Ask anyone to name the Asian economic powerhouse that has taken the world by storm, and the answer is almost certain to be China. Rewind 25 years, however, and the response would have been quite different.
“In the 1980s, Japan glittered, it sparkled, it seemed to be the future,” says Michael Donnelly, professor emeritus and founding director of the Asian Institute at the University of Toronto.
It was a period, he recalls, when sake in Toyko came with gold flakes in it. Japan's share of the auto market had gone from three or four per cent to almost 30 per cent in just a decade. Bankers predicted Japan's economy would surpass the U.S.'s within a decade – that is, until Japan's housing bubble burst, prompting a period of rapid decline in the 1990s.
Although differences between the two countries are vast, China now seems to have 1980s Japan's unstoppable momentum. It surpassed Japan as the world's second-largest economy last quarter, capping off 30 years of dazzling growth since free-market reforms began.
The average growth rate of GDP per worker has been between seven and eight per cent over the 30 years since China's economic reforms – even higher than that of Japan during its rise, says Prof. Xiaodong Zhu, an expert on China's economy and macroeconomics at the University of Toronto. Many are now certain that China, whose gross domestic product hit $1.337-trillion in the last quarter, will one day become number one – and it certainly may. But history has shown that predictions for anything as complex as a country's economy should be taken with a grain of salt.
As China has soared to become a world power, it has touched off both admiration and cultural anxiety – much the way Japan did in the 1980s.
Like shoulder pads and leopard print, Japan was in vogue. Big in Japan was Alphaville's first single. Cool American kids played Nintendo and watched Voltron, a Japanese-American cartoon show, while their parents nervously read Michael Crichton's Rising Sun, a paranoiac fantasy about ruthless Japanese businessmen taking over U.S. industry.
“In the 1980s, the Japanese were represented in American media as systematic and a bit ruthless, hermetic socially,” says Bart Testa, an expert on Asian cinema at the University of Toronto. “There was a degree of awe and fear of the industrial accomplishment of the Japanese.”
There is a whiff of that same xenophobic fear of the “yellow peril,” the worry that “they” will take over, in some Western reactions to China's success, though it has been more muted, a sign that such explicit racism has become less acceptable in a more global era.
China has some superficial similarities to 1980s Japan, such as potential housing problems and a greying work force. The similarities end there, however, between democratic, solidly capitalist Japan and China, where much of the population is still destitute. A typical image of 1980s Japan showed its highly sophisticated robots assembling a new generation of smaller, more efficient cars.
This strikes a contrast with China's football-sized factory floors, where young people bend over tables, in hairnets and latex gloves, churning out everything from iPods to designer T-shirts and plastic trinkets – an image immortalized in a famous series by Canadian photographer Edward Burtynsky. That image, with its uneasy echoes of the west's own dark industrial era, has come to sum up all our mixed feelings about the new world power.
Yet recent strikes and work stoppages in China's coastal factories have led to speculation that, as wages climb, the country is making the transition from a well of cheap labour for foreign firms to a market of newly affluent consumers and assertive workers.
“You cannot have cheap labour forever,” says Prof. Zhu, adding that the passing of this era will be good for China.
