Historical Dictionary of United States-Japan ... - Bakumatsu Films

however, required political stability in Asia. Accordingly, by 1949, the
United States had focused its attention on bringing political stability to
Southeast Asia, as a prerequisite for Japanese economic recovery.
The United States also emphasized demilitarization in the early
stages of the Occupation. Because this left Japan defenseless, Washington
realized that to guarantee Japan’s security the U.S. would have to
maintain military bases and armed forces on the Japanese islands and,
in 1951, the U.S.–Japanese Security Treaty was signed. The United
States compelled Japan to accept American bases on the former’s territory,
and to agree, reluctantly, to rearm.
The Korean War, which broke out in June 1950, had a positive effect
on the Japanese economy. The Chinese Communists’ intervention in the
war and their military successes enhanced China’s prestige in Asia,
even though hundreds of thousands of Chinese “volunteer” soldiers
were killed in Korea. As China’s status increased, the United States believed
that it would be difficult to retain Japan’s pro-American orientation
unless it made strenuous efforts to preserve its own prestige. In
Asia, China and America were close allies during World War II, but
when the Communists came to power in 1949 the two countries became
bitter enemies. As this situation left Japan as the United States’ principal
Asian ally, Washington did its utmost to reinforce the U.S.–Japan alliance,
primarily by means of economic and military measures.
POST-OCCUPATION ECONOMIC RELATIONS
INTRODUCTION • 21
During the 1950s, the United States tried to reduce Japan’s trade deficit
and integrate the Japanese economy with those of the Western bloc.
Washington expected that the General Agreement on Tariffs and Trade
(GATT) would provide Japan with economic benefits; however, Japan
could not enjoy the full benefits of the GATT because of restrictions imposed
by other member states. Moreover, the United States itself restricted
the possible expansion of Japanese trade by severely constricting
relations with China.
In spite of these difficulties, four factors helped Japanese economic
development in the early post-Occupation period. First, the United States
tolerated Japan’s restrictions on imports and foreign investment, because
few American businesses regarded the Japanese market as important.
Second, Washington facilitated Japanese access to the American market