Fat Years - Chan Koonchung [115]
What sort of stability would there have been in East Asia if that happened? Both countries might have once more suffered equal and terrible losses. To disarm this time bomb, create a win-win situation for China and Japan, and force the United States to withdraw from East Asia required great wisdom or a once-in-a-century stroke of luck. That stroke of luck was the global economic stagflation.
One can say that Japan’s economic depression had already lasted more than twenty years, and every time their situation seemed to improve, they would fall back again. They were growing weaker, and the latest global economic decline made recovery look too far away to imagine. Japanese industrial production, which had once looked down its nose at the rest of the world, seemed to have no hope of recovering any time soon.
Chinese leaders saw this period of Japan’s greatest weakness as an opportunity too good to pass up. They demanded that the isolationist and protectionist Japanese market immediately be opened up to China, especially to allow China to purchase Japanese companies. If Japan refused, China would take retaliatory measures to restrict the access of Japanese goods and businesses to the Chinese market. These demands were the straw that broke the Japanese camel’s back. Now China is Japan’s number-one trading partner, and the Japanese economy recovered somewhat between 2002 and 2008, largely due to its trade with China.
In the end, and in the name of free trade, with great pomp and circumstance the two nations concluded a most-favored-nation agreement. Both countries can now go in and out of each other’s markets, without restriction, just as in China’s close bilateral economic-cooperation agreement with its Hong Kong special economic zone. This was the first time in history that Japan had freely opened its doors to another country. As these two markets rapidly became integrated, they were soon able to challenge the American and European economies.
When China and Japan joined hands, South Korea and other Asian countries all expressed a desire to collaborate with them to establish an East Asian common market. Even Australia, New Zealand, Canada’s two western provinces, and the Latin American members of APEC all wanted to organize a Pacific and East Asian community.
Besides expanding their free-trade area, China and Japan also signed an unprecedented agreement to allow the free movement between the two countries of workers with special expertise or capital investors. To assist Japan with its problem of an aging population, Chinese immigrants to Japan have to be under forty-five, while no such limit was placed on Japanese immigrants to China. On the basis of this agreement, an estimated fifty thousand or more Chinese will emigrate to Japan every year, about the same number that were going to Canada.
These Chinese have various reasons for emigrating: to find employment, because travel is easier with a Japanese passport, because of the quality of the Japanese lifestyle, or because they don’t want their children to endure the fierce competition for advancement in the Chinese education system. Most of the Japanese immigrants to China are senior citizens who can get much better value for money out of their pensions there, giving them both a higher standard of care and more enjoyment. China is helping Japan replenish its declining population with people of excellent quality. This policy also has great symbolic meaning, since it implies that China and Japan have forgotten their former enmity, and now happily receive each other into their respective countries. The process is similar to how the traditional enemies Germany and France began to live in peaceful coexistence after the Second World War and also established a new order in Europe.
Of equal