Abstract
South Korea and Taiwan provide fruitful comparisons in political economy. During the Cold War era, they deepened their trade with Japan. However, the top political leaders in those places exhibited different levels of threat perceptions towards Japan. Why did the leaders formulate their discourse towards Japan so differently in the post-Cold War era? The role of nationalism is salient during their economic take-off periods. The motivations behind these developmental strategies and the discourse used to justify such national growth cannot be excluded from the studies of comparative politics and political economy. This article examines the political discourses of two dictators—Park Chung-hee in South Korea and Chiang Kai-shek in Taiwan—and shows how they justified their policies towards Japan while establishing economic nationalism at the same time. It concludes with findings that are relevant to recent development in comparative studies, and it offers policy implications for East Asian security.
Comparing is ‘learning’ from the experience of others and, conversely, that he who knows only one country knows none.
Introduction
The contemporary history of South Korea and Taiwan is closely related as they were both Japanese colonies until the end of the Second World War. When the Qing dynasty lost the Sino-Japanese War, Taiwan was ceded to Japan under the treaty of Shimonoseki, through which Korea terminated its tribute to China. Japan’s triumph over China also marked its status as a great power in East Asia. When Japan won the Russo-Japanese war in 1905, it gained significant influence over the Korean Peninsula. In 1910, Japan annexed Korea and assumed full control over Korea’s government and military. The study focuses on how South Korea and Taiwan, which later experienced significant economic growth from the 1960s to 1970s, justified their economic policies towards a former empire in Asia.
South Korea and Taiwan provide fruitful comparisons in terms of economic development. Namely, these two countries executed two kinds of developmental strategies that successfully exemplified ‘economic miracles in East Asia’. Previous studies on Asian politics have mainly focused on the pattern of developmental strategies and the advantage of state-led capitalism, and few have looked at how political discourse on identity affects the making of foreign economic policy (Amsden, 2001; Johnson, 1987; Kang, 2002; Wade, 1990).
During the Cold War era, when they encountered similar geopolitical confrontations against communists’ aggressions, both Taiwan and South Korea deepened their trade with Japan. However, the top political leaders in those places exhibited different levels of threat perceptions towards Japan. Why did the leaders in South Korea and Taiwan formulate their discourse towards Japan so differently in the post-Cold War era? For example, Chiang Kai-shek maintained close ties with former Japanese military officers even after his retreat to Taiwan, while Park Chung-hee forcefully banned Japan music and literature to preserve the distinctiveness of South Korea traditions (Jung, 2015). Moreover, when Japan surrendered at the end of the Second World War, Chiang made a public speech urging ‘don’t use force against force’, and he stated that the good people of Japan were ‘by no means enemies’ and must correct the errors of crimes (Yamaguchi, 1971, p. 555).
The variation of their economic nationalisms has not received much attention in the studies of political economic and Asian studies. Scholars have been either preoccupied with the comparative advantages in the models of the developmental states or failed to analyse the discourse systematically. This article provides the first step towards understanding the causes of differences in the South Korea’s and Taiwan’s economic nationalism, and explaining their legitimation strategies towards Japan in the post-Cold War environment.
In Pathways after Empire: National Identity and Foreign Economic Policy in the Post-Soviet World, Andrei Tsygankov examines the economic policies of the three post-Soviet countries—Latvia, Ukraine and Belarus—from 1991 to 1996, and compares their prior experiences with national independence from Russia (Tsygankov, 2001). He argues that a stronger national identity led to a trade policy that pulled away from the former empire (Russia), while a weaker sense of national identity led to strengthened economic ties with Russia.
Nationalistic discourse, in this sense, is more than a cultural construct composed of history and symbols, and it is also a constant narrative of national process and purpose (Bhabha, 1990, p. 1). This article, therefore, proposes an identity-based perspective to the study of international political economy (IPE), and it argues that realism and liberalism fail to explain not only the variation of economic strategies for the post-Soviet countries, but also the different identity discourse in which South Korea and Taiwan adopted in the post-Second World War era. To be clear, by putting forward the economic nationalism perspective, this study does not mean to neglect other factors in South Korea’s and Taiwan’s developmental discourse. Rather, existing explanations such as market structures and models for economic comparison are insufficient ones as should be supplemented with a more advanced understanding of national identity and threat perceptions. The political wills behind such economic factors—the narrative in which the national purposes of the developing countries express themselves—provide another perspective that uncovers the driving forces for the developing countries around the globe.
This article proceeds as follows. First, it points out why South Korea and Taiwan had the different levels of threat perceptions towards Japan, and how this variation impacts the construction of economic nationalism. Second, this study focuses on South Korea’s and Taiwan’s legitimation strategies to deepen economic tie with Japan, respectively. It examines political discourses of two dictators during the Cold War era—Park Chung-hee in South Korea and Chiang Kai-shek in Taiwan—and shows how they justified their policies towards Japan while establishing economic nationalism at the same time. Moreover, it also uncovers the complexity of Park’s and Chiang’s discourses as they shaped significantly different ‘national purposes’ for South Korea and Taiwan. Finally, it concludes with findings that are relevant to recent development in comparative studies and offers policy implications for East Asian security.
Bringing Back National Identity to the Study of IPE
Whereas liberalism and the phenomenon of globalization have received much scholarly attention in current IPE literature, economic nationalism remains an underdeveloped concept. Moreover, a conventional view of economic nationalism usually carries a negative connotation, implying such as an ideologically driven policy, less market-oriented approaches or xenophobic sentiments towards foreign enterprise. However, such accounts are not accurate. This study argues that economic nationalism is more than a policy toolkit including trade protectionism, a strong-state intervention and mercantilism measures. It is not so much about the economy or policy option as it is about the national discourse and the formation of political identity (Crane, 1999). Such a narrow view of economic nationalism excludes a comparative study of different states and a historical analysis of economic policy. Redirecting the focus from policies to the ideas and identities that support such policies can give economic nationalism a more presence in the field of political economy.
Placing national identity and economic policy within a comparative framework also sheds light on the state formation for developing countries. Even in the era of globalization, states remain the central actors in world economies, as they are the focal points for local actors, interests groups and international institutions. In Globalization and Economic Nationalism in Asia, the editor Anthony D’Costa invited several Asian experts to highlight the development of economic nationalism in contemporary Asia. More specifically, Asian countries pursue various policies to promote economic development, such as techno-nationalism, support for internationalization of national firms and currency controls. India, China, South Korea, Japan and Singapore have been implementing economic nationalism and integrating with the world economy in both traditional and novel ways (D’Costa, 2012). Rethinking the nature of economic nationalism provides a broader perspective to the study of modern state development and foreign policymaking. Economic development can be considered one explanation for the origins and manifestation of the ‘we feeling’ that is similar to nation-building (Helleiner & Pickel, 2005, pp. 2–6). On another level, it can also highlight a certain aspect of nationalism by drawing on literature on economic culture, sociology and psychology (Granovetter, 1985, Hofstede, 1999; Streeck, 1997).
Given the different stages of state development and its levels of economic integration, the policy discourse of economic nationalism would also vary with representations of the economic nation (Crane, 1998). For instance, Helleiner further argues that economic nationalism can contain diverse policy prescriptions which may even support liberal economic ideas (Helleiner, 2002). More importantly, the national contents of economic policy—how to better promote unity, prosperity and power—provide guidelines for policymaking and evaluation. In this sense, the foreign economic policy is an implementation of the national identity and foreign discourse, implying the future of a given national economy (Shulman, 2000). Similar to the formation of nationalism, the purpose of economic growth and developmental strategy is also a highly contested issue in both domestic and regional politics. Therefore, a closer examination of the content of nationalistic discourse reveals how South Korea and Taiwan promote economic development, and how the top leaders view their relations with Japan.
Mainstream IPE theories, such as realism and liberalism, cannot fully explain the variation of economic policies adopted by South Korea and Taiwan after the Second World War. For example, liberalists argue that both countries would increase trade and economic cooperation with Japan, but they ignore the way in which the political leaders justify their choices when faced with ambiguous and contested public opinions. Realists posit that states would seek limited economic cooperation to maintain autonomy and vital national interests. However, such explanations fail to account for their increasing trade flows with Japan—a former empire that sustained brutal colonial rule and the serious war crime in East Asia. Tables 1 and 2 indicate such trend in South Korea and Taiwan during the 1960s to 1970s.
Bilateral Trade Flows for South Korea and Taiwan
Bilateral Trade Flows for Taiwan and Japan
2. * indicates missing data.
Comparative studies on post-Soviet states can contribute insights on the development of economic nationalism in East Asia. For example, scholars in Eastern European studies have considered the centrality of political identity in the context of economic development and nationalistic discourse. In National Purpose in the World Economy: Post-Soviet States in Comparative Perspective, Rawi Abdelal asks why Lithuania, Belarus and Ukraine, respectively, chose a pro-Western, pro-Russia and ambivalent national identity in their economic policies after the collapse of the Soviet Union. He points out that economic nationalism determines their choices on monetary and trade policy with Russia. More specifically, major political forces in Lithuania agreed that the country culturally belonged to the West and needed to embrace Western institutions such as the European Union to counter Russia’s influences. On the other hand, Belarusians have a weaker sense of national identity, and they are culturally closer to Russia. A greater economic integration would, therefore, benefit both sides. National identities in Ukraine are divided between nationalist West and pro-Russian East, and the highly contested political identities even undermined Ukraine’s sovereignty over Crimea in 2013. He also tests the nationalist argument in other end of empire cases: the collapse of the Hapsburg Empire in the nineteenth-century Europe, post-war Indonesia after the Dutch colonial rule and West Africa after French colonial rule. These cases reinforce the identity-based approach to the world economy and show that the study of economic nationalism can account for the different policy choices of these countries.
While Abdelal focuses on the realm of trade and currency policies of post-Soviet states towards Russia, he concludes that the difference in the strength of a national identity explains the divergent policy outcomes (Abdelal, 2001). However, this study pays attention to one specific area: how the political leaders in South Korea and Taiwan differently justified their foreign economic policies in which both of them have increased trade flow with Japan. More specifically, given that South Korea and Taiwan have the different level of coherence in their national identity and different threat perceptions, why did these countries still increase their trade flows with Japan after the Second World War? This analysis posits that different identity discourses adopted by South Korea and Taiwan create two different kinds of economic nationalism. Their perceptions of Japan and self-identity can explain why, despite their increasing trade flow with Japan, South Korea–Japan relations are under strong tension from time to time, while Taiwan generally remains on good terms with Japan.
Building on Abdelal’s and Tsygankov’s work on post-Soviet states, this study extends their identity-based arguments and examines them within East Asian politics—beginning with the time when South Korea and Taiwan gained political independence from Japan after the end of the Second World War. Both of their studies on post-Soviet states offer good examples of how different economic strategies can be understood through the formation of political identities. However, there remain differences among their works. For instance, Tsygankov focuses on the initial phase of identity formation when these states gained political independence from Russia, and how the levels of national identity determine the directions of economic policies. ‘National experience of statehood’, as Tsygankov concludes, can strongly affect the attitudes of political leaders in newly independent states. On the other hand, Abdelal highlights the formation of political identity as a contested and evolving process, conducting many interviews with political elites and compiling primary materials from those countries. This study recognizes the strengths of these two works, but there are trade-offs between different approaches to the same subject. In the comparative analysis of South Korea and Taiwan, Abdelal’s focus on the process of identity formation fits these former Japanese colonies well. As Korea was divided into two countries right after the Korean War, Taiwan was handed back to China as a province in the south-eastern coast. These two countries did not fully experience national independence in the same way as those post-Soviet countries. Therefore, I choose to examine discourses of the political leaders and elites before and during their economic take-off periods. These time frames provide an excellent venue to understand how South Korea and Taiwan justified and implemented their economic policies.
The comparative study, which juxtaposes South Korea and Taiwan, presents an empirical puzzle to political economy, as these two countries both chose to increase bilateral trade with Japan, yet they had different levels of threat perceptions towards this former empire after the end of the Second World War. In terms of theory building on IPE, examining these two forms of economic nationalisms points to a constructivist approach to understand the close connection between political identity and economic policy. Namely, what developing countries want depends on who they think they are (ibid., p. 5). Identity discourse remains an important cultural factor in economic decision-making, and ideal-based explanations should be recognized in their own rights, and not only subsumed as a by-product of interest-based one (Blyth, 1997; Jacobsen, 1995). South Korea and Taiwan have different discourses of self-identity, and therefore, they provide excellent cases to uncover their legitimation strategies on economic policy.
With all things being equal, political discourse during economic take-off periods usually builds up the sense of belonging and offers greater aspirations for the general public (Barkey, 1997; Coleman, 1995). Taiwan and South Korea might also have undergone through this process while constructing their economic nationalism during the Cold War era. To be clear, the argument about identity and economic nationalism does not imply that South Korea and Taiwan neglected substantive benefits in deepening economic relations with Japan. Rather, it suggests that these nations’ economic considerations and industrial policies are embedded in specific cultural contexts, and it is in the public statements of political leaders that national interests and aspirations can make sense to the people.
Nationalistic Discourse in the Developmental States
South Korea and Taiwan represent two ‘models of developments’ that are influenced by both Japanese colonial legacy and the Cold War structure. For example, one of the most salient features of industrial development in South Korea was the strengthening influences of chaebols groups. ‘Chaebols’ refer to large business conglomerates controlled by several Korean families. The government continued to devote significant amounts of money and resources to subsidize these private enterprises that could achieve higher levels of exports and market shares. Unlike South Korea which opted for this chaebol-government developmental strategy, Taiwan’s development strategy favoured small and medium enterprises that make up the majority of the nation’s economy.
Scholars in political economy offer a market-oriented approach which emphasizes the comparative advantages of skilled workers and sectoral interests in these two countries that strongly favoured for free trade policy (Cumings, 1998; Doner, 1992; Doner, Ritchie, & Slater, 2005, Grindle & Thomas, 1991). Alternatively, others offer state-centred perspectives to understand the different capacities among these countries to carry out economic policies (Kohli, 1994, Weiss, 1997, 2003). However, such rational explanations fail to identify political dynamics behind the observed economic activities among these two East Asian countries. That is to say, to better understand the economic development of South Korea and Taiwan, a comparative discourse analysis is necessary to highlight how the political leaders in these countries justified their economic choices and evoked the feeling of ‘we-ness’ among the general public to help catch up with the world economy.
Kathryn Sikkink undertakes a systematic comparison of economic development model in Latin America. Specifically, Sikkink asks why the developmental policies failed in Argentina (1955–1962), and succeeded in Brazil (1954–1961). Her findings show that the differences in Brazil’s and Argentina’s responses to organized interests and their different political styles attribute to divergence to such results. She rightly points out that successfully implementation of developmental policies requires both technical skills of state institutions and persuasive ability of the government (Sikkink, 1991, p. 207). In light of Sikkink’s insight, this article stresses that the construction of economic discourse not only requires the political leaders justify policies, but also involves the process of gaining resonance for those policies in specific historical contexts.
While the article recognizes the important associations between political institutions and the level of economic development, it argues that political leaders, when applying different framing strategies of national identity, can produce significant impacts on the future of a given nation’s economy. The role of nationalism is especially salient for developing countries that are catching up with developed ones during their economic take-off periods. More specifically, the motivations behind these developmental strategies and the discourse used to justify such national growth cannot be excluded from the studies of comparative politics and political economy.
The role of state and government agencies in implementing economic policies is another political factor essential to current literature on political economy and global governance. Linda Weiss challenges the conventional account that the process of globalization erodes the capacities of modern states and argues that states will become more efficient to guide economic policies and forge stronger ties with domestic groups. Specifically, she emphasized the transformative capacity of states in anticipating changes and adopt appropriate public policies (Weiss, 1998, p. 39). This study extends Weiss’s sophisticated study of state capabilities and elaborates the role of strong leadership in South Korea and Taiwan during the authoritarian rules. Government agencies and the top political leaders are certainly not powerless, and they can actively help to take the initiative and provide information for private sectors (ibid., p. 196). The article builds on current scholarship on the IPE, and it seeks to bring back the role of nationalistic discourse and external security threat back to the study of economic development and public policies.
South Korea and Taiwan: Different threat Perceptions towards Japan
Identity formation poses a crucial task for both intellectuals and political elites in newly independent states, as they attempt to differentiate themselves from the former ruling country. In the post-Soviet states mentioned earlier, there are significant variations in political elites’ perceptions of Russia: Lithuanians and Latvians see Russia as a security threat, Belarus as parts of Slavic civilization and Ukrainians are divided between these two. A different phenomenon occurs in the East Asian context: as South Korea and Taiwan were Japan’s colonial subjects in the early twentieth century, they both faced strong communist aggression from North Korea and China, respectively, after the Second World War.
These two countries both experienced dictatorial leadership in this period: Park in South Korea and Chiang in Taiwan established authoritarian regimes and limited democratic movements. Their national discourses shared two common schemes: they both needed to wrestle with the fear of communist insurgency and the brutal memory of Japan’s colonial rule. However, the juxtaposition of nationalistic discourses in South Korea against Taiwan also yields some further insights about their foreign policies towards Japan.
Throughout the 1960s to 1970s, South Korea and Taiwan considered Japan as an important economic partner, but there were significant differences in South Korea’s and Taiwan’s perceptions of Japan. Namely, South Korea still saw Japan as a security threat, while Taiwan did not and actively seek Japan’s support to gain political legitimacy over China.
During this time, South Korea and Taiwan also executed different cultural policies that helped to address their perception of Japan and other security concerns. In 1965, President Park Chung-hee issued a ban on Japanese popular culture to increase his anti-Japan credentials and promote the national identity among South Korean people (Jung, 2015, p. 731). The odd combination of decreasing Japan’s cultural influence and increasing its trade flows explained why South Korea remained wary about Japan. On the other hand, Taiwanese people experienced a rapid Sinicization process when Mandarin was officially introduced as the national language in the 1940s. President Chiang started the ‘speak Mandarin movement’ and systematically prohibited Taiwanese and other dialects in public spheres. The cultural assimilation process, from the mainlanders’ view, would promote unity and communication among peoples from different ethnic backgrounds.
Moreover, the way in which South Korea and Taiwan framed their national purposes—and specifically how the leaders justified their political legitimacy with constant reference to unity and memory—contributed to different substances of the economic nationalisms (Nakano, 2004). Economic discourse in South Korea stressed the ‘we-ness’ among its general public, while Taiwan created an isolated ‘otherness’ between the government and its people.
In Abdelal’s study, political parties who favour strong integration with the West often encourage their citizens to pay the short-run costs of economic interests in exchange for greater sovereignty in the long run. Within this comparative analysis, this ‘sacrifice for the short-term’ discourse can be identified in Park’s statement when he legitimated South Korea’s economic policy. Both political elites and the general public in South Korea were clearly aware of potential risks of increasing cooperation with Japan given its previous expansionist ambitions.
Establishing a self-reliant economy for South Korea would require not only a mass mobilization of resources, but also strong political propaganda to encourage public participation in economic affairs. For example, to establish a steel and iron mill, South Korea needed to make a huge investment in infrastructure and increase domestic demands first. The Park administration was determined to reach this goal and successfully secure funds from the Japanese government. The allocation of a significant portion of South Korea’s national budget to heavy industry (long-term) rather than to the food industry (short-term) reveals the way in which economic nationalists in South Korea secured economic independence and dealt with foreign threats (Kim, 2011). However, this ‘short-term versus long-term’ comparison did not take place in Chiang’s economic discourse. Greater economic ties with Japan would not compromise Taiwan’s national autonomy, so long as Japan did not establish diplomatic relations with the People’s Republic of China (PRC).
Admittedly, there are two different drives behind South Korea’s and Taiwan’s development strategies. Namely, South Korea chose a chaebol-led pattern with substantial government subsides, while Taiwan’s economic success relied on small- and middle-sized companies with strong entrepreneurship. One may argue that there are presumably different economic discourses to support their policies accordingly, and thus the nationalistic ideas were products of their rapid economic development. However, this study shows that some of the political ideas, such as anti-Japan sentiment in South Korea, Taiwan seeking political reconciliation with Japan, and deterring communists’ aggression in both places, were inherent prior their economic take-offs and even persistent through subsequent developmental strategies.
South Korea and Taiwan in a Comparative Perspective
During the Cold War era, these two countries both relied on Japan’s trade and investment, but they applied different legitimating strategies to justify their foreign policies. What kinds of insights can be derived from these historical materials for the study of economic nationalism in both countries?
Park Chung-hee received professional training in a Japanese Military Academy, and he served as an officer in Manchuria later. During this time, he adopted the Japanese name Okamoto Minoru (also called Takaki Masao). While he might have truly admired Japan’s culture and development, Park carefully framed his foreign discourse towards Japan when becoming President in South Korea. 1 He stressed economic independence as a crucial strategy to national survival, and national identity was framed as regaining pride and autonomy in the coming future. Therefore, economic discourse under Park Chung-hee set the foundation for nationalistic elements that are still highly salient in South Korea.
Chiang Kai-shek also received military training in Japan where he served in the Imperial Japanese Army from 1909 to 1919. While these two leaders received Japan’s influences in their early military careers, they exhibited different attitudes towards Japan when they assumed Presidency in their respective countries. For example, while Park remained vigilant towards Japan because of its brutal colonial rule, Chiang sought political reconciliation with Japan after the end of the Second World War. When Chiang retreated to Taiwan, maintaining economic relations with Japan was a continuation of his previous foreign policy.
This study not only looks at their foreign discourses towards Japan but also how the political leaders in both countries frame their national identity to deter the communism. Different identity formations in South Korea and Taiwan contributed to how the strong leaders justified their economic nationalism and their Japan policies. The construction of national identity reflects the cultural orientation and historical memory of the people towards their nations. Japan previously served as a colonial empire for South Korea and Taiwan, but it later played different roles in their discourse of economic development (Cumings, 1984, p. 4; Kohli, 1994). Admittedly, US foreign aid and its security commitment to South Korea and Taiwan contributed significantly to their economic growth. The degrees of these two countries’ reliance on US presence were about the same, since they both considered the US important partners against communist regimes. Their threat perceptions and discourses towards Japan, however, varied despite their increasing economic integration with the former empire. The following section focuses on how these East Asian countries justified and formulated their economic policies towards Japan.
South Korea under Park Chung-hee
The colonial experience in Korea history created a significant impact on South Korea’s sense of identity and community after the Second World War, because Korea was once an independent country whose sovereignty was deprived for almost half a century. During the colonial era, the Japanese government actively promoted a series of assimilation policies to coerce Korean people to think and act as if they were part of the Japanese empire without having their own identity. Therefore, the national building process for South Korea after the Second World War centred on the recovery of sovereignty—an essential element in its nationalistic discourse to exert self-control and independence. For example, during the strongman’s era, Park Chung-hee emphasized the distinctiveness of Korean culture to the extent that he forcefully banned all music and literature from Japan. In this specific context, national identity is the top security concern, and the political leader would also perceive economic development as parts of the survival of this country (Tsygankov, 2001, p. 18).
The economic structure of Korea was highly dependent upon Japan’s national purpose under its colonial rule; the control of the Japanese government led almost every aspect of Korea’s economic development. South Korea and North Korea were supposed to be economically interdependent, but the end of Korea War in the 1950s split the two territories apart. The separation of the Korean peninsula created economic stagnation for both countries. For example, most of the electric power and natural resources were located in the North (Frank, 1975, pp. 6–8). The distribution of military power favoured the North, as North Korea processed most of the peninsula’s metal production and heavy industries, which began operating during Japanese colonial rule. While the South mostly had textile and food-processing industries, South Korea’s foreign policy during this time regarded ‘anti-communism’ (the North Korean regime) as a crucial reference point in its decision-making (Choi, 2012; Cumings, 1984, p. 23).
When Park Chung-hee established authoritarian rule in the 1960s, he also normalized diplomatic relations with Japan in 1965. Soon South Korea’s soft loans from Japan led to increased trade and investment between these two countries. The signing of this official treaty clearly reminded the general public of the harsh memory of Japan’s colonial rule, and many even claimed that the Park administration sold out the country.
2
However, from his perspective, South Korea and Japan both considered North Korea as a common enemy. The two countries could positively cooperate in security and economic issues (Cumings, 2005, pp. 310–313). Park Chung-hee said:
In May 1961 when I took over power as the leader of the revolutionary group, I honestly felt as if I had been given a pilfered household or bankrupt firm to manage. Around me, I could find little hope of encouragement. The outlook was bleak. But I had to rise above this pessimism to rehabilitate the household. I had to destroy, once and for all, the vicious circle of poverty and economic stagnation. Only by reforming the economic structure would we lay a foundation for decent living standards. (Gibney, 1992, p. 50)
After all, South Korea was still a weak and poor country even a decade after the Korea War. In this sense, Park’s anti-communist agenda was not only an ideological inclination, but also a realist calculation of power. Moreover, under his strong leadership, Park stressed the importance of economic development and financial assistance from Japan to deter the military threat from North Korea.
Park’s headstrong commitment to anti-communism won support from the United States and Japan, and financial and military aid from these two counties laid the foundation of South Korea’s national power. Although Park harshly oppressed democratic movements, he considered the national economy as the highest priority. For example, he created the ‘Economic Planning Board’ (EPB) to execute a series of development plans. The advisory members assessed South Korea’s competitiveness in the world of increasingly connected economic relations, and the extent to which the government support was potentially promising industries and upgrading their capabilities (Graham, 2003, pp. 20–29). Competitiveness certainly matters for South Korea to restructure its national resource and subsidies, and President Park’s strong will in prioritizing heavy industry is a great example of how economic nationalism affects the process of domestic adjustment to industrial policies (Jwa, 2017). As one former official described how much Park Chung-hee was involved with South Korea’s economic planning, he said:
He (Park) always thinks about all the economic pictures, what is going on, and so on. Once he knows the problem, he tries to solve it … He defines the program and tries to work out the system to solve the problem. And then tries to maximise the efficiency of the organisation, and the system. He constantly summons the ministers, the secretaries. Once in a month, he attends these briefings at the EPB about the economic situation. (Mah, 2011, p. 11)
Park’s national discourse aimed at deterring military aggression from the North, and his economic goal was ‘to promote the modernization of the industrial structure and to build the foundation for a self-supporting economy’. More specifically, the plan included: (a) an emphasis on food self-sufficiency and development of marine resources; (b) a diversified industrialization of chemicals, machinery, iron and steel; and (c) an increase in the level of technology and productivity by the improvement of human resources (Frank, 1975, pp. 19–21). The central-led government enabled Park to credibly guide future economic development, so that it could successfully promote an ‘export-led growth’ policy and create new sectors in South Korea to compete with others internationally (Graham, 2003, pp. 20–25).
When South Korea’s overall capabilities increased significantly, the shift of balance of power started to favour South Korea in 1969–1970. However, unlike President Chiang, who was eager to reclaim the lost territory in mainland China, Park did not propose any concrete policy for future reunification and preferred to maintain the status quo. Developing national economy and enhancing security were the more important options for the Park administration. 3 Park said: ‘We must modernize our country to reunify its people. A modern country rests on the bedrock of economic independence. The long journey to reunification begins with economic independence (Kim, 2011, p. 562)’.
Park insisted on developing heavy industry despite strong objection from the World Bank and his technocrat proposing for the textile industry at that time. His famous slogan that ‘steel is the national power’ is a good illustration for industrial deepening (Cumings, 1984, p. 32; Moon, 2009, p. 6). The third 5-year plan was implemented economic nationalists who decided to put capital investment on coal, steel and other heavy industries (Cumings, 1986, pp. 161–162; Graham, 2003, pp. 26–37).
Seeking independence certainly serves as a crucial element of President Park’s economic nationalism. This emphasis can also be observed through Park’s economic technocrat, Kim Chung-yum, a chief officer in economic affairs under Park’s tenure, who executed a series of policies in export-oriented industrialization and market liberalization. In his memoir, Kim revealed statements and incidents that were relevant to economic nationalism in South Korea.
For example, when South Korea built up its heavy and chemical industry (HCI), an integrated steel and iron mill was essential to enhance productivity. In 1968, when negotiating with Japan’s Ministry of Trade and Industry, Minster Ohira suggested Korea simply buy steel from Japan, because the economic scale of South Korea did not reach the capacity for a steel mill at that time. Mr Kim, as the chief officer, responded with this ‘sacrifice for the short-term’ statement. He said,
Korea would eventually increase its production capacity to one million tons. The infrastructure investments would be funded by the national budget. Also, some of the reparations from Japan could be used to fund the construction of the steel mill, which would lower financing costs. And I stressed that unlike other developing countries, Korea had sufficient domestic demand for steel of up to one million tons, allowing it produce steel that was globally competitive and profitable. (Kim, 2011, p. 162)
Upon the completion of the main steel mill, it had reached the planned capacity and had significantly increased its production since then. The Park administration was determined to achieve this policy goal despite initial doubts from the World Bank and the Japanese government.
On the bilateral relations, a political rapprochement with Japan was South Korea’s priority at that time given the imminent threat from the North. President Park explicitly expressed his feeling of Japan’s colonial past and the rationale behind establishing positive relations with Japan. He said,
Japan took our independence, murdered our families, and confiscated our property. Considering their acts committed on Korea, they are our mortal enemy ... If I am asked about Japan, I will make my deeply rooted, anti-Japanese feelings known to anyone. If I have to choose to either be for or against Japan, I will always choose to be against Japan ... Considering the unspeakable acts inflicted by Japan, the wounds of our suffering cannot heal overnight. But, our country, at this moment, faces more serious challenges. Our country has been divided and is continuously under the threat of communism. Let us not be obsessed with old feelings in this competitive international world. We must be able to rise above and be willing to cooperate with our enemies of the past: today and tomorrow. It is a wise decision to promote national interests and the welfare of the people.
4
As these words suggest, national survival was the primary concern under Park’s tenure, and the sense of urgency from the communists’ invasion from North Korea promoted stronger diplomatic and economic relations between Japan and South Korea. At the same time, South Korea needed to build a stronger national identity and maintain an export-led industrialization to secure both political and economic independence.
The national purposes of South Korea also manifested in political propaganda, as the Park administration constantly promoted slogans like ‘we can do it’ which featured a positive attitude towards economic growth and a community-building of ‘we-ness’. People in South Korea actively contributed to the development of the nation’s economy and well-being. Even though Japan and North Korea were both enemies to South Korea to different extents, treating Japan less as a security threat and more as an economic partner seemed to be the lesser of the two evils for the South Korean government.
Taiwan under Chiang Kai-shek
The national purpose for Taiwan might seem like an oxymoron, because it was and remains only a part (a province) of a greater China. The national discourse during the Cold War era was constructed in an ironic way of treating Taiwan as ‘otherness’—with constant reference to the military threat from the PRC. The quest for legitimacy over China subsumed the identity formation among Taiwanese people.
When Dr Sun Yat-sen established a modern China in 1912, he also announced ‘three principles of the people (sam min zhuyi)’ which set out the foundation of political and economic systems on this new born country. However, his ideas were not fully realized due to intense civil conflicts. It was not until the KMT’s retreat to Taiwan that Dr Sun’s plan was actually executed in this island (Hughes, 2013, pp. 6–9).
Kuomintang (KMT) political elites applied their state-led capitalistic ideas to post-war Taiwan, and they hoped that economic development in Taiwan would serve as a strong material base when they fought the Communist Party across the Taiwan Strait. The KMT, as the ruling party at the same time, formulated anti-communist propaganda as the nationalistic discourse and imposed the authoritarian rule to limit democratic movements.
From a Chinese perspective, the concession of Taiwan to Japan represented a symbol of injustice and humiliation by imperialism, but the importance of Taiwan only began to emerge when the KMT lost the civil wars against the communist party and established itself in the island. Beijing and Taipei were both claiming to represent China legally, and Chiang needed to assert the legitimacy of KMT in Taiwan. Chiang and KMT members regarded Taiwan a ‘model province’ where economic plans were implemented successfully, and the ‘Taiwan experience’ could later guide to other Chinese provinces when they regained political authority in mainland China. The KMT brought many experts in industrial policies, technocrat on economic development and well-trained professionals to Taiwan, which speeded up the pace for economic take-off (Cumming, 1984, p. 22).
When Taiwan experienced significant economic growth from the 1960s to 1980s, there were strong tensions between Taiwan’s emerging identity and KMT’s nationalistic discourse. After Taiwan successfully experienced democratic transitions in the 1990s, the economic nationalism started to put more emphasis how to formulate its own national purposes and identity.
To a larger extent, economic nationalism in Taiwan after the Second World War can be traced back to China’s struggles against imperialism in the nineteenth century, where China suffered significant defeats on both economic and international fronts. President Chiang and most of the technocrats at that time shared the mission to reclaim or restore a greater China, and Taiwan is a transition towards a revanchist victory against the communist party. This section provides public statements of government officials, and they are all mainlanders from the KMT members. Under the authoritarian rule, President Chiang and these influential figures directed the economic policy and foreign relations with Japan.
For example, Yin Zhong-rong, the founding father of Taiwan’s economic development, who established the Industrial Development Council (IDC) and Economic Development Board (ECB), expressed the urgency to save a greater China and his mission to advance national capabilities. He said: ‘The suffering of this nation has not come to an end, and I am already in my 50s. I should work even harder in the next ten years. Even if I die by then, my life would be worthwhile’ (Shen, 1988, p. 7). 5
Yin successfully implemented a mix of planned and liberal economic policies that helped promote export-oriented industrialization in Taiwan (Wu, 2004, pp. 6–7). Later on, his successor, Li Kwoh-Ting, also supported Yin’s ideas and further advanced the technological development of Taiwan’s industrial structures. However, when there was a growing awareness of Taiwanese identity accompanied by its rapid economic growth, Li pushed back against such a quest for Taiwan’s identity. He said:
I was born in the chaotic times, and China’s humiliations had impacted me greatly. Therefore, I always felt deeply responsible for the country and hoped for a better and stronger China … It would be a rather shallow thinking if people nowadays put a priority on locals over the nation-state. Take Taiwanese literature, for example: it is only a part of Chinese culture. Those who emphasize the centrality of Taiwanese culture ignore the long-term historical perspective. Should you devote time and resources to a county, a province, or a 5000-year cultural heritage? (Yuanjian, 1987, pp. 2–17)
Li’s higher emphasis on the centrality of China’s identity over Taiwan’s local agenda was common among government officials during that time, given that President Chiang and most of his cabinet members regarded Taiwan’s resources and its economic development as their final bastion to deter the PRC. Furthermore, the discourse of economic policy often implies an ‘anti-communism and reclaiming China’ agenda (fangong fuguo). For example, Yen Chia-kan, who served as the Minister of Economy and later became the Prime Minister in 1963, expressed this official view. He said: ‘In order to fulfill the mission (of anti-communism and reclaiming China), we must increase our production, employment, living standards … Taiwan is our base, and we shall equip ourselves materially and mentally’ (United Daily News, 1964).
As Li’s and Yen’s statements suggest, fighting against the PRC and reclaiming the national pride as a great China seemed to be the main purposes for economic development. During Chiang’s tenure, economic nationalism in Taiwan was heavily embedded with an anti-communist agenda while not addressing ‘Taiwan’ itself as the subject of economic development. When dealing with economic relations with Japan, Chiang regarded Taiwan–Japan bilateral trade as an instrumental use of his anti-PRC propaganda. Chiang Kai-shek pursued a policy of magnanimity (yi de bao yuan) towards Japan at the end of the Second World War, because both China and Japan were not only seriously war-stricken, but they also shared common strategic interests in deterring communism. When the KMT settled in Taiwan, the policy of seeking political reconciliation with Japan remained unchanged.
According to the latest study on Japan–Taiwan military ties, a group of former Japanese wartime officers stayed at Taiwan and assisted professional and strategic training for the military troops during Chiang’s tenure (Nojima, 2014). The archival data indicate that the KMT not only strengthened economic relations with Japan, but also maintained closed, albeit secretively military collaboration with Japan.
Previous studies indicate that severe security threats were the driver for nationalism in north-eastern Asian countries (Woo, 1991; Woo-Cumings, 1998). Taiwan, when compared with South Korea, probably experienced the greater degree of insecurity form mainland China and abandonment from the US security in the later state of Chiang’s tenure. China, unlike North Korea, had become more powerful militarily and assertive in gaining diplomatic support throughout the world (Weiss, 2000, pp. 30–31). An imminent threat from Communist China and geostrategic considerations led the KMT to seek closer economic ties with Japan (Yamaguchi, 1971, p. 555). The strong contrast of ‘Other’ also yields significant impacts on the formation of Taiwan’s identity during and after the Cold War era (He, 2014).
As long as Japan committed to a ‘One-China’ policy—not to officially recognize the PRC—Taiwan and Japan would maintain positive economic and political dynamics. When sensing Japan had attempted to negotiate trade pacts with PRC, Taiwan threatened to boycott Japanese products. 6 President Chiang assumed a moral high ground in fighting against communism, and he publicly demanded Japan not conduct trade negotiations with PRC. 7 According to archival materials, President Chiang proposed two guidelines concerning economic relations with Japan: (a) preventing the export of Taiwanese products to Japan’s companies that had business with the PRC; and (b) not allowing import goods from Japan’s companies that had business with the PRC at the same time. 8 Chiang justified Taiwan’s trade with Japan as an integral part of his anti-communist agenda, and therefore his discourse towards Japan exhibited a specific feature. At a minimum, President Chiang wanted Japan to separate its foreign policy from its trading: Japan could conduct trade with the mainland, but it could not officially admit PRC status. The Japanese government morally supported the KMT’s claim to China’s legitimacy and trade with Taiwan.
When Japan normalized with China in 1972, Chiang felt betrayal from Japan even after he had implemented such generous foreign policy. He said: ‘The Japanese government disregarded moral principles and established diplomatic relations with the Communists despite strong opposition … Japan is expecting a greater bilateral trade, and this will bring danger to the nation’. 9 Although Taiwan–Japan trade grew steadily during that time, Chiang Kai-shek criticized Japan for appeasing the communist regime in Asia and encouraged the Taiwanese people to remain high spirits to cope with international isolation in the 1970s (ibid., pp. 3787–3841). Even though the KMT built up infrastructure in Taiwan and promoted rapid economic growth, the national discourse during Chiang’s tenure was China-centred and anti-communist. Since economic relations between Japan and the PRC remained at a minimum due to the Cold War confrontation, the bilateral trade between Taiwan and Japan served as leverage against communist aggression and a base for Chiang’s legitimacy. Therefore, a tacit assumption behind KMT’s discourse that ‘they are not here to stay (in Taiwan)’ was a collective psychology of émigré regime which failed to build ‘we-ness’ in its economic discourse.
In sum, South Korea and Taiwan underwent significant economic growth during the Cold War era. However, Park Chung-hee and Chiang Kai-shek exhibited divergent views towards Japan and formulated different nationalistic discourse despite facing similar and eminent security threats in the form of communism (Table 3).
Economic Nationalism in South Korea and Taiwan
Conclusion
The economic miracle delivered by South Korea and Taiwan can be largely attributed to the legacy of Japanese colonial rule, US foreign aid after the Second World War and the state-led strategies of strong central governments. However, existing literature only provides partial explanations to identify the successful outcomes, leaving ideational factors unaddressed. This work highlights the fact that behind their phenomenal growths, South Korea and Taiwan both had strong motives to promote such developmental strategies. Economic nationalism, in this sense, sets out the national purposes of these developing countries: where is the country heading and how political identity affects foreign economic policy.
Previous sections survey current literature on political economy and argue that economic nationalism proposes an alternative perspective for understanding the formation of identity and its implications for foreign economic policy. Rather than isolating itself from a wealthier neighbour, South Korea gained its economic independence by trading with Japan significantly as a part of its survival strategies. Taiwan under the KMT regime pursued a tolerant and open policy towards Japan, but it ultimately failed to prevent Japan from officially recognizing the PRC. In both cases, national identity had significantly shaped these nation’s economic policies and respective outcomes. The comparative study on South Korea and Taiwan suggests that establishment self-image and external threats exert both constitutive and discursive effects on their economic nationalism in Asian politics. In particular, they revealed themselves in which political dictators justified their policies in culturally different ways. The framework of economic nationalism helps us to understand the historical context in which national identity and perceptions of Japan are taking place. To South Korea, seeking self-reliance was Park’s top priority, as he was determined to strengthen national independence against threats from North Korea and Japan. In the case of Taiwan, Chiang Kai-shek did not seem overly concerned with Japan’s security threat.
This study points to some initial thoughts concerning future research directions. Examining and contrasting foreign discourses from different countries has always yielded interesting intellectual inquiry: why does one country see things this way, while the other does not? The formations of threat perception and national interests have attracted much scholarly attention in political science. The empirical puzzle is more appealing when two colonial subjects, South Korea and Taiwan after the end of WII, faced similar conditions, but deployed different rhetorical strategies when formulating foreign economic policies towards Japan.
The historical discussion of this study suggests that the political leaders in South Korea and Taiwan, as later developers who both employed state-led strategies to participate in the world economy, had evoked different kinds of economic nationalism to justify their policies. The different threat perceptions and framing strategies towards Japan indicate that the legacy and memory of colonialism, though varying from case to case, were still significant even decades after the Second World War concluded. Future scholars interested in juxtaposing different economic discourses can pay more attention to the historical backgrounds and political identities of these countries in their comparative analysis.
The economic nationalism perspective offers rich implications for scholarship and policymaking. For economic development, it illuminates an overlooked driver for regional integration and the foundation for national aspirations. For comparative politics, the identity standpoint adds to a better understanding in the process of economic reforms and democratization.
In terms of East Asian security, this comparative study offers insights on recent maritime disputes involving these three countries, and the final settlements of this issue require systematic efforts to uncover the history of colonial rule and nationalism in Asia. Both South Korea and Taiwan have territorial disputes over Dokdo and Senkakus islands with Japan in East Asia, respectively. They constructed their legal claims to the disputed islands differently when responding to Japan. Specifically, South Korea nationalistic discourse reflected deep sense of insecurity towards Japan, as President Roh Moo-hyun and Lee Myung-bak both made strong statements concerning Dokdo, resorting to sovereignty and independence of the nation. 10 On the other hand, Taiwan toned down its claim on sovereignty over Senkakus Island in exchange for greater benefits for the fishing resources (The Taipei Times, 2017). So far the two major political parties in Taiwan have not yet to formulate a uniform stance towards Japan to claim sovereignty over the disputed islands (The Taipei Times, 2012a, 2013b, 2013c). The different levels of threat perceptions and the legitimation strategies deployed by these two countries in the maritime disputes showed that the impact of colonial history and nationalist discourse developed during the Cold War era is not only salient, but also worth further examination in East Asian security nowadays.
Footnotes
Acknowledgements
I truly appreciate two anonymous reviewers for their helpful comments on the earlier draft. I also like to thank the generous research support from Global Security Studies at Johns Hopkins University.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The author received no financial support for the research, authorship and/or publication of this article.
1.
Whether Park Chung-hee was sincerely pro-Japan or pretended to be submissive remains an enigma, historians in South Korea may uncover more materials or statements in the future. This study does not tend to set the historical records straight, but instead, it closely examines Parks’ economic policy and public statement during his tenure.
2.
3.
Such thinking could be observed through the archival materials at the United Nations. Refer to United Nations Commission for the Unification and Rehabilitation of Korea: Document No. 49, No. 52, No. 53, No. 55, 14 January 1972.
4.
Speech delivered at the US press club on 18 May 1965, during his visit to the United States.
5.
Yin also expressed similar views when he had gone through the Sino-Japanese War in 1945 (Chu, 2009, p. 79).
6.
For a detailed explanation of President Chiang’s propaganda to suspend trade with Japan (Liu, 2010). For Japan’s diplomatic maneuvers to initiate trade pacts with the PRC, refer to Lee (
).
7.
‘Chiang Kai-shek answered questions from a reporter of the Associated Press, April 5, 1958’, in the edited volume of President Chiang’s Statement, p. 3929. (Chiang Kai-shek da meilian she jizhe, xian zongtong jiang gong quan ji).
8.
‘Commission on Oversea Anti-Communism Propaganda: Meeting Records 189’, Archival Data No: 817.1, Ministry of Foreign Affairs, Republic of China (ROC). (Haiwai dui fei douzheng gonzuo tongyi zhidao weiyuan hui: di 189 cu huiyi jilu).
9.
‘Chiang Kai-shek’s address to the military and general public on the 61st anniversary of the Republic of China, October 10, 1972’, in edited volume of President Chiang’s Statement, p. 3779. (Chiang Kai-shek 61 nian guoqing jinian gao quanquo jun min tongbai shu, xian zongtong jiang gong quan ji).
10.
‘Special Message by President Roh Moo-hyun on Korea–Japan Relations’, Office of the President, Republic of Korea, 28 April 2006 (The Japan Times, 2012).