As Japan increasingly pursued expansionist economic policies, the value of the Japanese populations in Southeast Asia to the economic demands of the nation of Japan became increasingly apparent. Japanese communities, which had largely been focused on prostitution and associated services along with petty trade, gained increasing economic importance. From the 1890s onward, Japanese shipping and Japanese trade offices in Southeast Asia increased, Japanese banks opened, and Japanese increasingly sought employment and business opportunities in colonial extractive industries such as rubber and mining which in turn helped meet growing Japanese state demands for raw materials in the expansionist economy. Simultaneously, Japanese consulates were established in major urban areas such as Singapore and Manila, with several established in the first two decades of the twentieth century in Batavia, Surabaya, and Davao. With increasingly apparent imperial aspirations, and victories over China and Russia, the Japanese began to be viewed with some alarm by the colonial powers in Southeast Asia. Increasing Japanese involvement in trade, additional relations with local populations, growing Japanese populations associated to such trade, and the increase in Japanese shipping activities became matters of concern in light of Japan’s emergence as a regional powerhouse.
The increase of Japanese vessels on the shipping lanes emerged as one matter of concern. Nippon Yusen, financed by Mitusbishi, had a regular Kobe-Manila shipping line by 1982 and a Bombey route by 1894 (Shiraishi and Shiraishi, 10). Before 1920, not only was there a regular Java shipping line run by Nanyo Yusen but also branch offices of these two major shipping companies as well as Yamashita Kisen established in Singapore (Shiraishi and Shiraishi, 10). A dispatch from September 4, 1933, a summary of a report by the Chief of Shipping Services of the Dutch East Indies, identified Japanese shipping as a “threat” to Dutch interests (103). Shipping within the Dutch East Indies, on China-Japan lines, African lines, Burmese lines, and Europe-Java and Europe-East Asia lines where all indicated as routes suffering due to cheap and aggressive Japanese freight lines, many of of which continued to fly the Japanese flag (103, 104). These freight companies had the advantage of not only a depreciated yen and cheap labor, but also assistance from Japanese ministries and subsidies, and were described in the dispatch as “nationalistic . . . [and] not without arrogance” (104, 105). Indeed, the report connected the rise and state support for such shipping with “an almost aggressive expansion of overseas interest” (106). The increase in shipping, as well as the Japanese efforts, it seemed, to map out Dutch East Indies shipping lines, harbors and oil pipelines were also considered troubling by the British Consul-General in Batavia (127-128).
Another example of such worries was the British concern demonstrated about the large lease of land to the Japanese company Nanyo Kohatsu Kaisha in the Dutch East Indies in November of 1935 (3, 4, 5, 7). The company itself was linked to a Japanese financial institution, the Oriental Development Company, which had supplied capitol to Nanyo Kohatsu Kaisha; Nanyo Ringo Timber Exploitation Company, also operating in Southeast Asia; and other organizations engaged in development in “Japanese colonies, China, and the South Seas” (11). The Nanyo Kohatsu Kaisha concession, granted in Dutch New Guinea, was a topic of interest for British, with inquiries being made as to the details. The acting Consul-General of the British Consulate in Batavia addressed some of the concerns by outlining Dutch plans to prevent the development of Japanese-dominated ports as well minimizing their contact with local populations, particularly in restive provinces (7). The potential of Japanese official involvement with nationalist leaders had already been realized by the late summer of 1933, when the British Consul-General reported on contacts between the Japanese and Muhammad Hatta on Java (125). The worries were put clearly: in case of war, such ports could be used to stage attacks on Singapore and other western interests or used as submarine bases, and such restive populations could be mobilized into rebellion. While a more or less “open port policy” was in effect in the Dutch East Indies, the was an awareness that Japanese dominated ports were a potential threat (109). Intelligence reports on the matter of the concession, originating from Australia, noted that although the importation of some labor from Japan had evidently been approved by the Dutch East India authorities, the Dutch “opposed any Japanese settlement savouring colonisation” (9). Such concentrations of population could be used as staging grounds for martial actions in the case of Japanese aggression.
It seems that there was a rising awareness that the increased economic interest of Japan in Southeast Asia along with the increasing nationalism, colonial aspirations and “pan-Asia” rhetoric was a reason for concern. Yet, in 1935 the story was very much the same as in 1933. Despite a growing awareness that Japan represented a potential threat to the European colonial order, large concessions were still being made to Japanese companies and the formation “shipping blocs” to resist Japanese domination of the freight lines was seen as a need but was yet unrealized. Able to recognize the dangers that entrenched Japanese interests represented, it seems that the colonial powers were unable, perhaps because of bureaucratic inertia, to address it.by