Mao Zedong once
proclaimed that China had stood up, say that China is now walking, perhaps even
running.
For about 150 years, Japan could claim it was the best Asian student of Western
powers. It beat waning China in the 1880s, taking over Korea and Taiwan; it
crushed fading Russia in 1905, gaining a foothold in Manchuria; it chose the
right side in World War I, helping to expel the Germans from the Far East. All
these successes whet its appetite, went to its head, and made Japan think it
could push all the white men out of Asia, replace the Western colonies with its
own rule, and even conquer the once-mighty China.
It turned into a bad dream. Still, not even defeat in World War II managed to
stop the student, which set out to emulate and outperform its American teacher.
Japan was eventually stopped in the late 1980s, when America won on two fronts
- against Tokyo's technological and financial threats and against the Soviet
Union, which after seven decades crumbled.
It was a sudden halt for Japan, but at the time it seemed temporary. Japan
looked poised to come back in one way or another. In 1989, the Soviet Union
also seemed ready to turn a new leaf and begin again, when it let all the
Eastern European countries slip out of its grip and enter the West's fold.
China, conversely, with the Tiananmen crackdown in 1989, seemed to have turned
back the clock and appeared set to become once more the sick man of Asia.
Everything turned out differently. Twenty years later, the relative position of
these countries is totally different: In a year or two, China should become the
first economy of Asia in a century to overtake Japan's gross domestic product
(GDP).
In the meantime, Japan's decline has become more than simple statistics. The
social contract that guaranteed lifetime jobs, family values and security is
falling apart. Japanese papers report of elderly people who let themselves die
at home, without family or friends to take care of them and without a pension
to live on. Other elderly people resort to petty theft to increase their meager
purchasing power.
Young people aren't faring much better. Many have abandoned hopes for one of
the few safe sources of lifetime employment, and they practice job-hopping as
if it were a hobby. Unlike their parents, they are not driven and dedicated to
their companies - yet why should they be? Japan is still quite well off, and
they can still afford a decent life - but there is no big dream or ambition to
fight for when opportunities are fewer.
The economy is in very bad shape. In the last trimester, GDP grew by 0.9%, but
unemployment in July was up to a record high of 5.7%. The public sector's
on-balance-sheet debt is expected to top 200% in 2010. In theory, the situation
is not too bad, as Japan is a net creditor (it is one of the largest purchasers
of America's bonds), and all its internal debt is sold to Japanese people, so
the risk is low and interest on this internal debt is not high.
A radical policy of privatizing state assets and bad state companies could
offset this debt. But those assets de facto are under the control of the
powerful bureaucracy, which together with the LDP and large companies formed
the three sides of Japan's post-war triangle of power and which made the
"miracle" possible. Now, the LDP has collapsed, and the DPJ promises to trim
the powers of the bureaucracy. Japan, then, will need a new political pact of
power, and it is unclear who, aside from the DPJ, will shape it.
Externally, Japan has been export-driven, centered on the US and Europe. Yet in
recent months, China has become its largest trading partner, signaling also a
shift of objective importance for the country.
On the strategic front, Japan faces dramatic changes. For decades it was
America's stalwart in Asia, enjoying privileged access to Washington. Now, with
China's rise, it might have to play second fiddle to this new bilateral
relationship. To position itself better for new regional politics and new
market drives, the DPJ has pledged to form better ties with neighboring Asian
countries, and China will be the foremost.
In other words, both on the political and the economic fronts, a Japan looking
for a new future could favor the new tone in US-China ties. It is unlikely to
hinder them as it could gain from both sides of the Pacific.
The time is right. Sixty years ago, the foundation of the People's Republic of
China decided Japan's destiny in Asia. America lost China, its old ally was
reduced to Taiwan, and it needed to rebuild a strong Japan to counter the
strategic threat of Mao. Now that Mao's shadow is fading, and China's economy
looks like the possible locomotive of future growth and an exit from the global
financial crisis, Japan could emerge not as the Asian alternative to China, but
a bridge - some kind of glue or guarantor - between the US and China.
Economically, a switch in trade signals this. Culturally, it has already
happened. Many modern Chinese words, like democracy and science, have been
imported from the Japanese, who had previously used Chinese characters to coin
new concepts.
Moreover, the players in this new political and economic scene have no interest
in expelling the US from the Asian scene; they all know that in the foreseeable
future, the US is a guarantor of regional peace, as it promises security to
Japan and South Korea and thus prevents an arms race in the region [1].
All these theoretical ideas need practical solutions, and this won't be easy.
Japan's premier-designate Yukio Hatoyama promises nothing short of a massive
reformation, possibly as big as the Meiji Reformation some 150 years ago.
Hatoyama's blue-blood lineage, his willingness to face Japan's many
difficulties, and the DPJ's massive popular mandate could be a sound platform
to make this work. However, old Japan and old interests might still want to
fight to buy themselves another day.
Asia has about a year to see whether or not the DPJ can act on its promises and
change Japan. Next year, there will be a vote for the Upper House and Hatoyama
needs to gain an absolute majority there. If he fails, and fails to convince
voters of his determination to change, the old LDP might return - and then
hopes for change might fade as China steams ahead in the region and in the
world.
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