Japanese Rock, Chinese Mushroom, America in the Cold

With the sounds of sabers rattling, Japan and China soon be at war over a group of islands between Okinawa and Taiwan; or so we are told by the American controlled mass media. These islands are called Okinotorishima and Senkaku islands. According to the news stories, the confrontation between Japan and China is quickly boiling over and it is just a matter of time before the navies set sail and the guns start blazing over control of these islands. We are told that the Japanese and the Chinese hate each other so there’s just no stopping an emerging Chinese juggernaut from exacting revenge on a hapless Japanese weak-sister for past war deeds. So we are told…

Senkaku — islands or just rocks?

Considering the fact that China began complaining about Japanese control over these islands in 1969 — now over 35 years ago — It’s a safe bet that any sort of military confrontation between Japan and China, for any reason, is extremely unlikely. Most probably a third Sino-Japanese war is an impossibility anytime in the foreseeable future. The economic relationship between Japan and China is too deep and too mutually beneficial to both countries for the business leaders of either of those nations to allow politicians to get in the way. If the free market is allowed to function — without government interference — as it looks like it will be — war between Japan and China is nothing short of a wild dream by the current US administration and its anti-China neo-con allies. The only way Japan and China could ever come into a confrontation is if the governments of those two nations allow the US government to interfere and somehow convince them to throw out their extremely mutually beneficial economic relationship. Considering how much power business leaders in these two nations now wield, in spite of communist rule in mainland China, this just isn’t going to happen.

Japan and China are now each other’s #2 trading partner. It is inconceivable that either country would allow this trade relationship to sour over some small islands (China calls them "rocks") or over Taiwan — regardless of any agreements the United States may have with the government of Taiwan. Japan may say they will help defend Taiwan from Chinese attack, but saying they will and actually sending in the military to do so are two very different things. It also defies logic to imagine that Japan would go to war to defend Taiwan — a former colony of the Imperial Japanese Empire — against China after what happened between those two nations in World War II. Japan also needs a sympathetic China to rein in a nuclear-armed North Korea. Japan will not go to war against China for any reason.

The island dispute between Japan and China is almost a modern day Hegelian tragedy of comic proportions. In Japanese the islands are called, Senkaku Islands; in Chinese they are named Diaoyutai Islands. The dispute over these islands began in 1969, but their modern recorded history can be traced back to 1885. In that year, Japan began a survey of the islands and found them to be uninhabited so they incorporated the islands under Japanese control. US involvement in this matter began officially in 1895. After being defeated in the first Sino-Japanese war of 1894—95, China surrendered and the Treaty of Shimonoseki was signed between the two belligerent nations. This treaty was drafted by John A. Foster, former American Secretary of State, and advisor to the Qing Dynasty. From the Chinese point of view, the Treaty of Shimonoseki gave Taiwan and all other surrounding islands to Japan.

But — in a direct rebuff to China — Japan claims that the islands under the current dispute were not involved in the Treaty of Shimonoseki at all. Japan insists that these islands belonged to Japan since before the war of 1894-95. Japan also has the actions of the United States to back up its claims. After World War II ended, the United States took control of Okinawa and the entire Ryukyu Island chain from Japan. The uninhabited islands in question fell under US jurisdiction and were used for bombing practice by the US airforce. As a defeated nation, Japan made no protests over the use of the islands by the US military. China also made no protest of this at that time — possibly because the internationally recognized government of China at that time was an ally of the United States in the Second World War; and, quite probably, they also had their hands full in a civil war of their own against Mao Zedong and the Chinese communists. The communists in China won the civil war in 1949; Okinawa reverted back to Japan in 1971; and as was stated by agreement, along with the return of Okinawa, Japan received the Senkaku Islands. When possible oil reserves were discovered in the area near the islands in 1969 both Taiwan and China began to protest Japanese use of the islands. Global Security.org has a very complete assessment of the situation on its website. It says:

These islands were neither part of Taiwan nor part of the Pescadores Islands which were ceded to Japan from the Qing Dynasty of China in accordance with Article II of the Treaty of Shimonoseki which came into effect in May of 1895. Accordingly, the Senkaku Islands are not included in the territory which Japan renounced under Article II of the San Francisco Peace Treaty.

It must be pointed out here that, in spite of what is falsely reported in the mass media — and quite contrary to popular belief, China and Japan are not in a quarrel over ownership of these islands. In fact, China does not dispute Japanese ownership of the islands at all. Global Security.org in that same article continues:

China argues that Okinotorishima island, the southernmost island in the Japanese archipelago, is merely a rock, not an island, in an attempt to nullify Japan’s claim of an exclusive economic zone around the small island, which is under Tokyo jurisdiction. The Chinese said they had “differences of opinion,” citing Okinotorishima and the Senkaku Islands. While Beijing acknowledges that Okinotorishima belongs to Japan, it stressed that it did not fall under the classification of an island as defined by the UN Convention on the Law of the Sea, but is instead a rock, which cannot be used to designate an exclusive economic zone, as the Japanese government has done.

Japan feels it needs these islands as she has a long historical claim to them and needs the fishing rights to feed her people. China feels that these islands are not islands, but are rocks, so Japan cannot claim them in an economic zone; China needs freedom of movement near these "rocks" as they are the ocean gate-way to Taiwan in case there ever is any trouble with their "run-away province." The discussion between the two nations is tied up in semantics. Is an atoll an island or is it simply rocks? If the politicians of either country were allowed to make Carte Blanche decisions about this case, there could conceivably be trouble. But, if the businessmen of Japan and China are allowed to take care of this discussion, it will be economically beneficial for everyone — excepting the United States of course. The foreign policy of the current US government is setting up the United States to be left out when it comes to affairs concerning China. The current US administration wants cool relations between the two Asian giants in order to prop up the failing dollar, sputtering economic health, and its waning empire. The Japanese are not stupid; they can see — as much as just about anyone else — excepting the Bush administration — where the money is going to be in the very near future. Japan will side with her Asian neighbor when the going gets rough.

It is difficult to imagine that Japanese and Chinese businessmen would allow their potential profits and relations with their #2 trading partner to be damaged over an island, some rocks, or an atoll; despite the constant cries that the sky is falling and the bombs will be going off at any moment that we hear constantly from the American mass media.

For many years, the western mass media has told us horror stories about a possible military conflict between Japan and China. Sometimes even the domestic media of those countries joined in and obliged. But, luckily, cooler heads have prevailed. Considering their long history and future mutually beneficial economic opportunities, it is preposterous to imagine a third Sino-Japanese war — in spite of current communist Chinese government on again, off again rhetoric.

An excellent case in point was what BusinessWeek Magazine in July of 2001 called, "China vs. Japan — The Phony Trade War."

From all appearances, then, the trade battle is causing irreparable harm to the two giants’ relationship. But appearances can be deceiving. In fact, the two economies already are deeply integrated — and are growing more so every day. And nothing that has happened is likely to change that. “In spite of diplomatic problems from time to time,” says Japan Finance Vice-Minister Haruhiko Kuroda, “we see a close economic relationship between the two countries.” Indeed, the brouhaha over produce and straw mats shows just how reliant the Japanese have become on China to fill their sukiyaki hotpots and also furnish their homes. The numbers bear this out. Bilateral trade hit an all-time high of $85.73 billion in 2000 and, according to the Japan External Trade Organization, is on track to surpass the $100 billion mark this year (chart). Last year, Japan’s trade deficit with China totaled $24.88 billion — making China one of the few non-oil-producing nations to sell more to Japan than it buys. The trade spat is, in effect, a side show to the real story: that Japan already is China’s biggest trading partner, while China ranks as Japan’s No. 2 after the U.S. This is a rapidly growing relationship that will alter the dynamics not just of Asia, but the entire world.

At that time, Japan and China were having a tiff over onions, leeks, straw, and mushrooms. The Japanese government got smart and backed off interfering, thereby allowing business and the free market to take over, and now Chinese vegetables can be bought at any supermarket in Japan and the benefactors are the Japanese consumer and the Chinese farmers. In part, because of this, Japanese and Chinese trade has boomed to a record $200 billion US dollars in 2005. Expect another double-digit increase this year. Japan is gobbling up Chinese goods, China is inhaling Japanese investments. The USA is sitting on the sidelines watching the money float by because of an ill-considered and antagonistic foreign policy towards China by the Bush government and destructive attacks on retailers, like Wal-Mart, that sell Chinese goods in America. This American-style of anti-free trade tirade and attitude that people in the United States often show is unheard of in Japan.

The case of the booming trade in mushrooms is a very interesting example and is the one that, whether intended that way originally or not, will be the model for future Japanese and Chinese economic cooperation. Any person who is a gourmet, or just knows good food, will tell you that there is a world of difference in, say, rice grown in California and rice grown in Japan. The same can be said for mushrooms or many other foodstuffs. Back in the days when Japan and the United States were having a trade row over rice, I heard many very odd, ill-informed, and economically unsound opinions on the matter from both Americans and Japanese. The California rice farmers claimed that California rice tasted just as good as Japanese rice. That’s not true. It does not. That is an ignorant statement to make. For use in Japanese gourmet food, Japanese rice tastes much better than California rice. That is to be expected. Of course Japanese rice and California rice are different. Think about it; Japan has a history of cultivating rice that goes back over a 1000 years; the climate in Japan is totally different than that of Southern California; Japan is one of the few places in the entire world that enjoys rain that consists of naturally soft water; and the biggest kicker of all, Japanese rice had better taste better than California rice because it costs anywhere from 4 to 10 times more per kilogram.

I suppose it would be also obvious to expect that French wine should be better than California wine for the very same reasons; history, vast experience in cultivation, and a higher price.

That being said, I couldn’t understand the Japanese rice farmers’ point of view either; they wanted the Japanese government to block all imports of rice. One farmer told me that, "Japanese people don’t like foreign rice." I understood what he meant to say and I agreed with him. But I also pointed out that the consumer should be allowed to decide. Of course I was right about that. But it was a mistake telling that to a Japanese rice farmer. I got myself into a spot where I was being harshly criticized. I should have known better. Why argue with some old guy who has probably never even tasted foreign-produced rice or long grain rice in his life, nor does he even want to try? Of course, for Japanese food, even top quality California rice does not taste as good as top quality Japanese rice. But if someone wants to eat cheaper California rice, then that should be their choice. California rice shipments into Japan would not hurt Japanese rice producers who were making top quality rice. The Japanese consumer would still buy the best rice when they went out to eat sushi, or when serving some other traditional Japanese cuisine for guests. Convenience stores that sold cheap rice balls for a dollar could conceivably profit by using 100% California rice or a mix of domestically grown and imported rice in their product.

Japanese sticky rice is terrible for things like Mexican food, Thai food, Indian food, etc. Japan doesn’t need to block imports of rice. If the Japanese consumer didn’t buy the imported rice, then let the importers go bankrupt. No problem. The consumers in a free market should be allowed to decide.

About $750 dollars worth of Japanese produced Matsutake mushrooms

Perhaps the Japanese government learned something from all those years of trade rows with a self-centered and hypocritical United States.

Allow me to return to the example of the mushrooms to reinforce my point: This last New Year’s my mother-in-law made a delicious traditional style Japanese soup. She asked that I go to the store to buy mushrooms. Not being particularly fond of mushrooms, I just picked up a pack of mushrooms that looked good. That was a mistake. The package I grabbed was mushrooms imported from China. She wanted domestically produced mushrooms. Japanese produced Matsutake Mushrooms sell for anywhere between $100 to $250 dollars each. Chinese produced Matsutake sell for about one-forth that cost. A gourmet will tell you that the mushrooms produced in Japan have a slightly different taste, texture, and aroma than those produced in China. My mother in law was a professional dietician, she can tell the difference; I cannot. When it comes to special meals, she’ll insist on the domestically produced mushrooms. Since I cannot even discern the difference, I will opt for the cheaper mushrooms every time. The result is that the Japanese mushroom producers are not hurt, the Chinese farmers profit, and the Japanese consumer gets the freedom of choice. When the Japanese and Chinese are practical, as opposed to idealistic, in their dealings with each other, everyone wins. The current US government should sit up and take notice.

This is how the free market is supposed to work. I believe Japan knows all about this through its experience over these past 4-plus decades. China is showing that it is an excellent student and is also learning very fast. There’s no way Japan or China will risk the relationship they have with each other. I don’t care if we are talking about a rock in the ocean the size of a baseball or a rock the size of Taiwan. They certainly won’t risk it because the Japanese prime minister goes to a church twice a year. The economic relationship between Japan and China will continue to grow. Japan needs Chinese goods; China needs Japanese technology, investment, and know-how. The histories of these two neighbors are so intertwined that they cannot be separated. Sure, as with all families, the siblings will sometimes fight and argue, but eventually they will stand together.

Asians may appreciate someone who speaks softly while carrying a big stick. But they definitely do not appreciate someone who is loud, violently unfriendly, or aggressive. The Japanese and Chinese have had centuries together learning how to bow and be humble; there are ancient religious, cultural, and language ties. When the fireworks do go off in Tokyo and Beijing they will be in celebration. Fortunately, Japan and China will profit. Unfortunately for America, the policies of the Bush government with their anti-China neo-cons, will mean that the USA will be left out in the cold.