who had spent their careers in the empire and identified themselves with the colonies they managed, these policy makers had little or no overseas experience; their concerns were with the domestic economy. For them, Manchukuo represented a laboratory in which to test economic theories which they would later apply to Japan.
At the heart of the Manchurian experiment were two novel ideas of economic governance beginning to circulate in the industrialized world, though never before applied to a colony. The first, state-managed economic development, borrowed the Soviet model for the command economy. The second, the self-sufficient production sphere, or bloc economy, drew on economic analyses of military production in World War I. Replacing the old mandate for “managing Manchuria” the new economic mission of development (kaihatsu) called for coordinated industrialization of Japan and Manchukuo and aimed at military self-sufficiency.37
Under the banner of “Manchurian development,” the Manchukuo government created twenty-six new companies by the end of 1936, one company per industry in such fields as aviation, gasoline, shipping, and automobiles.38 Five-year plans were instituted beginning in 1937, setting ambitious production targets. While Manchurian development was skewed toward heavy industrialization, the agricultural sector was also brought within the sphere of government planning. Although policies like the introduction of new crops and the establishment of agricultural extension services and marketing cooperatives were geared primarily toward enhancing Japan's agricultural self-sufficiency, the developmentalist agenda of the Manchukuo government also sought to legitimate the colonial project in the eyes of the subject population. Recognizing that poverty created a breeding ground for anti-imperialist sentiment and communist agitation, administrators tried to eliminate some of the economic causes of discontent. Of course, developmental policies aimed at improving the welfare of the Chinese peasantry were easily compromised when they conflicted with imperatives for resource extraction or the interests of the collaborating Chinese elite. Nevertheless, the rhetoric of colonial development showcased new ideals of social reform that borrowed from the movement to mitigate rural poverty within Japan.
The new program transformed Mantetsu's role in the colonial economy. Previously, the economy was its private domain, and Mantetsu executives presided over an imperium in imperio. In the face of the Kwantung Army's advance into economic management, however, Mantetsu retreated from its mining and manufacturing activities, concentrating on management of its transportation network. Final control over its empire of subsidiaries was relinquished in 1937 to Manchurian Heavy Industries, the large public-private firm created to coordinate the industrial production targets of the Five-Year Plan. This represented a defeat for Mantetsu in its struggle with the army for control over the government institutions left vacant by the withdrawal of Zhang Xueliang from Manchuria. Victorious, the army used its domination of the puppet state of Manchukuo to initiate the heavy industrialization of the colonial economy and to reconfigure the institutions for managing Manchuria. Forced by these initiatives into a series of unprofitable investments in the new state-run industries and a network of strategic railways, Mantetsu's capital strength and profitability were gradually whittled away.
There were compensations. The new program put a premium on planning and generated an enormous demand for research. Mantetsu became the brain trust for Manchukuo development, later expanding into a center of planning for the empire as a whole. Mantetsu's prestige as a research institute reached its peak in the early 1940s, when the Research Department commanded a staff of 2,200 to 2,300 researchers.39 In addition to its new role in planning, Mantetsu was given a free hand in the economic development of north China—rapidly becoming the next frontier for Japanese imperial expansion—to offset its loss of jurisdiction in the Manchurian economy.
Following close on the heels of the new military and economic programs, the announcement in 1936 of the Japanese government's intent to carry out mass Japanese emigration to Manchuria signaled a third radical departure for the imperialist project. Grand in scope, the plan aimed to send five million farmers, a figure equivalent to one-fifth of the 1936 farm population, to a “new paradise” in Manchuria in the space of twenty years. By placing in Northeast China a large settler community that would reproduce itself, Japanese hoped to mount their imperial jewel in a permanent setting.40
The settler community created by the government's colonization program bore little resemblance to the Japanese society that had grown up in Manchuria in the years before Manchukuo. The older community was exclusively urban; the new settlements were in the countryside. A privileged elite of administrators, entrepreneurs, and professionals made up the urban community; the rural immigrants were drawn from the ranks of impoverished tenant farmers and the lumpen proletariat. Unlike the colonial elite, who eagerly flocked to the continent in the 1930s, swelling the urban population to close to a million in 1940,41 the farm immigrants needed to be bribed with offers of free passage, free land, and a long list of other enticements before they would be persuaded to take advantage of the opportunities in Manchukuo.
Among other reasons, urban life was more attractive because fellow Japanese citizens comprised a large proportion of the population. In the two centers of urban settlement, Dalian and Fengtian, Japanese made up 29 percent and 59 percent of the 1932 population, respectively. The 300,000 rural settlers, in contrast, entered a world where they constituted a fraction of a percent of the estimated 34 million natives.42 The settlers were divided among just over a thousand villages scattered throughout the rural hinterland. Often the sole Japanese outpost for many miles, these immigrant villages were swallowed up in the Chinese multitudes that surrounded them. In addition, few of the urban Japanese intended to take up permanent residence in Manchuria, a fact much lamented by the ideologues of colonization. Since urban settlers had financial mobility, they often chose to return to Japan after finishing their tour of duty in the colonial service or their company's Manchurian branch. The agricultural settlers, however, came for good. The price of government aid was a lifetime commitment to their new home. Even if they changed their minds, returning to Japan was far from easy. They had severed ties with their home villages, selling off land and property, and in most cases they were financially dependent on the government and would be hard pressed to find funds to pay the fare home. Unlike their urban counterparts, the rural settlers were stuck in Manchuria—permanent residents, if not out of choice, out of necessity.
Government involvement in the welfare of the farm settlements extended far beyond what was provided urban colonists. Rather like the economy itself, the immigrant villages were state-planned and state-managed. A swelling bureaucracy and ever-larger budget appropriations were given over to the micro-management of the immigrant villages. Everything from the number of livestock to the crop mix was prescribed by plan. State-run cooperatives bought colonists’ produce and sold them seed, fertilizer, and sundries for everyday use. State agricultural agents advised them and reported on their progress. Such attention aimed to secure their long-term survival and, at the same time, to ensure that colonists stayed put on the land.
Like everything about Manchurian government policy, there was a heavy military coloration to the agricultural settlement program. Behind the big budgets and the state preoccupation with the welfare of the colonists lay a two-fold strategic agenda. First, in constructing Japanese villages in north Manchuria along the border with Siberia, administrators aimed to create a human buffer zone against the Soviet Union. Second, by settling Japanese in the rural centers of the Chinese resistance movement, officials hoped to deter further guerrilla warfare against the colonial state. To prepare them for their paramilitary role, the state included military maneuvers in the course of training provided to all agricultural settlers, and issued them arms along with tools and seeds when they arrived in their new homes. In effect, the settlers were turned into a strategically deployed reserve of the Kwantung Army.
Through the agricultural settlement program, Manchukuo administrators created a new colonial society, one comprised of a weak and subordinated farming class that could be controlled in ways not possible with the urban colonists. Like the gamble for power by the Kwantung Army in 1931 and the risks taken to test out the planned economy, settlement was an experiment; it was an attempt to create a new instrument of the colonial
