chapter  14
16 Pages

Conclusion – 1950s to 1980s

The enormity of the transformation which Japan has undergone since the desperate months of summer 1945 is not easy to comprehend. In 1949 Japan’s trading deficit with the US was in excess of ¥146 billion, and Japan was a net importer of capital. In the financial year 1986 Japan had a trade balance surplus of ¥16,200 billion with the rest of the world, over half of it with the US, and was the world’s largest supplier of capital. Direct foreign investment by Japan, traditionally at a low level, increased rapidly in the wake of the rising yen, and reached $22.3 billion in 1986; much went to East and Southeast Asia, but the US was the largest single host economy. At the end of the Occupation years Prime Minister Yoshida’s first trip abroad was to the US to sign the San Francisco Peace Treaty in September 1951. Southeast Asian nations made agreement to the treaty conditional on a promise of Japanese reparations payments. The last of these payments was made in the early 1970s. Significantly, Takeshita Noboru’s first foreign visit as prime minister was to Manila, for a meeting with the heads of government of the Association of South East Asian Nations, (ASEAN) in December 1987. Japan has become an economic giant, a substantial overseas investor whose export success is legendary and whose stock market dealings surpass in volume even those of Wall Street. From an occupied country, compelled to make considerable sacrifices to regain independence and autonomy, Japan became a US satellite and ally. A framework of dependence on the US was established, the influence of which has endured to this day, but at the same time Japan has gradually moved towards a point where she realizes that she can no longer refuse to exercise the part in international relations which naturally accrues to her from

her immense economic strength. Her preoccupations with the US relationship, though remaining pivotal, are increasingly measured against the necessity of establishing amicable relations with other areas of the world, in particular the nations of Southeast Asia, the East Asian NICs (newly industrialized countries) and the People’s Republic of China.