\chapter{Capitalism to the assault of Asia}

\chapterauthor{Yves GRENET}


The forward march of humanity follows an upward trend but with advances and setbacks, rapid progress in some peoples or in some continents while others are slowing down.
From the sixteenth century Europe took off with the development of science and technology but also of a merchant capitalism that would soon set out to conquer the world.
Meanwhile, after having preceded Europe over millennia, Asia remained in the Middle Ages with its empires and traditional kingdoms, a fixed feudalism and a way of thinking that did not renew itself.

At the beginning of the second millennium AD, Chinese junks, ships of an unknown size in Europe, commonly went as far as India and Indonesia.
In the second part of it, it is European ships of ever-increasing power that approach the coasts of Asia, merchant ships but also warships.
Vasco da Gama arrived in Calicut in 1498, just five centuries ago, and the Portuguese monopoly at the expense of arab-Venetian trade was definitively established in 1507.
Two years later the Portuguese reached Malacca, in 1511 Anboine, in 1514 China.
Rival European interests clashed in Asia, Portuguese and Spanish in the Moluccas in 1526 for example.
The former landed in Japan in 1542, the year in which the latter settled in the Philippines.

Eager for products of the land of Asia others arrive in its waters. The first English expedition to the East Indies was in 1591.
The Dutch landed in Japan in 1599, then again in 1609; it was the same year of the creation of the Bank of Amsterdam, which made a treaty in 1619 with the East India Company.
The English began to penetrate the Indian peninsula by settling in Madras in 1639, in Bombay in 1662.
The French in turn founded their East India Company in 1664, settled in Surat in 1668, pondicherry in 1674.
The creation of the Bank of England (1694) closely followed the founding of Calcutta (1690); it is already a question of knowing what pays best to manufacture in Europe or to import:
the English Parliament forbade the manufactures of the indians in 1719.
After the French East India Company was reconstituted (1723) and the Paris Stock Exchange founded (1724), the French became increasingly interested in the Indies.
The conflict between France and England on this territory is not only an extension of their wars in Europe; it is the rivalry between two merchant capitalisms at a time when industrial capitalism is growing.
The Treaty of Paris of 1763 gave way to England to colonize the Indies, as shown that same year by the deposition of the Bengal soubab and the following year the defeat of the Great Mogol at Buxad.
The ideas of liberalism accompanying the rise of capitalism are opposed in the name of \enquote{laissez-faire, laissez-passer} to the old mercantilist charters.
The conflict between the old and the new led to the abolition of the privilege of the French East India Company in 1769 and its re-creation by Calonne in 1785, the Regulating Act concerning the English East India Company in 1773 and the India Act of 1784.

Faced with the first Western invasion, the peoples of Asia fought as was the case in the Indian peninsula:
the Mahrattes fought against the French and English, and various Indian rulers tried to use their rivalries to safeguard the independence of their states.
The Chinese fought against Russia, which was still largely pre-capitalist, and obtained from it the capitulation of Albasin (1685); they tried to keep Europeans away from their shores by limiting the possibility of disembarking there.
As for Japan, it had as early as 1638 forbidden any foreigner access to its soil, as well as any travel outside the country to the subjects of the Empire, which was intended to protect an independence hostile to any change.


\section{Asia colonized by Western capitalism}

Before the nineteenth century already a number of human lives had been mowed in Asia by the irruption of the Europeans, their desire to conquer at the expense of the Asians and the conflicts between themselves, in which they had dragged them.
Already some of the wealth of these peoples had been drained to the West, making their contribution to the primitive accumulation necessary for the great start of liberal capitalism.

In the nineteenth century, the desire to have access to sources of raw materials and to open up all markets gradually led to the consideration of colonizing the whole of Asia.
At the time of the Congress of Vienna (1815), England controlled all of India except Assam, Punjabi and Sindh; further east it occupies Malacca and Penang.
The Netherlands holds Java firmly and has positions elsewhere in the Dutch East Indies, the future Indonesia.
Spain has long dominated the Philippines. In India, we must add the French, Danish (in Bengal) and Portuguese (Goa) trading posts.
Portugal still owns Timor and the port of Macau in China. This somewhat disparate set is just waiting to expand.

The colonial powers manage these territories in the best interests of their ruling classes.
England renewed the privilege of the East India Company in 1813, with headquarters in London and Governor-General in Calcutta; it occupies half of the Indian territory and raises the tax for the metropolis.
Until then, India had exported cotton; now it is forced to export its raw cotton and it is Manchester that manufactures cotton fabrics for the greater profit of its capitalists, which makes it possible, among other things, to finance the work of economists in favour of liberalism and free trade, the Manchester school precisely.
Indian textile craftsmanship is ruined, misery settles among the peasants, leading to diseases and deaths to be written without reservations on the black book of British capitalism.

In the still independent Asian countries the economy is still pre-capitalist on the basis of subsistence peasant production.
There are feudal workshops and factories owned by the daimyo in Japan, large private textile and porcelain factories in China.
The merchants of these countries fail to break the traditional frameworks. Constantly reborn seeds of capitalism are constantly stifled.
China of the Manchu Qing Dynasty, Vietnam of the Nguyen Dynasty, Japan of the shogun remain conservative and sclerotic states, such as Burma, Siam, Laos and Cambodia.
Relations with the West were even more limited in the early nineteenth century than in previous centuries.
The Japanese admit exchanges with the only Dutch in the island of Deshima in the harbor of Nagasaki, China receives foreigners in Guangzhou, there are some Western trading posts on the coast of Tonkin.
Westerners are eager to see these markets open up to the large population.

In the meantime, they used the first half of the nineteenth century to expand their existing possessions. 
England conquered Sindh, Balochistan, in India, and waged war on the Sikhs of Punjab in 1845 and 1848.
It moved to Singapore in 1819 and hung on to Malaysia where it could. It occupied the coast of Burma in 1825 before conquering Lower Burma in 1852.
The Netherlands reduced the last independent sultanates neighboring its territories, the last being that of Aceh in Sumatra in 1869.
Spain completed the conquest of the southern Philippines in 1840. Everywhere indigenous blood flows but it doesn't matter!
Teak, tin, coal and rice are supplying Europe and new markets are opening up. Isn't that what matters?
France, meanwhile, gained a foothold in the territories surrounding Annam.
From 1862 to 1867 it seized Cochinchina to the south of it, imposing without too much difficulty its protectorate in Cambodia in 1863.
A quarter of a century later it was the turn of Tonkin (1883-1885) at the cost of bloody fighting, the Third Republic taking over from the Second Empire. But the interests are the same.
With the protectorates of Annam and Laos will exist for seventy years a French Indochina.
Siam owes to its intermediate situation between the British and French territories the possibility of maintaining limited political independence: it is in fact a semi-colony.

But the masterpiece of the stranglehold of Western capitalism by letting the appearances of sovereignty be saved, it is certainly in China that we find it.
The Chinese government, closed to the beauties of free trade, always refused to open its ports to foreign trade;
a strong smuggling was practiced on its coasts by English traders, exchanging opium grown in Bengal by the East India Company for Chinese tea.
The seizure of a shipment of opium by the Viceroy of Canton served as a pretext for the First Opium War, closed in 1842 by the Treaty of Nanjing, which opened five ports in southeastern China to foreign trade and ceded Hong Kong to the British.
The second (1856) and third (1858) Opium Wars, with the assistance of France, resulted in the cession by the two treaties of Tien Tsin (1858 and 1860) of eleven other ports.
The capitalist powers had behaved like drug-trading gangsters and thousands of Chinese lives had been sacrificed (in addition to those killed in battle, the famine of 1857 had killed 8 million people).
But the Chinese market was open and would remain so. 

European capitalism is now established for a long time in Asia.
The British East India Company saw its commercial privilege and its right to administer the vast Indian complex renewed in 1833 and again in 1853.
However, the liberation movement was already brewing against the domination of the English. In 1857, the revolt of the cipayes, part of their troops, broke out, whose uprising made London tremble.
It was drowned in blood: 320,000 Indians were executed, including 200,000 civilians. The East India Company, with structures so far removed from liberalism, was dissolved in 1858.
The advent of liberalism was marked by the opening of land to British colonists and to the capitalist interests of Great Britain acting on the spot through their representatives (\emph{managing agencies}).
Peasants whose land escaped the greed of the colonizers had their rural economy monetized so that they could pay taxes, first to the Company and then to the administration of the Crown.
Terrible famines took place in 1860, 1866, 1873, 1877 whose deaths numbered in the millions. The last of these famines coincided with the festivities that made Queen Victoria the Empress of India.

In the Dutch East Indies there is rather sope sort of state capitalism whose two pillars are the Dutch Trading Company (Nederlandse Handel Maatschappij) and the Bank of Java (Java Bank), respectively established in 1825 and 1828.
A fifth of the land, often the most fertile, is handed over to the Dutch and cultivated by villagers subjected to drudgery.
But here too, many capitalists of the metropolis, in the name of a liberalism in accordance with their interests, wanted the abolition of this system and export crops were, from 1860, withdrawn one after the other to the monopoly and open to free enterprise.
In French Indochina, in addition to the cochinchina plantations, the land emptied of its inhabitants during the Tonkin War was, after 1885, handed over to companies based in mainland France. 
Everywhere the products of metropolitan industries find their outlets.

In this colonized Asia, China remains theoretically independent. Relative independence.
From the Treaty of Nanking (1842) Chinese customs could only impose duties of 5\% on goods from European industries, after the Third Opium War they were put in 1861 in the hands of officials of the capitalist powers.
They take advantage of their position of strength to carve out concessions by the fait accompli like England in Shanghai.
Japan, still closed to foreigners, was \enquote{opened} by Commodore Perry's American squadron in 1853, which forced the Shogun government to let Westerners access its ports by the Treaty of Kanagawa (1854).
Here too, customs duties have been limited for the benefit of their exports and forced recognition of the extraterritoriality of certain portions of Japanese territory for their benefit.
But, unlike China where the Tai Ping revolt did not succeed in the 50s, the shogun accused of too much complacency towards the barbarians of the West was overthrown in 1867, which will allow the rapid accession to capitalism in this part of Asia.


\section{Birth and development of an Asian capitalism}

Capitalism was able to prevail in other continents through the revolutions of England, America and France of the seventeenth and eighteenth centuries, the bourgeoisies of these countries having used popular movements to impose themselves as a ruling class.
On the other hand, the establishment of an Asian capitalism paradoxically began with a monarchical restoration.
To move from one economic and social regime to another the paths are diverse; this doesn't apply, moreover, to the capitalist regime alone.

Contact with the Westerners had caused Japan to rise in prices, lose its gold reserves and peasant revolts.
A new expedition of these in 1863 had proved once again their material superiority.
The accession to the throne of the new Emperor Mutsohito in 1867 led to the abolition of the functions of shogun and the beginning of 1st Meiji, that of the \enquote{enlightened government}.
Feudalism was abolished in its various aspects, but the new Japanese ruling class was composed not only of the merchant bourgeoisie but of many feudal lords who easily switched to capitalism, like many English lords in the previous century.
But in Japan it is the state that allows the start of a modern economy for the establishment of which primitive accumulation would otherwise have been insufficient.
Companies founded by the Japanese state were handed over by him to the private sector in 1881 at very low prices.
There are companies of various sizes but some dominate the others and organize themselves into cartels (zaibatsu) as early as 1893, the most famous of which are Mitsui, Mitsubishi and Sumitomo.
Capitalist Japan is moving fast, very fast forward.

In China a capitalist sector appeared and a certain industrialization began in this second half of the nineteenth century.
Imports from the outside capitalist world harm certain Chinese industries (textiles in particular).
Ports open to foreigners, however, constitute centres of diffusion of capitalism; to mark the possible synthesis of the old and the new, we even speak of \enquote{Confucian capitalism}.
But the hinterland and the countryside remain traditional.
A floating sub-proletariat exists, part of which emigrated to form coolies all over the Pacific, while more affluent elements are added to this Chinese diaspora that will play its full role in twentieth-century capitalism, especially in Southeast Asia.
In China itself capitalism lives in close osmosis with the bureaucracy, which does not give at all the same results as in Japan.
Capital is insufficient, management is often not rational, markets are limited.
Above all, competition from better-organized Westerners, with an efficient banking sector and control of foreign trade, is a major obstacle on the road to Chinese capitalism.

Elsewhere in Asia, colonial domination plays a role as a brake.
Rare are the cases of large companies created under these conditions such as those of the Birla family or the Tata family in India, whose mines and steel mills of Jamshedpur started on a large scale at the end of the nineteenth century.
The Indian bourgeoisie also acquired certain structures, such as the Madras Trade Association, created in 1856 and transformed in 1910 into the South India Chamber of Commerce.
In the colonial countries the bourgeoisie is above all a comprador bourgeoisie at the service of foreign capitalism and the one that works for the establishment of national enterprises remains limited.


\section{Rivalries between capitalisms in Asia} 

\enquote{There is room in Asia for all of us}, proclaimed Lord Salisbury in 1880.
Even if \enquote{all of us} meant Western capitalist states, it was already an optimistic view, as the rivalries in Southeast Asia at the same time showed.
In addition, there was Japanese expansionism, which would have to be reckoned with.
The notions of \enquote{Empire} and \enquote{Imperialism} were praiseworthily spread by authors ranging from Disraeli to Kipling before it was made clear by Hobson, Hilferding and Lenin that imperialism was the union of industrial capital and bank capital to form a finance capital aimed at world domination.

At the beginning of the Meiji era, the Japanese ruling class, not feeling ready, had given up attacking Korea in 1873.
It had nevertheless secured its control over the Islands of Bonin, Kurils and Ryukyu.
Then Japan had proposed to China to establish a condominium on Korea in 1891, a project that did not succeed.
On the contrary, the desire for expansion led Japan of large integrated companies, imperialist Japan to rush to China in 1894.
By the Treaty of Shimonoseki (1895) it obtained not only Taiwan and the Pescadores Islands, but a large indemnity, which served to make Japanese capitalism develop even faster, and the right to build businesses in northeastern China (Manchuria).
But Russia forced it to leave Port Arthur.

The imperialist powers then embarked on the \enquote{battle of concessions} (1896-1902), each of them, Great Britain, France, Germany, Russia, Japan, striving to win the best share and jealously watching that of the neighbor.
They agreed following the Boxer Rebellion in order to intervene in 1900 with all the brutality their troops were capable of.
For the first time Japan then attacked a European state, Russia (1904-1905), defeated it and the Treaty of Portsmouth earned it Liaodong in China, southern Sakhalin and a free hand in Manchuria and Korea.
The United States, which has not managed to carve out a zone of influence on Chinese soil, has instead ousted the Spaniards from the Philippines granted to them by the Treaty of Paris (1898).

The formation of a Chinese bourgeoisie, proletariat and intelligentsia linked to the progress of capitalism cannot remain without political consequences.
Founded by Sun Yat-sen the \enquote{Union for the Renaissance of China} (1894) and the Tong Meng-hui League (1905) maintained insurrectional activities that led to the October Revolution of 1911.
Described by British authors as an \enquote{invisible bourgeois revolution}, it established the republic, soon led by the reactionary general Yuan Shi-Kai to whom the Westerners hastened to grant a \enquote{loan of reorganization}.
At the same time, the largest financial groups established in Asia (Hong Kong and Shanghai Banking Corporation, Yokohama Specie Bank, Banque de l'Indochine, Deutsche Asiatische Bank, Russian-Asian Bank and several American banks) agreed to form the \enquote{First Consortium} in 1912, in order to share the profits.
This attempt at super-imperialism was all the less lasting as the First World War soon broke out.

In Asia, it mainly benefited Japanese imperialism.
Japan, which had imposed its protectorate on Korea in 1905 and brutally annexed it in 1910, entered the war on the side of the Allies as early as 1914, while China waited until 1917 to do so.
Japan took the opportunity to demand that it accept its \enquote{twenty-one demands}, settle in Shandong and penetrate the Chinese market more than ever.
After the Russian Revolution of 1917 the Allies agreed with Japan to intervene in the Far East against Soviet forces.
At the Treaty of Versailles (1919) Japan obtained to replace Germany in Shandong, but the Westerners forced it at the Washington Conference (1921-1922) to return it to China, at the same time as to renounce its project to annex part of Eastern Siberia and Mongolia.
The fury of the Japanese imperialists then prevented the realization of a \enquote{Second Consortium}. Decidedly super-imperialism was very difficult to practice!

The colonial empires of the nineteenth century continued their careers in the first forty years of the twentieth century.
In India, British colonial capitalism continued to dominate, but Indian capitalism was gaining momentum, led in particular by the Parsis of Bombay and the Marwaris, money lenders from Rajputana.
On the whole, Indian businessmen remain confined to light industry, but there are exceptions: the Tata Group continues its career in heavy industry.
From 1927 onwards, Indian capitalists regrouped in the Federation of Indian Chambers of Commerce and Industry, complained about the \enquote{drain of wealth} exerted to their detriment by Great Britain and significantly inspired the Congress Party founded in 1920.
The granting of certain regional powers to the Indians by the Montaigu-Chelmsford reforms of 1919 and the Round Table Conferences of 1930-1931 satisfied them.
Linked to world capitalism, India felt the consequences of the 1929 crisis, which affected workers, peasants and civil servants.
The movement of civil disobedience led by Gandhi in 1932-1933 led London to concede by the 1935 Statute an internal autonomy which, although very limited, was no less real.

In the colonies of Southeast Asia (Dutch East Indies, Philippines, French Indochina, Malaysia) the comprador bourgeoisie linked to foreign capitalism is, as we have seen, generally stronger than the national bourgeoisie.
For plantation workers as well as for those in mines and ports, living conditions are very harsh.
Social movements stood up against the exploitation of which they were victims, such as the workers' strikes in Saigon in 1927-1929.
An insurrectional movement in the Dutch East Indies failed in 1926-1927. In all these countries too, the crisis of world capitalism of 1929 hit the peoples.
The decline in demand for raw materials and their prices affected both colonial companies that were laying off workers and small indigenous producers deprived of outlets.
The peasants of North Luzon in the Philippines rose up in 1931, strikes broke out in Manila, others in Malaysia, others in Rangoon.
In Indochina, the Nghe-An uprising in 1931 was militarily suppressed, resulting in hundreds of deaths and thousands of convicts in poulo Condore's prison.
Colonial power remained unchanged until the war, there as in the Dutch East Indies.
On the contrary, the Americans considered it wiser for their capital to grant internal autonomy to the Philippines and the British did the same for Burma, detached from India in 1935.

The period from 1917 to 1923 has been described by British authors as the \enquote{golden age of Chinese capitalism}.
The latter had indeed benefited from the commands of the world at war. Many banks were established as a result of the official Bank of China in 1918. The boom lasted until 1923.
But the \enquote{warlords} held a significant part of the provinces, often supported by the Western powers benefiting from \enquote{unequal treaties} (customs, extraterritoriality, concessions, tax privileges).
From 1924 to 1927, Guomindang (Kuomintang) troops led by Jiang Jie-si (Chiang Kai-shek) drove out the \enquote{warlords}.
He himself had the financiers Kong and Song as his brothers-in-law and had nothing to deny to the bourgeoisie.
Under his pressure he broke in 1927 with the Communists, who would form the \enquote{Republic of Chinese Soviets} in 1931, before leading the Long March to Shenxi in 1934.
The Guomindang in turn receives the support of the Western imperialists, who cede customs and legal advantages to put it in a position of strength vis-à-vis the Chinese people.
The \enquote{Four-Year Plan} aims to strengthen China's industry, in which banks invest huge amounts of capital. The annual growth rate was 8 to 9\%.
But the global crisis reached China in 1932, so that a quarter of China's industries had stopped working by 1935.
The recovery was taking shape, the Communists had offered Jiang negotiations, and an agreement was in sight when Japan launched a general war against China in July 1937.

Japanese capitalism developed during this time and in 1930 its heavy industry could compete with that of the Westerners.
Part of the Japanese bourgeoisie is looking for an expansion that is not necessarily warlike.
Japan exports its capital, especially to East Asia. Japanese investment in China more than quintupled between 1914 and 1930.
The mitsui and Mitsubishi zaibatsu control the South Manchurian Company, the Bank of Taiwan, the huge Naigai Wata Kaisha cotton company that has many factories in China.
Japanese interests also owned mines and railways. A proper colonial exploitation is made from Taiwan and Korea. 
However, the Japanese military budget was cut by more than half between 1919 and 1926.
The Kinseikai-Minseito cabinets of 1924-1927 and 1929-1931 sought to reach an agreement with the Chinese nationalists of the Guomindang and with the United States.
But, in the meantime, a military expedition was sent in 1928 to Shandong against Jiang's troops.

Suffering the consequences of the crisis of 1929, Japanese imperialism became frankly military and aggressive. From 1932,
the army is actually in power and big capital lets it expand by other methods that require a strong increase in the military budget.
The \enquote{Manchu Incident} of 1931, followed by a landing in Shanghai, led in September 1932 to the creation of the puppet state of Manchukuo.
After the assassination of many politicians by young officers in February l936, the military no longer had any obstacles to their aggressive designs, even if some of the zaibatsu were worried.
\enquote{Greater Asia} under Japanese rule was their ideal.
An engagement between Chinese and Japanese troops in July 1937 near Beijing (Beijing) was used by the militarists to launch Japan into an assault on China.


\section[Japanese imperialism; end of colonization in Asia]{Japanese imperialism, liberation movements and the end of colonization in Asia}

World War II began on Asian soil in 1937.
Japanese troops advanced in 1937-1938 in northern China, in the Yangtze River basin and around Guangzhou.
This war in China was extremely cruel with mass killings and the use of combat gases (which were not used elsewhere until 1945).
The capture of Nanjing and its massacres resulting in 300,000 deaths have remained in all Chinese memories.
The Nationalist government, which took refuge in Chongqing, retained only southern and western China, while the Japanese installed a puppet government in Nanjing in 1940 led by Wang Jing-wei.
However, the nationalist and especially communist guerrillas organized themselves to resist the Japanese troops.

The generalization of the war waged by Japanese militarism in Asia began with the attack on Pearl Harbor in Hawaii on December 7, 1941, confronting it in the Pacific and Asia with the United States and Great Britain.
Within a few months Japanese troops occupied Hong Kong, Malaysia, Singapore, the Dutch East Indies, the Philippines and Burma.
Thailand following an agreement also of December 1941 let these troops pass. They reach the gates of India and Australia.
Japanese imperialism establishes its \enquote{Sphere of Asian Co-Prosperity}, a modest cover of its undivided domination.
Japan exploits coal from China, oil from Indonesia and Burma, tin and bauxite from Malaysia and Indonesia, cotton from the Philippines, rice from Thailand and Cochinchina for the benefit of its war economy.
Like that of his colony in Korea, it brutally recruited labor from Malaysia and Indonesia.
Japanese capitalism derives increased profits from the war; in 1942 the four major zaibatsu controlled 50\% of Japan's financial capital, 32\% of heavy industry and 61\% of japan's sea transport;
they finance the \enquote{Development Companies} of occupied North and Central China, ensuring the maximum exploitation of Chinese wealth.

But other Asian capitalisms also benefit from the war.
On the side of the Chongqing government, the \enquote{big four families} (Chen, Jiang, Kong, Song) also enriched themselves both by controlling production and by speculating on the dollar.
Runaway inflation is ravaging Nationalist China. It is strong in Japan and very strong in India.
Wages do not follow. Peasants, workers and the middle classes are suffering from living conditions worse than ever.
In addition to the direct victims of the fighting, the Henan famine killed four million people in 1942, the Bengal famine at least three million in 1942-1943 and the Tonkin famine two million in 1944.
So many victims who will never have a place on any war memorial but deserve to be included in this \emph{Black Book}.

When Japanese forces were forced to retreat everywhere, the American atomic bomb was dropped on Hiroshima and Nagasaki, and Japan was forced to surrender in August 1945, the face of Asia was changed forever.
The Japanese had, as in China, installed governments to their devotion in Burma, Vietnam, the Philippines and Indonesia and some nationalists from these countries had agreed to follow them.
But the people soon understood that the “Sphere of Asian Co-Prosperity” was working in the interests of Japan alone.
Movements such as the Malayan People's Anti-Japanese Army in Malaysia, the Anti-Fascist People Freedom League in Burma, the Viet Minh in Vietnam, the Hukbalahap in the Philippines, all joining the demands for national independence those for social progress, had popular support.
As soon as the Japanese capitulation was surrendered, power was taken by nationalists in Burma and Indonesia, but in the latter country it was soon challenged.

Western capitalist and colonialist states had the choice between two attitudes: recognizing national liberation movements, granting the independence for which they were fighting, or opposing them with force.
The United States admitted independence from the Philippines in 1946, Britain from Burma and Ceylon in 1948.
The armed struggle was the lot of Indonesia in 1947-1948 and Vietnam from 1946 to 1954.
The Netherlands and France having made the wrong choice, have lost all their economic positions and ceased for a time to play a role in Southeast Asia.
Moreover, the non-application of the Geneva Accords of 1954 led to the American war in Vietnam from 1959 to 1975 and the reunification of the country with a socialist regime that no capitalism wanted.
In Malaysia, Britain fought the progressive liberation movement from 1948 to 1953, when it handed over power to pro-Western elements, with British capitalism continuing to play a dominant role in the Malay Peninsula.
Japan has, of course, lost all its colonies, with Korea being independent but divided between a socialist North and a capitalist South, and Taiwan handed over to nationalist China.

Labour Britain had recognized as early as 1945 the principle of independence for the inhabitants of the Indian peninsula that Churchill so disliked.
But English colonialism had sown the seeds of division between the secular-leaning Congress Party and the Muslim League.
From then on, when independence was granted in August 1947, it was granted to India on the one hand and Pakistan on the other.
London managed to make them two dominions within the Commonwealth, but there were at least 300,000 deaths by massacres and executions, 500,000 by famine and 7 million refugees who lost everything on the roads.

In China, the Guo-min-dang had emerged from the war rather weakened and the Communists rather strengthened.
The \enquote{big four families} of Chinese capitalism thought only of taking credit for the confiscated Japanese companies, while inflation continued and the people suffered from poverty and repression.
After an attempt to form a coalition government, civil war resumed in late 1946. The Guo-min-dang troops, initially driven out of the countryside, lost the encircled cities:
Shenyang (Mukden), Beijing (Beijing), Nanjing, Shanghai and Wuhan. With the proclamation of the People's Republic of China on October 1, 1949, and despite the maintenance of a \enquote{national capitalism}, Chinese capitalism seemed to have its heyday behind it.


\section{The capitalist economies of post-war Asia}

By the end of World War, Japan had lost 2 million dead and its economy was in ruins. The American occupiers wanted to dismantle the financial power of the zaibatsu.
The companies had to hand over their shares to the authorities and were decalcified.
These were more antitrust than anti-capitalist measures, which will come as no surprise to the victorious American capitalism.
Moreover, this policy ended in 1948 in the face of the rise of the Cold War and in the approach of communist success in China.
With the help of the occupiers, the Japanese employers broke the strikes and purged the progressive elements of the enterprises.
The outbreak of the Korean War in 1950 brought about the San Francisco Peace Treaty between the United States, some of the Allies and Japan (1951) and the revival of an embryonic Japanese army.
The recovery of the economy known as the Jimmu boom began, and in 1955 the level of production of the 30s was caught up.
Gross national product is growing by 10 per cent per year. Japan also succeeded, in 1955, in gaining admission to gatt.
The Kishi government negotiated a new treaty with the United States restricting the use of U.S. bases in Japan for foreign operations in Asia, signed in early 1960; however, as it extended the American alliance, ratification met with popular protest.
The new Prime Minister Ikeda promised to double the GNP in ten years but the country really achieved it in five (1965) and continued to grow by 10 to 14\% per year.
In 1970, Japan was the third largest economy in the world behind the United States and the Soviet Union.
Japanese capitalism organizes with the state a Ministry of International Trade and Industry (MITI), which helps it in its purchases and sales, and subsidiaries of Japanese companies multiply in South Korea, Taiwan, Hong Kong and Singapore.

Japan having become the second largest trading partner of the United States, whose market it has penetrated thanks to prices lower than its own, there is no shortage of reasons for friction between the two imperialist powers.
The US trade balance is in deficit (one billion dollars a year on average) while Japanese capitalists refuse to lower their own tariffs.
The inconvertibility of the gold dollar announced by Nixon in 1971 was accompanied by a trade surcharge that penalized Japanese products.
The first oil shock (1973) led to a deficit in Japan's current account balance.
The yen, which had become a strong currency sought after on the foreign exchange markets, and Japanese exporters experienced the consequences from 1976 onwards.
This period nevertheless began with the Izanagi economic boom (1965-1970). From 1963 to 1972, the growth rate averaged 10.5\% per year.
It was lower from 1973 to 1985, at around 4.1\% per year. The rise of the yen in 1985-1986, due to the desired depreciation of the dollar, again threatened Japanese exports.
Japan responds by saving energy, developing research in large companies (Fujitsu, Hitachi, Honda, Nippon Electric, Nissan, Toshiba, Toyota), decentralizing labor industries in Southeast Asia, and investing in developed countries.
Japanese capitalism has abundant savings (4.5\% of gross domestic product), unparalleled management and information, compulsory levies are the lowest in the developed countries and military spending is only around 1\% of GNP.
Nevertheless, after the Heisei boom (1986-1990), which was weaker than the previous ones, Japan entered a period of low growth in 1992 (1.4\% average growth).
In 1997-1998 it experienced the most classic crisis of overproduction, that is to say of under-consumption, of which all capitalism is threatened.

The Second World War, like the First, was a profitable period for Indian capitalism.
The British government became the major customer of the peninsula's steel and textile industries, and as a result, India moved from debtor to creditor.
A fifteen-year plan (1947-1962), called the Bombay Plan, was adopted, which provided for a doubling of per capita income during this period.
According to him, the state was to finance the basic industries and the private capitalists the sectors promising a quick profit.
This design full of charm for the latter had received the name of \enquote{mixed economy}. The Bombay Plan has long continued to inspire the Indian economy.
Nehru passed three five-year plans: 1951-1956, 1956-1961 and 1961-1966. Private industry was given protective tariffs, or even imports were banned.
The Rs 163 million in public investment during the three plans favoured industry and services at the expense of agriculture.  
Heavy industry developed rapidly, that of consumer goods much slower. India received more than \$9 billion in aid from 1951 to 1966.

The \enquote{Green Revolution} dominated the periods 1961-1965 and 1966-1970 and agricultural production grew faster than the population.
But 1965-1967 were the years of the industrial recession. The weaknesses of Indian capitalism were emerging, as was the inefficiency of the public sector.
The industrial recovery of the years 1970-1977 was accompanied by concentration. On the other hand, Indira Gandhi privatized Indian banks for a time in 1971.
Industrial production grew slowly until 1984 and then faster (8\% per year) until 1990. In the 80s, investment accounted for nearly 25\% of gross domestic product.
The World Bank forced India to devalue the rupee by 50\% in 1966.
That same year the conflict with Pakistan ended in Tashkent but it resumed during the East Pakistan uprising in 1971, which gave birth to Bangladesh.
Indian capitalism succeeded in 1981 in banning strikes in \enquote{essential} sectors, which did not prevent a general strike from killing 700 people in early 1982.
India is seeking foreign investment for its industries and is striving to conquer markets in Southeast Asia.
Under the governments of Indira Gandhi, assassinated in 1984, then her son Rajiv (1984-1989) and Narasimha Rao (1990-1996), India conducted a nuclear test and acquired a missile with a range of 2,500 km.
The continuing tension raises fears that India, now one of the world's largest capitalist powers, will sooner or later face neighbouring Pakistan.

Indeed, Pakistan is in conflict with it, especially over Kashmir.
It has always oscillated between adopting an Islamic State position, which it has taken several times since 1956, and a more secular attitude.
Progressive reforms (nationalizations, agrarian reform) were adopted in 1971 by Zulfikar Ali Bhutto and in 1973 by Fazal Elahi Chaudri.
But a military coup put General Mohammed Zia al-Haq in power in 1978, and Sharia law was adopted as the supreme law.
The country took an active part in the war in Afghanistan and received \$3 billion in U.S. aid in six years.
Daughter of Ali Bhutto executed in 1979, her daughter Benazir Bhutto became prime minister in 1988, was deposed in 1990, returned to power in 1993.
Despite the unrest, the growth rate has fluctuated in recent years between 4 and 6\% per year. The Pakistani ruling class retains many more traits of feudalism than the Indian one.
This probably partly explains the country's political oscillations. It admitted in 1992 that it could manufacture nuclear weapons and many believe that it undertook this manufacture.
The Indian peninsula may from one moment to the next ignite as a result of national rivalries between the ruling classes confronted that are reminiscent of what capitalist Europe experienced in the nineteenth and early twentieth centuries, but this time in the nuclear age.

The economies of southeast Asian countries emerged from World War II extremely weakened by the destruction (Burma, Philippines) and other consequences of the war.
Whatever the differences from one country to another, the liberation movements all had economic development on their agenda.
The newly independent states set up central banks, the creation of which in the 50s and 60s was recommended by the World Bank as well as... central planning, which is enough to show that this is a distant time.
Thus was born the five-year plan (Repelita 1) in Indonesia in 1969, the first Malaysian plan in 1970, the twenty-year plan for Burma in 1972 and three five-year plans in Thailand, which followed one another after that date.
Government participation in the economy was strong in Indonesia, Singapore, Malaysia, Thailand and the Philippines, providing 10 to 40 per cent of gross national product.
These states used protectionism to promote the growth of their infant industries. Some of them claimed at that time to be between capitalism and socialism.
It was generally a capitalism where the state played an important role and where the neocolonialism of the former colonial powers still held strong positions (Burma, Malaysia).
In order to keep these countries in their camp, the United States provided aid (\$2.6 billion for Thailand between 1950 and 1975 for example) obviously welcomed by the pro-Western ruling classes.

After the American defeat in Vietnam (1975), the capitalisms of Southeast Asia embarked on policies of growth in their industry, trade and financial activities.
Already in Indonesia after the coup d'état of 1965 which had caused 500,000 deaths and 700,000 arrests, Suharto from 1967 had given this country an impetus both nationalist and favorable to the great interests by developing a real colonialism (West New Guinea, Celebes, Moluccas, Timor).
In Thailand, military coups (1975, 1977, 1988) as in the Philippines under the presidencies of Marcos (1965-1986), Cory Aquino (1986-1992) and Fidel Ramos (from 1992), capitalism is strengthening.
The \enquote{newly industrialized countries} open their doors to foreign capitalism, obeying the rules of neoliberalism advocated by the International Monetary Fund and the World Bank.
Growth rates during the 90s were around 8\% per year. Everywhere we give as a model the \enquote{new tigers} who have thus found the ways of economic take-off.

To these \enquote{new tigers} we must join the \enquote{new dragons} no less capitalist than them.
Taiwan had an average annual growth rate of 6.7\% from 1977 to 1996, with peaks of up to 13\% Hong Kong has set its growth rate at 5\% for ten years and South Korea at 8.4\%.
The latter has become the eleventh industrial power in the world.
South Korean capitalism is distinguished by the activity of its conglomerates or chaebol (Samsung, Daewoo, Kia, Halla, Hyundai, LG, Sangyong), which can not be better compared than to Japanese zaibatsu.
It is also marked by the many scandals of its ruling class, which has never hesitated to exert cruel repression against workers, students and opponents.
Two former presidents of the Republic were sentenced in 1996, one Chun Doo-hwan to life, the other Roh Tae-woo to 17 years in prison for the 1979 military coup and the massacre of at least 2,000 people participating in the popular demonstrations in Kwangju in 1980, the most notorious repressive fact.
The leaders of the main chaebol have all been punished by the courts for corruption.

The economic successes of both \enquote{new dragons} and \enquote{new tigers} attracted foreign capital to countries whose currencies were aligned with the dollar but where profits were higher than those made in the Western world.
When difficulties arose in 1997 this capital, representing speculative investments, began to flee the capitalist countries of East Asia.
The crisis began in Thailand in July and then spread to the Philippines, Malaysia and Indonesia. Currencies had to be devalued (by 15-55\%) and IMF and Japanese assistance was sought.
The disaster spread from stock exchange to stock exchange. Hong Kong reunited in July with China, but forming a special administrative region still fully capitalist, was reached in October and South Korea in December.
The same month in the latter country, discontent led to the election to the presidency of the opponent Kim Dae-jung who accepted the IMF plan, pardoned his predecessors and the leaders of the chaebol, but demanded from them a great rigor of management.
The financial crisis did not end in March l998. What is certain is that the growth rate of the East Asian countries will be lower than in previous years at least until the year 2000 and probably beyond.
Bankruptcies, the cessation of foreign investment have led to layoffs, unemployment and protest movements repressed by force as in Indonesia.
Asian capitalism rallied to neoliberalism no longer appears as the model that it was enough to imitate for the Third World to access a real development.


\section{What is the future of capitalism in Asia?}

Asia played a key role in the peoples' claim to independence after the Second World War.
The 29 Asian and African countries meeting in Bandung in 1955 had demanded an end to colonialism and the right of the new States to assume their independence.
The Non-Aligned Movement, which Asian personalities such as Nehru had strongly contributed to promoting, affirmed the right of each people to choose its path, capitalist or socialist, and to dispose of its natural wealth within the framework of a New International Economic Order (Algiers 1973).

The path of capitalism was therefore not fatal. If it was followed in many Asian countries, as we have just seen, it was in the interest of the local ruling classes but strongly supported and aided by the greatest capitalist power in the world, the United States of America.
Still, they experienced difficulties from the beginning: when they wanted in 1954, on the model of NATO, to create the OTASE (Southeast Asian Treaty Organization) they found only three Asian states to join it (the Philippines, Thailand and Pakistan).
It is true that the Americans continued to occupy South Korea and exert a strong influence there in the years of the rise of its capitalism.
It is also true that they protected the Chinese nationalists, keeping theirs in Taiwan, even after the United States recognized the People's Republic of China in 1979, based on their interests.
The role played by them in Thailand, Indonesia, South Vietnam until 1975, and the Philippines cannot be underestimated.

Their action has always been relayed by the International Monetary Fund and the World Bank, where the United States has the highest quotas and whose headquarters are therefore in Washington.
For twenty years, these financial institutions have been the thurifers of neoliberalism in Asia and around the world.
The Asian Development Bank, providing interest-free or very low-interest loans, has also played its part in the flourishing of capitalism in Asia.

North Korea from 1946, mainland China after 1949, North Vietnam after 1954 and the whole of Vietnam since 1975, Laos finally chose a path other than that of capitalism.
In China, however, private companies have been authorized since 1978. Joint enterprises were established with foreign capital from 1980 and special free and economic zones were established.
The slogan \enquote{socialist market economy} was launched in 1992. 3,200 joint-stock companies listed on the stock exchange (Shenzhen and Shanghai) have been established. 
Foreign investment has increased. Vietnam has followed a similar path, although there has been no stock market so far in that country and its leaders are showing great caution.
The IMF and the World Bank insist that reforms in both states be carried out to the end, which means in the minds of these financial institutions a full return to capitalism.
Officials in both countries, however, have always presented these reforms as not calling into question the socialist character of their regimes.

Our time is one of economic integration on all continents.
The South Asian Association for Regional Cooperation (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka) has played only a limited role as a result of the Indo-Pakistan rivalry.
But the Association of Southeast Asian Nations or ASEAN,( Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand), created in 1967 in Bangkok, is an important economic and political organization with links with the European Union and other groupings of states. Vietnam joined in 1995.
On the other hand, the Japanese imperialists seize every opportunity, such as the East Asian financial crisis, to seek to establish a yen zone in Asia, in which we can see a softened version of the \enquote{sphere of co-prosperity} of unfortunate memory.
The workhorse of their American rivals is rather the Asian Pacific Economic Cooperation launched in 1989 by Australia but which they took over in 1994 and which should lead in 2010 to a vast free trade area encompassing both sides of the Pacific.

After the return to capitalism of the countries of the former Soviet Union and those of Eastern Europe, the dominant thought in the West is that this return must take place in Asia as everywhere because capitalism is the only conceivable human regime.
That he is human is what reading this book can legitimately cast doubt on. That it is the only conceivable one is no more true.
He had predecessors who were not capitalists and competed in this twentieth century with another who was not either. The domination of big capital is heavy to bear.
Despite the stranglehold on information and the \enquote{single thought >\rfootnote{\enquote{>} is in the original. You probably wonder why there is \enquote{>} here. Well so do I. It might be a typo but since I'm not sure I let it as it is}} people are realizing it every day and, among them, the Asian masses facing the consequences of the financial crisis.
It is inevitable that they will aspire to something else to ensure a better life and find the way to it. For capitalism is not the future for Asia or for the rest of the world.


\rauthor{Yves Grenet}
