recognising that the future of China depends on
it. In March 2004 private property rights were
declared ‘inviolable’.
What is left of the former Marxist state is the
one-party system. Hu Jintao replaced Jiang
Zemin as party chief in 2002 and president in
- His style is more in conformity with a
modern leader, dispensing with a fawning media.
The Chinese people enjoy greater personal free-
dom. But the reform of the party, despite Hu
Jintao’s call encapsulated in the exhortation of the
‘Three Represents’ that the party should ‘repre-
sent’ advanced productive forces, advanced
culture and serve the people, remains no more
than a vague aspiration. The leadership fears that
genuine encouragement at the grass roots of elec-
toral choice, even within the party would open
the floodgates. The pressures for reform come
from the intellectuals, a small group that can be
contained. The Chinese leadership is not prepared
to take risks when so much progress has been
achieved. Higher living standards have engen-
dered compliance with the system, protected by
a large army. The new urban middle class is
content to enjoy the fruits of their enterprise.
While Japan’s annual economic growth
remained sluggish, about a fifth of China’s, its
economic output (GDP) is five times as large as
China’s with a population of 127 million com-
pared with China’s 1,300 million. Japan’s econ-
omy is the second largest in the world after that of
the US. But Japan has contributed little to global
growth. Is the once dynamic tiger permanently
slowed by old age? Since 1990 an upturn was
anticipated almost every year and never happened.
In 2004 the economy finally did manage to perk
up, not spectacularly, but for Japan in comparison
to earlier years a steady growth of 1.5 to 2 per cent
a year would mark a significant change.
What has also begun to change is the political
system dominated for most of the post-war years
by factions of the Liberal Democratic Party
(LDP). In the past, policy conflicts were fought
out within the LDP by the most powerful factions,
the prime minister was usually a front man of short
duration and disposable. Junichiro Koizumi is the
first ‘modern’ leader who has courted the people
and made good use of the media, a personable and
striking figure with his coif of hair, youthful in his
sixties compared with his tired predecessors, and
nicknamed ‘Lionheart’. His notable achievement
when he first became party leader and so prime
minister in 2001 was to face down the factions and
to rely for his political power on ‘people power’
and the electoral system. He promised deep
reforms of the economy, privatisation, competi-
tion of business at home, reform of the banking
sector and an end of the wasteful corruption and
public spending. But the Japanese people are
afraid of change and the inevitable loss of security
it entails, deploring rising unemployment and
fearful of restructuring. In the domestic economy
only comparatively small progress was achieved,
while efficient big business which exports to the
world did not wait on government reforms to
maintain its competitiveness.
Koizumi’s popularity was put to the test in the
November 2003 elections to the lower house.
Despite fears of his promised ‘structural reforms’,
the LDP remained the largest single party with
half of the 480 seats. But another new feature has
been the emergence of the Democratic Party of
Japan (DPJ) as a credible opposition party. The
gain is the evolution of a two-party system
strengthening democratic choice. Koizumi’s
other aim is to shed Japan’s subservient inter-
national pacifism in the face of North Korea’s mil-
itary threat – North Korea not only has developed
nuclear weapons which Japan has forsworn, but
missiles which it demonstrated could reach Japan.
A symbolic step of his new thinking was to deploy
a small force of troops of the self-defence forces
outside Japan in southern Iraq. The signs are that
Koizumi will not be another in a long line of
short-lived prime ministers.
South Korea, once Japan’s follower in eco-
nomic development, contrasts with Japan in hav-
ing undertaken radical reform to restructure its
economy with spectacular success. After the dip in
2003, the economy is growing strongly dominated
by restructured efficient big business, the chaebols.
But politics are more tumultuous. After one year in
office the opposition parties impeached President
Roh Moo Hyun on the flimsiest of pretexts in
March 2004, a gambit that backfired when in the
national elections the following month his Uri946 GLOBAL CHANGE: FROM THE 20th TO THE 21st CENTURY