The Soviet Union and Japan signed a series of trade agreements focused primarily on electronic technology—especially electronic chips and software development. For the Soviets, the goal was clear: learn from Japan's technological edge to build a competitive local electronics industry. With Europe imposing a long-standing military and technological blockade on the USSR, its high-tech sector lagged far behind the West. Breaking through that blockade became a top priority.
For surrounding countries, Japan—then the world's second-largest economy—was the natural partner. Though the Soviet Union appeared to be helping Japan slow its post-bubble recession, the reality was more calculated. Moscow was using the opportunity to advance its own tech industry and bypass Western restrictions.
This carrot-and-stick approach succeeded brilliantly. Just days after nearly clashing militarily, the two nations became economic partners. Prime Minister Miyazawa Kiichi laid all the blame for the crisis on Self-Defense Agency chief Nakatani Gen, who promptly resigned the day after the treaty was signed.
Watching Miyazawa and Pavlov exchange warm handshakes on TV, the public was left confused—wondering what political games were at play. But one thing was clear: between nations, relationships are built on interests, not true friendship.
Miyazawa's "rebellious" move also sparked dissatisfaction in Washington. The U.S. government, which gained nothing from the crisis, criticized Miyazawa for undermining the U.S.-Japan alliance. Yet, as a skilled political fox, Miyazawa balanced the competing powers with ease. After suppressing pro-American factions, he simultaneously pushed forward trade with the Soviets and enhanced economic ties with the United States, especially by making slight tariff adjustments under American pressure.
Trade barriers remain the primary method for protecting domestic industries worldwide. Japan—lacking full autonomy—used tariffs strategically to maintain favor with both allies. In many ways, this competition was reminiscent of China's struggles centuries ago.
Meanwhile, on the Soviet home front, efforts to modernize electronic technology accelerated. The future belonged to communication tech, and Yanayev was determined not to let the Soviet Union fall behind neighbors like China. Though some market reforms had been introduced, most industries remained under government control.
Ryzhkov admitted the reforms were too radical, causing devastating inflation that nearly collapsed the Soviet economy. Yet ordinary citizens no longer had to queue endlessly for bread and meat. Private workshops sprang up, filling shortages, and farmers introduced from China worked previously uncultivable land, boosting agricultural output.
Still, the USSR needed to import large amounts of food from China. Yanayev increased agricultural support for Ukraine, viewing stability there as key to maintaining social order—even if democracy and freedom were secondary concerns.
Politically, Yanayev pursued democratic reforms cautiously. Since the August 19th coup, government control over public opinion tightened. While state-backed newspapers spread official messaging, Surkov—Yanayev's loyalist—allowed a small window for controlled self-criticism, mostly targeting corruption and privilege. However, any criticism of the Communist Party's core policies was forbidden.
This censorship extended beyond Soviet borders. Similar to America's McCarthy era, dissenting voices were silenced or expelled, while cooperative intellectuals became propaganda tools, praising the Soviet system and demonizing America—even if their exaggerated flattery embarrassed everyone involved.
Many compared Surkov to a "gray cardinal," a Leninist puritan guiding Soviet politics behind the scenes. Ironically, this propaganda strategy blocked Western liberal ideas from penetrating Soviet society, erecting an invisible "iron curtain" that even affected perceptions in the U.S., contributing indirectly to events like the Los Angeles riots.
Slogans like, "No one is above the law," became key to building a Soviet legal system promising fairness, which helped stabilize the nation. Though calls for major disintegration lingered, they rarely sparked widespread unrest.
Yet some restless forces still sought to rewrite history and change the country's course. The situation in the three Baltic states hinted at growing unease—an undercurrent of instability lurking beneath the surface.