Japan’s apex survival instinct is put to the test
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Clearly, things are looking dicey for globalisation: fun while it lasted, no doubt, and an admirably long stint as the conceptual spirit animal of political leaders, corporate chieftains and end-of-history historians. But when America’s vice-president rails against the “drug” of cheap labour, his boss coos over the supreme beauty of tariffs, and the chair of HSBC (“opening up a world of opportunity”) warns that globalisation as we know it may now have run its course, it is probably time to accept that the tectonic shift has begun.
And while those plates are in chaotic, terrifying motion, both winners and losers of globalisation will need a dependable life hack. It is an excellent bet that Japan will have one, though few may like it.
On the face of things, the unfolding triple-crisis that combines retreat from globalisation, the diminution of a rules-based world order and the rapid fraying of Pax Americana are almost uniquely calamitous for Japan: the most elegant of advanced economic palaces built upon that exact triangle.
Donald Trump may see the US as a victim of rip-offs by other nations; most will conclude America has done astonishingly well. But for the better part of 80 years, Japan has arguably been the most consistent beneficiary of the three constructs above.
Its rise to the world’s second-biggest economy in the late 1960s was followed by over four decades in that position. Even as it has stagnated and ceded that spot to China, Japan has remained on a relentless path to greater global exposure. The proportion of Japanese companies’ sales generated overseas has more than tripled since 1991. Earnings in the broad Topix index of Japanese companies, says CLSA strategist Nicholas Smith, are a “geared play on global growth”: the correlation between their profits and the global composite purchasing managers’ index (a benchmark of global economic health) is extremely close.
Japan has profitably played the part, as framed in its US-written constitution, of the pacifist entrepreneur: solving its extreme natural resource and energy poverty through global markets, while vigorously selling through every available channel. It has acquired companies and projected intellectual property. It has lived peacefully under US military protection, while judiciously reminding Washington of its status as America’s “unsinkable aircraft carrier” in the Pacific.
And Japan has, to a greater extent than most, fashioned an entire modern society and culture around the stabilities that the globalisation/world order/Pax Americana have provided. These are also the forces that have granted it the wealth, space and leisure to become a cultural superpower.
So it should not be surprising that the past few months of the new Trump administration have so profoundly rattled Japan: it seems to have everything to lose from the shift, at almost every level where economic, social and geopolitical pain might consequently be felt.
Prime Minister Shigeru Ishiba’s visit to Washington last month was hailed as a success because it went smoothly. The subsequent weeks, during which Trump openly stated his suspicion of military allies and Japan failed to secure a promise of tariff exemption, have been far more unsettling. And it is not difficult to find politicians, government officials, corporate executives, military officers and ordinary Japanese who are unsettled.
But to predict calamity for Japan is to miss why globalisation has been so good for the country: its adaptability and its overwhelmingly potent pragmatism and survival instinct. Certainly, the geopolitical and geoeconomic environment have suited Japan exceptionally well, but much of that is because Japan has adapted itself precisely, constantly and rapidly to its contours. The speed with which Japan, for example, embraced the opportunity in China after 1989 remains a masterclass in Tokyo making globalisation work to its ends.
Japanese who now see the breakdown of the postwar order as inevitable suspect they know what is coming. Ageing, shrinking Japan must adapt with a pace and a vigour that it has only rolled out twice before, when it was younger and scrappier: once during the late 19th-century Meiji modernisation, and again after 1945.
The key, then as now, is Japan’s ability to shed ideology when survival demands it: to place adaptability on a higher pedestal than anything, no matter how cherished the contents of those lower tiers may be. It is not an easy act to pull off, and not many will have the taste for it. It will, however, be worth watching what apex survival instinct looks like in the new era.
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