Firstly, apologies for the long absence, I have been rather busy lately and could not muster the will to blog. This post is an article I came across in the papers which I would like to share with you all. It’s an interesting theory on how the earthquake will affect Sino-Japanese Relations. There are two camps to this theory; the opportunity theory and the crisis theory. Let’s begin with the “Opportunity Theory”.
This camp believes that with the massive destruction to the Japanese economy, Japan will require large amount of steel and other building materials to rebuild, giving China the opportunity to provide the surge in demand for its goods. With food produce being affected by radiation, confidence in Japanese food will decline along with its quality on to the lines with Chinese goods. As a result, this will give China the “level-playing” field that it has been dreaming of. In addition, international bankers will leave Tokyo for Shanghai and Hong Kong due to radiation fears, the two cities will thus replace Tokyo as the financial centres in Asia.
In the diplomatic arena, Japan will be occupied with reconstruction leaving China to do what it wants in the East China Sea. Through massive and proactive assistance to Japan, China will no doubt increase its reputation within the Japanese public while further pushing for Japanese corporations to move their operations to China. With the combination of assisting Japan with its reconstruction and increasing its reputation amongst its neighbours and the prospect of making the Chinese Yuan the East Asian currency, East Asia can be united but with China as the head rather than the historically assumed Japan.
The “Crisis Camp” on the other hand, feels that it will push Japan further into America’s arms reflecting the post war construction period. Any opportunities mentioned above will only benefit those of the United States and its allies. This camp also believes nationalism will fuel the withdrawal of funds from China to rebuild its own country thus slowing down economic co-operations between the two nations.
With the US helping Japan to rebuild, the US will have unrivalled access to the Seas along China’s coast thus obstructing any efforts for sovereignty claims in the East China Sea by China. With nuclear power under debate, Japan will further push for its own claims in the disputed areas in hope of developing its oil and gas fields.
Regardless of how it will all turn out, when Japanese scholars were asked what they feel about these two theories, their response was: “we have more important things to worry about now”.
Referring article: http://specials.mingpao.com/cfm/News.cfm?SpecialsID=242&Page=1&News=7deeab838655002bdffc203da603002bf7ec1b3b5f42003bf7d50a1f48a20037
3 comments:
very nice piece, definitely will help me sound a little more cultured at work... I wasn't even aware that theories like this are already defined and out there. Do you prescribe to the opportunity or crisis camps?
I would tend to lean towards the former, simply because Japan's frail economy is going to be distracted by another problem while China continues to grow. I hardly think "nuclear meltdown" will be the catalyst to reigniting Japan's economy.
I also think the US gov't response will be much more muted than in post-war (in order of obviousness):
1) Post-war rebuild was on an entirely different scale.. The entire system had to be rebuilt, politically & economically. This disaster is fundementally a natural disaster, where a large US presence pushing a political agenda would not have much credibility
2) Japan is not a broken third world country anymore. Politically it would be a very hard sell. People will ask: why would the US need to help out the 3rd largest economy? Did they help us during Katrina?.. this will be especially important for reason #3
3) The 2012 elections are coming up. The US is still very focused on domestic issues. Rebuilding their OWN economy, and balancing an out of control budget. It would be political suicidal for anyone to advocate a spending frenzy in another country, regardless of whatever long term opportunities there may be.
4) The second largest holder of US debt is Japan.. the single largest holder is China. This isn't like building nuclear silos on the border of the USSR. The US shouldn't try to play games with China, they are far too intrinsically linked and the US economy is far too frail at the moment.
In summation, i think the multinationals will be more involved than the federal government. Companies like GE, Caterpillar and a host of others i can't think of will have a much larger role this go around, and these companies will NOT push any pro-American agenda.
Excellent analysis! I too believe it will be an "opportunity" rather than a "crisis" for China but to a much smaller impact than what those scholars mentioned.
Yes, building material demand will surge and so will energy supplies, which will benefit also Australia immensely. (Coal prices are already at a all time high) However, in terms of food, I would disagree. In consumers' mind, Japanese food is and always will be of higher quality than Chinese produce. The radiation fear factor is only temporary and confidence in Japanese products will regain its reputation.
In fact, Japanese products as such as milk formula to dried seafood (mushroom, abalone, etc) has increased in price many folds due to shortage and rise in demand.
Overall, I think the disaster will bring the two nations closer together as China continues to aid Japan. The debut of the two pandas yesterday has already given much positive light on China and will continue to do so in the near future.
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