JAPAN: ECHOES OF WORLD WAR II : World View : Japan's New Sphere of Power : Its World War II failure to unite 'all corners of the Earth' has been supplanted by industrial clout.

By SAM JAMESON

Aug. 1, 1995 12 AM PT

TIMES STAFF WRITER

Fifty years ago, the first atomic bombs fell on Japan, ending World War II and rolling up the khaki-clad legions of Japanese troops who had imposed a “Greater East Asia Co-Prosperity Sphere” from the Aleutians to the islands off Australia to the frontiers of India.

But today the Japanese are back on the march, and a new co-prosperity sphere has emerged. Built by corporate cadres in dark suits, their loyalty shifted from the country to the company, it dwarfs anything imagined by wartime leaders.

In the old sphere, Gen. Hideki Tojo, the wartime prime minister, talked of Japan and its Asian partners seeking prosperity through each other’s success, uprooting Western colonialism and “drawing all corners of the Earth under one roof.”

What happened, in fact, was that Japan continued to rule its own colonies while launching an expansionist war in China and seizing Southeast Asia for its natural resources. Ultimately the strategy failed, but Japanese ambitions stopped only briefly with the end of the war.

In the new industrial sphere of the postwar years, Japan’s factories overseas spurred much of the growth of developing Asia. Its machinery and components industrialized the continent and institutionalized Japanese trade surpluses. The infrastructure of trade--ports, railways, highways--was built with Japanese foreign aid, the largest in the world. And Japanese capital outflows, also the world’s largest, provided the wherewithal to bring it all together.

“Just as the world cannot do without Saudi Arabia’s oil, the world cannot do without Japan’s capital,” said Kim Ki Hwan, a lawyer and former presidential economic adviser in South Korea.

“[Imperial] Japan wanted to bring ‘all corners of the earth under one roof’ politically and economically, and they failed in that goal. But they have achieved it economically,” he added.

“Half of the prosperity of Southeast Asia is the achievement of Japan,” agreed Hisahiko Okazaki, formerly Japan’s ambassador to Thailand.

Indeed, with Japanese industries holding a lock on the world leadership in technology and capital, the rest of Asia cannot do without Japan, Lee Kun Hee, chairman of the Samsung Group of South Korea, told a seminar in Tokyo in May.

Neither the old nor the new co-prosperity sphere, however, is a single-faceted phenomenon. Despite wartime atrocities and aggression, Asian memories of the old Japan run the gamut. Nor are the views of the new Japan any more unified.

Malaysian Prime Minister Mahathir Mohamad praises Japanese business people who started investing in Malaysia in the late 1960s “even in the face of poor investment conditions.” Ultimately, he told the Tokyo seminar, they “created wealth in Malaysia that now returns to Japan” through Malaysia’s imports from the island nation.

“Clearly, enriching your trading partners enriches you,” Mahathir said.

Japan was the first Asian nation to take on 20th-Century Western powers in war and the first to transform itself into an industrial powerhouse in peace, showing its neighbors that an Asian country could “make it,” the Malaysian leader added.

Between 71% and 95% of the population in Vietnam, Malaysia, Thailand and Indonesia holds “positive feelings” toward Japan today, according to an opinion poll conducted by the Gallup organization, the Yomiuri newspaper of Japan and the Chosun Daily News of South Korea.

But in South Korea, which endured a harsh 35-year colonial rule under Japan, and in China, where 21 million Chinese (according to the Beijing government, although the number has been declared high by other authorities) died fighting the Japanese between 1937 and 1945, majorities continue to hold what the poll politely called “negative feelings” toward Japan. Impolitely, the emotions are bitterness and hatred.

In Hong Kong, “the Japanese were never popular. They are not popular now,” said James D. McGregor, a retired Hong Kong government official who is now a member of the British colony’s Legislative Council. “Nobody believes the Japanese would do anything except for themselves.”

Yet the Japanese contribution to banking, insurance, real estate, construction and distribution in Hong Kong is “very substantial,” McGregor added. “We respect them and use their services.”

Today, in the Philippines, where the Japanese killed 1 million people--mostly civilians--”there’s no rancor. There’s no hatred--although maybe a flash of resentment now and then among the older people,” said Maximo Soliven, publisher and editorial chairman of the Philippine Star, who himself fought the Japanese as a teen-age guerrilla.

“The same can be said for the other Southeast Asian nations,” he added.

Said Okazaki, the retired Japanese diplomat: “It may or may not be a coincidence but, generally, we Japanese are now doing well in business in the places we occupied in the war.”

Liked or disliked, the Japanese became acquainted with the local people, “making it easier to do business together,” Okazaki said.

Korea and Taiwan

Perhaps the greatest contrasts in the evaluations of Japan today are found in the two areas that Japan ruled as colonies--Korea and Taiwan.

In Seoul on Aug. 15, the 50th anniversary of the late Emperor Hirohito’s surrender speech, the South Korean government will begin dismantling the most prominent building in the capital--the former Japanese governor general’s office.

But on the same day in Taipei, at the former Japanese governor general’s office, it will be business at usual. The old colonial headquarters serves as the office of President Lee Teng-hui of the Republic of China, and no one is talking about tearing it down.

Unlike the British, who kept their colonial subjects at a distance, the Japanese offered assimilation--the “opportunity” to become Japanese--to both Koreans and Taiwanese. Koreans, with a 5,000-year history of independence and a distinctive culture, regarded the offer as an insult. To them, Japanese rule seared an indelible scar on their pride and robbed them of the opportunity to develop. In addition, the Japanese administration in Korea was harsh and coercive.

“Co-prosperity? Mere lip service!” snorted Kim Sam Ung at the Research Center of Japanese Collaborators in Seoul. “Japanese planned to take up our land and live here because their land was plagued by earthquakes.”

The bitter memories and resentment, however, have served postwar South Korea as a driving motivation for hard work to “beat Japan,” much as Japan drove its people to “catch up with the West.” Even now, Kim Ki Hwan, the former presidential adviser, admitted, “Koreans can afford to lose to others but not to the Japanese.”

But, at the same time, a fear that Japan would squash Korean economic aspirations induced Koreans to restrict foreign investment, foreign ownership of real estate and foreign ownership of stocks, he noted.

These policies, and others like them, “have hurt Korea,” he said. “Without this fear of Japan--and it was a fear--we would have had a more liberal trade and investment [structure], which would have given Korea a higher technology and eliminated the gap in incomes we suffer in comparison with Taiwan and Singapore.”

In sharp contrast, the Taiwanese, who were historically accustomed to rule by outsiders, “felt no sense of political oppression” during the 1895-1945 Japanese administration, according to King Mei-lin, a member of the Taiwan independence movement who is principal of a Japanese-language school in Tokyo. She has lived in Japan for 36 years and, with her Taiwanese husband, raised two children who decided on their own to assume Japanese citizenship.

King was 11 when World War II ended the Japanese rule of Taiwan, but she said she remembers that “the adults around me considered themselves to be part of Japan. Although they realized they were second-class citizens, they did not seem to feel politically suppressed.”

King compares how the Japanese ruled Taiwan to how the Americans governed Japan during the post-World War II occupation.

“America, like Japan, is very simple. It aggressively tried to sell democracy to the country it was occupying. Just as I, as a Taiwanese, was told by Japanese, ‘Become a Japanese,’ Americans told the Japanese, ‘Do democracy!’

“It was exactly the same. Japanese believed that being Japanese was the best and that would raise the level of us Taiwanese. . . . Americans believed that exercising democracy was the best. Both foisted what they believed upon others in a meddlesome sort of way,” she said.

Japan applied the same colonial policies to Korea and Taiwan, but the Koreans resisted, the Japanese retaliated and the escalation drove the colonial rule in Korea into ever greater harshness, said Tsai Chung-po, 69, director of the Taiwan Rotary Club. In Taiwan, people accepted their fate and gave the Japanese credit for what they tried to do, he added.

“The Japanese developed Taiwan for their own benefit, but you have to judge them in the context of the colonialism that prevailed throughout the world at that time,” said Hsu Wen-leung, chairman of the Chi Mei Corp. in Tainan, Taiwan. “Compared with other colonialists, Japanese ran the most humane rule of all.”

Japan, said C.J. Hsu, a deputy director at Taiwan’s Board of Foreign Trade, “laid the foundations for economic development in Taiwan.”

Spared Atrocities

Taiwan was spared both the atrocities and the fighting that ravaged mainland China in World War II. As in Korea, the Japanese built railroads, highways, power stations, harbors and ports, communications facilities, hospitals and water treatment facilities. They also instituted universal elementary school education at a time when only Japan itself, in all of Asia, had such a system.

By the time the Chinese Nationalists came to take over Taiwan after Japan’s defeat, Taiwan was richer and more advanced than China.

“When we were told we were going to be ruled by China, our motherland, we were overjoyed--until they [the mainlanders] came, and we saw how uneducated and crude they were,” said King, the school principal.

“Everyone was astonished. They treated us as if we were their spoils of war--the prize they had won.”

Chinese troops responded to native Taiwanese protests against abusive treatment by slaughtering untold numbers of islanders in an incident that began Feb. 28, 1947. It is the atrocity that Taiwanese natives remember most keenly today.

“Taiwan, as a colony of Japan, became modernized. China had not yet been modernized,” King said.

Half a century of political independence from Japan still has not freed either Taiwan or South Korea from a critical economic dependence. Like most of Asia, both nations rely on Japan to supply key components and parts for goods they manufacture. As they export more to the United States, they buy more from Japan.

Economists estimate that for every five cars that South Korea exports, it must import the equivalent value of one car from Japan in parts and components.

This year, South Korea’s exports are booming, and Seoul is bracing for a $15-billion deficit with Japan--up from $12 billion last year, said Hwang Soon Taik, a trade official in South Korea’s Foreign Ministry.

Taiwan, for its part, suffered a $14.6-billion bilateral deficit last year and is headed toward more than $16 billion worth of red ink this year, said Hsu of Taiwan’s foreign trade board. Already, the deficit with Japan amounts to $575 for every man, woman and child on Taiwan, more than three times America’s per capita deficit with Japan of $175.

Big Trade Deficits

Prof. Ho Jui-teng of the Japanese literature department at National Taiwan University blames Japan’s refusal to transfer its leading technologies to other Asian countries for perpetuating the ever-growing trade deficits throughout the region. But even when Asians score a breakthrough in technology, dependence upon Japan continues.

Lee Yong Woo, a director of Duksan Copper Foil Co. of South Korea, told how his company spent more than a decade developing technology to produce copper foils for printed circuit boards. The boards form the “heart” of many electronics products. Before Duksan developed its copper foil, Japanese producers sold square-meter sheets for $4.50, Lee said. But when Duksan marketed its product at $2.60 a sheet, the Japanese lowered their prices to match.

“That showed how much profit they were making before we entered the market. And it also showed how willing they were to slash their price to hurt their competition in Korea,” he said. “The pattern is the same for other technologies and industries as well.”

Duksan today can produce all of the copper foil that South Korea needs. However, it supplies only half the nation’s demand because Korean electronics companies cannot afford to cut their links to Japanese suppliers.

“They have to retain their ties with the Japanese leaders who are setting the path for the future in the electronics industry,” Lee said.

Indeed, Japanese preeminence is even greater than trade statistics indicate. Throughout Asia, countries have banned imports of finished Japanese products, including cars, trucks and a host of electronics goods and household appliances--depriving Japan of untold billions of dollars’ worth of exports.

In South Korea, a struggle--in the form of government-backed programs of “localization”--continues in an effort to break the reliance on Japan for machinery and components. When the first program was launched, more than 4,500 machines were listed for local production. Now, the number has climbed above 7,000.

“We want to catch up with Japan. But when we get to a certain level, we discover that they have moved even higher,” said Kim Dong Chul, an official at the Ministry of Trade, Industry and Energy.

Talking about achieving independence from Japan “is sort of like me always promising my wife that I won’t get home late,” said O Jong Nam, legal affairs officer for the Finance Ministry.

Yu Tzong-shian, president of the Chung Hwa Institution for Economic Research in Taipei, said Taiwan would not be able to sustain its burgeoning exports to China--which are about to exceed its exports to the United States--without importing machinery and key components from Japan.

Even the United States has found itself ensnared by reliance on Japan for such items as auto engines, computer components, facsimile machines and other sophisticated products. That reliance, combined with the difficulties of cracking Japan’s market, has given Japan what former Secretary of State James A. Baker III calls a “structural trade surplus” with both the United States and the rest of the world.

Lee Kuan Yew, Singapore’s senior minister, warned Japan at the Tokyo seminar that “the United States and Europe will no longer tolerate mercantilist practices that stress exports and restrict imports. . . . Japan risks serious deterioration in bilateral relations with the United States if it persists with its current practices.”

The new co-prosperity sphere, however, is no longer only a Japanese show. Increasingly, it is becoming a pan-Asia sphere.

The American Link

And unlike in the old sphere, Japan today wants the Americans and the Europeans to stay involved. It has rejected proposals by Mahathir for it to lead an economic forum of Asians only. Instead, Japan backs the Asia Pacific Economic Cooperation (APEC) forum, which includes the United States.

Today’s developments appear to be a far happier arrangement than when Japan tried to impose its old sphere on Asia. In November, 1943, for instance, Tojo convened a grandiose Greater East Asia Co-Prosperity Conference in Tokyo but managed to assemble only one legitimate leader (Prince Wan Waithayakon of Thailand) and five “puppet” leaders (from China, Manchuria, the Philippines, Burma and India). In November in Osaka, Japan will host a summit of 18 APEC leaders, including President Clinton.

Robert Kuok Hock Nien, a Malaysian Chinese tycoon based in Hong Kong, expects China’s input to the new “sphere” will be “truly immense.” Mahathir believes that India, Indonesia, South Korea, Thailand and Taiwan also will “make it big” in the early decades of the 21st Century.

All of Asia, Mahathir boasted, will “become so rich that . . . Asia will become the locomotive of growth for the rest of the world.”

Ironically, the rosy outlook for the rest of Asia that Japan did so much to promote comes at a time when Japan’s own economy is facing gloom. Now in its fourth year of essentially zero growth, Japan “is in the process of spiraling down into deflation and a possible depression, thanks to a large corporate financial deficit,” warned Andrew Hunt, chief economist at Thornton Management (Asia) Ltd. in Hong Kong.

The troubles, however, have spurred a new export push and yet another surge in the yen’s value--giving Japan’s investment muscle new sinew abroad just as it is going limp at home. As a result, some experts say the apex of Japan’s new co-prosperity sphere still lies ahead.

“You are going to see a very rapid increase in Japanese [overseas] investment,” Jeffrey Garten, U.S. undersecretary of commerce, told Reuters. “We are seeing a real shift in Japanese strategy toward making Asia a platform for their commercial policy around the world.”

Lee Kuan Yew agreed.

Armed with the strong yen enabling it to “preempt American and European investors in moving into key sectors and securing market share in East Asia,” Japan, he predicted, “will integrate the region’s economies through investments, technology transfers and trade.”

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Japan’s Economic Empire

Since World War II ended, Japan has come to dominate Asian economies. Figures show its cumulative direct invrestments, in millions of dollars, in each nation from 1951 through 1994.

(Japanese military empire at its height in World War II.)

China: $8,729

North Korea: $36

South Korea: $5,268

Taiwan: $3,997

Hong Kong: $13,881

Vietnam: $238

Thailand: $7,184

Brunei: $124

Malaysia: $6,357

Singapore: $9,535

Philippines: $2,817