In 1853, Commodore Perry, demonstrated United States military force on behalf of U.S. business interests. Perry intimidated Japan into a one sided treaty with threat of vanquishing Japan’s much less industrialized military. Having been subjected to America’s use of colonial might, Japan embarked on the Meiji revolution, a modernization frenzy for 60 years, much as has been occurring in China since the 1978 Four Modernizations.
Just as America colonized through WWII for economic dominance, rationalized with a mistaken belief of cultural superiority, Japan colonized through imperial treaties and war for decades through the 1930s. During this time, similarly to China today, Japan’s leadership inspired a deep devotion to Japan’s destiny through education, media, military and other institutions.
Similarly to China’s concerns today, Japan was unable to limit its urbanization and required rapid GDP growth through the 1920s. When Japan’s economy was devastated by the Crash, instead of leaning socialist like America, Japan’s submitting culture turned militaristic, assassinating its elected Prime Ministers in favor of military leadership.
Japan’s military miscalculated its securing of oil from U.S. controlled colonies and eventually lost the war. After the war, the world, retreating from its wounds, was unable to contain decolonization. However, friendly autocratic governments mostly replaced colonies with terms favorable to business interests. The U.S. policy of world military dominance secured these relationships for a time.
In this environment, Japan thrived applying its discipline and tightly controlled banking and industry to a growth miracle. The miracle ended with bubble inflation caused by non secured raw material inputs, loose monetary policy, and a large rise in the valuation of the yen. Japan’s economy, like the United States, also succumbed to globalization.
Did China learn from these events as it prepared to reenter the world stage? You bet.
Of course, Chinese people are not evil and Chinese have long endured too much racism in America. But, no-one should be deceived by the Chinese government’s strategy to secure enough raw materials during this relatively peaceful period as possible for the future inward growth of their nation before such hegemonic relationships are hindered. China learned from Japan’s pre-war mistakes and will not repeat them.
Yes, the Chinese government is manipulating the value of its currency to give it an advantage in the international market. The idea that it is somehow unfair is a bit weird to me. If China wants to accept fewer dollars for its labor, why is it not entitled to do so? The world’s insistence on revaluing currency higher is just a system like any other. China is only copying a technique well implemented by Japan earlier.
Its U.S. strategy has limits, and China is coming to the end of those limits. China has fed off of the United States as much as it can. As a potential fatal flaw, it may have sucked too much life from its host. China must now somehow realize these saved dollars before Bernanke has a chance to take them back through QE2 and Qex’s.
Will the Chinese government collapse any time soon similarly to the end of the Japanese miracle? Heck no.