Japan was no longer alone in presenting America with an economic challenge. During the 60s and 70s two other Asian countries, South Korea and Taiwan, and two virtual city-states, Hong Kong and Singapore, followed the path Japan had taken — the path of export-led growth — and made rapid progress. They did not all do it the same way — each took its own course — but the four had a good deal in common with one another, and with Japan. All were small, at least by comparison with China, and none was well endowed with natural resources. All were close to China, but separate from it, and distinct in character. Each felt that it was under threat: the sense of insecurity enabled strong leaders to evoke great efforts, and great sacrifices, from their peoples. And all enjoyed strong American support. At least until 1970, they were seen as the front line in the struggle to contain Communism in Asia, and the United States helped them with ideas, money, and markets. Exporting manufactured products to America enabled them to achieve high rates of growth, and higher living standards for their peoples. It also made them dependent on the United States, and vulnerable to American protectionism. In the 80s growing trade deficits led the United States to press the Lesser Dragons, as they were sometimes called, to open up their markets to American exporters. All four were finding new opportunities in China, and getting more deeply involved there, but they still saw themselves more as competitors than as partners. American pressure was beginning to create a sense of common interest, while Japanese investment, and that of the Overseas Chinese was knitting their economies together. But regionalism had little attraction for the Lesser Dragons as long as the American market remained open.

South Korea

The war of 1950–53 left South Korea devastated and impoverished. Syngman Rhee was still in power, with the slogan ‘March North’. The United States entered into a security treaty with the Republic of Korea soon after the armistice, but the Senate made clear that it would come into effect only in the event of ‘external armed attack’.