Japan's gross national product has been expanding at the scarcely believable rate of more than 10 percent annually. It is evident that growth of this sort means major changes in quick succession. By the mid-1970s, if Japan sustains its current economic pace and the rest of Asia also continues at its present rate, Japan's GNP would virtually equal that of all other Asian countries combined, Mainland China included. Herman Kahn has pointed out that projection of present trends will give Japanese a per capita income equal to that of Americans soon after the year 2000.
Japan's gross national product has been expanding at the scarcely believable rate of more than 10 percent annually. It is evident that growth of this sort means major changes in quick succession. By the mid-1970s, if Japan sustains its current economic pace and the rest of Asia also continues at its present rate, Japan's GNP would virtually equal that of all other Asian countries combined, Mainland China included. Herman Kahn has pointed out that projection of present trends will give Japanese a per capita income equal to that of Americans soon after the year 2000.
Even if we assume that these projections will not be fully realized, Japan is already the third economic power in the world and seems to be on the verge of still greater achievement. Yet Japan's concern with the world outside has been largely confined to selling its goods and making money. Such a policy was acceptable when Japan was recovering from its defeat in the War of the Pacific, but the nation cannot continue in this fashion. As President Nixon wrote in Foreign Affairs in October 1967, "Looking toward the future, one must recognize that it simply is not realistic to expect a nation moving into the first rank of major powers to be totally dependent for its own security on another nation, however close the ties."
Prime Minister Sato has stated that Okinawa is the most important foreign policy issue for Japan in 1969. For after 1970 the Japan-U.S. Mutual Security Treaty may be abrogated on one year's notice. Implicit in the Prime Minister's statement was the awareness that the Okinawa problem is essentially up to the Japanese to solve. The Japanese themselves, and only they, are capable of determining their own destiny: What do they want? And why? And how do they propose to accomplish their aims? It is, essentially, a question of national self-definition...
This is a premium article
You must be a logged in Foreign Affairs subscriber to continue reading. If you wish to continue reading this article please subscribe , or activate your online account to get full online access.
Log In
Buy PDF
Buy a premium PDF reprint of this article.Related
Japan's low wage and high productivity economy, which has depended on an export boom, is being challenged by other economies, and forced to adopt new strategies. One of these is 'going multi-national'. This is economically right but presents a social and psychological dilemma. It threatens the social harmony represented by life-long employments and circumscribes the ability of the Japanese to control their cultural destiny.
Future historians may well mark the mid-1980s as the time when Japan surpassed the United States to become the world's dominant economic power. Japan achieved superior industrial competitiveness several years earlier, but by the mid-1980s its high-technology exports to the United States far exceeded imports, and annual trade surpluses approached $50 billion a year. Meanwhile, America's trade deficits mushroomed to $150 billion a year. By late 1985, Japan's international lending already exceeded $640 billion, about ten percent more than America's, and it is growing rapidly. By 1986 the United States became the world's largest debtor nation and Japan surpassed the United States and Saudi Arabia to become the world's largest creditor.
For over half a century Japan and Germany have been at the heart of America's international preoccupations. After a long and destructive war against both countries, the United States worked exhaustively to help its two erstwhile enemies recover and build democratic societies secure under the American defense umbrella. From the late 1960s to the mid-1980s, victor and vanquished moved to a more balanced relationship, especially in trade and finance. Today, in one of history's great role reversals, Tokyo and Bonn have become Washington's fierce trading rivals and also its primary bankers.

Sign-up for free weekly updates from ForeignAffairs.com.