Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-01-24
Jupon
Maybe Liberolized Trade
With Reds Isn't Answer
By EorI II. voss

with Communist China is being
looked upon by many these days
as some kind of panacea for Japan's
economic troubles. This is q view
held not only among many japanese
who should know better-chiefly
busineSsmen-but among people in
other parts Of the world, as well.
AS o result, the Japanese govern
ment is constantly under heavy
pressure to lift curbs on strategic
trade with Communist China. These
restrictions were instituted when the
United Nations embargo was voted
In 1850.
Within Japan this pressure comes
mainly from Japanese businessmen.
Some Of them. but by no means all
or even q majority of the foreign
traders, would stand to make some
short-range gains. There are Brit
ish businessmen, too, who wish Japan
could trade with China so that
Japanese competition for British
dominated markets In Southeast
Asia could be eased.
Another factor building this pres
sure is new uncertainty about the
level Of American aid. The United
States promise given last spring to
spend roughly $3.50 million a year
the amount of the annual trade
deficit-in Japan expires in the
spring of 1855. Undoubtedly the
United States will continue to be
~. 1.alv@ - the Tonovaro ao0n0Ynu
during the contemplated f1ve-year
defense buildup period. The Amer
lean part in that buildup is now
being negotiated by American diplo-
mats and the Japanese Diet. But
the level Of annual American ex-
pendituree In Japan probably will
fall on.
Markets Needed
Japan u looking for markets
abroad to take UP the slack. Her
root problem is well known. She
has Q population Of SO million. ex-
pected to grow to at least 100 mil
lion by 1870. trying to exc out .
living from o land area about as
large as California.
Communist China is taking adj
vantage Of the japanese population
problem to SOW confusion and en-
tice Japan out of the free world
alliance with rosy promises Of trade.
Last November. for instance, Picking
negotiated" an $85 million COM
mercial treaty with an unoficial
japanese Diet trade mission. So
far no goods have been exchanged.
and there is great doubt that there
ever will be. The japanese govern
ment shows no inclination to issue
export licenses for the goods.
One of the top Chinese officials
who participated in the ''negotia-
tionS" even went so far as to hint
that a new era of Chinese-Japanese
friendship was in the ofdng, and
that it might be climaxed with a
non-aggression pact.
Japanese government officials re-
call. however. that Mao Tse-tung
and the Soviet Union still have in
force a secret pact against Japan.
But even if all impediments to
Japan-China trade were removed.
just how much would Japan bene-
fit?
1t ought to be clear at the outset
that japanese trade with China
never was the cure-all that some
people seem to think. In the pc
RODS 1926-1930 and 1934-l936, ship
mentS to China amounted to 1913
per cent and 1872 per cent, reSpec-
lively. Of Japan's total exports. And
great part of these exports during
both periods were the result of
Japan's intensive effort to develop
first the Kwantung leased territory
and later the whole of Manchuria
as military and industrial base.
On the incoming side, Japan
got only 1877 per cent of its total
imports from the China mainland
in 1926-1930 and 1915 per cent in
1934-1936. This may be somewhat
artificial de-emphaSis of the i'm
portance of prewar China trade.
however. In 1895, for example.
Japan got SO per cent Of her coal
imports. sos per cent Of her iron
ore imports and 80 per cent of her
salt imports from China. OF course,
that was when Japan dominated
Manchurian. There is no hope of
getting such quantities of those
goods out of Red China today be-
cause Mao needs the materials to
build his own industrial plant.
Defect Disrupted Trode
Japan's defeat in World War II
and the Chinese civil war COM
pletely disrupted Japan China
trade. The postwar peak was
reached in 1850. when China ac-
counted for only per cent of
Japan'S exports and 81 per cent of
its imports.
According to the best available
estimates, if Japan continues to
maintain the controls against ship
ping strategic material to China
that are prescribed by free world
agreement, exports to China could
range between $25 million and $50
million a year.
Even If Japan were to end her
cooperation with the free world
in restricting strategic shipments to
Red China, and if Peking could
provide enough materials to sell to
Japan in return, Sino-Japanese
trade would only reach an esti-
mated level of $50 million each way
This would be only SIS per cent Of
Japan's export trade and 3.5 per
cent of her imports on the basis Of
1853 trade figures exports of $1.24
billion and imports Of $2.O28 billion :.
Only o Mirage
The China trade issue then, seems
II be no more than Inirage-only
f. or S per cent Of Japan's for
eign trade requirements That is
why both japanese and American