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The Times MONDAY, FEBRUARY 21, 1938. Japan and Foreign Capital

One of the curious contradictions of Japan’s recent expansive drive on the mainland of Asia is that open expressions of desire for foreign capital have accompanied activities which certainly have not improved relations between Japan and the chief sources of surplus capital, Great Britain and America. The heavy industries of Manchoukuo have been turned over for development to a corporation headed by Mr. Yoshisuke Ayukawa, prominent Japanese industrialist; and Mr. Ayukawa recently placed himself on record as favouring foreign capital in Manchoukuo in the following terms: —

In effecting the industrial development of Manchoukuo I heartily welcome foreign capital and technique. I may add that the Manchoukuo Government fully acquiesce in this.

If foreign capital is thus pronounced acceptable in Manchoukuo, long a stronghold of a peculiar Japanese brand of military state socialism, it would be still more welcome, presumably, in North China, where sober Japanese economists and businessmen frankly recognise Japan’s inability to supply sufficient funds for adequate economic development. Indeed, the attempt to differentiate between North China and Manchoukuo, the reluctance to place these two regions, both of which are under Japanese military occupation, under an identical regime, is also in part inspired by the hope that foreign money may somehow be induced to flow into China s northern provinces, which are now under Japan’s suzerainty.

It is doubtful whether this desire for foreign capital is, or can ever be, more than wishful thinking, unless there is a drastic and complete re-orientation of Japanese foreign policy. Putting aside for the moment the moral considerations which would hinder investment in territories which, in the opinion of most Western countries, Japan has acquired illegally, there are two strong objections to any inflow of American or European capital into Manchoukuo and North China.

In the first place, military domination and freedom of business enterprise do not go well together. Japanese capitalists get on with the Japanese Army because they have no alternative. Foreign capitalists are under no such compulsion.. The attempt to mix Army rule with foreign capital would most probably end as fruitlessly as the attempt of the Soviet Government to attract foreign capital by means of a concessions policy which has now been entirely abandoned.

Moreover, an important prerequisite of investment is security. Japan’s own primary obligations, its state bonds, are to-day selling far below par in New York and London. Foreign capital might conceivably come into Manchoukuo or North China at some future time. But before this would lie a practical possibility there would have to be convincing evidence of a fundamental revision of many present-day Japanese foreign and internal policies.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/MT19380221.2.36

Bibliographic details

Manawatu Times, Volume 63, Issue 43, 21 February 1938, Page 6

Word Count
442

The Times MONDAY, FEBRUARY 21, 1938. Japan and Foreign Capital Manawatu Times, Volume 63, Issue 43, 21 February 1938, Page 6

The Times MONDAY, FEBRUARY 21, 1938. Japan and Foreign Capital Manawatu Times, Volume 63, Issue 43, 21 February 1938, Page 6