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Net Porn: Let Parents Do The Policing


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NET PORN: LET PARENTS DO THE POLICING

When Commodore Perry's black ships steamed into Yokohama in 1852, ending centuries of Japanese isolation, the country's elite adopted the slogan Datsu-ah, ny-o, or "leave Asia, enter the West." Today, 143 years later, a growing number of Japan's leaders are voicing another slogan: Datsu-o, nyu-ah, or "leave the West, enter Asia." It is the beginning of a historic shift, and it would be wise for Washington to take a moment out from its wrangling over domestic policy to cast a watchful eye east (page 108).

Already, there are signs of danger. Japanese negotiators are taking an in-your-face approach to the upcoming auto talks with the U.S., and the American side is shocked at their rudeness. Japanese investors are pulling back from U.S. stocks, bonds, and real estate. Japanese business and government leaders increasingly deride Western culture and boast of having "Asian values," such as discipline, devotion to the family, and primacy of the group over the individual. Politicians quietly side with Asian regimes against the U.S. over human rights, while bureaucrats help build mercantile economies in Japan's image.

But most of all, the Japanese are shifting their investments. In a mammoth swing away from the U.S., Japanese direct investment is pouring into China, Indonesia, Thailand, and other Asian countries. At $64 billion, it is three times that of the U.S. and growing. Increasingly, Japanese companies export from the Four Tigers and China, escaping the costs of a high yen.

None of this is accidental. Japan's Asia-first gambit is the logical outgrowth of the country's adamant refusal to deregulate and transform itself into a Western-style consumerist society that imports as much as it exports. Despite incessant prodding by the U.S., Japan remains a producer-dominated culture. Powerful corporate and bureaucratic elites are bent on gaining global market share and are using Asian partners both as export platforms and markets for Japanese goods. The superyen is the result. Had Japan's reformists succeeded in deregulating the economy, the yen might be 180 instead of 88.

Where will Japan's Asia tilt lead? For Asia, it means greater investment and growth, but at a price. Unlike NAFTA, which is a dollar bloc, and Eastern Europe, which is a German mark bloc, Japan's new sphere of influence is not a yen bloc. China, Indonesia, and Malaysia are borrowing enormous sums in yen, but their exports are not going to Japan, they're going to the U.S. Hence, they must pay off their appreciating yen debt with depreciating dollars. It's a ticking financial time bomb.

For the U.S., Japan's Asia tilt means the end to meaningful bilateral negotiations to open Japan's economy. The U.S. has no choice now, if it is serious about cutting its trade deficit, but to focus on its own domestic market. Washington should consider ending all free-trade zones in Ohio, Kentucky, and Tennessee for Japanese car companies that allow them to import foreign components virtually duty-free. It must then insist they buy domestically made parts, which are cheaper anyway.

Japan is not the only country shifting gears in the post-cold war era. The U.S., after all, is edging away from Europe. But Japan's tilt has disquieting resonances for Asians as well as Americans. This is the second time in the 20th century that some Japanese elites have promoted a pro-Asian, anti-Western identity for their nation. The first, sadly, was carried too far. Surely the Japanese are wise enough to learn from history.


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