The Japanese Thatcher

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Written by Julian Macfarlane

Julian Macfarlane is a Fulbright Scholar who dropped out of Harvard’s PhD program to got to Laos during its “Secret War” as journalist. After that, he spent time in South Korea under the post war authoritarian regime, then came to Japan where he worked in various roles, principally media-related as an analyst, writer, and consultant.  He has worked for the Prime Minister’s office, the Foreign Ministry, the Ministry of Economy, Trade and Industry, the Japan Self Defense Forces—in fact every major government ministry and agency – and also the major Japanese Defense and Aerospace contractors. He has also served almost every major corporation. He has written materials for many international conferences and initiatives and the United Nations.  He writes regularly on Substack.  And does voiceovers for SouthFront.

Japan and the US

Much has been made of the ascension of Sanae Takaichi as PM and head of the LDP, which has ruled Japan for most of its postwar history. Her approval rating when she took office was around 59%. After Busan, it was above 65%.

That was approval in Japan – but the the MSM are impressed too—mostly for the wrong reasons – the main one being she is a woman in a male-dominant society that has never seen a female PM.

Then again, who was the last female President of the United States of America….LOL?

Another key to her popularity is her claim to be channeling Margaret Thatcher. Most people have seen the movie, the Iron Lady, with Merryl Streep playing Thatcher. It was entertaining. But, few people understand Thatcher’s political career or policies or what she did to set the UK on its course to nowhere, with a greater social inequality, the decimation of industrial communities, and a shift towards an individualistic, materialistic society.

Takaichi, like all Japanese PMs, is a Consensus Leader.

Thatcher, however…

Thatcher was known for an autocratic and uncompromising “conviction politics” style, often bypassing traditional cabinet consensus and centralizing decision-making power within a small, trusted circle. Critics, even within her own party, described her as a “prim control freak” who stifled internal dissent.

Most people don’t understand the complicated way the Japanese handle human relationships, communication, and agreements – and therefore business, government, and politics. Nothing is set out clearly, everything is ambiguous. The “tatte no shakai” (vertical society) depends on compromise, ambiguity, and heterarchy.

Takaichi’s nominal political base is, of course, the ultra-right “populist” conservative wing of the LDP, where she can coast on the aura of her mentor Shintaro Abe.

Tacking to the Right is a smart move for any female politician. It was ror Thatcher. It clearly was also for Takaichi whose much publicized visits to Yasukuni Shrine were not because she cared about the war dead but because she was sending a message to the Right. “Almost no one in the LDP is here for you -but I am!” .

So Sanae-chan does “righty” stuff. She has dutifully made all the “right” noises about supporting the Nazis in Ukraine, without really doing anything – and she supports the US in the South China Sea, again – without actually doing anything.

So, the Americans like her. At least, Trump does. He is a sucker for women. Just ask Stormy.

The Americans also NEED Japan as much as the country needs the US!.

That said, Japan is in a weak position relative to the US, fiscally speaking, so it must finesse the relationship.

This is not just Takaichi’s opinion. Nor that of LDP politicians. It is the entire “Iron Triangle” – the Ministries, Big Business, and the Political Class.

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Their consensus is simple:

• don’t alienate Japan’s largest trading partner, China.
• don’t alienate the Russians who are supplying oil and gas to Japan
• promise to invest in the US – someday, if the bill can get through the Diet– someday. Promise anything but don’t offer guarantees.
• make a lot of excuses when the Americans want something you don’t want to give – and lie a lot.
• remember that Americans don’t remember anything after a news cycle or two.

Japan’s position is complicated.

Japan has been on the verge of financial collapse for years and has so far managed to prevent a complete collapse by means that do not prevent the collapse but postpone it.

After Lebanon and Sudan, Japan has the highest national debt in the world at over 260%. Even in debt-ridden Europe, debt ratios are much lower – Greece: 162%. The low interest rates mean that government bonds are no longer finding buyers, meaning that the Japanese central bank currently holds around 45% of its own debt. Moreover, the Nikkei share index has never recovered since the biblical crash in December 1989 – that was 36 years ago.

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The SWAP agreements mean FED supplies Japan with US dollars. The Japanese therefore run the risk that the Americans could threaten a financial collapse of the fragile Japanese economy dependent as it is on the American market and transactons. .

However, as time goes on, the power of the dollar is eroding, as well as American financial instruments. The US is not the only market Japan depends on. To do business in China, Japan must work in Yuan by 2030 when, if not the world’s reserve currency at that time, Chinese currency will be more powerful than the dollar.

Given the uncertainty of the future global economy, Japan does not want to become embroiled in US efforts to maximize trade pressure on China by restricting its own economic ties with Beijing, which is Tokyo’s largest trading partner and a major source of goods and raw materials.

Japan has repeatedly told China that it does not fully agree with the US on chip exports and semiconductor restrictions. This is because Japan still has advanced digital and photonic engineering capabilities and is looking ahead to the 6G era where it needs China. While Japan has Western partners in this field, China’s capabilities are developing fast with advanced chips and AI and the like.

Japan has been controlled by the US since 1945 and for a long time was happy to focus on economic redevelopment while the US built bases and looked after defense. But in this century, with the rise of China, Russia, India, Iran and BRICS, US bases are more of a problem than an asset.

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The Japanese right wing wants a strong Japanese military and a return to prewar nationalism — without the US – but opposed to China and Russia against whom they won two wars in the 19^th Century and built their empire, taking Korea, Taiwan, the Ryukyuus and Hokkaido. That means offensive capabilities which are expensive and impractical. In the past, such capabilities would also have required nuclear weapons. But military technology has moved beyond such weaponry.

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Just two Poseidons would render both the Kanto and Kansai— which is where more than half the population lives — uninhabitable.

No, the Japanese need an independent defensive military, not one controlled by the US – and not one capable of threatening anyone.

Maybe we should just say that Japan needs friendlier relations with its neighbors.

The GCAP fighter project is an example.

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It’s cheaper than buying a US weapons system – but has the disadvantage of most of the components being licensed in the US. It also appears that Japan is also selling Australia both frigates and submarines, where it has a technological and price edge over the US.  This is one area where it is ahead, although still dependent on American supplied Western systems which are inferior to Russian or Chinese ones.

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Does Japan have leverage?

Obviously, yes, given the enduring American delusion that it can win any war with anyone. Without the American bases in Japan, the US is in trouble, leaving only its bases in Korea where it is increasingly unpopular.

That leverage has allowed Takaichi to play Trump. She refused to stop buying Russian oil and gas but did a rare earth agreement and pledged support for US initiatives, whatever “support” means.

Keep in mind that the rare earth agreement is meaningless. Rare earths are plentiful worldwide But only China can process them – it produces over 90% of the world’s processed raw earth materials–having invested in that technology for 40 years. The West has no hope of catching up – nor Japan. But without rare earths you don’t have the magnets essential to almost every kind of electronic device for earbuds to the systems that allow fighter aircraft to fly and missiles to launch.

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The Chinese will keep supplying rare earths and magnets, but their agreement is in the context of export controls, which allow them to control the use of these things in strategic devices. In addition, the agreement is just a one year pause in the Tariff War.

Takaichi did all the right things. She talked conservative, acted pragmatic, smiled a lot and made promises without any guarantees.

In Japan, it’s known as “tatemae”– that which stands in front, social representation, a lubricant for relationships. The understanding is that nothing that is said is necessarily true. It can be promising, but not a real promise. “Truth” is known as “honne”- literally, the “real thing”.

The Chinese are well aware of this:

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In their meeting, Xi said that the two countries should focus on the big picture, seek common ground while reserving differences, build consensus and manage disagreements, and make sure the relationship will not be defined by problems or differences.

If the Takaichi government turns a deaf ear to these calls and adopts a saying-one-thing-doing-another approach to bilateral ties, it will be wasting the hard-earned opportunity to build constructive, stable bilateral relations with China.

One problem with Takaichi’s approach is that the consensus she represents is rather too wide. Pushing relations with Taiwan’s separatists and making noise about the Diaouyu Islands, Dokto Island (under Korean control) or the Kuriles (under Russian control) right at this moment is poor strategy.

She is not fully in control. She is not the Iron Lady, not a Thatcher. Although a touch passive aggressive, she lacks Thatcher’s aggressive drive to dominate.

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