As Japan struggled to rebuild itself after World War II, the charismatic Shigeru Yoshida, prime minister during the critical years of 1948 to 1952, called on the country to be a good loser. The Japanese have lost the war, he said, but they must not lose heart. Japan must cooperate with the United States, and pull itself out of misery and disgrace. The Japanese did indeed cooperate willingly with the Al- lied occupation — with the American (and British) “dev- ils” whom they had been taught for years to despise to the very core of their souls. . . . Postwar Japan went on to prove that it could indeed be a good loser. Under the new constitution promulgated under the guidance of the occupation, it has developed into a democratic country with a relatively moderate dis- parity between rich and poor and a stable, smoothly functioning political system. . . . The Japanese-U.S. relationship has thus come to occupy a truly unique position in world history. Never before has a multiethnic, contract-based society and a homogenous, traditional society joined together to form such a powerful team. As global powers, Japan and the United States combined have a decisive impact on world politics; it follows that their future relations will largely determine the blueprints of multilateral cooperation and world stability in the coming century. . . . Potential sources of bilateral friction are as numerous as ever: the trade imbalance, market liberalization, grow- ing Japanese investment in the United States, heavy U.S. dependence on Japanese technology, and so on. Occa- sional outbursts of economic nationalism, or “revisionist” thinking are probably inevitable as the debate over these issues unfolds. . . . Of far greater concern, however, is that Japanese- U.S. relations now face their gravest challenge since1945. The end of the Cold War has drastically altered the global geopolitical and geoeconomic context that shaped Japanese-U.S. relations. Both countries now face the urgent need to redefine their relationship to suit the new context. . . . Before they can build a strong bilateral relationship, Americans and Japanese must outgrow their obsession with being Number One. This psychological adjustment is absolutely necessary for both peoples. Projecting the nature of its own hierarchical society, Japan tends to view the rest of the world, it is said, in terms of ranking. This inclination fosters behavior patterns that are oriented more toward what to be than what to do. Japan is also overly conscious of itself as a late-starter, having entered modern international society only in the mid-nineteenth century, and this history has made catching up with and outpacing other countries a sort of national pastime. . . . It may be even more difficult for the United States, which dominated the free world during the Cold War, to make the psychological adjustments required to enter into a partnership with Japan that is truly equal.1. Among the “sources of bilateral friction” Funabashi lists the trade imbalance and Japanese investment in the United States. Why would these cause friction?

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As Japan struggled to rebuild itself after World War II, the charismatic Shigeru Yoshida, prime minister during the critical years of 1948 to 1952, called on the country to be a good loser. The Japanese have lost the war, he said, but they must not lose heart. Japan must cooperate with the United States, and pull itself out of misery and disgrace. The Japanese did indeed cooperate willingly with the Al- lied occupation — with the American (and British) “dev- ils” whom they had been taught for years to despise to the very core of their souls. . . . Postwar Japan went on to prove that it could indeed be a good loser. Under the new constitution promulgated under the guidance of the occupation, it has developed into a democratic country with a relatively moderate dis- parity between rich and poor and a stable, smoothly functioning political system. . . . The Japanese-U.S. relationship has thus come to occupy a truly unique position in world history. Never before has a multiethnic, contract-based society and a homogenous, traditional society joined together to form such a powerful team. As global powers, Japan and the United States combined have a decisive impact on world politics; it follows that their future relations will largely determine the blueprints of multilateral cooperation and world stability in the coming century. . . . Potential sources of bilateral friction are as numerous as ever: the trade imbalance, market liberalization, grow- ing Japanese investment in the United States, heavy U.S. dependence on Japanese technology, and so on. Occa- sional outbursts of economic nationalism, or “revisionist” thinking are probably inevitable as the debate over these issues unfolds. . . . Of far greater concern, however, is that Japanese- U.S. relations now face their gravest challenge since1945. The end of the Cold War has drastically altered the global geopolitical and geoeconomic context that shaped Japanese-U.S. relations. Both countries now face the urgent need to redefine their relationship to suit the new context. . . . Before they can build a strong bilateral relationship, Americans and Japanese must outgrow their obsession with being Number One. This psychological adjustment is absolutely necessary for both peoples. Projecting the nature of its own hierarchical society, Japan tends to view the rest of the world, it is said, in terms of ranking. This inclination fosters behavior patterns that are oriented more toward what to be than what to do. Japan is also overly conscious of itself as a late-starter, having entered modern international society only in the mid-nineteenth century, and this history has made catching up with and outpacing other countries a sort of national pastime. . . . It may be even more difficult for the United States, which dominated the free world during the Cold War, to make the psychological adjustments required to enter into a partnership with Japan that is truly equal.1. Among the “sources of bilateral friction” Funabashi lists the trade imbalance and Japanese investment in the United States. Why would these cause friction?

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