Japan's Trade with Communist China

Abstract

Japan relies heavily on foreign trade for its economic development. With limited territory and teeming population-100 million people living in an area slightly smaller than California, and a deficiency in natural resources to sustain the rapid growth of its industries-imports constitute a very significant part of its national income.1 Tadashi Adachi, Chairman of the Japan Chamber of Commerce and Industry, concluded in 1966 that Japan's economic development depended entirely upon the development of its foreign trade.2 For these and other reasons, foreign trade has always been a major consideration in the foreign policy of contemporary Japan. After the Meiji Restoration of 1868, Japan's trade with China began to expand, but in that period it was Great Britain that dominated China's foreign trade. For example, in 1880, China's trade with Japan represented only 3% of its total foreign trade while trade with Great Britain accounted for 77%. By 1926, however, this situation had changed drastically and the volume of Sino-Japanese trade had surpassed that of Sino-British trade.3 From 1930 to 1939, the China trade became increasingly important to Japan's economy, reaching 21% of Japan's total annual exports and 12.4% of its total annual imports.4 With the control of more Chinese territories during World War II, China became the leading trade partner of Japan. The close trade relationship between Japan and China prior to 1940 can also be illustrated by Japan's dependence on imports of key industrial materials from China. From 1934 to 1936, China supplied 34% of Japan's import of iron ore, 38.6% of salt, 68.4% of coal and 71.3% of soybeans.5 As a source of Japanese imports, China was next only to the United States and Korea in total trade volume. As a market for Japanese exports, China ranked first among Japan's trade partners. On the China side, in 1938, Japan was