Managing the Greater East Asia Co-Prosperity Sphere

Strategies and Organizations for Managing “Greater East Asia Co-Prosperity Sphere”

Tetsuji Okazaki (The University of Tokyo)

Abstract: During the World War II, Japan occupied a large part of East and South East Asia, called “Greater East Asia Co-Prosperity Sphere” (Daitoa Kyoei Ken). This paper overviews what the Japanese military authorities and the government did to develop the occupied areas in the 1930s and the early 1940s. It is remarkable that different development policies and organizations were applied across occupied areas. In Manchuria, which Japan occupied earlier, after trial and error, a system of planning and control was introduced. By this system, more or less systematic development of industries was undertaken. Meanwhile, in China Proper, the Japanese military authorities and the government prepared the statutory holding companies as channels for investment from Japan, but industrial development was basically entrusted to those holding companies and individual companies affiliated to them. Finally in South East Asia, development was almost totally entrusted to existing Japanese firms.

URL: http://econpapers.repec.org/paper/tkyfseres/2013cf900.htm

Review by Masayoshi Noguchi

This paper by the leading authority on the history of Japanese wartime economy was distributed by NEP-HIS on September 13th, 2013. It provides a very interesting general overview and understanding of the process behind the formation of the Greater East Asia Co-prosperity Sphere. Thanks to a very thorough and detailed literature review, the paper provides a comprehensive overview of “what the Japanese military authorities and the government did to develop the occupied areas [called Greater East Asia Co-Prosperity Sphere] in the 1930s and the early 1940s” (p. 1); while also summarising and contrasting different approaches taken by the Japanese authorities to the development of Japanese interests in Manchuria, mainland China and South East Asia. Comments are also offered as to the consequences of these different approaches.

Between 1915 and 1945, the Manchurian region was one of the major locations of China’s steel industry. The development of steel industry in that region was closely related to the Japanese invasion of China. Following the establishment of the (puppet) State of Manchuria in 1932, the Japanese government encouraged the formation of iron-steel factories with national capital to help transform Manchuria’s steel industry into a typical export-oriented industry. The main features of the development policy for Manchuria were the establishment of “special corporations” and so called “one industry, one corporation policy”. The five-year industrial plan for the State of Manchuria recognised the need for a business entity to administrate the overall development. It thus encourage the Nissan zaibatsu to form the Manchuria Heavy Industry and Development (MHID) Corporation, which was established in December of 1936. Nissan also took over the management of the Showa Steel Factory and invested in the Benxihu Coal and Iron Company, thereby gaining control over the steel industry in Northeast China. However, the initial plan for the MHID was soon subjected to a major revision as the outbreak of the Second Sino-Japanese War in July of 1938 significantly increased the demand to supply the Japanese military. At the same time, control of the MHID transformed and it became subject of direct control by the state. Later, when the export of steel products to Japan turned out to be less than originally expected, the steel industry ceased to be operated as an export-oriented industry.

The promotion of the economic development of mainland China was based on “the Outline of Measures to deal with the Incident” (p. 4). In order to support this development and attract capital investments from Japan to China, in November 1938 the Japanese government established two entities, namely the North China Development Corporation and the Middle China Promotion Corporation. These two corporations made significant investments to their affiliated companies in the fields of transportation, telecommunication, electricity, and coal mining.

Immediately after the outbreak of the Pacific War in December 1941, “the Outline of Economic Policies in the South East Asia” was promulgated, but in South East Asia, unlike the other two cases, “a policy to develop the local economies in a systematic way was not taken” (p. 7) and the “development was almost totally entrusted to existing Japanese firms” (p. 8).

In summary, Okazaki’s study shows how the formation of Greater East Asia Co-prosperity Sphere was not unique or consistently applied across geographies as it was conditioned with several restrictions. These included geographical terms and conditions of each area to which the Japanese army advanced, the success or failure of the military strategies, the interaction of the military, the state and economic interests as well as the economic terms and conditions of Japan itself. Although it is not easy to agree with a part of description presented by Okazaki (for instance that the advance of the Army into Manchuria was primarily motivated by its own economic concerns (p. 7)), the paper is required reading in order to understand this very important phase of the Japanese wartime economy.

About these ads

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s