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This article looks at theeconomies ofManchukuo andMengjiang, in the period 1931-1945. The effective Japanese annexation of 1931 led to acolonial system (seeManchukuo (administration)). Japan invested in heavy industry, and to a lesser extent, agriculture.
TheGeneral Affairs State Council retained Japanese control of officialeconomic policy. TheCentral Bank of Manchou was the national central bank. TheKwantung Army held the highest authority, representing theEmperor of Japan, and the respective ministries of the nominal Manchukou central government were also involved.
After it occupied Manchuria, Japan took over the region's Chinese public enterprises (many of which originated from theZhang Zuolin andZhang Xueliang regimes) and converted them to Manchukuostate-owned enterprises.[1]: 44
Industrial development in Manchukuo was accomplished with state planning and Japanese investment, prioritizing military build-up andheavy industry without an emphasis on profitability.[1]: 29
Economic planning in Manchukuo was influenced by Japanese observations of theSoviet approach to catch-up industrialization and reflected in Manchukuo's Five Year Plan for Heavy Industry.[1]: 9 The development of industry in Manchukuo further influenced Japanese economic mobilization following the start of theSecond Sino-Japanese War.[1]: 9
In 1932, theKwantung Army requested that theSouth Manchuria Railway establish an Economic Research Team.[1]: 43 This team drafted many of Manchukuo's early economic policies and emphasized state control over the economy.[1]: 43
Industrial development had as a primary goal supplying raw material and finished products for the Japanese military. Amid the 1930s, thousands of idealistic engineers, most connected with theHome Ministry, left for the neighboring colonies of Taiwan, Manchukuo and Korea, laying down the foundation of amodernized empire, amongst such plans: roads, bridges, railroads, canals, ports, water works, and communications networks were commissioned.
The first industrial centers in Manchukuo were in theMukden–Dairen area. Industrial centers were inAnshan, Shakakon,Dairen,Ryojun,Fushun, Fusin, and other cities. Manchukuo used the Korean ports ofUnggi,Chongjin andRason for theJapan sea area.
Products includedaircraft, automobiles and trucks, blankets, boots, bread and flour, bricks, candies and foods, carpets, rawcellulose,cement, dyes and inks, electrical devices, fabric, farm equipment, glass, industrial paint, industrial paper, liquor and beer,locomotive manufacturing and repair and related railway industries, milk and cheese,mining equipment,munitions, processed leather products,rubber articles,soy and otherprocessed foods,vegetable oil, hand and heavy weapons, etc.
Some measures of Manchu industrial production (1932–35):
During Manchukuo's first Five Year Plan, Germany was a major supplier of sophisticated industrial technology to Manchukuo.[1]: 47
Japanese and Manchukuo authorities used Chineseprisoners of war for forced labor.[1]: 30 Many of these POWs were Chinese civilians abducted by the Japanese army from unoccupied China.[1]: 57 Manchukuo used forced labor in major industrial enterprises, including Shōwa Steel Works.[1]: 57
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The effective annexation gave Japan an area suitable forfarming, such as scarcely existed on the country's islands, or other parts, generally mountainous, of theEmpire of Japan. The area was primarily agricultural in character, although with some urbanization. Agriculture employed 85% of the population.
Farmers produced many crops, particularly on the southern plains. Manchu farms practicedcrop rotation frequently with primitive culture methods.Kaoliang (70%),corn andmaize (70%),wheat (80%) andsoy (35%) were popular crops.
Others in quantity were:alfalfa,apples,apricots,chestnuts,col,cotton,cucumber,forage,garlic, giantradish,hemp,indigo,lupulus,millet,nuts,onions,opium poppies (foropium),peaches,pears,peanuts,rice, ricine,rye,sesame,sugar beet,sweet potatoes,thyme,tobacco, and others. In Amur land (Manchu side) honey (1,800 tonnes) was collected.
From kaoliang and corn liquors were made, includingvodka,sake,beer, soy juices andvinegar. The modern wheat andflour industry was located in Harbin from Russian times apart from basic mills in other areas.
The mostintensive farming occurred in a 150–250 kilometres (93–155 mi) zone, extending from theLiaotung Gulf to the Northwest. In 1934 it totaled between 120,000–160,000 square kilometres (46,000–62,000 sq mi). The proportions of the principal crops in 1934 were:
Soy was Manchukuo's principal crop.[2] The first exports were made in 1908 to England. The economic expansion of soy is attributed in great part to theSouth Manchurian Railway Company, which enabled direct export fromDairen abroad, in particular to China and Japan proper. Manchukuo hosted many types of processing mill. 1933 to 1934 saw a reduction of more than 4,000 square kilometres (1,500 sq mi) in cultivated extent and production fell from 4-6 million to 3.84 million tonnes.
The Japanese developed industry to use soy, with average production of 1,500,000 tonnes. Half was exported to Europe. Crude oil paste forfertilizer and soybeans for food was sent to Japan. The rest of the plant was used incellulose factories.
Manchukuo regularly produced 120,000 kilograms of mediocre quality.
The opium poppy was grown to obtain opium. In November 1932 theMitsui Zaibatsu conglomerate held astate monopoly for poppy farming with the "declared intention" of reducing its heavy local use. Fixed cultivation areas were set up in Rehe and northwest Jilin. For 1934-35, cultivation area was evaluated as 480 square kilometres (190 sq mi) with a yield of 1.1 tonnes/km2.
"Nikisansuke", a secret Japanese merchant group, participated in the opium industry.[3]
This group was formed by:
According to Japanese scholar Goichi Yamada, the opium trade in Machuria generated profits ranging from 2 million to 14 million yen per year.[4]
The military prohibited the use of opium and othernarcotics by its troops (punishment was loss of Japanese citizenship) but the army was allowed to use money generated by opium trading to finance the war. Professor Motohiro Kobayashi of Tokai University said the Japanese army's intelligence division worked with local gangs to sell opium.[5]
One of the participants,Naoki Hoshino negotiated a large loan from Japanese banks using alien on the profits of Manchukuo's Opium Monopoly Bureau as collateral.[citation needed]
According to Professor Naoki Kumano ofKyushu University, part of the produced opium is exported toNazi Germany as part of a trade deal. Originally, Nazi Germany imported soy beans from Manchuria. However, Manchuria was unable to fulfill the trade obligation due to bad harvest of soy beans in 1941. Instead, opium is used as replacement. The opium exported to Germany is mainly used to producemorphine. The opium trade continued until the end of World War Two.[6]
Oxen,donkeys, heavyhorses transported the harvest.Xing'an province worked horses andBactrian camels, and Heilongjiang and Jilin provinces usedsled dogs to aid transport.
The cultivable land was estimated as 300,000 square kilometres (120,000 sq mi) principally in the central plain.
- Heilongjiang:
- Jilin:
- Liaoning:
- Rehe:
- Chahar:
- Suiyuan:
Manchukuo was a productive area, with many domestic animals in subsistence farms or larger properties. Japanese experts increased production with the introduction of foreign species, includingpigs,cattle, andsheep, which producedmilk,meat,leather andwool.
Other interesting products were thesilkworm and thewild silk ortussah (tussor) Worm. The first needed thewhite mulberry for food; and the second neededQuercus mongolica and other species ofoak tree to make Tussah silk. Both products were collected for dyeing and export to Europe and America or sent as raw material to these markets. Thecocooned worms were sent to China and Japan. The production of Tussah Silk orpongee was inKaiping andAndong (Liaoning Province) while silk worms stayed in Kwantung (Kantoshu) andSouth Manchurian Railway zone, and Chosen.
Inbushels per acre, except cotton in kilograms.
| Country | Rice | Wheat | Corn | Maize | Potato | Cotton packs |
|---|---|---|---|---|---|---|
| China | 67 | 16 | 21 | 19 | 87 | 168 |
| Japan | 68 | 25 | 22 | 36 | 139 | 199 |
| India | 29 | 11 | 15 | - | - | 80 |
| Soviet Union | 47 | 10 | 15 | 16 | 128 | 188 |
| USA | - | 14 | 25 | 22 | 108 | 177 |
InChientao orYenki Manchu district theKorean Colony extensively cultivated rice.
Lumber and wood products were important industries.Rehe andJilin provinces held great expanses of various types of forest. From 1911 to 1931 Chinese lumberjacks began to work there; the volume of cut wood during the Manchu period was some 2,500,000,000 cubic metres (3.3×109 cu yd). Foresting took place mostly in theYalu andSungari river areas; their tributaries permitted river transport to woodworking centers inAndong, Jilin andHarbin cities. TheTumen and other northern rivers also provided transport. Typical production before 1939 was 4,000,000 cubic metres (5,200,000 cu yd) per year. Uses were:railroad ties,cellulose paste for paper and forKarafutorayon production, and export to Japan, Russia and Central andNorthern China. A similar pattern may have occurred inMengjiang.
In the mountains many species of animals could be hunted for their skins, for meat, or for sport. This area corresponds with the currentHeilongjiang province. The situation is similar inMengjiang too.
The riversAmur,Sungari,Nonni,Mutang-Kiang,Ussuri,Liao,Yalu andTumen, and the lakesKhanka,Buir-Nor andHulun-Nor are all important fish sources. Species includetrout,salmon, andEuropean perch. With the exception of Buir-Nor and Hulun-Nor, these can be fished only in snow-free months. The latter lakes are useful fish sources for residents inXing'an Province near theRussian-Mongolia frontier area, and were a cause of frontier disputes.
The annual catch in rivers and lakes was 25,000 tonnes. Sea fishing was in thePo-Hai Gulf andYellow Sea areas. It includedcod,shrimp,sea bream,lobster, andcrab.
The most important cities were:
Another table mentioned this:
The Japanese constructed 6,500 kilometers (4,000 mi) of roads. They also founded a local airline which linked Dairen, Mukden, Harbin, and other points, with a hub in Hsinking. The Amur, Nonni, Yalu Liao and Sungari rivers served regularcabotage boats and transport vessels in the West and Northwest. Hsingan Province commonly used camels in commerce between it and Meng Chiang and SovietOuter Mongolia. The principal railway lines 12,000 kilometers (7,500 mi) were theEast Chinese Railway, constructed by Russia and expanded by Japan, and Beijing-Mukden railway with Railway Centers in Mukden and Harbin.
TheSouth Manchurian Railway Company resembled theCanadian Pacific Railway in that it was more than a railroad. In 1931 it invested 27% of capital in coal in Fushum, 3% Anshan iron factory, 8% in Dairen and Ryoujun ports in Kantoshu, with other lesser investments in Yamato Hotel, Tuitsuike Hotel inTangkatzu spa, merchant and fishing vessels, electricity power plants, local institutions, schools, research institutes for farming, geology, and mining, sanitation and medical, public services, public architecture, etc. The Japanese government provided most of the funds with the rest provided by private Japanese, Chinese, and Manchu investors.
In 1935 Manchukuo contained 8,500 kilometers (5,300 mi) of active railways. 80% were classified as "State railways", with 1,100 kilometers (680 mi) owned by the private Manchuria Railway, and the remaining 1,760 kilometers (1,090 mi) owned by North Manchuria Railway. In 1932 the government planned the construction of 60,000 kilometers (37,000 mi) of roads in ten years, completing only 7,000 kilometers (4,300 mi) with the intent of promoting public bus transport.
The important commercial ports were Ryojun and Dairen. Other ports include Andong, Niuzhuang,Huludao. In the Japan Sea area were the ports of Yuki, Rashin and Seishin.
The most important mining products arecoal andiron inFushun and Fusin. Fushun and Fusin also contain deposits of oil-rich slate and schists. Abundantgold deposits exist in theGreater Khingan Mountains and Amur River. Other minerals include:asbestos,antimony,bauxite,calize,copper,gold,lead,lime,magnesite,manganese,pyrite,marble,salt,soda,silver,sulphur,tar,tin,tungsten,zinc, etc.
The principal coal deposit is at Fushun, inLiaoning, extending 15 by 3 kilometres (9.3 mi × 1.9 mi). Fushum, 32 kilometers (20 mi) from Mukden, containsbituminous coal reserves of 700,000,000–1,000,000,000 metric tonnes which became available viaopen-pit or regular mining methods. Bituminous coal reserves are estimated at 3,000,000,000 metric tonnes, mostly in Liaoning with the rest in Jilin, Heilongjiang, Hsingam, and Rehe provinces.Anthracite coal reserve estimates are 200,000,000 metric tonnes andlignite estimates are 50,500,000 metric tonnes.
Additional deposits were in Yentai. Private mines operated inBenxihu and Xintai. Other important mines were Sian (in Liaoning province), Muleng (in Jilin province) and Peopiao (in Rehe Province).
Production during 1907–1908 remained under 2,000,000 tonnes. In 1919–1920 extraction increased to 3,700,000 tonnes, rising in 1924–1929 to 5,540,000 tonnes. During 1925 the South Manchurian Railway Company invested in opening coal deposits in Chalai Nor 25 kilometers (16 mi) from frontier station Manzhouli which extracted 290,000 metric tonnes. By 1934, production had reached 8,000,000 tonnes. Both local use and exports increased.
In 1934–1936 extractions were:
In 1923–1924, 1,000,000 tonnes were extracted. Coal production in Manchukuo during 1930 exceeded 10,000,000 tonnes. In 1941, other areas produced 20,000,000 tonnes with reserves of 20,000,000,000 tonnes. Coal production was calculated in accord with other sources. In 1932 reserves of 4,500,000 tonnes. In 1944 estimates increased to 20,000,000,000 tonnes.
The Japanese builtcoal gasification plants for industrial uses.
Manchukuo also exported processed or raw products to Japan.
According to American geologist Forster Payne, 70% of iron sources of East Asia are in coastal regions of Manchuria, with reserves calculated in 1944 of 2,000 to 2,500 Million Tonnes against 721 Million of Tonnes in Germany. Such ores had 60% iron; other reserves near Anshan, south of Mukden, contain a median 40% iron content[citation needed].
1931–1932 production was 1,000,000 tonnes from deposits in Taku Shan (near Anshan, Liaoning) in the Shan Pai Shang mountains, in Miaoerkow and Tungpientao and in Liaoning. In 1933, the total production of iron in the Anshan and Penhsihu factories was 430,000 tonnes. In 1934, 950,000 tonnes of low-gradehematite was first produced. The Miaoerkow mine also produced 235,000 tonnes of hematite. In the Tungpientao deposits, the reserves are 100,000,000 tonnes of high-grade iron. The Anshan Factories in 1941 produced 1,750,000 iron tonnes and 1,000,000 steel tonnes. In 1942 production increased to 3,600,000 tonnes and Penhsihu produced 500,000 tonnes. In addition, the Tungpientao factory had the capacity to produce 800,000 tonnes.
Alternatively, the "Special Report of Geological Survey of China" (1945) mentioned that the Japanese extraction of iron in Manchuria and occupied China grew from 101,000 tonnes to 175,000 tonnes or by 73%. Manchukuo received from Japan scrap iron for iron and steel processing and at the same time exported unfinished steel products.
Manchukuo has little petroleum except at Fushum and Fusin where there were extensive deposits of oil-richslate,oil shale andschist. Fushun produced 1,000,000 tonnes in 1941. In Rehe some oil was extracted in conjunction with coal deposits. Manchukuo also operatedoil refineries.
The principal sources ofbauxite in Manchukuo arealunite deposits inLiaoning.
Bauxite and Alunite in Yentai, Penshiu, Ninshintai, Saoshin reserves were estimated at 25,300,000 tonnes with metallic content of 55%. Later another 120,000,000 tonnes was discovered. In 1932 the "Mantetsu" (South Manchurian Railway Company and Anshan Iron Steel Works) organized laboratories in Fushun and Tokyo to develop processes to exploit these sources. In 1936-38 they founded the "Manchu Society for Light Metals". The refining process used electricity from Fushun coal,hydrochloric acid,potassium chloride andiron silica. During 1938-42 aluminum production increased from 5,000 to 30,000 tonnes.
In 1936, copper production reached 100 tonnes, growing in 1943 to 500 tones. Lead production was 1,223 tonnes. Zinc extraction was 398 tonnes.
Magnesite mines northwest of Tsichiao and Nuishishan opened in 1913, with estimated reserves of 13,600,000,000 tonnes. These sources became exploitable with the 100 kilometers (62 mi) extension of the Andong-Mukden railway. In 1941 three installation processed the ore, producing 24% of world output.
Hydroelectric power provided the majority of electricity during the period. The Japanese invested in power plants on the Sungari and Yalu rivers. They protected plants in the Nonni and Liao rivers during the August 1945 Soviet Invasion.
Other electricity sources included gas, oil,bunker oil and coal.
In 1925 grain exports comprised 88% and lumber the remainder. In 1929 there was a slump in soy sales to the United States, and Germany became the principal buyer.
In 1933 the "Manchu exterior commerce" (a Japanese monopoly), recorded that exports exceeded imports. Coal represented 10% and iron a greater amount. Minor exports were other farming products (pigs, mice,kaoliang, peanuts); imports were cotton, flour of various grains, iron, and unfinished and manufactured products for Industry. The principal commerce was with China and Japan, with some exports going to Russia. Other export tables from 1923 indicated output of 4,423,000 tonnes, 50% soy and 30% coal.
In 1939 foreign trade rose to 2,650,840,000 million Manchukuo Yuan. Japan ranked first, but other trading partners included the United States, China, and Germany.
In 1931, the total production of natural resources inside the Japanese Empire was ¥283,000,000. Foreign purchases, totaled ¥220,000,000, which represented 40% of consumption. However, their local production was evaluated as ¥746,000,000 vs. imports of ¥660,000,000, so local production represented 61% of the total.
Most major private enterprises in Manchukuo were Japanese-owned rather than Chinese-owned.[1]: 53
Japanese investment led to Manchukuo's emergence as the third-largest industrial area inEast Asia (after Japan-proper and theU.S.S.R.). At Manchukuo, other foreign businessmen mentioned how "Japanchukuo" controlled all Manchukuoan industry with Japanese filling all important technical and administrative roles.
Japanese investment (private and central government) ran at ¥1,715,000,000 (£171,580.000sterling) in 1938. In 1941, ¥5,000,000,000 was reinvested—the equivalent of $2 for every person in China. For local and foreigncommerce, Japan organized acentralized economic structure, a nationalcentral bank and a local currency, theyuan of Manchukuo.
During the early years of Japanese control, Manchukuo represented 14.3% of total industrial production in China, including 12% of its industrial work force. From 1913 to 1930, farm production grew by 70%; its railways represented 30% of all Chinese railways.
During 1937 the Japanese Government with theJapanese Army commissioned industrialistYoshisuke Aikawa to organize and direct theManchurian Industrial Development Company with a capital of 758,000,000 yen. This became the "Manchoukuoan Zaibatsu Empire" and guided in centralizing mining and heavy industry.
The Japanese invested ¥440,000,000 (£44,000,000). One-half to two-thirds of the investment was reserved for soy products.
Investments were made in theDowa Automobile Company (for the manufacture of cars and trucks),Manshukoku Hikoki Seizo KK (for making engines and aircraft) in Harbin,Morishita Jintan, Mukden Arsenal, Anshan Iron & Steel Works (founded in 1913) and renamedShowa Steel Works (in 1933) in Anshan,Manshukoku Koku KK (Manchurian National Airways),Central Bank of Manchou (national central bank),South Manchurian Railway Company,Yamato Hotel, Tuitsuike Hotel inTangkantzu lake,Kirin Company and others.
In 1945 Japan reported its monetary investments in land as 11,000,000,000 Yen.
From 1932, the Japanese increased their private and government investments in other industrial sectors:
Nippon Lurgi Goshi K.K. of Tokyo, the Japanese Lurgi office in Tokyo, using industrial licenses of Metallgesellschaft-Lurgi Frankfurt am Main A.G. of Germany, installed the following industrial plants in Manchukuo:
The Japanese company mentioned above decided during the war to install a similar factory in China to process the coal of the Mengchiang and Hopei areas:
In 1943 the Japanese began the construction of a 200 kilometers (120 mi) river channel to ease navigation from Mukden-Anshan-Sinku (Sing-Kow) to theChili Gulf. A second goal was to regulate the flow of the Liao-ho river on the left side of Fushun en route to Mukden. This project permitted easy access for merchant vessels to the heart of the Manchukuan Industrial District. At the same time the Japanese planned the construction of power plants in Sungari and other rivers for magnesium refining and other developments.
Before 1932, the economic situation was chaotic, but the establishment of theYuan of Manchukuo as the local monetary unit in parity with the JapaneseYen, and establishment of theCentral Bank of Manchou as the central bank institution produced a relatively stable business climate.