Nearly 30 years ago, Donald Trump complained about a US chat show about the trade practices of Japan. This was during Japan’s boom of the 1980s, which propelled it to become the world’s second-largest economy. Now, China has taken that spot – and Trump as president used the same rhetoric to attack it.

China is the current bugbear of American foreign policy, which came center stage under Trump. According to one Wall Street Journal commentator, Trump sought to unify the world against China just as Reagan sought to isolate the Soviet Union. This goal is seemingly continued under Biden, who has claimed that China “won’t surpass the U.S. to become a global leader on my watch” and has seen a similar effort to create a greater coalition of democratic states to counter authoritarian states such as China along with Russia.  

Such sentiments echo earlier ideas about Soviet expansionism, with calls to contain China just as the Soviet Union was, most notably in the Longer Telegram, published by the Atlantic Council in 2020. The paper is an intentional echo of George Kennan’s earlier policies of containment expressed in the earlier The Long Telegram.  

While the idea of the current Sino-American relationship as a new Cold War presents a compelling yet simple metaphor, augmented by the U.S.’s triumph against the Soviet challenge, this analogy falls apart in several areas. Firstly, unlike the Soviet Union, China has no ideology to export and has seen its path as a uniquely Chinese one rather than a universal one as advocated by the Soviets. 

Secondly, while China has seen the modernization of its armed forces and nuclear arsenal, it is not on the same scale as the Cold War arms race between the US and the Soviet Union. Instead, as expressed by the concerns of the American delegation at the Alaska summit, the principles of the Sino-American competition are primarily economic and technological, which echoes America’s earlier encounters with a rising Asian power, Japan. It is this case that raises several notable parallels with the present Sino-American relationship as well as offering a potential clue over the course that it will take.      

Meiji Industrialisation and Neo-Confucian State Capitalism 

Today’s China, as America’s primary economic challenger, can be seen as the latest incarnation of the East Asian model of authoritarian state capitalism. This was pioneered by Japan with its industrialization and development during the 19th century. 

China’s current communist rulers see industrialization as the “magic key” to Great Power status – made clear from the message behind the Made in China 2025 scheme which asserts:

“Since the beginning of industrial civilization in the middle of the 18th century, it has been proven repeatedly by the rise and fall of world powers that without strong manufacturing, there is no national prosperity. Building internationally competitive manufacturing is the only way China can enhance its strength, protect state security and become a world power.”

Ironically, a variant of this approach has been praised by some British MPs, in their suggestion of the Singaporean model as an example for post-Brexit Britain to follow. But they overlook how such a model is one of state capitalism, rather than the free-market nirvana they perceive it to be.

For it is state capitalism that enabled Japan and China to become manufacturing powerhouses, they both started with cheap, poor quality goods, and then created more sophisticated innovations – see, for example, the recent moon landing of a Chinese probe, the Chang’e 4. 

The particular nature of China’s challenge is that its authoritarian system undermines the assumption that capitalism and democracy go hand in hand. A capitalist China is not necessarily a democratic China.   

Toshiba then, Huawei now 

Another parallel can be found in the path of China and Japan’s flagship companies and the American approach towards them. As part of Japan’s booming semiconductor industry in the 1980s, Toshiba was a testament to Japan’s growing economic and technological prowess, bestowed with the full support of the Japanese government.  

However, trouble would befall the company in 1986, when it was discovered that Toshiba had secretly sold advance machine tools to the Soviet Union. This breached the Coordinating Committee for Multilateral Export Controls agreement. 

In a move that would become familiar to Chinese firms that incurred Washington’s ire, the US targeted Toshiba on the grounds of national security concerns.  

In the fallout from the scandal, two of Toshiba’s managers were jailed and Washington banned the sale of Toshiba products to the American market for 2-5 years as well as forcing the company to close its American factory. Additionally, Toshiba was made to share its technical knowledge and patents with its American competitors, with many of its technical documents being allegedly seized by the CIA as part of an investigation into the affair. As a result, Toshiba’s reputation was severely damaged by the scandal, and it has largely been unable to recover its former prestige.  

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Washington’s earlier moves against Toshiba have been reflected in its present campaign against the Chinese telecommunications giant, Huawei. Just as Toshiba had once been a symbol of Japan’s semiconductor industry, Huawei has been a pioneer in 5G technology, a field that Beijing and Washington have been seeking dominance in. 

Alongside a global campaign to compel nations into banning Huawei from building 5G infrastructure networks, Washington’s moves have also mirrored the Toshiba-Kongsberg affair. This has been apparent in the detention of Huawei’s CFO, Meng Wanzhou, by Canadian authorities upon Washington’s request for violating American sanctions on Iran. As with the Toshiba-Kongsberg affair, this has been another example of Washington utilizing national security concerns to further its economic interests. 

In addition, it is the semiconductor industry that Toshiba once dominated that continues to have economic and geopolitical implications for the Sino-American competition. This has been amplified by the chip shortages since 2020, which has been one of the consequences of the Trump administration’s trade war with China. The shortage has had a notable impact upon the video game and car industries as well as being part of a wider push by China to wean its industries off sectors dominated by the United States. 

The cases of Toshiba and Huawei have had several notable parallels that have illustrated the centrality of economic and technological factors rather than ideological concerns. This has been the nucleus for the current Sino-American rivalry and the Japanese-American competition of the late 20th century.  

However, these cases also mark a notable difference between the two events, with China lacking the security ties with the U.S. that Japan had, which were notable in getting Tokyo to follow Washington’s lead. As a result, alongside China’s push for autarky, Washington has less leverage over Beijing than it had over Tokyo, which means that it is less certain that it will be able to repeat what it had done to Toshiba in its push against Huawei.        

The war that never came

The most notable parallel between the rise of Japan in the 1980s, and China today, is the rhetoric used to describe them. While this includes references to seemingly unfair practices alluded to by Trump, it is more drastically articulated in predictions that conflict lies ahead.

This was expressed by Trump’s economic advisor, Peter Navarro, in The Coming China Wars, and followed George Friedman’s 1989 bestseller The Coming War with Japan, which predicted a shooting war between the US and Japan by the turn of the century. The latter warned of renewed Japanese-American tensions, claiming that many of the factors behind Japan’s aggression in the 1930s and 1940s, such as the vulnerability of its maritime trade routes and lack of natural resources were still present. As a result, Friedman claimed that the path of Japanese-American relations in the 1990s would be similar to that of the 1930s, which would conclude in a shooting war by the turn of the century. 

In addition, both today’s China – and Japan three decades ago – have been held up as a cause of economic malaise in the Western world, with politicians promising to “get tough” with these nations. Yet this repeated rhetoric also demonstrates the perils of following such a simplistic vision.

For a start, the predicted Japanese-American conflict was based on the assumption that the end of the Cold War would see a divergence between Japanese and American interests and the dissolution of their alliance. However, rather than falling as the former Soviet communist states did, China went from strength to strength. This served to reaffirm the necessity of America’s alliance with Japan as a counter-balance in Asia.

It was the alliance that granted the US a degree of leverage over Japan, as illustrated by the 1985 Plaza Accord, which, in strengthening the yen, has often been held up as one of the causes of Japan’s subsequent economic slump. Repeating this with China is a far more challenging proposition for Washington.

The similarities in the rhetoric between these periods also illustrate the flaws in placing the blame of current Western economic malaise solely on Japan or China. The former’s economic rise of the 1980s came in the period of deindustrialization throughout much of the Western world, bringing social dislocation which has not been fully resolved. 

Problems and populism

The West’s failure to resolve the transition from manufacturing was amplified by a poor global infrastructure and the failure to resolve the causes of the 2008 crisis, which played a significant role in the rise of populism. The impact was palpable in the “Rust Belt” states of the US, and the old factory towns of northern England, focal points for Trump and Brexit respectively. 

These had also been among the perceived losers from the rise of Japan and China, with the belief that success in those countries came at the expense of the old industrial heartlands of the West. This is a sentiment that populist movements have been keen to exploit. Yet while the ascendant economic powers may change, the problems remain unsolved. 

The social impact of these problems along with wider economic uncertainty has been present in both cases. A notable example of this can be seen in the 1982 murder of Vincent Chin, who was beaten to death in a racially motivated attack by a pair of unemployed autoworkers. Chin’s murderers targeted him because they believed he was Japanese and blamed Japanese firms for the loss of their jobs. 

In a similar vein, Sinophobia has also grown as a result of the trade tensions between the US and China. 

This has seen a spike of anti-Asian attacks during the coronavirus pandemic, with the Chinese being blamed for the spread of the virus, most notably in the labeling of it as the ‘China virus’ by figures such as Trump. 

From this, both anti-Japanese and Sinophobic sentiment in the late 20th and early 21st century can be seen as a downstream of wider anxieties posed by economic trends. This has been a characteristic of both the Sino-American competition of today and the Japanese-American one of the past.    

Towards the Future

While the rhetoric of the Japanese-American economic rivalry has compelling parallels with the current Sino-US trade conflict, it would be a mistake to follow these too closely. The underlying domestic structural factors behind current problems should not be overlooked in favor of externalizing the causes.

In all, while it has been tempting to cast China as another Soviet Union, it is the earlier case of the American competition with Japan that provides closer parallels than that of the Cold War. Even if the United States is able to achieve a perceived “win” over China, as it had done with Japan, it does little to remedy these problems. Instead, it merely furthers the temptation to blame an external “other” when the next wave of problems emerges.