[SAJC] Transformation of East Asian economies 2024 v2

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 1 The development of the Global Economy Topic 2: Transformation of East Asian Economies: Japan(1947- 1991) SAJC History Unit, 2024 Learning Outcomes (from the Examination Syllabus) 3 Essential Questions for this topic: 3 Guiding Questions for this topic: 4 1. Problems Affecting Japan’s Immediate Post-War Recovery 5 1.1 Japan’s constraints: Limited Natural Resources 5 1.2 The Destructive Legacy of WWII 5 2. Potential for Rapid Economic Recovery 5 3. Reasons for Japan’s Economic Success: The Role of USA 6 3.1 American Motivations 6 3.2 American Aid 6 3.3 Early American Reform Policies in Japan 7 3.3.1 Ending of Reparations and Promoting Balanced Budget 7 3.3.2 Agricultural Reforms 7 3.3.3 Industrial Restructuring 7

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 2 3.3.4 Keiretsu System 8 3.3.5 Improvements in Social Capacity for Economic Growth 10 3.4 U.S. Military Protection of Japan 6 3.5 American spending in East Asia: Korean and Vietnam War Boom 6 3.5.1 Korean War 1950-1953: USA’s Special Military Procurements 6 3.5.2 The Vietnam War Boom 7 4. Reasons for Japan’s Economic Success: Role of the Japanese Government 12 4.1 Overview 12 4.2 Promotion of Industrial Production 13 4.2.1 Restoration and Promotion of Industrial Production 13 4.2.2 Promotion of Heavy Industrialisation Centred on Advanced Technology and Heavy Capital Investment 14 4.3 Government support for Large-Scale Business Groups 14 4.4 Government Promotion of Foreign Trade Through Export-Oriented Industrialisation 15 4.4.1 Slow Expansion of Trade in the 1950s 15 4.4.2 Export Oriented Industrialisation in the 1960s 15 4.4.3 Continued Trade Surplus in the 1970s 16 4.4.4 Myth of Export-Led Growth 16 5. Flexibility in Meeting New Challenges Through Swift Structural Adjustment 16 5.1 Meeting the Challenges of the 1960s: Labour to Capital-intensive 16 5.2 Meeting the Challenges of the 1970s: Capital to Technology-intensive 17

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 3 5.3 Meeting the Challenges of the 1970s: Developing New Investment Portfolios and New Markets 18 6. Japan’s Lost Decades (Late 1980s- Early 1990s) 18 6.1 Factors leading to Japan’s Economic Stagnation 18 Learning Outcomes (from the Examination Syllabus) Students are able to: ● evaluate the factors that contributed the factors that contributed to the economic transformation over time ● evaluate how the economic miracle in Japan as a reflection of the Growth of the Global Economy ● evaluate how, s ituated within this changing global ec onomy, the East Asian economies of post-war Japan China showcased how countries leveraged global economic changes to chart their own paths to economic development. ● evaluate the significance of the role played by the USA in the initial provision of aid ● evaluate the internal government policies and actions of Japan to boost economic development ● evaluate the significance of “paying it forward”/ reciprocal action of Japan as a major donor of foreign aid and as a major trading and investment partner Essential Questions for this topic: • How did the global economy develop? • How did the development of the global economy impact different countries? *Questions set will not require candidates to compare the economic transformations of Japan and China

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 4 Guiding Questions for this topic: • What are the economic conditions of Japan at the end of WWII? • What are the economic problems/constraints and the pre -existing conditions that favour rapid recovery? • What are the external (international development s and role of USA ) and internal factors and conditions (role of Japanese government) that shaped Japan’s rapid economic recovery and growth from 1945 to the 1970s? • What are the Keiretsu system and how did it contribute to Japan’s economic transformation? • What are the strategic manoeuvres adopted by the Japanese government (state intervention methods) that contributed to Japan’s economic transformation? • What are the socio-economic changes implemented that attributed to Japan’s economic ascension from 1947 to 1991? You can also refer to Section 6 of the Post -War Economic Liberalisation: Economic Miracle in Japan in your Growth of Global Economy notes given in Term 1 to supplement your knowledge! 1. Problems Affecting Japan’s Immediate Post - War Recovery 1.1 Japan’s Constraints: Limited Natural Resources • Even without WWII, Japan faced a severe economic constraint – it is a mountainous island nation with only 29% of arable land. Hence, it has few natural resources to support its growing economy and large population. • Japan had to import large quantities of food, such as rice from China. It was also highly dependent on imported energy sources. • All these contributed to unfavourable balance of trade and created the need to earn foreign exchange to service its import needs. • To do this, at the end of WWII, Japan had to rebuild its manufacturing and

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 5 processing industries to convert raw materials imported from abroad before they could be exported. 1.2 The Destructive Legacy of WWII • WWII left Japan with massive economic and social problems. There was widespread destruction of housing, industrial plants and major cities, leading to extensive homelessness and some 10 million unemployed. • The annual coal production was reduced to a million tons, while the 1945 rice crop was only two-thirds of the norm. • There were widespread shortages. The result was rapid inflation. • Material losses due to the war have been estimated at a quarter of national wealth and these were compounded by the need to pay for the immediate cost of the American Occupation. 2. Potential for Rapid Economic Recovery • Not all the consequences of the war were bad. Unemployment meant that there was a pool of labour, much of it skilled, available to be directed towards new tasks and the reconstruction of the country. • The war had raised the level of technology and production capacity in heavy industry, notably in iron and steel, machinery, and chemicals. • The war had also left in place a network of financial controls (originally designed to give priority to munitions) which were available to the government as instruments of reconstruction. • There was huge potential for economic recovery and this was tapped upon by the post-war administration. • In 1952, at the close of t he Allied Occupation, Japan was a ‘less -developed country’. But within two decades, Japan moved to ‘developed’ status. • Japan achieved one of the highest economic growth rates in the world from 1953 to the early 1970s, creating a historical phenomenon known as Japan’s ‘economic miracle’. This development, which propelled Japan to the status of an economic superpower, is one of the most significant in 20th century economic history. 3. Reasons for Japan’s Economic Success: The Role of USA

Saint Andrew’s Junior College (2024) 9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 6 3.1 American Motivations • The American government under the auspices of the Supreme Commander of the Allied Powers (SCAP), General Douglas MacArthur, played a crucial role in Japan’s initial economic recovery. • During its military occupation from 1945 to 1952, the USA treated its former enemy with a combination of political firmness and economic leniency. • By impo