The Rise of Japanese Ultranationalism
The first great wave of modern globalization (which, because of the industrialized West's initial leading role in defining global modernity, in its early phase culturally overlapped fairly closely with what might also be described as Westernization) had begun in the late nineteenth century. In East Asia, it culminated in the 1910s–1920s with China's May Fourth Movement and Japan's Taishō democracy. During these same years, French colonial rule also promoted a degree of Westernization in Vietnam, while Japanese colonial rule in Korea encouraged a curious combination of modernization, Westernization, and forced Japanese-ization. The high tide of globalization receded rapidly after the disastrous collapse of the U.S. stock market in 1929, however. By the 1930s, the world was descending into what some Japanese historians have aptly dubbed a “dark valley.” As a result of the Great Depression, in the United States, real gross domestic product had declined 35 percent by 1933, a quarter of American workers were out of work, and there were calls for the newly inaugurated president Franklin D. Roosevelt to assume dictatorial powers. Even socialism no longer seemed entirely unthinkable in America. In Germany, the Weimar Republic gave way to Adolph Hitler. In China, the Nationalist Republic became an authoritarian single-party state with an increasingly nationalized economy. In Japan, Taishō democracy was thrust aside by the rise of ultranationalistic militarism.
Surprisingly, the industrial sector of Japan's economy recovered fairly quickly from the depths of the Great Depression, thanks to a sharp devaluation in the exchange value of the yen (which made the price of Japanese exports globally more competitive), low interest rates, and increased government spending on public works and armaments. The volume of Japanese exports actually doubled between 1930 and 1936. But, as much of the world responded to the Great Depression by adopting protectionist measures – such as high taxes or outright quotas on imports, which threatened Japan's ability to continue exporting – the argument began to resonate that what Japan really needed was to create an economically self-sufficient yen-bloc that would be independent, and under Japan's own control. Manchuria, in particular, came be viewed as a potential economic “lifeline” for Japan.