World View: China Declares Economic War on Japan
This morning's key headlines from GenerationalDynamics.com:
- Japan bolsters defenses as 1,000 Chinese fishing boats approach
- China declares economic war on Japan
- Chinese Communist Party urges punitive sanctions against Japan
- Quote: 'There won't be a war because it's bad for business!'
- Should we defend Japan against China?
Japan bolsters defenses as 1,000 Chinese fishing boats approach
The Japanese embassy in Beijing has suspended passport services and is
bolstering its defenses around the Senkaku/Diayou islands, after media
reports indicate that a flotilla of around 1,000 Chinese fishing boats
was sailing towards them. Hundreds of Japanese businesses and the
country's embassy suspended services in China on Tuesday, expecting
further escalation in violent protests over a territorial dispute
between Asia's two biggest economies. Reuters
China declares economic war on Japan
China is trying to hurt Japan economically, to gain leverage in its
campaign to take control of the Senkaku/Diayou islands. In the 2010
confrontations, China took revenge on Japan by terminating shipments
of rare earth minerals, needed for manufacturing of many of Japan's
electronic products. In the current confrontation, the Beijing
government is encouraging the Chinese people to demonstrate and
protest against Japanese businesses in China. The government urged
protesters not to use violence, but that part of the message is
clearly not getting through. Protesters torched a Panasonic factory
and Toyota dealership, looted and ransacked Japanese department stores
and supermarkets in several cities. China's National Tourism
Administration ordered travel companies last week to cancel tours to
Japan over the weeklong National Day holiday in early October.
AP and Bloomberg
Chinese Communist Party urges punitive sanctions against Japan
The Chinese Communist Party (CCP) is urging strong punitive sanctions
against Japan, for its "well-orchestrated plan" to take control of the
Senkaku/Diayou islands, according to the CCP's official newspaper:
The "nationalization" of the Diaoyu Islands by Japan
after "purchasing" them from a "private owner" is ridiculous and
cannot change the fact that they are Chinese territory. ... China
should take strong countermeasures, especially economic sanctions,
to respond to Japan's provocations. Military consideration,
however, should be the last choice.
The United States has frequently used Article XXI Security
Exceptions of the WTO (taken from the earlier General Agreement on
Tariffs and Trade) to impose economic sanctions on other
countries. The security exception clause says a country cannot be
stopped from taking any action it considers necessary to protect
its security interests. That means a country can impose sanctions
on enterprises, financial institutions, organizations and even
other countries' central and local governments. Taking a cue from
the US' practice, China can use the security exception clause to
reduce the export of some important materials to Japan.
China didn't announce any sanctions against the Philippines in
April, but it froze banana imports from that country in response
to Manila's aggressive attitude in the Huangyan Island
dispute. Though the economic countermeasure forced the Philippines
on the back foot, it also harmed the interests of some Chinese
So it is important for China to devise a sanction plan against
Japan that would cause minimum loss to Chinese enterprises.
Quote: 'There won't be a war because it's bad for business!'
How many times have people told me that Generational Dynamics is wrong
about some geopolitical thing, saying, "There won't be a war
because it's bad for business, and the business owners on both sides
will make sure that there won't be a war." That whole concept is
silly since, of course; if it were true then there never would be any
But now you're seeing that in fact "bad for business" does not STOP
war preparations, it PROPELS them. The fact that "business is good"
between Japan and China does not mean there won't be a war; to the
contrary, "business is good" only becomes an additional weapon to be
used in the preliminaries. And as the quote above from China Daily
notes, China has already used economic warfare against the Philippines
of the Scarborough Shoal, some islands that are clearly the
Philippines' sovereign territory. The Chinese aren't saying that a
war would be bad for business. They're saying, let's use economic
warfare, and if that doesn't work, then we'll use military warfare.
The Chinese always talk about how they want "harmonious relations"
with everyone. What they mean by that is, "Relations will be
harmonious as long as you do everything we demand, and give us
everything we want. Otherwise, we'll kill you."
Should we defend Japan against China?
Some web site readers of my previous article had a a heated discussion
over whether we should come to Japan's defense against China, in view
of the horrific atrocities that the Japanese committed during World
War II. Leading the "anti" side of the debate was someone from the
Silent generation who experienced some of those atrocities.
I have two points to make. The first is something I've said before:
The United States has no choice. The U.S. became Policeman of the
World with the Truman Doctrine, put forth by President Harry Truman in 1947. Since then,
we've signed defense treaties with numerous countries, and all of them
would go into total panic if we repudiated our treaty with Japan.
The second is more generational. Once upon a time, the
British and the colonists committed atrocities on one another.
A little later, the North and South committed atrocities on one
another. In WW II, Germany and Italy joined Japan as our
enemies, while Russia was our friend. Since then, new
generations have replaced all of those people. In some cases,
the new generations decided they like us, and in other
cases the new generations decided they hate us. New American
generations are barely aware of the atrocities our enemies
committed, and they're equally unaware of such things as
the firebombing of Dresden or the nuking of Japan.
A generational crisis war transforms a country, gives the country a
new character, and makes it a different country than it was before the
crisis war. World War II transformed America completely, changing it
from a laissez-faire economy to a heavily regulated economy, and from
an isolationist nation to the Policemen of the World. Essentially,
every nation starts from "square one" in the Recovery Era that
follows a crisis war.
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