Japan: Century 21 - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 344

wide area of China and Southeast Asia and the South
Pacific, they eventually lost ground in fierce fighting
against the Americans and their allies. Japan came
within range of allied bombers (based in China and on
Pacific islands), which destroyed T Tokyo and almost
all other Japanese cities. The war in the Pacific was
brought to an abrupt end after the Americans dropped
atomic bombs on the cities of Hiroshima and Nagasaki
in 1945.

network of wholesalers and retailers. Most produc-
tion keiretsu concern automobiles and electronics.
Most distribution keiretsu are involved in consumer
electronics.
A member, but very independent, of the Mitsui
Group is the T Toyota Motor Group. T Toyota was
founded in 1894 by the T Toyoda clan that had its
start in the manufacture of wooden spinning ma-
chines. T Toyota, with its automobiles, real estate
firms, insurance companies, and other interests,
is becoming a combination vertical-horizontal
keiretsu .

PHOENIX FROM THE ASHES
Defeat in the war meant the end of GEACPS but a new
beginning for Japan. The country was almost completely
devastated by the bombing, and its people were literally
starving in the immediate postwar period. Y et Japan' s
recovery in the ensuing years was the most rapid of any
nation in history . Relying on the Confucian values of hard
work, loyalty , and cooperative efforts and with American
assistance, infrastructure was rebuilt. A democratic form
of government was put into place, the zaibatsu were bro-
ken up and divorced from a reduced military , and land
reform gave land to the war-ravaged peasants.
Grounded in a fresh technological base, the govern-
ment, financial institutions, and industry banded to-
gether to build the new Japan. Another form of industrial
conglomerate emerged: keiretsu .

A LEGACY OF TENSION
More than half a century after Japan' s defeat in World
War II, there are still tensions between Japan and the
neighboring countries that once comprised Japan' s em-
pire. Survivors and their descendants in China and Korea
have little inclination to forgive the Japanese for their
harsh and oppressive rule. Moreover, the Japanese have
yet to atone for their atrocities. Lingering resentments
damage international relations to this day .
One example of the bad relations concerns a recent
episode of sex tourism by Japanese men to the southern
Chinese city of Zhuhai, one of that country' s fast-
growing SEZs. Such cities attract poor migrants from the
Chinese countryside in search of a livelihood and have a
flourishing underside of prostitution and other illicit
activities. A package tour group of some 400 Japanese
men, all employees of an Osaka-based construction
company , was entertained there for three days by 500
local prostitutes.
Even though it is not unusual for Japanese males to
travel in groups to China and other Asian countries for
packaged sex, this particular orgy happened to coincide
with an anniversary of Japan' s pre-World War II invasion
of China. The incident raised particularly strong indigna-
tion in the Chinese media, which described the event as
an affront to Chinese dignity . It then became the center of
a diplomatic flap between the two nations, causing
Japanese officials to issue a public apology .
Japan' s relations with neighboring Russia are also
strained by historical tensions. The two countries could
be enormous trading partners, given the proximity and
richness of Siberia' s natural resources. However, full ex-
change is held back by a territorial dispute that dates
back to the end of World War II. At that time Russia
snapped up a chain of small islands northeast of

Keiretsu

Keiretsu means something close to “link” or “affili-
ated with.” A keiretsu is a hierarchical organization
of companies. There are “horizontal keiretsu ” and
“vertical keiretsu .”
Horizontal keiretsu revolve around a financial
core including a major bank, a giant trading com-
pany , and a huge manufacturer. For instance, there
are Mitsubishi Bank, Mitsubishi Corporation, and
Mitsubishi Heavy Industries. There are also about
30 companies and more than 200 affiliates (10 per-
cent equity ownership) that are part of this hori-
zontal keiretsu .
Many vertical keiretsu lie within the borders of
the major horizontal keiretsu such as Mitsubishi,
Sumitomo, or Mitsui. Vertical organizations are
either in production or distribution. A collection
of firms assembles parts for a manufacturer who
directs its end product through a distribution