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Zhibin Gu: Japan against China: current war prospects in light of history and competition
by globalization forum
Sunday Feb 3rd, 2013 2:26 AM
Is a war coming in between Japan and China? Where would the West stand if such a war takes place? Why such conflicts may persist in spite of all progesss under globalization? Get powerful reviews from a leading expert Zhibin Gu.
China and the New World Order:

How Entrepreneurship, Globalization, and Borderless Business are Reshaping China and the World (Book Excerpts)

by George Zhibin Gu
Foreword by William Ratliff
Publisher: Fultus; 248 pages

taken from; http://www.financialsense.com

Part VIII
The Japan-China Issue: Evolving Relations in Light of History

SUMMARY

Japan has been a major source of problems for East Asia and beyond for more than eight centuries. In the distant past, Japanese pirates and Japan’s government caused vast bloodshed in the region. But the greatest Japanese aggression took place between 1894 and 1945, causing unspeakable miseries to many people and nations and killing tens of millions.

Yet, unlike what has happened in Germany, this dark Japanese past has not been addressed or condemned. Though the German government has willingly and openly discussed and condemned the crimes committed in the Nazi era, Japan’s government has not addressed it past aggressions.

Now, entering the 21st century, the Japanese government has continued to behave irrationally and irresponsibly in all sorts of ways in dealing with the crimes of the imperial Japanese government. This type of behavior causes continuing widespread anger among the victimized nations. At the same time, it reflects Japan’s difficulties in becoming more open and leaving its traditionally tightly closed society behind.

Economically, in this era, Japan and the nations it victimized have engaged in ever-increasing trade and investment activities. Interdependence has become a foundation for a new era.

Despite this improved economic picture for the region, today the Japanese government continues to irritate its neighbors by glorifying its past aggressions, honoring war criminals, and altering history textbooks, among other acts. This has naturally produced new tensions in the region, and creates a shadow over relations in general and economic relations in particular. So, what is at stake for Japan and its neighbors, especially China?

A sound analysis shows that, for a variety of reasons, the economic relationship between Japan and China may be more significant to Japan than it is to China, limiting the Japanese government's freedom of action. Ultimately, Japan must play its role rationally in order protect its long-term interests.

But there are more significant issues for Japan. Today, the basic problem of Japan is its closed society and market, which have already harmed its economy and general health in no small way. For Japan to move ahead and become a true solution provider in a new era, the key is to become an open society and market. Such openness will above all benefit the Japanese people.

Chapter 25. Japanese Business in China

In the past three decades, Japan and China have enjoyed ever-increasing economic ties, but their political relationship has lagged seriously behind. The ongoing political rows cast a shadow over the economic ties. So what’s really at stake?
Japan Inc. in China

Japan Inc. has been the third most important investor in China, after "Overseas Chinese Inc." and U.S. Inc. By 2005, Japan had invested over U.S.$72.59 billion in equity in China, while Japanese banks are leading international lenders to China. At the same time, the booming Chinese economy has become an engine for Japan's economic recovery. Recently 50% or more of the total increase in Japanese exports has been attributable to China.

In this era, Japanese investments in mainland China have come in three waves. The first wave, which really only tested the water, was in the 1980s. Japanese investors at that time felt that the Chinese lacked sufficient buying power to make investments worthwhile. As a result, only small investments were made.
The second wave occurred in 1993-1995, as Chinese growth began to accelerate. Still, however, Japanese investments remained limited in scope and reach. China was treated as a factory, not a market. Goods made in China by Japanese manufacturers were largely sent to overseas markets.
But by the late 1990s, seemingly all of Japan Inc. rushed in—creating the third wave. By 2005, not only giant Japanese multinationals, but also many small and medium-size firms had arrived. Greater Shanghai alone has more than 40,000 Japanese residents. Japanese schools operate in major cities such as Xian, Dalian, Beijing, Shenzhen, and Shanghai. In 2004, the number of people traveling between the two nations reached 4.35 million—a new record.
Basically, Japan Inc. is now completely hooked on China. This should not come as a surprise—China has become the largest consumer market in the world, besides being a top manufacturer and top trading nation. In 2005, China had nearly 400 million handset users and sold more than 16 million personal computers, giving it, respectively, the first and second biggest global market for these goods.

[...]

Chapter 26. Japan’s Past Aggressions vs. Current Affairs

Most people are aware of Japanese aggressions only in the period of 1894-1945. However, the reality is that Japan has been a key source of problems for Asia for more than eight centuries. Although these problems reached their height in the first half of the 20th century, Japan’s past aggressions produced vast miseries for itself as well as for many other nations.

[...]

Chapter 24. Uneven Development: India vs. China

Both China and India have already overcome enormous man-made barriers to reach their current stage of development. To move forward, they need to institute greater political and institutional reforms, aimed at clearing away bureaucratic problems. A basic fact is this: Their openness to the world should make the transition much less painful.

Commonalities

China and India have several characteristics in common as late developers. One of these is their mammoth populations. In recent history, it has been in the less populated nations that development occurred first. The largest developed nation is the United States with its 270 million people. This is a small population compared to those of India and China, which together have more than 2.3 billion people—over one-third of humankind.

The movement of so many people into the world development orbit is a new chapter in the story of humankind. Indeed, their advancement will be influential to an unprecedented degree. Once these countries move solidly ahead on this new path, life on earth will rise to a new level.

[...]

This book consists of 26 chapters, which are organized into eight parts:
I. China’s New Role in the World Development

Ch 1. China's social changes vs tourism
Ch 2. Whose 21st century?
Ch 3. Go east, young man!
Ch 4. Everyone in the same boat
ch 5. Power and limits of later developers

II. The Yuan, Trade, and Investment

ch 6. China's competitiveness vs rising yuan.
ch 7. Where to invest your money?
ch 8. Behind a rising yuan
ch 9. Beyond textile trade wars

III. China’s Fast-Changing Society, Politics, and Economy (in light of Chinese and global history)

ch 10. Lessons from Shenzhen, China's new powerhouse.
ch 11. Hunan province: from red state to supergirl and superrice.
ch 12. A revolution of Chinese professions
ch 13. What is the Chinese bureaucratic tradition?
ch 14. Why does Beijing want to reform?

IV. China’s Banking, Insurance, and Stock Market Reforms

ch 15. The explosive insurance market
ch 16. Chinese banks on the move, finally.
ch 17. lessons from China's stock market.

V. Chinese Multinationals vs. Global Giants

ch 18. The coming of age of Chinese multinationals.
ch 19. Behind Chinese multinationals' global efforts.
ch 20. China's technology development.

VI. The Taiwan Issue : Current Affairs and Trends (federation as an alternate way for unity)

ch 21. Federation: the best choice for Taiwan and mainland China.
ch 22. Taiwanese businesses in the mainland.
a vibrant Taiwanese force.
Hightech.
Other sectors.
What is the next?
Will Spring follow winter?

VII. India vs. China : Moving Ahead at the Same Time

ch. 23. China and India: can they do better together?
ch 24. Uneven development: India vs China.

VIII. The Japan-China Issue : Evolving Relations in Light of History

ch 25. Japanese business in China.
ch 26. Japan's past aggressions vs current affairs.

Author George Zhibin Gu is a journalist/consultant based in China. He has written three other books: 1. China’s Global Reach: Markets, Multinationals and Globalization (Fultus, 2006); 2. Made in China: National and Business Players and Challengers under Globalization and Capitalism (English edition forthcoming, 2007); and 3. China Beyond Deng: Reform in the PRC (McFarland, 1991)