Hearing of the Asia and the Pacific Subcommittee of the House International Relations Committee: The Emergence of a Changing Japan

HEADLINE: HEARING OF THE ASIA AND THE PACIFIC SUBCOMMITTEE OF THE HOUSE INTERNATIONAL RELATIONS COMMITTEE

SUBJECT: THE EMERGENCE OF A CHANGING JAPAN

CHAIRED BY: REPRESENTATIVE JAMES A. LEACH (R-IA)

WITNESSES:

THOMAS U. BERGER, PH.D., ASSOCIATE PROFESSOR, DEPARTMENT OF INTERNATIONAL RELATIONS, BOSTON UNIVERSITY;

LEONARD SCHOPPA, JR., PH.D., ASSOCIATE PROFESSOR, DEPARTMENT OF GOVERNMENT AND FOREIGN AFFAIRS, UNIVERSITY OF VIRGINIA; RICHARD B. KATZ, SENIOR EDITOR, THE ORIENTAL ECONOMIST REPORT, TOYO KEIZAI AMERICA

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Mr. WILSON. Thank you, Mr. Chairman, and thank you for your leadership in bringing focus on Japan, the long-term relationship that we have with Japan, our ally and our partner, and I know firsthand from my home State of South Carolina how much we appreciate the relationship that we have with Japan. We have welcomed significant investments in my home State.

American Koyo is located adjacent to the district that I represent. Fuji Film in Greenwood is one of the major employers. We are very pleased with Hatachi in Greenville, with Honda in Florence. In fact, another asset that we have, I am very grateful—I represent Hilton Head Island, and we have nearly 200 golf courses from Hilton Head Island to Charleston to Myrtle Beach.

And Mr. Chairman, we welcome Japanese tourists. We have found that it is actually less expensive to fly to South Carolina and play golf than play on some of the golf courses in Japan. And so we have an open door for visitors from Japan, and investments from Japan, and I am honored to be here, and thank you very much again for your leadership.

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Mr. WILSON. Thank you, Mr. Chairman, and Dr. Schoppa, I appreciate your recognition of Japanese-United States relations as a rock of stability, and that indeed we should be appreciating our friends as we consider crises around the world but not to ignore people who now we have gotten such a warm relationship with, and as was mentioned, with investments.

For example, in my home State of South Carolina, I have toured the Bridgestone Tire Company at Aiken, South Carolina, and the Utaca Technology Company at Lugoff, and these are enterprises where United States and Japanese workers work side by side. There is cross-training between the countries, and you would not anticipate that level of contact, but it is across—not just our State, but across the United States.

Additionally, I am very grateful for Japan, their response to September 11th. They too had been victims of terrorism. And so instead of being intimidated, obviously Japan was right there providing support for the liberation of Afghanistan by way of oil supply in the Indian Ocean, and then providing 600 troops.

I had a son serve in Iraq, and he told me of how impressed he was by the Japanese troops in the reconstruction projects, non-combat role that they have in Iraq.

But as I think of all the good, I appreciate Congresswoman Watson. She is very perceptive. She has jumped ahead to North Korea, and that is my concern. Indeed, the heinous barbarism of state-sponsored kidnapping that occurred in Japan. I mean, I cannot even imagine how horrible that must have been for the people.

Additionally, the missile test over Japan, and it has already been identified, and I would like all three of you to address, but you have indicated that a nuclear response by way of developing a nuclear weapon may not be the response. What will be or what is the best response for Japan to diffuse the tension on the Korean Peninsula? And we can begin with Dr. Berger and come to the right.

Mr. BERGER. Well, you are asking the 60 trillion yen question in some ways about the region. I mean, what to do with North Korea is something which I think is perplexing everyone.

From the point of view of Japan—and I am not going to try to address the issue in general as that would require another hearing, I would imagine, and I am not totally competent to address it—but I mean, from the point of view of Japan, they obviously on the one hand feel threatened by North Korea. They are more in the line of fire than we are. North Korean missiles could reach Japan, but they are not very accurate. There is evidence of North Korean—there is clearly a North Korean espionage network in Japan. There are fears that in the case of actual hostilities they could face both commando raids. North Korea is a very large and well-trained special forces, 100,000 of them actually who could pose some problems for Japan. The Japanese self-defense forces and defense agency are trying to deal with that.

You could face also the problem of agents using key positions, weapons of mass destruction in Japan, something the Japanese actually had experience with in the 1990s of the doomsday cult which used poisoned gas in the Tokyo subway.

So there are real security concerns emanating from North Korea. There are in Japan as a result of the incidents which has been referred to—the Taipuh Dong 1998 missile crisis, and other things, the Japanese have a very clear and dark image of North Korea.

Japanese friends of mine who—the Japanese television, Fuji television has been showing broadcasts from North Korean news, and Japanese look at these broadcasts. It is very sort of animated Communist commentators, listening to these threats periodically that emanate from Yung Hang about turning Japan into a sea of fire in the event of hostilities. Their basic response is these folks are crazy. This is a threat.

At the same time the Japanese, I think, are worried about what actual contingencies on the Korean Peninsula would mean, and would probably prefer if at all possible to get the kind of thing which we are pushing for, a Libyan solution, a negotiated, complete and verifiable approach, and they are prepared to support the United States in pushing for that.

If we ever had to escalate beyond that, there would be some tough decisions that would have to be made in Tokyo about the kinds of risks that they face, but I think they are looking to the United States to take the lead on that, and they will burn those bridges when they get to them down the line.

Mr. SCHOPPA. The North Korean problem is vexing not only because of the North Koreans themselves, but because we have to coordinate such a diverse group of allies to really have any impact. It is not just the Japanese, of course, but the Chinese and the South Koreans who all have to come aboard our policy.

I think what stands out when you think about the Japanese views on this issue is how flexible they are compared to the Chinese and the South Koreans.

So if we can convince the South Koreans and the Chinese to go along with a tougher policy of threats of sanctions or imposition of sanctions, Japanese will be aboard. They will be aboard and willing to support that.

If we are unable to convince those other allies, the Japanese are probably going to just keep their heads down and counsel the Americans that really there is very little we can do in terms of economic sanctions without the support of these other two allies.

So the lesson, I think, is not to worry too much about the strong feelings in Japan, which are definitely there, but can be moved if we decide to go in a more cooperative direction or a more threatening direction. Much more depends on our ability to convince the South Koreans and the Chinese.

Mr. BERGER. One thing which I would like to add, the nationalism issue, the history problems are affecting relations between Japan and Seoul, and Japan and Beijing, and this is one of the potential casualties of this heightened tensions over nationalist issues, and can, as Chairman Leach already pointed out, become a problem for United States policy in the region pretty easily.

Mr. WILSON. As a person who has visited Pyongyang, I appreciate your trying to interpret it because it is certainly an enigma.

A final question, Mr. Chairman, is I was in Japan—excuse me—I was in China in January and I had the opportunity to visit Beijing again, and for the first time visited Shanghai, but I was so impressed at the economic vitality and dynamism that I saw there. But it occurs to me that the United States-Japanese relationship with two global powers integrating their economies, working together for mutual benefit of their citizens—could not Japan be a model for China of how China can work with the United States and maintain its sovereignty?

Mr. KATZ. I think, you know, China—since 1978, the entire modernization strategy of the Chinese Government has hinged on globalization of its economy. It is actually a far more globalized economy than Japan's is. The ration of trade to GDP is much, much higher in China than it is in Japan. The ratio of manufactured imports to GDP is much, much higher in China.

About 65 percent of China's exports are actually conducted by multinationals investing in China, and many of those multinationals are not from the United States or Japan. They could be from Korea. Korea, for example, has more direct investments in China than does Japan. They are from overseas Chinese of the off-shore islands, from Singapore, Taiwan indirectly through Hong Kong.

So you have an economy which is—also, by the way, about 65 percent of the imports of China are also conducted through these multinationals. So the entire strategy toward modernization and industrialization of rapid growth hinges on China's internationalization.

So I think what that means is that China, the leadership of China recognizes that its ability to progress further to become stronger and more prosperous requires stability on its borders.

Aside from the issue of Taiwan, which is a very special issue for historical reasons, what Chinese officials have said to me is there is in fact no other issue which poses a fundamental conflict between the United States and China. Other issues, there may be differences of opinion and things may bump up against each other, and China certainly wants to assert itself as a rising influence in the area. But aside from Taiwan, there is no other issues which can cause a potential for a fundamental conflict.

So I think China simultaneously wants stability on its borders, very good economic and trade and investor relations with the United States as well as Europe, as well as its Asian neighbors, and yet to sort of assert its abilities, its prerogative both to make up for past humiliation of colonialism and just what it thinks is its rightful due. And so we see a little bumping up around some of these energy areas, and other issues of that type, but I think those are regarded as manageable issues rather than issues to be stoked and to inflame passion. So I think China does not see any conflict at all, quite the opposite, between its own prosperity and good relations with the United States.

Mr. WILSON. Thank you very much.

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