ABSTRACT
This chapter presents the growth and nature of Japanese economic dominance in the Pacific Basin and its implications for Japan's relations with the US and other Pacific Basin countries. It provides analysis of changes in the strategic balance in the Western Pacific Basin resulting from growing rapprochement between the US, China and the Union of Soviet Socialist Republics and its implications for the US-Japanese defence relationships. Japanese overseas relocation of industries was linked to trade expansion. A new region for Japanese economic expansion in Asia was China. By the 1980s Japan had become China's leading supplier of high technology and manufactured consumer goods. Along the Asian rim of the Pacific Basin there was great strategic change after 1980. During the 1980s a major change was taking place in the strategic balance in the East Asian sector of the Pacific Basin with a growing rapprochement between the US and China, which began in the 1970s.
