Britain and the Return of Japanese Economic Interests to South East Asia after the Second World War

Despite Japan's military defeat in 1945, Japanese economic interests returned to South East Asia remarkably rapidly in the post-war era. Backed by the United States, Japanese economic expansionism represented a new threat to British commercial and financial interests in a region much coveted by British policy-makers. Yet, notwithstanding doubts and fears expressed by some British business leaders and public servants, British policy played an important role in the re-emergence of Japan as an economic force in South East Asia. Although emphasis was placed on controlling the process, the logic behind the Anglo-American coalition in the Cold War pointed towards the need to build up Japan as a counterweight to communist China. At the same time, it was appreciated that Japanese trade and investment would benefit the sterling area as well as the economic development (and, hence, political management) of South East Asia. The resurrection of Japanese economic activity in South East Asia was also a side-effect of British decolonization policy. As this was increasingly fulfilled, indigenous political and business leaders welcomed economic links with the ‘new’ Japan.