The War of the World: History's Age of Hatred (50 page)

Chiang’s regime was not without its strengths. Where the Left saw only foreign exploitation, there was sometimes genuine foreign-financed development. Thousands of miles of new roads and railways were built between 1927 and 1936, the bulk of the construction financed by European investors. Yet the Chinese state remained exceptionally weak both in fiscal and in military terms. The privileges granted to Western investors hampered the development of China’s own institutions. Chiang’s China was certainly not capable of withstanding a concerted challenge to the ‘Open Door’ system by a foreign power intent on monopolizing China’s resources.

Had it not been for the Depression, the civilian politicians and the
zaibatsu
might conceivably have retained the upper hand in Tokyo. But the collapse of global trade after 1928 dealt Japan’s economy a severe blow – a blow only made more painful by the ill-timed decision to return to the gold standard in 1929 (the very moment it would have made sense to float the yen) and Finance Minister Inoue Junno-suke’s tight budgets. The terms of trade turned dramatically against Japan as export prices collapsed relative to import prices. In volume terms, exports fell by 6 per cent between 1929 and 1931. At the same time, Japan’s deficits in raw materials soared to record heights (see
Figure 8.2
). Unemployment rose to around one million. Agricultural incomes slumped.

There were alternatives to territorial expansion as a response to this crisis. As Finance Minister from December 1931, Takahashi Korekiyo

Figure 8.2
Japan’s raw materials deficit, 1897–1936 (thousands of yen)

cut Japan’s economy loose from the deadweight of orthodox economics, floating the yen, boosting government spending and monetizing debt by selling bonds to the Bank of Japan. These proto-Keynesian policies worked as well as any tried elsewhere during the Depression. Between 1929 and 1940 gross national product rose at a real rate of 4.7 per cent per annum, significantly faster than the Western economies in the same period. Export volumes doubled. In theory, Japan might have carried on in this vein, reining in the budget deficit as the recovery gathered pace, exploiting her comparative advantage as a textile manufacturer at the heart of an Asian trading bloc. As a percentage of total world trade, intra-Asian trade doubled between 1913 and 1938. By 1936 Japan accounted for 16 per cent of total Chinese imports, a share second only to that of the United States.

Yet the proponents of military expansion forcefully argued against the option of peaceful commercial recovery. As we have seen, the countries best able to withstand the Depression appeared to be those with the biggest empires: not only the Soviet Union, but also Great Britain, which made no bones about restricting Japanese access to
imperial markets in the 1930s. Japan’s principal export markets were neighbouring Asian countries; could those markets be relied upon to remain open in an increasingly protectionist world? There was, in any case, good reason to suspect the Western powers of preparing to abandon the unequal treaties in response to Guomindang pressure.
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Japan was also heavily reliant on imports of Western machinery and raw materials. In 1935 she depended on the British Empire for half her imports of jute, lead, tin, zinc and manganese, nearly half her imports of rubber, aluminium, iron ore and cotton, and one-third of her imports of pig iron. She imported almost as much cotton from the United States as from India and Egypt and large quantities of American scrap metal and oil. At the same time, Japan needed the English-speaking economies as markets for her exports, around a fifth of which went to British imperial markets. In the words of Freda Utley, the left-wing English journalist and author of
Japan’s Feet of Clay
(1936), a liberal Japan could ‘but oscillate between the Scylla of dependence on the USA and the Charybdis of dependence on British empire markets’. In the short term, the increased military expenditure caused by a shift to formal imperialism would stimulate Japan’s domestic economy, filling the order books of companies like Mitsubishi, Kawasaki and Nissan, while in the long term, it was argued, the appropriation of resource-rich territory would ease the country’s balance of payments problems, for what use is an empire if it does not guarantee cut-price raw materials? At the same time, Japan would acquire desperately needed living space to which her surplus population could emigrate. In the words of Lieutenant-General Ishiwara Kanji, one of the most influential proponents and practitioners of a policy of territorial expansion:

Our nation seems to be at a deadlock, and there appears to be no solution for the important problems of population and food. The only way out… is in the development of Manchuria and Mongolia… [The] natural resources will be sufficient to save [Japan] from the imminent crisis and pave the way for a big jump.

In one respect this argument was not wholly spurious. That Japan faced a Malthusian crisis seemed all too clear when famine struck some rural areas in 1934. Imperialism addressed this problem. Between 1935 and 1940 around 310,000 Japanese emigrated, mostly to the growing Japanese empire in Asia; this certainly eased the downward pressure on domestic wages and consumption. In another respect, however, the case for expansion was deeply suspect. Quite simply, expansion exacerbated precisely the structural problems it was supposed to solve, by requiring increased imports of petroleum, copper, coal, machinery and iron ore to feed the nascent Japanese military-industrial complex. As the Japanese Marxist Nawa Toichi put it, ‘the more Japan attempted to expand the productive capacity of her heavy and military-related industries as a preparation for her expansion policy… the greater her dependence on the world market and the imports of raw materials’ became. The onus of proof was unquestionably on the militarists to demonstrate that Japanese imperialism would not merely exacerbate the condition it was supposed to cure.

Some empires are acquired by accident, as the British liked to think theirs had been. The Japanese empire in China was acquired by incidents. On September 18, 1931, a Japanese force led by Lieutenant Kawamoto Suemori blew up a short stretch of the South Manchurian Railway five miles north of the town of Mukden. They had been trying to derail the Dairen express, but missed it. Blaming the explosion on Chinese bandits, the Japanese proceeded to occupy the town and take control of the railway. Manchuria, they claimed, was descending into anarchy. It was time, in the words of the Commander-in-Chief of the Kwantung Army – the Japanese force stationed in Manchuria since 1905 – to ‘act boldly and assume responsibility for law and order’ throughout the province. Within hours of what became known as the Manchurian Incident, the Japanese had also captured Yingkou, Andong and Changchun; by the end of the week they controlled most of the provinces of Liaoning and Jilin.
There would be many such incidents in the course of the next six years.

The transformation of Manchuria into the puppet state of Manchu-kuo provides a perfect illustration of the tendency of empires to expand spontaneously, as a result of local initiatives rather than central plans. Since the Jinan Incident of May 1928, when General Fukuda Hirosuke had defied orders from Tokyo by clashing with Chinese forces in Shandong, there had been a pattern of military insubordination on the periphery of Japan’s Asian empire. A month after the Tsinan Incident, Colonel Kōmoto Daisaku of the Kwantung Army had detonated a bomb underneath the railway carriage of Zhang Zuolin, the leading Chinese politician in Manchuria, in the hope of precipitating a Japanese takeover of Mukden. Zhang’s son, Zhang Xueliang, had responded to his father’s murder by aligning himself more closely with the Guomindang government in Nanking and endeavouring to reduce Japanese influence in Manchuria. This was bound to cause concern at a time when Nanking was stepping up its pressure for an end to the system of extra-territoriality. The catalyst for the Manchurian Incident was in fact a dispute over the right of Korean farmers, whom the Japanese had encouraged to emigrate across the border, to construct their own irrigation ditches at Wanbao-shan, a small town near Changchun. Clashes between Chinese and Korean villagers set off a chain reaction; there were anti-Chinese riots in both Korea and Japan, which duly elicited anti-Japanese responses in China, including the execution of a Japanese officer accused of spying in Mongolia. The moment seemed propitious to those Kwan-tung Army officers, such as Ishiwara Kanji and Itagaki Seishirō, who had long argued for a switch from informal to formal empire. They were able to summon reinforcements from Korea, once again without authorization from Tokyo. Time and again lower-ranking officers seized the initiative in China, reflecting the way their training had emphasized strategy over tactics and operations.

The insubordination of Japanese overseas armies raised an obvious question: who ruled in Tokyo? On paper, it was still the civilians, and behind them their patrons in the
zaibatsu
. But the domestic constellation of forces was changing rapidly. It was a sign of the shifting balance of power that the Prime Minister at the time of Zhang
Zuolin’s assassination, Tanaka Giichi, had let his murderer off all but scot-free, merely reprimanding him for failing to provide adequate security for Zhang’s railway carriage. For his part, the Emperor Hiro-hito viewed the antics of the Kwantung Army and its supporters in Tokyo with disquiet. His inclination, encouraged by venerable courtiers like the former Prime Minister Prince Saionji Kimmochi, was to rein in the soldiers. Yet it was in the Emperor’s name – or, to be precise, on the basis of his ‘right of supreme command’ – that Japan’s military leaders now pressed for still greater latitude. In 1930 a faction within the Japanese navy challenged the decision by the government of Hamaguchi Osachi to sign the London Naval Agreement, which extended the old 5:5:3 ratio for American, British and Japanese capital ships to cruisers, destroyers and submarines. In November of that year Hamaguchi was gravely wounded by an assassin. Henceforth any Japanese politician who stood up to the military was taking his life in his hands. Nevertheless, it would be misleading to portray what was happening as a kind of Japanese
pronunciamento
in the Hispanic style. There is a need to distinguish between the radical young officers in the Kwantung Army and the top brass of the General Staff, who in fact shared the Emperor’s unease about what was happening in Manchuria. Indeed, General Kanaya, the Chief of the General Staff, sought to prevent a complete takeover of Manchuria in the weeks following the incident. Nor was that the only fissure within the Japanese military. The old clan-like factions like the Satsuma, Saga and Chōshū were giving way to new societies like Issekikai (the One Evening Society) as well as more sinister organizations like Sakurakai (the Cherry Blossom Society) and Ketsumeidan (the Blood Brotherhood),
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some of which also recruited members within the civil service. The civilian politicians were themselves divided. Hamaguchi’s successor as Prime Minister, Wakatsuki Reijirō, pinned his hopes on a diplomatic compromise with the Chinese, but the opposition Seiyū kai
party backed the Kwantung Army and denounced him as a weakling. In December 1931 he resigned. It was a turning point. Of the fourteen prime ministers who came after him between 1932 and 1945, only four were civilians. Two of those, including Wakatsuki’s successor, Inukai Tsuyoshi, were assassinated. Inukai was just one of three prominent civilians murdered in 1932, including the former Finance Minister and the head of the Mitsui
zaibatsu
. Thereafter power was increasingly concentrated in the hands of an inner cabinet, within which the service ministers wielded an unquestioned veto power.

At first sight, it should be noted, there was something to be said for replacing Western imperial dominance in China with Japanese. After all, would not the Japanese understand better than Europeans how to develop a territory like Manchuria? Even before the Manchurian Incident, there were more Japanese than Europeans in China, and there is ample evidence that they were pulling ahead of the British as the principal exponents of ‘informal imperialism’. Nor did the Japanese do an altogether bad job of developing their new colony. Between 1932 and 1941, a total of just under 5.9 billion yen was invested there. The conspirators behind the Manchurian Incident had an almost utopian vision of how the region should develop as a ‘paradise of benevolent government’ based on ‘harmonious cooperation among the five races’. The indigenous population would be protected from ‘usury, excessive profit and all other unjust economic pressure’. This was not as disingenuous as might be suspected. Not for the last time in the mid-twentieth century, an occupied territory became a laboratory for experiments too radical to be carried out at home.

Why did the Chinese put up so little resistance to the Japanese takeover of Manchuria (a policy of passivity they would continue for a further six years, in the face of repeated Japanese territorial incursions)? As soon as he heard of the Mukden bombing, Chiang Kai-shek advised Zhang Xueliang not to meet force with force, despite the fact that his troops, though inferior in quality, substantially outnumbered the Japanese. The simple explanation is that Chiang was continuing his well-established policy of avoiding confrontation with the Japanese, conserving his resources for the internal war against the Communists. It was not a policy that won him much popularity,
particularly with the Communists now calling for resistance against the Japanese. Indeed, the Manchurian Incident precipitated a crisis within the Guomindang regime which forced Chiang temporarily to retire from politics. On the other hand, Chiang’s principal rival, Wang Jingwei, was no more eager for war with Japan. His policy was to negotiate in earnest while offering token resistance. The question was with whom to negotiate? One option was to resume talks with the Japanese Foreign Minister Shidehara, in the hope that he would be able to restrain the Japanese military. Alternatively, China could seek the support of the Western powers. It was decided to refer the Man-churian question to the League of Nations and to decline the Japanese government’s requests to negotiate on a bilateral basis. Unfortunately for the Chinese, this was probably the wrong decision. A swift deal with the moderates in Tokyo might have limited the damage in Manchuria. Nothing swift, by contrast, was likely to emerge from the League.