Sorry, Uncle Sam, Japan is waking up

BY A SET of coincidences this spring I spent an hour and a half talking in Tokyo with the man who subsequently blew apart Japanese politics, Tsutomu Hata. He led the breakaway group of MPs from the ruling Liberal Democratic Party, founded the Shinsei (Renewal) party and may become the next prime minister of Japan - as and when Japanese politicians manage to complete their labyrinthine discussions and form a new coalition government.

The conversation deserves a wider audience partly because of the momentous nature of the change in Japanese politics: the LDP has ruled since 1955 and provided the stable background against which Japan was able to move from an impoverished, shattered state, to become almost the richest country on earth. It is hard to remember that in the Fifties Japan was racked by labour unrest and political dissent, rather as Britain was in the Seventies, and that the great industrial take-off could not occur until the LDP provided a stable, pro-business climate.

But the conversation also gave some feel for the way in which the new generation of politicians sees Japan's place in the world changing - the way in which it can no longer subcontract both its foreign policy and its national defence to the US and must assert itself more as a regional leader.

That issue - how Japan might move from being an economic superpower to become something of a political superpower - is perhaps the most important one raised by the change of direction of Japanese politics.

The country's political wrangles have, for most Japanese people as for the rest of us, been very boring. (Even Japanese politicians found their politics far too dull, as Mr Hata admitted, though he subsequently tackled that problem.) But Japan as a political superpower has profound implications for the world.

We covered three big areas: the relationship with China; how and whether Japan could maintain economic leadership in Asia; and the need for more active Japanese politics.

As far as China was concerned, Mr Hata believed that its economic development could not be stopped. Whether the rest of the world welcomed it or not (and he did welcome it), the Chinese economy would go on growing rapidly and become the largest economy of the region, maybe the world. From the point of view of the rest of the world there were several problems, including its attitude to human rights and its nuclear weapons. But as the economy carried on growing, there was a good chance that such development would lead to the development of democracy.

There were, however, great dangers. We discussed one in particular: the possibility that China would split, with the developed coastal regions separating from the less-developed hinterland. China could not allow that to happen.

The regional impact of the growth of democracy in China would be enormous. If democracy succeeded, Chinese influence on India and the whole of South-east Asia would become much greater. If it failed, the rest of the world would find itself flooded by refugees.

Mr Hata saw the relationship between the US and China becoming very difficult, partly because the US would find its regional influence waning, partly because of US impatience about China's slow progress towards democracy. Japan's job, as he saw it, was to act as mediator between China and the US, explaining each to the other.

We then turned to Japan's position as the economic leader of Asia. That Asia would become yet more important to the world economy was self- evident: the work ethic in Asia was stronger than it was in North America or Europe. (That is a common theme in Japan, and one that should be taken on board by the Social Chapter lobby in the EC.) But while Japan had technical leadership, it would inevitably produce more of its goods overseas. It therefore had to become a regional economic co-ordinator, transferring its technology abroad and helping the rest of the region to develop. It had also to co-operate technically with the US, for maintaining that relationship was very important.

All this demanded more active politics. Japan's present policy paralysis simply could not continue. The political scandals were one problem, but there was also the absence of active debate about policy, itself a result of the difficulties encountered in changing policy. In Mr Hata's view, Japanese politicians needed not just to develop policies on the big international matters. The country needed also, perhaps, to change its constitution so that it could take a more active role in its own defence. And it needed to push more power out to the regions, for over the past 50 years far too many economic and political decisions had gradually been brought to Tokyo.

The Japanese government had to become more active also for reasons of economic management. It was, for example, very difficult to change taxes or subsidies under the present system. The world economy could move very fast but the Japanese government could not react to such change.

Finally, Mr Hata sketched some of the changes he sought in the political system, which included single-seat constituencies and some other constitutional changes. Such political reform will clearly be part of the new government's policies, whoever forms such a government, although the nature of such reform is far from clear.

What, however, from a British point of view seems self-evident is that Europe and North America will, over the next 10 years, have to become accustomed to a Japanese government that is able to take decisions and will consequently seem much more assertive.

We will have to become accustomed to a Japan that not only manages the world's largest commercial empire, but one that shares with China the political leadership of Asia. Here in Britain, we can live with this. Japan's commercial expansion has been enormously to our advantage: in five years' time car production in the UK will probably be back above 2 million, with half of that coming from the new Japanese factories. As for Japanese political expansion in Asia, that is not really an issue that directly concerns the UK.

For the US, though, it is quite different. Mr Hata stressed several times the importance of the relationship with the US. But Japan has actually managed that relationship very badly, running up its vast trade surpluses and blocking US efforts to get into the Japanese market. As a result, Japan-bashing is a popular congressional sport in the US. Japan sees this as deeply unfair: that its political loyalty to the US is not appreciated. There is a strong movement for the country to play a more assertive role - witness the bestseller The Japan That Can Say No, by Shintaro Ishihara and Akio Morita.

If the US finds it hard to live with an economically successful Japan, it could find it that much harder to live with a politically assertive one.