The ‘Nixon Shocks’ of 1971, which announced the opening of relations between the us and China and initiated a series of measures to protect the us economy, had an immense combined impact in Japan.footnote1 As America’s main economic rival, Japan was the most threatened of all the major capitalist economies by Nixon’s protectionism. The immediate result of the ‘Nixon shocks’ has been a considerable increase in Japanese diplomatic and political moves in East and South-East Asia; these had lagged strikingly far behind its economic advances in the area. The development of Japan’s international role will be one of the central features of imperialism, and of inter-imperialist contradictions, in the last quarter of the 20th century. Japan has already had one period of notable expansion in the East and South-East Asia area this century. This new expansion is not a simple re-run of the previous episode. Post-1945 Japan has been to a considerable extent remoulded by us imperialism and integrated into the American empire. As a consequence Japan has so far been able to advance in Asia almost entirely by economic means: neither political nor military measures have been in the front line. Contemporary expansion contrasts strongly with the pre-1945 experience, where military power was, to a very large extent, in the vanguard.

Japan’s gigantic economic stake in South-East Asia has both strengthened its bargaining position vis-`-vis the us, and laid the basis for renewed political and military activity in the area. The us is supporting this trend. For, although Japan is the us’s strongest trade competitor on the domestic us market, postwar Japanese imperialism has been forged in the image of its conquerors and the fact of conquest remains. The Security Treaty gives America powers approximating to those of an occupation, as top Washington leaks have recently been emphasizing.footnote2 Furthermore, up until May 1972, the us was in fact occupying a part of Japan as a colony and was able to use its hold on Okinawa as a bargaining counter in economic, political and military negotiations (and, by hanging on to so many installations in the Ryukyus, probably can go on doing so for some time). Here we shall try to resume briefly the sometimes paradoxical strengths and weaknesses of the uneasy relationship between Japan and America, starting with its most striking component—trade.

At present Japan depends on the us for about 30 per cent of its trade: in 1970 Japan sent 33·7 per cent of its exports to the United States, and took 34·4 per cent of its imports from there (as against figures of only 28·2 and 28 per cent, respectively, for the whole of Asia and the Middle East). The us, on the other hand, sent only 14·7 per cent of its exports to, and took 10·8 per cent of its imports from, Japan in 1970.footnote3 But there is a significant difference in the structure of each country’s exports to the other. In 1970, 72 per cent of Japan’s sales to America were heavy industry and chemical products; 24 per cent were light industrial products, and a mere 4 per cent were raw materials. Of the us’s exports to Japan in the same year, 58 per cent were made up of foodstuffs and raw materials, 7 per cent of chemicals, and only 25 per cent of machines, instruments and manufactured goods. In other words, the relationship is not unlike that of an industrialized country (Japan) to an underdeveloped one (us). While quantitatively subordinate to the us in terms of its reliance on their mutual trading, Japan is qualitatively the superior of the two in terms of the kind of goods traded.

In addition, and because of the greater value of their products, by 1971 Japan ran a fairly large trading surplus with the us—more than $2 billion, which accounted for about 30 per cent of Japan’s total trading surplus for the year. By 1972 the bilateral trade deficit for the us was expected to reach $4 billion.footnote4 As a consequence of this and trading surpluses with other countries, Japan has seen, the recent multiplication of the country’s reserves: they rose from $7,927 million at the end of July 1970 to $12,514 million at the end of August 1971, putting Japan ahead of the United States. They rose again to $15,235 million by the end of that year, and in December 1972 Japan’s total reserves (official plus hidden) came to $23–24 billion.

The vast majority of the reserves is composed of dollars, at present not convertible; Japan has always had very low gold reserves. Thus it does not have complete control over its surplus whose main function is to prop up the dollar. It may well be that almost the totality of Japan’s reserves have never left the shores of the United States, and are not really ‘reserves’ for Japan at all—but for the Americans. It must therefore be emphasized that Japan’s failure to buy gold and other non-dollar currencies can only be interpreted as a sign of weakness and subordination to the us.footnote5 Nor is it clear what legal mechanism, if any, or what agreement, if any, has been used to prevent Japan acquiring gold. However the fact that it has not moved out of dollars is the most striking reminder of Japan’s overall situation.