In the name of Asian solidarity:Sino–Japanese competition for technology diplomacy in Burma,1955–1965

Bohao Wu

Peking University,China

Abstract A decade after the 1955 Bandung Conference,China and Japan engaged in a competition for technological exports to Burma.1 During this process,technocrats in Beijing and Tokyo mobilized non-governmental collaborators—local Chinese industrialists and Japanese businesses seeking overseas expansion—as proxies to maximize their technological output to Burma.The Burmese,on the other hand,used the competition between Beijing and Tokyo as a bargaining tool,and pressed the two regional powers to provide at Rangoon’s request.The technical aid Burma received was also affected by its shifting visions for development.Factionalist struggles between 1958 and 1962 changed not only Burma’s political landscape but also its leadership’s mind-set regarding the economy: the nation moved away from aid-driven industrial modernization towards a self-reliant,agricultural economy based on limited foreign technologies.Consequently,the meaning of the term ‘technological aid’,though used throughout the decade,became flexible and indistinct,carrying vastly different connotations at different stages of the Burmese state-building process.In this way,Burma’s experience as an aid-receiving country in Cold War Asia may speak to the flexible power dynamics between the aiding and the aided countries,and shed light on the diversified means through which states employed science and technology as diplomatic tools in Cold War competition.

Keywords Technology transfer,industrialization,Sino–Japanese competition,Burma

1.Introduction

Revisiting the economic legacy of the 1955 Bandung Conference,it is almost impossible to miss the disparity between the promising economic agenda it put forward and the lack of progress in its aftermath.As confrontation in Indochina escalated during the mid-1960s,and countries (Indonesia,Malaysia and Burma,in particular) engaged in civil uprisings and territorial disputes,the region received increasing military aid and witnessed a decline in intra-regional economic cooperation during the two decades after 1955.The substitution of technological support with military aid attested to the diminishing sense of the idealism stipulated at Bandung.

However,it would be hasty to dismiss the economic initiatives at Bandung as utterly unrealistic.By examining newly declassified diplomatic documents from the 1950s to 1960s,it is possible to argue for a re-evaluation of the technological cooperation practised in the post-Bandung decade.China,Japan and Southeast Asian countries managed to forge important connections in bilateral cooperation during this period.As this paper demonstrates,these bilateral technological programmes were shaped by diplomatic dynamism involving multiple countries.

Existing scholarship has paid attention to this aspect of the Cold War,and explored how the geopolitical confrontation facilitated the founding of such aid programmes.This research is exemplified by monographs from Jeremy Friedman and Gregg Brazinsky.In his bookShadow Cold War,Friedman(2015)examines the competition for leadership between China and the Soviet Union,the two socialist giants,through economic and technical assistance to developing countries.Brazinsky(2017),in contrast,offers an analysis of the Sino–American competition for prestige,which was also conducted under economic terms.

However,the scholarship remains scarce on Burma,a country that played an essential role in forming the Non-Aligned Movement.Existing research primarily examines Burma’s industrial development through the lens of foreign technical assistance,and evaluates the significance of these aid projects in the economic landscapes of both aiding and aided countries.Aaron Moore’s (2014)study on the hydropower project at Balu Chaung provides an excellent example of this line of inquiry.Examining how Japan used its reparations deal to facilitate its grasp on Burma’s course of development,Moore (2014: 322) argues that the project itself was an agglomeration of governmental initiatives to create ‘a(chǎn) new network of power’,and bring together America’s geopolitical design for Southeast Asia,Japan’s ambition for economic leadership in the region and the Burmese regime’s efforts to establish effective control over its borderlands.Zou and Fan’s (2019) study of Burma’s national economic development plan (Pyidawtha) also contributed to the understanding of Burma’s struggle for modernization in the post-war period.The Burmese government’s unique interpretation and pursuit of a welfare state shaped its decision to replace British aid with assistance from China,signalling the interrelation between the country’s domestic political and economic development and the international context.

Nevertheless,focusing on the initiatives of aiding countries,these studies risk overlooking the multilateral nature of foreign technological assistance to Burma.Utilising the country’s neutral position during the Cold War,the Burmese government was able to parley with its foreign investors and shape the proceedings,terms and eventual outcomes of its aid.For instance,the U Nu and Ne Win governments both took advantage of the conflict between Cold War blocs,and turned aid from one camp—for instance,that from China and the Soviet Union—into bargaining chips for negotiations with the rival camp.As a result,negotiators from China and Japan often found themselves forced to offer better terms to their Burmese counterparts,citing the fear that Rangoon would be swayed by the preferential offers from the opposing camp.Leaving out this story may risk blurring the agency that aided countries had,and may underplay the multilateral nature of science diplomacy during the Cold War.

Existing studies also pay insufficient attention to non-governmental initiatives involved in forming technological aid,leaving a significant part of the exchanges unaddressed.The economic assistance programmes examined by Friedman and Brazinsky were secured primarily in intergovernmental agreements,through either formal negotiations or memorandums exchanged via diplomatic channels.However,the Cold War also witnessed the extensive mobilization of non-governmental proxies,including businesses and individual entrepreneurs.This point is well exemplified in China’s and Japan’s aid to Burma.In the 1950s and 1960s,Beijing actively solicited help from local Chinese entrepreneurs in Burma to promote its industrial equipment.At the same time,Tokyo was able to employ the country’s industrial giants—Panasonic,Hitachi and Nichimen,in particular—as foot soldiers to provide technological support.Therefore,these companies and entrepreneurs had to carefully integrate diplomatic aims into their commercial activities,creating much tension and political risk in the process.

Using recently declassified documents in China and Japan,this paper examines the competition between Beijing and Tokyo in their technical assistance to Burma,and how Burma strategically employed the competition to tighten its grasp on the national economy.During this process,economic bureaucrats in the two countries mobilized nongovernmental collaborators as channels to maximize their technological output in Burma,while the Burmese leadership used the competition to balance China’s and Japan’s economic influence in the country.This paper also highlights the fluidity of technological aid,in which Burma’s perspectives for national development constantly shaped the meanings,terms and forms of the technological aid that it desired.I argue that the factionalist struggles transformed Burma’s economic ambition over time:from industrial modernization and an open economy driven by foreign investment to a selfreliant,agricultural economy based on limited foreign technologies.As a result,China’s and Japan’s respective aid to Burma carried vastly different connotations at the different stages of the Burmese state-building process.In this way,Burma’s experience as an aid-receiving country in Cold War Asia may speak to the flexible power dynamics between the aiding and the aided countries,and shed light on the diversified means through which states employed science and technology as diplomatic tools in Cold War competition.

2.Non-governmental proxies in Sino–Japanese competition for technology output to Burma,1955–1958

Having been one of the main operational theatres in World War II,Burma faced difficulties pursuing economic recovery in a war-shattered landscape.In addition to the heavy fighting in Rangoon,Meiktila and Mandalay between the Japanese Army and the Allied forces,a civil war between the ruling Anti-Fascist People’s Freedom League (AFPFL) and Burmese communists in 1948 also stymied the country’s economic development (Smith,1991).From 1948 to 1953,U Nu’s government suffered from a sharp decline in rice exports and a stagnated domestic economy that forced the government to seek economic aid from the international community (Zou and Fan,2019).However,U Nu’s dedication to neutralist diplomacy made Rangoon a reluctant participant in the Western bloc’s initiatives,including the Colombo Plan—the technological cooperation group led by its former colonial suzerain (Egreteau et al.,2013).Scepticism about Washington’s support for Kuomintang forces’ presence in north Burma also prompted U Nu to reject the aid that Vice-Prime Minister Ne Win secured from the United States in 1953 (Jiang,2022).Consequently,Burma’s initial approach to the West did not procure the economic aid it so desperately needed.

Under such circumstances,Burma turned its focus eastward,to China (its new socialist neighbour and former ally in the independence struggle) and Japan.The 1955 Bandung Conference provided a gateway for such an attempt.During the conference,the Burmese made it clear that,while the country did not want‘conditioned aid’from the United States,it would welcome any funds and technologies from outside the region (Zou and Fan,2019: 570).This call echoed Japanese delegate Takasaki Tatsunosuke’s speech,in which he pledged that Japan was ‘a(chǎn)nxious to contribute her share’ to address the ‘scientific and technological lag of Asia and Africa’(Takasaki,1955:75).The Chinese delegation,too,had made contact with the Burmese delegation.As Zhou Enlai(1955)reported to the Central Committee of the Communist Party of China(CPC),the Burmese side demonstrated much interest in acquiring Chinese machinery—mainly textile machinery—to develop its industries.As a result,both Beijing and Tokyo stepped up their aid efforts to Burma after 1955,supplying industrial equipment to Rangoon under the pledges made at the Bandung Conference.

However,the Burmese leadership’s ambition for rapid industrialization was not unopposed within its ranks.Even before the political upheavals in 1958,there existed a long-term division within the AFPFL regarding Burma’s route to industrialization.The ministers Ba Swe and Kyaw Nyein,and the so-called ‘educated group’ they led,prioritized industrial development and had a more welcoming attitude towards foreign investment.In contrast,the Thakin faction,led by Thakin Tin and Thakin Kyaw Don,favoured agricultural development over industrialization,fearing that the current pursuit of rapid industrialization through foreign aid was unfit for Burma’s situation (Pho,1963).Nevertheless,since Ba Swe and Kyaw Nyein maintained firm government control from 1955 to 1958,both ministers ensured that the opposing voices remained irrelevant and moved their industrialization ambitions forward with aid from Japan and China.

To exert influence on Burma’s ambition for industrialization,economic technocrats in Beijing and Tokyo mobilized a wide range of non-governmental initiatives at their disposal.For China,the 350,000 Chinese ethnics in the country (or 2% of the total population) were natural collaborators,should Beijing play its cards right (Overseas Chinese Research Association,1955).In addition,unlike their counterparts in Malaya,Thailand and Indonesia,who maintained significant influence in the commercial activities of their countries of residence,Chinese communities in Burma were primarily concentrated in various handicraft and light industries,including soap,timber,breweries and rice-grinding factories (Overseas Chinese Research Association,1955).The Burmese Chinese communities’ preoccupation with manufacturing rather than commercial activities corresponded with the strategy Beijing envisioned for the overseas Chinese.From Beijing’s perspective,the overseas Chinese needed to become as ‘relevant’ as possible in the national economies of their countries of residence,both for their safety and for China’s national interest in these places.Such an idea was proposed by Liao Chengzhi,who argued that overseas Chinese in Southeast Asia would benefit from actively participating in the industrialization of regional countries.Liao’s argument received support from Zhou Enlai.In his report to the 8th CPC National Congress in 1956,Liao made his arguments clear:

Admittedly,as the colonial economy in these[Southeast Asian]countries collapses,and the national capital develops,there will be a conflict between the overseas Chinese capital and the national capital …However,this conflict is reconcilable when we encourage Chinese capital to work together with the national capital and develop enterprises that contribute to people’s livelihood there … Overseas Chinese in Southeast Asia should work with our policy.If overseas Chinese capital can invest in local industries gradually,steadily,and in an organized way,it will reduce the negative influence of Chinese commercial capital in their respective national economies and become a positive factor in making local economies prosper … We are ready to encourage overseas Chinese to unite and work in this direction.(Liao,1956/1990:307–308)

With Zhou’s support,Liao further developed his theory and proposed that the Chinese government should support overseas Chinese in their ‘transition to manufacturing’ by incorporating their products into China’s national economy: ‘If necessary,we should include their factories in the domestic economic plan.Moreover,to compete with imperialists,we should connect[their manufacturing business]to our production and consumption chain,and solve difficulties through one supporting the other’ (Liao,1957/1990: 320).These ideas were then publicized in thePeople’s DailyandTa Kung Pao,and circulated by Chinese traders in Hong Kong and Singapore.

Some Chinese entrepreneurs in Burma welcomed Liao’s proposal and travelled to China to arrange imports of Chinese industrial equipment for their factories.One example was Zeng Chengfa,a Chinese entrepreneur and board member of the Myanmar Chinese Chamber of Commerce (MCCOC),who was invited to attend China’s National Day celebration and to visit Shanghai and Beijing to tour Chinese factories in September 1956.As the Chinese document (China Import and Export Company Shanghai Branch,1956)shows,the tour for Zeng and his companions emphasized light industry factories that produced consumer goods because the Chinese expected Zeng to help promote Chinese factory equipment upon returning to Rangoon.In return,Zeng helped to organize an MCCOC entrepreneurs’ visit to the Autumn Trade Fair in Guangzhou in 1958,and actively promoted Chinese products to Burmese technocrats with whom he became acquainted.

Beijing’s strategy with local Chinese industrialists was partially effective.In addition to the increasing imports of Chinese machinery—most notably for timber-cutting and cotton-spinning—Chinese entrepreneurs in Burma also sought technological input from China for their factories.An example of such cooperation over technological support was seen in May 1958,when the Chinese National Transport Machinery Import Corporation (CNTMIC) signed a contract with the Yin Yin &Sons Company.Owned by Daw Yin from Fujian Province,the company was one of two major Chinese soapmanufacturing companies in Burma,with assets worth more than US$210,000 (Hara,1959).According to the contract,the CNTMIC would send four technicians to build a soap factory in Rangoon with the glycerine machinery supplied by Chinese manufacturers (CCO,1958a).Beijing even demonstrated a significant level of tolerance when these local entrepreneurs violated the contracts.When Chinese technicians arrived at Daw Yin’s factory,they found themselves short of supplies agreed to by the Burmese.When two of the four technicians complained to the Chinese Consulate that the pension paid by the local Chinese company was less than the agreed amount,they were instructed to address the issue internally and not bring the complaint to their employer (CCO,1958b).The flexibility—and,to some extent,tolerance—that China demonstrated with local Chinese collaborators boosted Beijing’s presence as a technology provider in Burma.

Compared to the Chinese,Japanese leadership emphasized soliciting help from domestic industrialists to expand Japan’s influence.In 1954,Takasaki Tatsunosuke and Kishi Nobusuke—the former became the president of the Economic Planning Agency in 1955 and the minister of the Ministry of International Trade and Industries (MITI) in 1958,while the latter became the Prime Minister in 1957—held a conversation regarding the future of the Asian economy.Both agreed that corporate Japan should adopt an aid-centred policy in Southeast Asia.Instead of pragmatic,commercial calculations based on the principle of ‘give and take’,both corporations and the government should engage in a strategy of ‘give and give’ in their interactions with their Southeast Asian counterparts,focusing on providing technology to locals and incorporating them into the Japanese manufacturing process (Kishi and Takasaki,1954).The two politicians believed that coexistence and co-prosperity (kyōsonkyōei) would be in the long-term interest of Japanese businesses in Southeast Asia.

Nevertheless,not all Japanese entrepreneurs shared the politicians’sanguinity for regional development.Instead,corporate Japan held a more reserved—and pragmatic—attitude in committing investment to Southeast Asia.For Japanese merchants,it was in their best interest that the region meet Japan’s needs for raw materials and markets,and,should it require technological support,the need would be for the extraction of natural resources.This was especially true for Burma,whose attraction to corporate Japan remained focused on its natural resources,including iron,timber and oil.Thus,it was not surprising that the Japanese mining industry championed advocating for Japanese investment in the country.

In January 1955,Kurushima Hidesaburō,the president of the Dowa Mining Company and a board member of the Japan Business Federation(JBF,Nippon Keizai-dantai Rengōkai),visited Burma and met U Nu,who returned from his visit to China the previous December.In their conversation,Kurushima told U Nu that it was Japan that built the Manchuria that he had seen during his visit,and,if given the chance,Japan could help build in Burma ‘just as it did 30,40 years ago in Manchuria’ (Kurushima,1955: 43).Upon returning to Japan,Kurushima wrote to promote his idea,claiming that exporting Japanese technology to Burma would ‘wake up the sleeping resources there’ (Kurushima,1955: 45).Since 1955,Kurushima had used his influence in the JBF to persuade his colleagues of the necessity of providing technology to Burma for the development of its natural resources.

In 1958,Kurushima went even further and supported the exchange of specific industrial equipment with Burma to facilitate Japan’s interests.When he was invited to talk with Takasaki,both figures criticized the ‘myopic’ practices of simply exporting manufactured goods to underdeveloped countries.Kurushima believed that Japan must‘take the initiative’ to export the technology and equipment of the‘obsolete industries’ to these countries (Takasaki et al.,1958:13–14).Such arguments were welcomed by Takasaki,who was eager to accelerate Japan’s overseas ventures during his appointment as the head of the MITI later that year.

Kurushima’s and Takasaki’s anxiety about the lack of progress in Japan’s technological output in the region was understandable:despite the advocates in both business and the government,Japanese industrialists remained reluctant to invest in manufacturing capacities in the region.According to MITI statistics,from 1954 to 1957,corporate Japan had sent 1298 technicians abroad,‘a(chǎn)n absolute majority of which were in Southeast Asia’.Among the technicians,85% were in the mining industry,signifying that ‘technological assistance flourishes mostly in fields directly related to [the region’s]export of raw materials’ (MITI,1958: 16–17).This contrasts with China,which had already made much progress in extending technological support to Burma’s industrialization.

As early as June 1956,China had signed a contract with the Burmese to help the latter to design and build a textile factory with more than 20,000 operating spinners (People’s Daily,1956).When the construction was completed in 1958,Beijing provided another US$4.2 million loan to Rangoon,enabling the latter to build a textile factory with more than 40,000 spinners (JICA,1966: 31;People’s Daily,1958).Admittedly,such construction projects proved to be very costly to China:China had to not only develop a set of equipment rendered for Burmese weather and cotton conditions,but also cover the costs for sending materials,technicians and even medical teams to support the construction (Liu,1960/2011).Nevertheless,the construction of textile factories was cheered as a remarkable achievement in the propaganda,and was used to set a contrast to the conditioned aid and economic pragmatism provided by Japan and the United States in the region.

China’s success put pressure on the Japanese government,which attempted to address businesses’reluctance to invest by incorporating Japanese businesses in its war-reparations arrangements with Southeast Asia.Burma,the first Southeast Asian country to settle reparations with Japan,was no exception to this strategy adopted by Tokyo(Kajima Institute of International Peace,1963/1984).The capital goods provided by Japanese manufacturers,including factory and industrial equipment,constituted most of the 72 billion yen that Japan agreed to provide to Burma.From 1955 to 1958,Japan delivered 21.4 billion yen in capital goods to Burma,constituting 75.1% of all reparations it paid (Research Committee on the Problems of Reparation,1959).From the Balu Chaung hydropower project to canneries and factories for car repairs,dye manufacturing and fridge production,the factory programmes were conducted via close coordination between Japanese industrial conglomerates and general trading companies (sōgō shōsha)(Research Committee on the Problems of Reparation,1959).For instance,the construction of the Balu Chaung Hydropower Station was contracted to Nippon Koei and the Kajima Corporation,while the Nichimen Group constructed the power grid for Rangoon (Moore,2014;BAJCTC,1972).These companies then received compensation from the Japanese government for their endeavours in Burma.

To compete with Beijing’s industrial aid,Japan used its advantages in industrial technologies,highlighting transportation machinery and heavy industrial equipment in its aid to Burma.In their internal papers (DAMOFAJ,1958),Japanese technocrats divided the aid to Burma into three categories,including the whole factory and industrial project(category A),the heavy industry equipment and vehicles (category B),and the other manufactured goods(category C).Of the 20.3 billion yen allocated for 1958,the first two categories accounted for 12.3 billion yen,or more than 60%of the total aid.As its competitor in Beijing could not match the equipment that Japan could provide,such an arrangement contributed to Japanese manufacturers’profits by enhancing the country’s technological dependence on them.According to the Congressional Committee of Investigation on Science and Technology(CCIST,Kagaku gijutsu chōsa iinkai),Japanese businesses exported more than 26 billion yen’s worth of industrial equipment and parts to Burma in addition to the repatriation programmes between 1956 and 1959 (CCIST,1963).This was also reflected in the changing landscape of Japanese–Burmese trade: from 1956 to 1962,the percentage of consumer goods (textiles and food) that Burma imported from Japan dropped from 58.8% to 28.4%,while the percentage of capital goods and chemicals increased from 29% to 58.6% of total imports(JETRO,1964).As a result,Japanese industrialists in equipment,machinery and transportation boosted their role as the primary equipment providers and technology suppliers in Burma.

However,Japanese enterprises’ preoccupation with commercial interests through aid projects disappointed the Burmese,who expressed their scepticism towards Japanese businesses’ intentions during Kishi’s state visit in May 1957.As U Nu told the Japanese Prime Minister,while ‘there was nothing wrong with the Japanese government’,he regretted that ‘a(chǎn) group of Japanese businesses only minded their immediate interest and hampered the Japanese–Burmese cooperation’ (DAMOFAJ,1957).Kyaw Nyein also accused the Japanese enterprises of having an ‘excessive obsession with their profit’ and manipulating the prices for Japanese equipment via a ‘cartel-like’ practice.In response,Kishi assured the Burmese that he would convey these concerns to relevant Japanese businesses and promised to boost the level of textile equipment as a sign of goodwill(AABMOFA,1957).

In part,Kishi’s somewhat deferential attitude to Burma was incorporated into his plan to deter China’s influence in Southeast Asia.Since 1957,Japanese decision-makers had stressed the threat of Chinese expansion in Southeast Asia,citing Beijing’s use of overseas Chinese to advance its‘trade war’ in the region (The Japan Times,1958).Sino–Japanese relations further deteriorated following their diplomatic dispute over Japan’s unyielding stance over the burning of China’s national flag in the Nagasaki flag incident.Consequently,from 1958 to 1960,the two sides intensified competition for both commercial interests and diplomatic prestige in Southeast Asia.Under such circumstances,technological aid to Burma became a crucial theatre in Sino–Japanese competition and did not lose momentum until the late 1960s.

3.Beijing–Tokyo competition and Rangoon’s turn to agricultural modernization,1958–1962

Sino–Japanese competition for influence in Burma’s industrialization faced a reorientation in 1958 due to Burma’s internal political disturbances.In April,Ba Swe and Kyaw Nyein split with U Nu,dividing the AFPFL into the AFPFL (Clean) under the Prime Minister and the AFPFL(Stable)under the two ministers.However,U Nu was able to defeat the vote of no confidence that Ba Swe and Kyaw Nyein initiated with the help of the Thakin faction and the leftists in the National United Front (Yin Hlaing,2008).The division within the party led to an interim military government under Ne Win,who received U Nu’s support while maintaining close ties to the leadership of AFPFL (Stable).As a result,a caretaker government under Ne Win was established in October 1958,with the Thakin faction controlling the cabinet and the parliament.

The immediate effect of the decline of Ba Swe and Kyaw Nyein in 1958 was the reorientation of the country’s economic strategy,moving away from rapid industrialization towards an emphasis on agricultural development.Despite Ne Win’s interpersonal connections to the leaders of the AFPFL(Stable),the military government had to distance itself from the losing side and appeared more sympathetic to the Thakin faction’s agriculturally centred agenda.This trajectory was clear when General Aung Gyi,Ne Win’s top economic acolyte,visited Japan in 1959.As he told the Japanese Foreign Minister Aiichiro Fujiyama,the new government would now move away from the ‘overemphasis on the industrial development of the previous government,which crippled the national economy and disrupted the stability of our people’s livelihood’(Fujiyama,1959).Aung Gyi promised that the military leadership considered Japan the most suitable ally for the government’s effort to ‘keep a balance between agriculture and industry,and prevent the country from becoming a breeding bed for communism’(Fujiyama,1959).Following Aung Gyi’s statement,Ne Win’s interim government adopted a series of approaches that effectively ended the aidmotivated industrialization that had characterized Burma’s economy in the post-Bandung period.

Nevertheless,Aung Gyi’s promise to Fujiyama faced much scepticism among foreign investors.Rangoon’s reorientation efforts also included a strict nationalization and import-substitute strategy,which aimed to reduce the country’s dependence on foreign merchandise and technology.In 1952,Aung Gyi established the Defence Service Institute(DSI),a military-controlled economic body to protect service members’ welfare.After Ne Win rose to power in 1958,the DSI accelerated its confiscation of assets owned by British,Indian and local Chinese firms and individuals (Yaguchi,1961a).Consequently,both foreign investors and Burmese entrepreneurs complained about the DSI’s abuse of militaristic power for economic benefit,driving the military government to consider an alternative body that had—or at least appeared to have—less association with the military.

That concern prompted Ne Win and Aung Gyi to establish the Burma Economic Development Corporation (BEDC) in 1961 to carry out nationalization without raising too many criticisms of the military.As Aung Gyi claimed,the BEDC had taken over 17 corporations from the DSI and would welcome non-governmental capital and entrepreneurs(Yaguchi,1961a).Nevertheless,the BEDC maintained essential ties to the Burmese military.As Japanese Ambassador Higuchi reported,the BEDC demonstrated little enthusiasm for soliciting nongovernmental capital for its projects (Yaguchi,1961a).Nevertheless,the creation of the BEDC and the DSI,and their essential roles in the government’s economic landscape,boosted Aung Gyi’s importance in his diplomatic manoeuvres with China and Japan,and provided him with a better negotiating position in securing the two countries’technological aid to Burma.

The nationalization effort failed to bring immediate relief to Burma’s dependence on foreign technology.Both the BEDC and the DSI were hindered by the country’s lack of capable technicians and managerial experts.As Japanese technicians sent to Burma observed,even with policies aimed at training native technicians,the Burmese government faced extreme difficulties in cultivating a technician community of its own:

Admittedly,the Burmese government sought to address its lack of technicians by promoting technology education and sending technician students abroad for training.Consequently,many young engineers emerged quickly … Nevertheless,able technicians who could manage design and implementation remained highly scarce.This was because the valuable [Burmese]talents would immediately become administrators,and stop accumulating experience from actual practices.(Sakaida,1960: 14)

As the lack of technicians remained unresolved,Burma had to secure further aid and technical support from China and Japan.To address its immediate problems,Burmese economic bureaucrats made frequent visits to Japan and China between 1958 and 1961,seeking additional reparations and help in Burmese development.However,Burmese officials faced many difficulties in securing continuous support from Japanese enterprises.Both Burmese technocrats and Japanese experts involved in the negotiation found the progress stymied.While Rangoon held a more sceptical view of foreign control in the Burmese economy,corporate Japan demonstrated little enthusiasm to invest in Burma’s development,citing the fear of sudden nationalization.

When U Rashid,Burma’s minister of industry,visited Japan in 1960,he approached Japanese corporate leaders and negotiated terms for Japanese technological assistance.As the negotiation memorandum shows,the demands from the two sides were far apart.The Burmese hoped that Japanese investors would establish factories as joint ventures so that the Burmese could learn from their professional knowledge,and both sides could share the burden and profit.In addition,the Burmese held to their nationalization schedule,rejecting Japanese demands to extend the grace period from 10 years to 20.However,the Japanese corporations dismissed Rashid’s proposal,demanding a lower percentage of capital contribution,and asked the Burmese to pay a technical fee up front for Japanese technology and equipment (Kosaka,1960).The unyielding stance that the Japanese adopted upset Rashid,who then complained that the‘failure to deliver any of the promised aid’over the past few years had caused political problems in Burma,especially when Nichimen’s plan to build a textile factory failed to make any progress,even after years of negotiation(Kosaka,1960).Upon returning to Burma,Rashid also conveyed his frustration with Ambassador Hara,worrying that the failure to secure a Japanese compromise might further endanger the bilateral relations between the two countries.

The lack of progress in Japanese–Burmese technological cooperation is significant for the Sino–Burmese case,primarily since Chinese engineers had already delivered two textile factories in Burma from 1956 to 1960.Moreover,Zhou Enlai met with Aung Gyi in January 1961 to finalize the negotiation for the border between the two countries,and agreed to provide additional economic assistance to Burma through the Sino–Burmese Agreement on Economic and Technology Cooperation.As the agreement prescribed,Beijing would provide Rangoon an interest-free loan of￡30 million to purchase technology and equipment from China and‘send technicians and professionals to Burma at China’s expense’ (Peoples’Daily,1961).As Aung Gyi told the Japanese,the factories that China promised to Burma were mainly processing factories for the country’s agricultural products,including paper mills and textile,sugar and bamboo pipe factories(Deng et al.,1989).Despite China’s economic difficulties in the aftermath of the Great Leap Forward,these programmes were mainly delivered on time in the mid-1960s,boosting Burma’s manufacturing capacities.

China’s progress in Burma unsettled Japanese decision-makers,who were concerned about Beijing’s expanding influence in the country.As the Japanese Ministry of Foreign Affairs (MOFA)estimated,compared to the ￡30 million promised by the Chinese,the sum of Japanese aid and investment in Burma in 1960 was only US$153,000.As a result,China’s aid would ‘take over a significant share of [equipment in] Burma’s four-year plan,thus affecting our country’s future economic assistance to the country’ (China Division,AABMOFA,1961).Tokyo also feared that China’s technological aid would turn Burma’s power dynamics to Beijing’s advantage.As Ambassador Yaguchi (1961b) estimated,Chinese aid to boost Burma’s processing abilities for agriculture products would help the Thakin faction,which held a pro-China position,to expand its support base in rural areas and give it an advantage in the next election.

Ironically,China’s progress prompted a sense of urgency in the Japanese government and,in turn,helped Rangoon’s negotiating position with Tokyo.When Aung Gyi visited Tokyo in 1961 to secure Japanese assistance,he was able to take advantage of Japan’s concern,and used it to facilitate the aid that the Japanese would provide.‘In order to balance Chinese communists’ expanding [influence]’,Aung Gyi told Prime Minister Ikeda,it was essential for ‘Japan and Burma to build closer ties between themselves’ (DAMOFAJ,1961a).In addition,Aung Gyi exaggerated the scale of Chinese aid to Burma,claiming that Beijing had offered a hundred million dollars worth of credit to Burma.In response,Ikeda told Aung Gyi that Japan would love to provide Burma with the ‘technical know-how’ it needed (DAMOFAJ,1961a).In his subsequent negotiations with Japan’s economic technocrats and business leaders,Aung Gyi was able to secure a cooperative attitude from the Japanese.He pressed Sato Eisaku,the minister of MITI,to instruct Nichimen to accelerate the construction of textile factories it had promised but also secured additional technological aid—in the form of Japanese exports and the promise to cover their expenses—from the Japanese (DAMOFAJ,1961b).As a result,the year 1961 marked the high tide of Beijing’s and Tokyo’s aid competition in Burma,in which Rangoon strategically used one side against the other to gain preferential terms that it had failed to procure in earlier negotiations.

4.Beijing and Tokyo’s technology diplomacy under the shadow of the‘Burmese Way to Socialism’,1962–1965

In 1962,Burma’s see-saw strategy with Beijing’s and Tokyo’s aid again faced turbulence due to the country’s political upheavals.In March 1962,Ne Win mobilized his supporters in the military and launched a successful coup to apprehend U Nu.The military coup effectively put an end to the civilian government in Burma and replaced it with the military-controlled Revolutionary Council.Even though some civilian ministers remained in the government,the military headquarters,along with the DSI and BEDC it controlled,now held power in every aspect of political and economic life in the Union of Burma.

Technocrats in Beijing and Tokyo were concerned about the coup,fearing that the new development would disrupt their relations with Rangoon.In 1962,the Japanese MOFA sent Okuda Shigemoto as a special emissary to Burma to speak with representatives of the new regime,and to ensure that the military government maintained a friendly attitude towards Japan.In his conversation with Aung Gyi,the latter assured Okuda that existing programmes signed by the U Nu government,although ‘unrealistic in many ways’,would only be adjusted rather than abandoned,since the new government wished to remain on good terms with foreign governments (Southwest Asia Division,AABMOFA,1962).Aung Gyi pledged that,although the country would no longer favour setting up joint ventures with Japan,the new government still wished to solicit help from Tokyo,especially in technology transfer (Southwest Asia Division,AABMOFA,1962).However,Aung Gyi’s assurances soon expired.

In 1963,Aung Gyi,the chief negotiator for aid with China and Japan,was forced to resign as the Minister of Trade and Industry and BEDC president(Seekins,2006).His resignation also suggested that Ne Win had lost interest in the staged importsubstitution strategy enabled by competitive professional knowledge from foreign aid.The mild nationalization policy gave way to an accelerated course of‘Burmanization’ that Tin Pe,Ne Win’s new economic adviser,advocated.On 15 February,one week after Aung Gyi’s resignation,Ne Win rolled out his ‘new economic policy’ and publicly proclaimed that the country would pursue the nationalization of all economic sectors,including the‘production,distribution,import,and export of all commodities’ (Trager,1963: 325).From 1963 to 1964,the Burmese government accelerated the nationalization effort,and fully annexed foreign banks,factories and commission trading agencies.This also included a complete nationalization of semi-civil,semi-governmental entities under the nominal directorship of the BEDC and DSI(JETRO,1964).Consequently,the foreign managerial experts and technical advisers on whom these economic bodies relied were replaced by military officers appointed as managers and board members.

Rapid Burmanization challenged both China’s and Japan’s economic agendas in Burma.For the former,the new momentum of nationalization dealt a heavy blow to local Chinese entrepreneurs,who had held a pro-Beijing stance since the mid-1950s.Before the rapid Burmanization in 1962,Chinese entrepreneurs in Burma partially circumvented governmental regulations by registering their companies as Burmese companies—using Burmese nationals as the nominal company representatives—to retain control of these businesses.The nominally Burmese companies were then recognized by Beijing,which offered support by using them as entry points for Chinese equipment into Burma.In 1960,the Chinese Embassy in Rangoon suggested that Beijing consider delegating its exports to Burma to two local companies—the Oriental Trading Company and the Myint Aung Company—which were registered as Burmese companies,as their Chinese owners were naturalized Burmese citizens.Beijing approved the plan and made the former the agent for general Chinese manufactured goods and the latter the sole agent for printing machinery from China (CCO,1960).These approaches ensured that Beijing’s non-governmental proxies would remain relevant in Chinese technological exports to Burma.

However,Ne Win’s rapid nationalization agenda eliminated the loopholes that Chinese entrepreneurs had exploited.The complete nationalization of all foreign trade agencies and most industrial plants drove Chinese industrialists out of business.As a Japanese agent in Rangoon reported,the nationalization effectively ‘moved Chinese and Indian merchants’ control of the economy to the hands of the Burmese government’ (Tanaka,1966: 127).Even though Beijing deemed these efforts unfriendly actions ‘suppressing’ local Chinese,it did not risk antagonizing Burma,citing potential political consequences of undermining the ‘Five Principles of Peaceful Coexistence’ prescribed at Bandung.Additionally,Beijing yielded to Burma’s nationalization of the Bank of China in Rangoon,featuring it as ‘a(chǎn) gift’ to the Burmese (Fan,2010).Consequently,Beijing’s reluctance to protect overseas Chinese commercial interests from the nationalization policy led to some dissatisfaction among local Chinese,whose support for Beijing faded.According to the Japanese estimation,Beijing’s reluctance to protect overseas Chinese properties from governmental seizure turned previously pro-Beijing Chinese in Burma towards a more neutral stance between Beijing and Taipei (China Division,AABMOFA,1967).Losing local Chinese entrepreneurs’ channels,Beijing switched its goal to ensuring the overseas Chinese communities’longterm survival in Burma instead of soliciting their help in technological exports (Chinese Foreign Ministry,1964a).

Ironically,the economic fiasco following Ne Win’s coup and the increasing management difficulties caused by the lack of expertise strengthened Burma’s need for foreign technological input.Replacing managerial professionals with military officers,the rapid nationalization under the DSI and BEDC led to immediate and dire consequences.As the Chinese Embassy in Burma observed,the lack of professional guidance disrupted industrial and agricultural production,leading to a decline in Burma’s national economy.Ne Win himself was disappointed at the economic fallout caused by Tin Pe’s plan.According to Chinese intelligence,the commander-in-chief asked his ministers to hold steadfast to the nationalization policy but tried to mitigate the dire economic consequences (Chinese Foreign Ministry,1964c).‘I do not know what the outcome will be’,Ne Win told his subordinates on 5 May 1965;‘What’s done is done,and must be seen through to the end.We cannot abandon it halfway’ (Chinese Foreign Ministry,1964c).From Ne Win’s perspective,while Burma might survive without foreign investment and joint ventures,it still needed agricultural expertise and industrial know-how to build the self-sustaining economy envisioned in his ‘Burmese Way to Socialism’.

Technocrats in Beijing and Tokyo detected Ne Win’s subtle attitude towards foreign input,and developed corresponding modes of action highlighting technical assistance to address the country’s isolationist turn.In 1964,the Japanese MOFA developed new policies for economic assistance abroad,making the‘effective utilization of technical cooperation as a powerful means to achieve diplomatic objectives’ the essential aspect of Japan’s aid policies(MOFAJ,1964).In explaining the new strategies,the technocrats at MOFA were unequivocal that the plan was developed to address Japan’s ongoing competition with Beijing,and highlighted the significance of sending technicians to Burma:The Asia region,where our country is located,is the joint point between the communist bloc—China,for a start—and various underdeveloped countries.In light of this [situation],the economic development that would sustain the political stability of our Asian neighbours is an indispensable premise to the prosperity and security of our nation … The technological elevation,as well as the development of human resources,is of particular significance … Maybe small in scale,the technical assistance projects contributed to the national development of regional countries,and helped them form closer ties with us.(MOFAJ,1964: 4–5)

Japanese enterprises in Burma quickly adopted this strategy.As the Japan Economic Research Institute (JERI,Nippon keizai chōsa kyōgi-kai)—the investigative body under the JBF—reported,Japanese enterprises changed their mode of operation in Burma towards a more technologically centred approach.Instead of setting up joint ventures and seeking direct investment,Japanese industries adopted the method of ‘termed technological assistance’,allowing them to provide equipment and technology that would enable the‘Burmese to take over management and operation over a limited period’in exchange for a sum of commission fees(JERI,1967:319).As a Japan External Trade Organisation(JETRO) report shows,Japanese manufacturers—including Panasonic,Hino Motors,Nippon Electronic Company,and Toyo Kogyo (Mazda)—developed new interests in Burma through ‘termed technological assistance’ (JETRO,1964: 33).As a MITI report shows,from 1965 to 1966,the number of interns and professionals provided by corporations in these sectors exceeded that in the governments ponsored programmes,making it the central channel for Japanese technological exchange with Burma (MITI,1966,1967).

The technological assistance,in turn,enhanced Burma’s technological dependence on Japan in critical industrial sectors.This was especially true for Japanese manufacturers in transportation and electronics—the fields in which Burma had already developed a reliance on Japanese technological input.As Tanaka Tsutomu,a technician of Nichimen sent to Rangoon,wrote in 1966,Burma’s transportation system was solely dependent on Japanese technologies.According to his report,the Burmese national railway was ‘predominantly supplied by Japanese trains,rails and carriages’,and ‘it is advantageous for Japan since the Burmese side kept placing orders on compartments[for replacement]’ (Tanaka,1966: 127).In this way,the Japanese technological turn enabled it to further Burma’s technological dependence on Japan,and it kept Japanese industries relevant even after Burma’s national economy became increasingly isolationist.

Echoing Tokyo’s considerations,Beijing also stepped up its aid to Burma due to the country’s exacerbating economic difficulties.As the Chinese Foreign Ministry (1964a) noted,Burmese nationalization may have strengthened the country’s economic dependence on China: ‘[the nationalization]has caused every crucial connection in the Burmese economy to suffer disruption … Burma relies heavily on us and Russia;they are a crucial communications channel for us,so we need to continue maintaining an amicable relationship with the Burmese’.In June,Beijing decided to move forward to support Ne Win’s government.The Chinese Foreign Ministry instructed Geng Biao,the Chinese Ambassador in Burma,to use Ne Win’s diplomatic isolation and economic difficulties as diplomatic leverage to facilitate bilateral relations: ‘He [Ne Win] needs to find help,and lately he has appeared friendly to us…We should take this opportunity to send coal during snow,working with vigorous ardour’(Chinese Foreign Ministry,1964b).

Beijing also adjusted its aid programmes to compete with Japan,highlighting technical support to supplement Burma’s loss during the chaotic nationalization.In its plan for foreign technical assistance for 1965,the Chinese Ministry of Light Industry (MLI) gave Burma priority in exchanging technicians and trainees: of the 149 trainees MLI intended to receive for the year,one-third came from Burma.The MLI also decided to send to Burma one-fifth of the 500 technicians whom China intended to send abroad (MLI,1964).The expenses of technicians and exchange students were covered mainly by the Chinese government.

In addition,Beijing made efforts on the propaganda front to prove the superiority of Chinese aid over that sent by the Japanese.As Chinese technocrats emphasized in their explanation,Chinese aid was altruistic and was most compatible with the aided countries’ goal of achieving self-reliance.This point was also revealed in a report of the State Planning Committee (now the National Development and Reform Commission) in October 1965.As China could not match the quantities of aid that Japan could provide,it had to compete based on quality instead of quantity in technological aid: ‘We do not need to compete with imperialists and revisionists for quantities [of aid programmes].Instead,we compete with them regarding policies,performances,achievements,and how we help aided countries develop a self-reliant economy’(State Planning Committee,1965/2011:554).To differentiate it from Japan’s aid,China’s technological aid was carried out under the ‘Eight Principles of China’s Economic and Technological Aid’announced in December 1964,which emphasized that China would ‘facilitate the aided country’s level of self-reliance,and would not increase the aided country’s dependence on China’ (State Council,1964/2011: 554–555).

However,China’s aid to Burma reached an abrupt end in 1967.As the radicalization of domestic politics during the Cultural Revolution gained momentum among overseas Chinese,Chinese residents’conflicts with indigenous populations in Burma intensified.Eventually,a series of ethnic conflicts led to the storming of the Chinese Embassy in Rangoon on 27 June and to the death of a Chinese technological expert working on the aid programme(Ji and Su,2000).China’s technological aid to Burma also experienced a decline following the death of the Chinese expert Liu Yi when Burmese protesters stormed the Chinese Embassy,and did not recover until Rangoon’s decision to break connections with the Western bloc in 1988.

5.Conclusion:Breaking the fluidity of technological aid in Cold War Asia

In hindsight,China’s and Japan’s economic and technological assistance to Burma in the post-Bandung decade was an unfruitful case compared to the two countries’aid to other nations.China’s aid to its Cold War allies—North Korea,Mongolia and North Vietnam—was much more prominent in terms of the trainees exchanged and factories built than that to Burma,while Japan’s technological output had more influence in reshaping the industrial landscape in Western-leaning countries including Malaysia,Thailand and South Vietnam.Compared with other neutral countries,Burma proved to be a problematic case for decision-makers in Tokyo and Beijing,as Tokyo’s and Beijing’s technological packages had supplemented the industrial ambitions pursued in Sihanouk’s Cambodia and Sukarno’s Indonesia.

What,then,are we to make of China and Japan’s competition in their aid to Burma? As this paper shows,the aid Burma received in the decade after the Bandung Conference speaks to the fluidity—in more ways than one—in the technological assistance envisioned in the final communique of the conference.Burma’s initiatives in receiving aid—primarily how its decision-makers strategically used the aid to advance its economic agenda—offer a glance at the undercurrents involved in offering technological aid during the Cold War.This paper reveals that the leadership of Burma—both the civilian government under U Nu and the military junta under Ne Win—made clever use of aid as a bargaining chip.The welcoming attitude that Burmese negotiators demonstrated towards foreign aid was in stark contrast to the hard-line positions taken during parleys,forcing the two aiding countries to yield to the Burmese agenda.In this way,the interactions between economic technocrats in Rangoon,Beijing and Tokyo helped to reveal the somewhat flexible power dynamics between the aiding and the aided countries during the economic Cold War.

Moreover,the aid that Burma received from the two countries between 1955 and 1965 speaks to the fluidity of the idea of technological aid: while the term ‘technological aid’ (ji shu yuan zhuin Chinese;gijutsu kyō ryokuin Japanese) was used in communiques and contracts throughout the period,it had entirely different connotations due to Burma’s changing mindset on national development.Under Ba Swe’s industrial ambitions,technological aid was synthesized to include foreign investment,industrial equipment,factory design and technological know-how.For U Rashid and Aung Gyi,technological aid had to represent Burma’s interests and emphasize the training of Burmese personnel in joint ventures under the directorship of foreign managerial experts.Under Ne Win and Tin Pe,Burma’s ambition for self-reliance reduced technological aid to its simplest form,involving only limited exchanges of trainees,technicians and equipment across borders.In this way,technological assistance evolved to become increasingly inclusive and was conditioned by the national interests and strategic considerations of the parties involved.

In addition,the flexibility of technological aid is seen in the variety of aiding bodies involved in the transfers to Burma.From 1955 to 1965,technocrats in Beijing and Tokyo employed non-governmental proxies to serve as channels for spreading technology.The solicitation of local entrepreneurs on China’s end and the use of Japanese corporations as ‘foot soldiers’ in providing aid suggested that the technological diplomacy was not limited to intergovernmental activities but also included civilians mobilized to extend governments’ diplomatic projects.Therefore,Burma’s experience as an aid-receiving country in Cold War Asia may shed light on the diversified means through which states employed science and technology as diplomatic tools during Cold War competition.

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.

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Note

1.Burma/Myanmar disambiguation: until 1989,the Union of Burma remained the country’s official name.However,a few countries—including Japan—continued to use ‘Burma’ (Birumain Japanese) to refer to the country,even after it adopted its current name,Myanmar,in 1989.For historical accuracy and disambiguation purposes,this paper uses‘Burma’ throughout.For similar reasons,I use‘Rangoon’ instead of ‘Yangon’ to refer to the country’s capital and central government.