Thursday, 4 October 2012

China, Japan, those islands--and the coming collapse of ‘the bargain’


The Middle Kingdom Problem

LAST WEEK I POSTED pictures of riots inside China against Japanese “occupation” of some rocks in the East China Sea the Chinese call the Diaoyu Islands, and the Japanese call Senkaku Islands. We might call them just islets, because these rocks (see them above) just don’t make the grade as islands.

So why is feeling running so high in China about the Diaoyu/Senkaku Islets that smiling car dealers can hold up banners with perky slogans boasting: “We will kill every Japanese person even if it means deaths for our own”? And Chinese movie theatres can have signs outside saying, “If you find Japanese men, kill them; if you find Japanese women, rape them”?  And hundreds and hundreds of thousands of Chinese can march in streets, burn Japanese businesses and beat anyone driving Japanese cars. 

A national wave of nationalistic sentiment is directed (at the moment) at the moment, at Japan—over a bunch of unimportant rocks that are not even habitable.


There’s clearly, you would think, something more significant going on here, something more symbolic than actual.  Historian Scott Powell pointed out, in the first of our online Chinese History lectures last weekend, that whenever you see such anger over something so apparently insignificant—whether it’s one person or millions of people--there is clearly something there deeply connected to that person’s—or those people’s—core values.*

So what core values could be involved here ?  And how might understanding them help us evaluate China’s future?

Scott’s answer was to go back 200o years, to something of which commentators (who talk just about oil and gas and geopolitiks) and economists (who talk just about trade ties and GDP and China’s manufacturing base) would both be unaware, but good historians will not. 

Scott calls it the “Middle Kingdom problem.” Which is to say that for over 2000 years, Chinese considered China the natural centre of the world.  Even the universe. For 2000 years they were the power in Asia—in the world; in the universe!—to which all others paid tribute. This has a powerful effect on a nation’s psyche.

Then came a shock from which the psyche has still not recovered.  First was the growing western impingement upon China—evidence, increasing with each contact, that China was a declining world power. Then came the serious shock: in its war with Japan of 1894-1905, when Japan first annexed these islands, China was beaten. Beaten by what, for 2000 years, had been a small tributary power but which now, through its emulation of western technology, had vaulted ahead.

For China, this represented a gigantic, barbaric, 200o-year-old loss of face. Symbolically, it represented the arrival of Japan on the world stage, and the end of the illusion of China as a great regional power.

This hurt. Deeply. It still does.

And this is the deeper significance of the Diaoyu/Senkaku Islets for both nations. For Japan, about to hit the economic wall, it symbolises the beginning of its own international glory days. And for China, now sinking in the economic mire, it symbolises the beginning of China’s embarrassing subordination in world affairs.

So why has this all bust out now?

Answer: Because both nations are sinking in the economic mire and so are retreating to their core values. Both of which rest, dangerously, on barbaric illusions about nationalistic pride.

The Collapse of the Bargain

A RELATED POINT, ONE becoming more relevant as economic shit hits Chinese fan, is the essential “bargain” Chinese people have so often made with their rulers. That bargain—made partly out of pragmatism, and partly out of a Confucian sense of duty—essentially allowed their rulers to be as authoritarian as they needed to be just as long as they delivered the national goals, be it national pride, military success or economic growth or prosperity. Chinese core values have never included freedom, but they do include having leaders deliver on their implicit promises.

This is why the most evil bastard in history, Mao Zedong, is still considered a hero in China—because, say Chinese, he “saved” China.  And this why the Chinese Communist Party have been so eager (so over-eager) to continue “stimulating” economic growth: because their bargain involves the state promising more wealth. So now that wealth is drying up, the ChiComs are doing everything they can to fake wealth creation—even if it means empty cities, empty savings accounts and a generation’s worth of malinvestment.

But what happens when stimulus collapses, and the “bargain” with it?  They could be as authoritarian as they liked as long as they delivered wealth/prestige/power/national pride/insert-latest-goal-here—but when delivery is not made, what then?

“The collapse of the bargain” will be interesting.

Time to enrol in a good course on Asian History—and as you’ll have read here before, I can highly recommend this one.


* Don’t believe me? Then ask yourself why so many grown men and women were chewing their nails so intensely around New Zealand last September about a few blokes throwing a pointy ball around?


  1. Thanks for that summary Peter. I too listened to the lecture and agree that Scott Powell, the lecturer, provided the context that is needed when viewing this issue.
    One further thing he mentioned was the fact that prior to 1970 China did not dispute the fact that the islands were Japanese. In fact, as this article shows, they explicitly argued that the islands were Japanese.

  2. An *excellent* post, Peter.
    China, Japan and Taiwan will need to be very careful that this dispute doesn't spiral beyond control.
    The combination of a Chinese economy starting to hit the skids, and a populace that has been whipped up to "Nuremberg Rally" levels of hysteria is very dangerous.


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