On November 13, the international section in the morning edition of the Sankei Shimbun newspaper had an article with the headline “Communist Party uses opening of the Asian Games to maintain social stability: Citizens won over by national event in Guangzhou, home of great wealth disparity.” The article said:
The Guangzhou Asian Games (an Asian sports festival) began in Guangzhou (Guangdong), one of China’s three major cities, on November 12. This “national event,” along with the Beijing Olympics and World Expo 2010 Shanghai, is being held to show China’s economic development to the world and is also being used by the leaders of the Communist Party to maintain the social stability they desire. […] The leading article of the People’s Daily newspaper (the bulletin of the Communist Party) on November 11 said, “Sports are a window showing the country’s comprehensive strength and the cultural level of our citizens. The rapid development of the economic system is the underlying strength of preparations for the Guangzhou Asian Games.” […] The main goal of the Asian Games is urban development and raising the cultural level of citizens.
It also said:
Guangzhou has experienced economic development as a trade city. Yet the same time disparities between the rich and poor have grown. In May 2010, strikes held in Guangdong demanding higher pay caused turmoil all over the country. The municipal government of Guangzhou decided to provide a lump sum to support the livelihoods of low income households who are suffering financially from the high price of commodities, and is diligently working to relieve the dissatisfaction of citizens.
The driving forces of the Chinese economy that has developed so rapidly up until now are the 2008 Beijing Olympics, the World Expo 2010 Shanghai, and these Guangzhou Asian Games (which aren’t as well known). Just as Japan achieved rapid economic growth with the 1964 Tokyo Olympics and the 1970 Osaka Expo, China is using big events to grow its economy, and the economy’s scale is expanding like a bubble.
After the Beijing Olympics the Chinese Government was afraid the bubble would burst along with the major worldwide recession caused by the so-called “Lehman Shock,” and held up the economy by throwing massive amounts of public funds at it. In this way they managed to maintain positive appearances. However, when the Asian Games begin China will have used all of its cards for powering its economy and prospects for the future economic system are thoroughly opaque. The Communist Party of China is beginning to feel impatient for a breakthrough in these circumstances. In the September incident near the Senkaku Islands caused by a Chinese fishing boat, they caused such an excessive reaction by Premier Wen Jiabao and others regarding the treatment of the Chinese captain. In this way they are working to strengthen anti-Japanese sentiment to increase national unity in order to cover up domestic problems in China.

　Since the Senkaku incident, large-scale anti-Japanese demonstrations have been held in cities including Chengdu (Sichuan). The Kan Cabinet, fearing strong opposition from the Chinese Government, quickly released the Chinese ship’s captain without prosecuting him. The Chinese Government permits moderate anti-Japanese demonstrations as a way of releasing the tensions of dissatisfied elements, but they are afraid that if the demonstrations go any further they will turn from an anti-Japanese movement to an anti-government movement. That is how extremely strained the domestic situation is in China.
The November issue of the magazine Choices had an article with the headline “The birth of a middle class in China is an illusion: 300 million middle class members a false number.” This article explained the current economic conditions of Chinese citizens in a very realistic way.
The Chinese media is astir with the phrase “the annihilated middle class.” The Chinese middle class is currently given the most attention by Japanese corporations, which are attempting to target this consumer group that is the most important one for business in China. But the truth is that they have run into a wall, and consumption energy is being lost. The hope is that China will be converted into a “totally middle class society” like Japan and consumption will grow exponentially in the future, but it is likely that this hope will not be fulfilled. The Chinese middle class has been created politically by the Communist Party of China. Due to inconsistencies in their political measures, it is nothing more than an “illusory class” that is about to be annihilated.
The middle class in China began existing in a conspicuous way starting around 2005. It is mainly composed of people working in management at state-owned enterprises or financial institutions, people with ranks higher than section manager in a government organization, salaried workers at foreign capital companies, white-collar workers, self-employed people managing restaurants, IT venture managers, and other people in coastal urban areas. Their consumer behavior is represented by purchasing apartments and automobiles, taking vacations abroad, and playing golf, and they give the impression within and without China that Chinese society has become affluent.
However, the situation has changed completely due to sudden apartment price jumps after 2008. Apartments in large coastal cities such as Beijing, Shanghai, and Guangzhou have reached a price far distant from China’s cost of living, jumping to a cost that is the equivalent of 30 to 50 years annual income even for the middle class. People who just bought an apartment are struggling to repay their loans. In China, people who have been forced to abandon their affluent consumer lifestyles are called “room slaves.” In other words, they are not owners of their apartment but slaves to it.
Money for living expenses decreases sharply due to loan repayment, leaving none left over for automobiles, home appliances, travel, or other purposes. The current reality is that even the Chinese middle class chooses and purchases low priced foods. Of course people in their twenties or thirties who inherited a house from their parents are not plagued by hellish loans, but instead there are many cases in which these people have purchased luxury automobiles and are struggling to repay car loans. Because they are enslaved to their automobile, they are known as “car slaves.” They are also becoming disconnected from middle class patterns of behavior, such as reducing the amount of consumer goods they purchase.
The collapsing middle class has been dealt a final blow by the sudden fall of the stock market. The SSE Composite Index, China’s representative stock index, was over 6,000 in autumn 2007 but is currently fluctuating around half price at 3,000. It temporarily sunk to the low 2,000’s. In China over 100 million people have stock trading accounts at securities companies, and it is currently seen as natural for the middle class to invest in stocks. The period of high stock prices around 2007 encouraged large amounts of consumption, but stock prices falling to less than half has had a negative wealth effect on the middle class.
Many people have gotten rid of their apartments because they aren’t able to repay their loans, and real estate prices have fallen to between one third and one fifth of their highest value. Even twenty years after the economic bubble burst in Japan, stock prices are still only one forth of what they were and land prices are one fifth of their previous amount. The same phenomenon will begin in China in the future, and it’s a foregone conclusion that the Chinese economy is entering a very long tunnel.

　When the economy was growing, the Chinese Government made a portion of laborers in large cities wealthy and cried out, “Look at Shanghai! China has become affluent!” In this way they were able to absorb the dissatisfaction of the intellectual class. However, now that economic growth is weakening they can no longer use that method. Already 40% of university graduates are unable to find a job, the real estate bubble is on the verge of collapse, ever greater numbers of people are being driven out of their homes due to their inability to repay loans, and 720 million peasants are still poor.
It wouldn’t be at all strange if outbursts from the intelligentsia and students occurred in large cities just like the Tianamen Square protests of 1989. At the time of the Tianamen Square protests, Deng Xiaoping suppressed these outbursts using military power through strong leadership.
Afterwards favorable treatment was given to the intelligentsia to diffuse their anger, leading the way to China’s current economic development.
However, if an outbreak of rebellion like in the past occurred today, it’s extremely doubtful that Hu Jintao and Wen Jiabao would be able to suppress it with armed force using the power of the state like Deng Xiaoping did. The people who understand this best are the leaders of the Chinese Government.
Thinking about China’s present condition, surely the reason for Wen Jiabao’s aberrant demands at the time of the Senkaku issue are clear. China is attempting to make people forget the country’s internal inconsistencies using drastic measures focused on the outside. To further fortify the background of these drastic measures, China is also making efforts to enhance its military strength. At the same time, the major power of the United States has announced a reduction in war expenditures over the next five years to the tune of 1 trillion dollars (approximately 83 trillion yen). In this way, they are beginning to revise their previous diplomatic stance that could be called one of over-commitment. After the end of the Cold War, the U.S. suffered a series of major blows through the Gulf War, Iraq War, and Afghan War. Reflecting on these wounds has made them turn towards devoting themselves to internal issues. As a marked contrast to China, they are moving to reduce military strength.
In the same November issue of Choices, the article “Europe speeding towards disarmament” stated that Europe and the U.S. are heading in the same direction:
The plan to reduce the British Armed Forces announced by Prime Minister David Cameron in October was a major shock. This army has the greatest fighting strength in Europe, yet Prime Minister Cameron says that defense expenditures will be cut by 8% and over 17,000 military personnel will be cut in the coming five years. In addition, all of the 20,000 British troops stationed in Germany will be withdrawn by 2020.
Regarding the Afghan War, the article said:
The national policy of Germany is that the German Army will not fight unless necessary, so they are distributed in the peaceful northern area, leaving the Taliban unchecked.
The Netherlands is weary of war and discussions are growing regarding evacuation. The Balkenende Cabinet collapsed in February 2010. Two thousand troops were responsible for central Uruzgan Province, but there they were also unable to exterminate the Taliban and eventually the Netherlands Army withdrew on August 1. France, Italy, and Spain already are not sending combat forces, merely going along with the U.S. as they “train Afghanistan’s security forces.”
If things continue in this way, NATO’s armed forces will be sequentially withdrawn from Afghanistan like teeth dropping out in the worst military strategy since the alliance was established.
The military imbalance between the U.S. and Europe is already definite. The total defense budget of the 27 European member states of NATO is approximately 300 billion dollars, less than half of the U.S. Armed Forces’ budget of around 700 billion dollars. Furthermore, Europe says it will reduce its annual defense budget in the future by 6% to 10%, which increasingly irritates the U.S. Comparing defense costs per citizen, Europe pays less than 300 dollars, which is one fifth of the amount the U.S. pays. Looking at defense spending compared GDP, last year Europe was 1.7%, less than the NATO estimate of 2% (the U.S. was 4%).
Incidentally, Japan’s defense costs are approximately 4.7 trillion yen ? roughly 450 dollars per citizen, which is approximately 0.9 percent of the GDP.

　The U.S. is working to reduce its military strength, and in the future it will likely protect stability in East Asia by placing importance on its relationship with Japan. In exchange for having withdrawn its own troops, the U.S. will certainly hope for Japan to increase its military strength. Isn’t this the chance for Japan to become a country capable of its own defense, which it hasn’t been able to accomplish up until now because it was suppressed by the U.S.? We must not fail to grasp this chance.
The first thing we have to do is revise the Japanese constitution (which hasn’t been legitimate since it was established), and make the Japan Self-Defense Forces (JDSF) into our national armed forces. Just like former Air Self-Defense Force Chief of Staff Toshio Tamogami says, a normal army has determined things that it must not do and other things that it can do. In the case of the JDSF, the things that it can do are fixed and it doesn’t behave in any other way. The JDSF is shackled and bound head and foot ? no matter how much money is spent, they can’t demonstrate most of their strength. It certainly can’t be called an army unless each soldier was resigned to violating the law while acting to protect his country. This was decided by the U.S. after World War II to prevent Japan from becoming a strong country once again, and we must immediately repeal this.
We also need to revise our interpretation of the right to collective defense, and change having strength but not using it to actually using it. As for Japan’s Three Non-Nuclear Principles (which are clearly a mere facade as evidenced by the exposure of the “secret agreement” between the U.S. and Japan), we need to at least abolish the part that prohibits the entry of nuclear weapons into Japanese territory. It’s also necessary to drastically relax the restrictions of the Three Principles on Arms Exports.
We should strengthen armaments, but I don’t hope for an enlargement of defense costs. We must make effective military preparations that are appropriate for the current era within a limited budget. The weapons that offer the highest cost performance are nuclear arms, which provide deterrence just by possessing them.
However, considering the public opinion inside and outside Japan there are many hurdles towards Japan suddenly possessing nuclear arms. For some time I have advocated for Japan to introduce the nuclear sharing arrangement participated in by the four NATO countries (Belgium, Germany, Italy, and the Netherlands). This would allow Japan to “rent” America’s nuclear weapons. In peace time the U.S. and participating countries alike carry out training, and in times of emergency the participating countries can use the nuclear weapons of the U.S.
Currently the world is on guard not against the direct landing of an enemy army but against attacks by special military forces made up of small numbers of people who create disorder inside the country, as well as cyber attacks aimed at computer networks. The U.S. has established a Cyber Command, and many countries are strengthening counter-measures against these two types of attacks.
Japan should use our strong scientific and technological skills to perceive and repel cyber attacks. We should train a cyber command that can carry out counter-attacks, divide the Ground Self-Defense Forces stationed in the northern area into two, and establish half of them as marine forces that can be deployed rapidly to guard against the southwest. Japan must also strengthen our special forces to oppose a landing by the special forces of North Korea, which is the most likely scenario right now.
For the defense of a country, it’s necessary to have the ability to deter and prevent rather than just to counterattack if something happens. To have deterrence, we must have offensive ability. We should develop conventional weapons such as the Massive Ordnance Air Blast bomb (MOAB) ? known as the “Mother of all Bombs” ? which has amazing destructive power, and also develop unmanned weapons in accordance with the worldwide trend which is progressing towards unmanned combat.
In Afghanistan, the U.S. is using reconnaissance planes to identify leaders and terrorists who are hidden amongst the general public (just like Israel faces with Palestine). They attack without considering how the surrounding area will be involved, slaughtering in a way that isn’t much different from assassination. The fact that they have been forced to carry out such forbidden acts is the reality in Afghanistan. In the near future the U.S. and NATO will probably withdraw from Afghanistan, which will come under the control of the Taliban.
It is becoming a worldwide trend for countries to reduce war expenditures and not interfere with other countries in which they have no direct interests. The only country that is increasing its military strength and intimidating its neighbors is China. From now on the risk of war will only grow in East Asia. In this situation Japan must work to keep the peace by displaying its strength. Now that we have obtained the understanding of the U.S. regarding the increase of armaments, we need to complete a sequence of procedures all at once including constitutional reform. Now is truly the perfect chance to make Japan a country capable of its own defense.