CONFIDENTIAL ·
role, would there be a danger of a resurgence of Japanese militarism (possibly even nuclear based)?
26. Outside Asia, Japan will continue to pursue her world-wide commercial interests, in many cases to the detriment of Western European nations. She is likely to extend still further into the growing markets of Latin America and Africa. As (already) the world's third largest industrial power in terms of gross national product, she could play a much more influential part in international politics than she has so far chosen to do. Torn in a way between the West, where she belongs economically, and the Afro-Asians, to whom she affects emotional ties, she has sought to offend neither. On the assumption that Japan's dramatic emergence as a major industrial power does not make her less 'Asian', she could be a unique bridge between North and South and her influence on both could contribute to reducing the tensions between them. It is surely a general Western interest to encourage her to play such a part, difficult though this may be.
South East Asia
27. The small countries of South East Asia adjacent to China have a long-standing, if intermittent, tradition of tributary relationship to her. The only thing they have in common is fear of China but they react in many different ways. Some, like Cambodia, think that this is inevitable in the long run while others, like Thailand, are heartened by the American military presence.
28. It is unlikely that Communist China aims, any more than Imperial China did, to achieve military occupation of the whole area, though this is easier for us to believe than for those who have to live next to her. Her aim is more probably to eliminate Western presence and influence and achieve, primarily by subversion, the establishment of regimes that will not constitute a threat to China, in the Chinese definition of this term (for which any Western presence could be a threat). But whatever view we take of the Chinese threat, fear of it is very real in South East Asia and is a most compelling reason for greater co-operation among the countries of the area.
29. For the northern tier of countries (Burma, Thailand, Laos, Cambodia and the two Vietnams) the need to bow before the Chinese wind is the more compelling the less they receive support from either the United States or the Soviet Union; their economies and local administrations are weak and their minorities and the resident Chinese communities are particularly open to subversion from Peking, who have already laid ground bait in some areas. Against this, however, can be put the quite strong nationalisms that have always set a limit on complete subservience to China and which can today be seen operating in Hanoi.
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30. The southern tier (Malaysia, Singapore, Indonesia and the Philippines) have the comfort of being that much further away from China; they are not as easily susceptible to Chinese pressure subversive or otherwise, as their northern neighbours. that the experience of the Emergency (of the 1950s) or the PKI (of the 1960s) should cause any undue complacency in Malaysia or Indonesia. But each of these countries has more to build on than those of the northern tier stronger administrations in Malaysia and Singapore; greater economic potential in Indonesia; more likelihood of continued American presence in the Philippines. In this southern tier - and indeed for all governments with interests in the area - there arises a further problem, of the extent and manner in which Indonesia - the most virile and potentially most powerful non-Communist country in South East Asia can be helped out of her present difficulties and into controlled collaboration for the common good of the area. Indonesia should no longer be a "threat" - in military intelligence terms - but it seems likely that the enormous potential strength of this country, and the direction in which. this strength will develop, will be a large factor in everyone's thinking in the next decade.
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CONFIDENTIAL
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