Political Geography: East Asia / Topic: Economics

1. Winning the Geo-Tech Battle and Building the Quad Alliance in the Indo-Pacific

Author:: Eric B. Brown, John Lee, and Thomas J. Duesterberg
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Under Xi Jinping, the People’s Republic of China (PRC) has established as its paramount geopolitical objective the replacement of the free and open, rules-based order in Asia with an alternative world order, one that is to be dominated by the interests and values of the Chinese Communist Party (CCP). This decision presents a danger to the entire world, not just to any one state or group of states. For, as US Secretary of State Antony Blinken said at the March 2021 US-PRC meeting in Alaska, the alternative to a rules-based order “is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.” In furtherance of its objectives, the PRC is in the midst of a large military build-up, but there is much more. For today’s CCP, political power grows not only from the “barrel of the gun,” as Mao Zedong once put it, but also from cutting-edge technologies. Thus, while Beijing pours billions into artificial intelligence and surveillance tech to impose its new “digital totalitarianism” inside the PRC, from Hong Kong to Xinjiang, it is also using its growing technological prowess to press its larger geopolitical agenda in the Indo-Pacific and beyond. It is weaponizing technology and connectivity, along with trade, finance, and other policy instruments to try to rule the key technologies and industries of the future, as well as to improve its strategic positioning and acquire political power over other countries—for instance, through its bid to dominate other nations’ most sensitive data networks, or via the export of its suite of “social stability” technologies, i.e., the “techno-tyrant’s toolkit.” In all this, the CCP’s intent is to entrench its power and Leninist norms and practices to the extent it can do so beyond the PRC’s borders, and to make other nations, or at the least their ruling elites, beholden to it. So in addition to the PRC’s militarily destabilizing activities in the West Pacific and incursions into India’s Himalayas, there is also a “geo-technological front.” If Xi’s CCP succeeds at enmeshing other countries in its expanding “PRC sphere of technological influence,” it could unlock and be able to exploit decisive military, economic, diplomatic, and ideological advantages.
Topic:: International Relations, Security, Economics, and Alliance
Political Geography:: China, South Asia, East Asia, and Asia-Pacific

2. The Trade Restrictiveness Index and Its Impact on Trade Performance in Selected East Asian Countries

Author:: Norlin Khalid, Muhamad Rias K.V. Zainuddin, Tamat Sarmidi, Sufian Jusoh, Faliq Razak, and Mohd Helmi Ali
Publication Date:: 09-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper aims to investigate the effect of non-tariff measures (NTMs) on trade in selected East Asian countries. In doing so, we first estimate the ad valorem equivalent (AVE) of NTMs and construct an augmented trade restrictiveness index (ATRI) by measuring the overall external regulations imposed by importing countries. Second, we analyse the effect of the AVE and trade restrictiveness index (TRI) of importing nations on the exports of various sub-sector products for each country in selected East Asian countries. Based on a standard gravity model framework, we perform a Poisson pseudo maximum likelihood (PPML) regression at the sectoral level (Harmonized System 2-digit) for total exports and major sub-sectors (agri-food, health, logistics, and manufacturing). The findings show that the ATRI has a negative and significant relationship towards bilateral exports for total exports, manufacturing, and logistics sub-sectors. The negative impacts of the ATRI also highlight that trade barriers play a significant role in bilateral exports. NTM restrictions (proxied by the calculated AVE of NTMs) imposed by importing countries have mixed results for technical and non-technical measures. Where technical measures have negative and significant impacts on bilateral exports for total exports, manufacturing, and health sub-sectors. This implies that implementation of technical NTMs such as sanitary and phytosanitary (SPS) and technical barrier to trade (TBT) measures in importing nations adversely affect bilateral exports for these sub-sectors. This is in line with our hypothesis, as exporters may face difficulties in meeting the current NTM specifications, leading to lower bilateral exports. In addition, the results show that most trade agreements have a positive and significant relationship with ASEAN and East Asia countries’ bilateral exports, suggesting that free trade agreements enhance trade between countries.
Topic:: Economics, Globalization, International Trade and Finance, and Non-Tariff Measures
Political Geography:: East Asia and Asia

3. Combating China’s COVID-19 Propaganda Offensive to Undermine the United States on the Global Stage

Author:: John Lee
Publication Date:: 03-2020
Content Type:: Working Paper
Institution:: Hudson Institute
Abstract:: Throughout the United States, it is becoming increasingly clear that the Chinese Communist Party (CCP) is exploiting COVID-19 in an effort to reshape the global order and enhance China’s international leadership at the expense of the US. A range of prominent commentators further assert that the Trump administration bears much of the blame for this turn of events. This argument tends to rest on twin assumptions:1 China is winning the battle of narratives when it comes to comparative national competence and its decisiveness in responding to its COVID-19 outbreak. The Trump administration is damaging America’s standing by getting off to a bad start in its response to the pandemic, exposing the underlying weaknesses of American institutions and preparedness for such a crisis. These arguments correctly acknowledge that the global pandemic is occurring within a context of US-China strategic, political, and economic competition and/or rivalry. This is the point of warnings to the administration that there is more at stake than containing and managing the virus, even if that is the immediate priority.
Topic:: International Relations, Foreign Policy, Economics, Health, National Security, and COVID-19
Political Geography:: China and East Asia

4. The Trump Impact on East Asia After Two Years

Author:: Gilbert Rozman
Publication Date:: 07-2019
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: Trade ties between the United States and many East Asian countries have faced a high degree of uncertainty since Donald Trump took office in early 2017. The world is now accustomed to an atmosphere of sanctions, tariffs, ultimatums, and negotiations under pressure with little left off the table. The centerpiece in this drama is, of course, Sino-U.S. relations. Much is written on that, and the saga of tense talks, occasional breakdowns, and upbeat statements continued as we were proceeding with our analyses of the East Asian region. Instead of trying to unravel where that might end, we concentrate on countries in the region neighboring China. We begin with the Trump economic impact on South Korea, turn then to Japan, switch next to Southeast Asia, and conclude with North Korea. In the first three cases, we identify various similarities as well as some differences, and with North Korea, burdened with “maximum pressure,” we find an outlier. South Korea has already cut a trade deal, Japan is now beginning negotiations for an agreement with the U.S., and the states of Southeast Asia, after Trump’s pullout from TPP and Japan’s leadership in keeping the momentum alive, are striving to hold onto multilateralism. Trump’s thinking is steeped in narrow notions of manufacturing trade deficits subsumed under the slogan “America First,” as well as updated alarm about unfair practices to coerce or steal intellectual property rights. He has rallied Americans with considerable international support behind the need to curb China’s predatory trade practices, while alienating virtually the entire world, including U.S. allies, with overcharged claims of “national security” in imposing tariffs to control imports of selected products, starting with steel and aluminum but threatening to make the sale of foreign-made cars and trucks the ultimate target for reducing the U.S. trade deficit. Concern prevails over what further damage Trump may do to the trade environment in East Asia. In Seoul, despite relief that what was most feared when Trump railed against the KORUS FTA did not come to pass, one hears warnings that Trump may extend barriers already imposed on washing machines and solar panels to automobiles—a large part of exports to the U.S. Just on the precipice of bilateral talks demanded by the U.S., Japan also nervously awaits pressure against its even more massive automobile exports. For Southeast Asian states, the prospect of bilateral negotiations with the U.S .is frightening as well, since it is understood that smaller economies have little leverage in such negotiations. The spillover for all of these countries from hefty U.S. tariffs on China is also feared, since they are deeply integrated into production chains.
Topic:: Foreign Policy, Economics, and Trade
Political Geography:: East Asia, North America, and United States of America

5. East Asia's Decoupling

Author:: Roland Rajah
Publication Date:: 01-2019
Content Type:: Commentary and Analysis
Institution:: Lowy Institute for International Policy
Abstract:: East Asia is no longer reliant on US or Western markets to fuel its growth, giving it more room to manage amid global trade tensions. Heightened global trade tensions and the US desire to ‘decouple’ from the Chinese economy for national security reasons pose significant risks to East Asia’s export-driven growth model. However, the latest data suggests East Asia is no longer so dependent on exporting to the West, with China in particular eclipsing the United States as the leading source of ‘final demand’ for the rest of the region’s exports. This gives East Asia much greater room to manoeuvre, as regional integration is now a more viable platform for growth while US decoupling efforts will likely struggle to find traction in the region.
Topic:: Economics, International Trade and Finance, Global Markets, and Exports
Political Geography:: China, East Asia, Asia, North America, and United States of America

6. Advancing the Regional Trade Order in East Asia with a Less Engaged United States

Author:: Korea Economic Institute of America
Publication Date:: 08-2018
Content Type:: Special Report
Institution:: Korea Economic Institute of America (KEI)
Abstract:: In the aftermath of Donald Trump’s election and immediate pullout from the TPP, a scramble ensued over how to proceed with constructing a regional trade order centered on East Asia. For China this brought closer scrutiny of its pursuit of the Belt and Road Initiative (BRI). In the case of Japan, questions followed about what to do with the residue of TPP. Others, notably countries in Southeast Asia, were left contemplating the balance between eastern exclusive regionalism and the western presence in regionalism. In the background were efforts in South Asia aimed at advancing economic integration with East Asia. A kind of free-for-all was in progress without the moorings that had been lost after the paradigm of competition between a U.S.-led TPP and a China hub-and-spokes BRI no longer was guiding the strategic calculations of Asian countries. Then, in March 2018 came Trump’s disruptive tariffs, threatening to set a trade war in motion. Four chapters explore the challenge of advancing a regional trade order in East Asia in the new circumstances of 2017-18. Tu Xinquan in Chapter 10 questions whether BRI is a path toward regionalism, delving deeply into the Chinese strategy for BRI. T.J. Pempel follows in Chapter 11 by exploring Japan’s thinking about TPP and the process of refocusing on TPP- 11 following the U.S. withdrawal. Chapter 12 by Sanchita Basu Das offers a hopeful ASEAN perspective on economic regionalism. Finally, in Chapter 13 Pradumna Bickram Rana traces thinking about re-energizing economic integration between South Asia and East Asia. With no finality to the RCEP talks and the recently concluded TPP-11 pact still taking shape and Trump’s “America First” trade policy casting a dark shadow, we aim to capture signs of a new trade order at a time of flux.
Topic:: Economics, Regional Integration, and Trade
Political Geography:: Japan, China, East Asia, Asia, and Korea

7. A Full Year of “Acting East”

Author:: Satu Limaye
Publication Date:: 01-2016
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: India-East Asia relations during 2015 offered a perspective on the first full year of India “Acting East.” India took important steps to shore up ties with several Asia-Pacific countries while also creating new relationships. While India-East Asia relations saw no ground-breaking developments, Prime Minister Modi continues to emphasize the political and strategic dimensions of India’s East Asia outreach – particularly in the maritime domain. An official review of India’s foreign relations released in late December provided a perspective on the priority that the Modi administration has been giving to East Asia.
Topic:: Diplomacy, Economics, International Cooperation, and International Trade and Finance
Political Geography:: India, East Asia, and Asia

8. Beyond Elitism: The Possibilities of Labour-Centred Development

Author:: Benjamin Selwyn
Publication Date:: 04-2016
Content Type:: Working Paper
Institution:: Centre for Global Political Economy, University of Sussex
Abstract:: This article outlines the theory and practice of Labour Centred Development (LCD). Much development thinking is elitist, positing states and corporations as primary agents in the development process. This article argues, by contrast, that collective actions by labouring classes can generate tangible developmental gains, and therefore, that under certain circumstances they can be considered primary development actors. Examples of LCD discussed here include shack-dweller’s movements in South Africa, the landless labourer’s movement in Brazil, unemployed worker’s movements in Argentina and large-scale collective actions by formal sector workers across East Asia. The article also considers future prospects for LCD.
Topic:: Development, Economics, International Political Economy, Labor Issues, and International Development
Political Geography:: East Asia, South Africa, Brazil, and Argentina

9. Who defines the rules of the game in East Asia? The Trans-Pacific Partnership and the strategic use of international institutions

Author:: Xinyuan Dai
Publication Date:: 02-2015
Content Type:: Journal Article
Journal:: International Relations of the Asia-Pacific
Institution:: Japan Association of International Relations
Abstract:: A growing sense among academics and policymakers alike is that the dominant issues of the twenty-first century will be decided in Asia-Pacific. But, the open question is how will these issues be decided: Who defines the rules of the game in the region and how? To address these questions, this paper studies the regulatory competition that is unfolding in the region. In particular, it examines the Trans-Pacific Partnership (TPP), with its potential to redraw the political-economic geography in Asia. Why is such a significantly path-breaking institution possible? This paper builds on the scholarship of international political economy and especially the literature on international institutions. It argues that this potential of the TPP crucially depends on the institutional environment in East Asia. A state of institutional anarchy enables the TPP to take hold in Asia. Important policy implications follow regarding the strategic use of international institutions.
Topic:: Economics and Politics
Political Geography:: East Asia

10. East Asia and international relations theory

Author:: Masaru Kohno
Publication Date:: 01-2014
Content Type:: Journal Article
Journal:: International Relations of the Asia-Pacific
Institution:: Japan Association of International Relations
Abstract:: East Asia now occupies a prominent place in the study of international relations (IR). This, of course, does not mean that IR scholarship in the past failed to pay due attention to East Asia. Wars, trade, and international integration in this region have been the subject of analysis in countless books and scholarly articles. However, the renewed interest in this region is not so much empirically driven (to increase East Asian coverage in the literature) as before but rather represents a theoretical inquiry pertinent to the intellectual underpinning of the scholarship itself. Today, some experts of the region harshly criticize the 'euro-centric' bias of existing IR study and seek to provide alternative conceptions based on the East Asian experience. In response, other scholars have advanced views less provocative but more nuanced about the originality of East Asia. And, there are still others who ï–‚atly reject the connotation that the logic of East Asian international relations is inherently different from that elsewhere. Thus, a diverse set of perspectives has been laid out on the table, but their strengths and shortcomings are yet to be evaluated systematically.
Topic:: International Relations, Economics, and War
Political Geography:: East Asia

11. ASEAN Centrality and the ASEAN-US Economic Relationship

Author:: Peter A. Petri and Michael G. Plummer
Publication Date:: 03-2014
Content Type:: Policy Brief
Institution:: East-West Center
Abstract:: ASEAN has become a focal point of the rapidly changing economic architecture of the Asia-Pacific region. ASEAN members are increasingly stable and politically confident, and constitute an emerging economic powerhouse. The region is dynamic, with 600 million citizens and a gross domestic product (GDP) that exceeds $2 trillion and is expected to grow 6 percent annually for the next two decades. (The Appendix at the end of this paper reports detailed output and trade projections to 2025.) Through deeper internal integration via the ASEAN Economic Community (AEC) and external initiatives such as the Regional Comprehensive Economic Partnership (RCEP), ASEAN is becoming a driving force in regional cooperation and a much-courted economic partner. The AEC and the RCEP projects are globally significant: the AEC could generate powerful demonstration effects for other developing regions, and the RCEP could become an important building bloc of the multilateral trading system.
Topic:: Security, Economics, International Trade and Finance, and Markets
Political Geography:: United States, East Asia, Asia, and Asia-Pacific

12. Food Security Robustness: A Driver of Enhanced Regional Cooperation?

Publication Date:: 03-2014
Content Type:: Policy Brief
Institution:: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:: Food security encompasses multiple, inter-connected dimensions, from production-related concerns, to market and price dynamics, environmental trends and policy approaches. Given this, 'robustness', the ability to withstand disruptions to the various dimensions, is critical to food security. Yet, countries in Southeast Asia continue to be largely focused on domestic production alone, which is unsustainable in the long run. This Policy Brief suggests that, in order to increase food security robustness, countries could turn to regional-level action. Towards this end, an analysis using the Rice Bowl Index is used to identify possible areas of cooperation and collaboration at the regional level.
Topic:: Security, Agriculture, Economics, Environment, Markets, and Food
Political Geography:: East Asia

13. The Global Fund's China Legacy

Author:: Yanzhong Huang
Publication Date:: 03-2014
Content Type:: Working Paper
Institution:: Council on Foreign Relations
Abstract:: The Global Fund to Fight AIDS, Tuberculosis and Malaria (hereafter "the Global Fund" or "the Fund") is the world's main multilateral funder in global health and the largest financier of anti-AIDS, anti-tuberculosis (TB), and anti-malaria programs. Since its inception in 2002, the Global Fund has disbursed $23.2 billion to more than 140 countries; today, it accounts for 21 percent of the international funding for the prevention and treatment of HIV/AIDS, 82 percent of that for TB, and 50 per cent of that for malaria. Until recently, it awarded grants based on the need of individual countries and the quality of each proposal. As a performance-based initiative, it closely tracks the results flowing from each grant disbursement. As a value-oriented organization, it requires recipients to have transparent, accountable, and inclusive governance mechanisms. Indeed, in terms of multisectoralism and civil society participation, the Fund is considered the most progressive global health institution. But unlike many other health-related multilateral organizations, it is not an implementing agency and lacks in-country presence. Instead, as a funding mechanism, it has grant applications and project/program implementation in each country overseen by a "country coordinating mechanism" (CCM), which draws representatives from government, UN and donor agencies, nongovernmental organizations (NGOs), the private sector, and people living with the diseases.
Topic:: Civil Society, Economics, Health, and Governance
Political Geography:: China and East Asia

14. Economic Integration between South Asia and East Asia: A Perception Survey of Asian Opinion Leaders

Author:: Wai-Mun Chia and Pradumna B. Rana
Publication Date:: 04-2014
Content Type:: Working Paper
Institution:: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:: Economic integration, which was deepening among the East Asian countries, is now broadening to cover the South Asian region as well. While we are starting to witness the emergence of Pan-Asian integration, a few distinct and yet related questions arise. What are the benefits and costs of South Asia and East Asia (SA-EA) integration? What are the respective roles of market-led vs. regional cooperation policies? Could the integration of the two be an example of "open" regionalism? What are the policies that South Asian countries should adopt under their "Look East" polices to link themselves to production networks in East Asia? What is the role of infrastructure and connectivity? What are the factors that have led to the revival of land connectivity or old South-western Silk Road in Asia? Should efforts to promote ASEAN-India connectivity be supported? Should the membership of East Asian institutions be expanded to cover South Asian countries at an appropriate level? In particular, should India be invited to join the various ASEAN+3 initiatives? Should South Asian countries (other than India) be invited to join the negotiations for the Regional Comprehensive Economic Partnership (RCEP)? Can the integration of the two regions re-invigorate economic integration in South Asia? This paper assesses the views of South Asian and East Asian opinion leaders through a perception survey conducted in 2013. 390 respondents from academia, business, and various government offices participated in the survey. In general, the opinion leaders in both regions generally feel positive about the integration of the two regions and they feel that it could revive economic integration in South Asia. They also feel that South Asian countries should be given a role in various East Asian initiatives.
Topic:: Economics and Regional Cooperation
Political Geography:: South Asia and East Asia

15. Regional Trade Agreements in East Asia

Author:: Innwon Park
Publication Date:: 03-2014
Content Type:: Working Paper
Institution:: Norwegian Institute of International Affairs
Abstract:: Both intra - and inter-regional trade agreements are proliferating in East Asia. Deepening regional interdependence through trade and investment, and the necessity for stability and revitalization of the regional economy since the East Asian financial crisis in the late 1990s led the East Asian countries to adopt discriminatory RTAs. Accordingly, East Asian commercial policy stance has shifted from unilateral to bilateral to mega-lateral liberalization. This report attempts to assess the East Asian countries' efforts to liberalize the regional market by cooperating with each other. We investigate (i) why RTAs have been proliferating in East Asia, (ii) what the main characteristics of East Asian RTAs are, (iii) whether the East Asian countries are natural trading partners for each other to enhance welfare gains from RTAs, and (iv) whither East Asian RTAs. From our analysis, we recommend following policy options. First, East Asian RTAs should follow an expansionary RTA path (for example, AFTA and five ASEAN+1 FTAs → RCEP and/or TPP → FTAAP). Second, as we consider the high dependence on external economies through global trade and investment, East Asia needs to cooperate with major external trading partners by forming cross-regional RTAs with the EU and US. Third, in order to enable East Asian economies to take the more desirable expansionary RTA path, harmonizing or simplifying ROO, the cumulation of value contents among the RTA members in East Asia, and enhancing trade facilitation should be a prerequisite considering the complicated web of RTAs, regional production networks, and the consolidation of the FTAAP.
Topic:: Economics, International Trade and Finance, and Regional Cooperation
Political Geography:: East Asia and Asia

16. China's Debt Dilemma: Deleveraging While Generating Growth

Author:: Yukon Huang and Canyon Bosler
Publication Date:: 09-2014
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: Much of the media coverage of China's economy suggests that the country is headed for a financial crisis. China's mountain of debt is decried, local government finances are labeled menacing, and a property bubble is called disastrous. But this picture is misleading. While China has serious debt problems, with prudent macroeconomic policies and productivity-enhancing structural reforms, the challenges should be manageable if underlying fiscal issues and growth-related reforms are addressed.
Topic:: Debt, Economics, and Reform
Political Geography:: China and East Asia

17. Southeast Asia from Scott Circle: Malaysia Steps into Spotlight as ASEAN and East Asia Summit Chair

Author:: Phuong Nguyen
Publication Date:: 11-2014
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: Expectations for this week's East Asia Summit and related meetings have been rather modest given the increasing complexity of issues facing countries in Asia and the limited capacity of Myanmar as host. To be clear, Myanmar has done a commendable job given this is its first time chairing ASEAN and hosting other regional meetings.
Topic:: Conflict Prevention, Diplomacy, and Economics
Political Geography:: Malaysia, East Asia, and Southeast Asia

18. Enhancing Value Chains: An Agenda for APEC

Author:: Matthew P. Goodman and Scott Miller
Publication Date:: 11-2013
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: Economic integration has been a focus of Asia-Pacific affairs for the last quarter century. To support and strengthen economic ties, governments in the region have pursued an array of integration initiatives, from the Asia-Pacific Economic Cooperation (APEC) forum launched in 1989 to bilateral and regional trade negotiations currently underway. APEC has been the most successful tool of regional trade and investment integration thus far and has the potential to continue bridging differences between various integration efforts in the region. This report, with input from a wide variety of regional and topical experts, posits that developing a common, high-standard policy approach to value chains could pull together the various integration efforts to the substantial economic benefit of the entire region. The report offers eight recommendations for a broad-based APEC initiative building on existing work in the region on supply chains and connectivity.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:: East Asia and Asia

19. Orville Schell: 'A Dream for a Strong and Respected China'

Author:: Orville Schell and John Delury
Publication Date:: 07-2013
Content Type:: Video
Institution:: Asia Society
Abstract:: New York, July 16, 2013 - China scholars Orville Schell and John Delury discuss how the "Chinese Dream" has evolved to encompass facets of the American Dream while still retaining a traditional, communal character as regards acquiring wealth. (1 min., 45 sec.)
Topic:: Communism, Development, Economics, and International Trade and Finance
Political Geography:: China, New York, East Asia, and Asia

20. Does Internationalizing the RMB Make Sense for China?

Author:: Yukong Huang and Clare Lynch
Publication Date:: 10-2013
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The last time a Chinese currency was used as an international medium of exchange was four centuries ago, when China's share of global GDP in PPP terms was nearly 30 percent (about twice its current level), the country was a major global trading power, and Chinese copper coins circulated throughout East Asia to India and even beyond (Horesh 2011). In the following centuries, silver dollars and paper bills replaced copper coins and China's share of external trade declined. Now, with China's return to the position of largest global trader and second-largest economy in the world, it is not surprising that discussion of internationalizing China's currency has resumed.
Topic:: Economics
Political Geography:: China and East Asia

21. East Asia and the Arctic: Alaskan and American Perspectives

Author:: Jerry McBeath
Publication Date:: 12-2013
Content Type:: Working Paper
Institution:: Centre for International Governance Innovation
Abstract:: This paper concerns the US view of East Asian nations' involvement in the Arctic, emphasizing the perspective of Alaska, the only US Arctic state. It treats six different areas of US/Alaska policy: US national strategy for the Arctic; oil and gas exploration and development; marine transportation; fisheries; investment in infrastructure; and governance. The study finds few differences between the positions of Alaska and the United States, notwithstanding often-hostile rhetoric from leaders in the United States' farthest north frontier. In general terms, both Alaska and the United States have historically sought trade and investment ties with East Asian nations. China has now replaced Japan as Alaska's major trading partner, followed by South Korea and Taiwan.
Topic:: Economics, Food, and Infrastructure
Political Geography:: United States, China, Taiwan, East Asia, South Korea, Alaska, and Arctic

22. Regionalism in Asia as Disguised Multilateralism: A Critical Analysis of the East Asia Summit and the Trans-Pacific Partnership

Author:: David Camroux
Publication Date:: 03-2012
Content Type:: Journal Article
Journal:: The International Spectator
Institution:: Istituto Affari Internazionali
Abstract:: Revolving around the concept of 'Community' or 'community', debate on an Asian region has ostensibly pitted those who proposed an entity limited to East Asia (China, Japan, South Korea and the ten countries of the Association of South East Asian Nations, ASEAN) against those who proposed a much wider region embracing India, North (and, perhaps, South) America, as well as Australasia. Previously these two conceptualisations possessed their eponymous translation in the East Asian Economic Caucus (reincarnated as ASEANþ3) and the Asia Pacific Economic Cooperation forum. However, with the creation in 2005 of the East Asian Summit to include India, Australia and New Zealand and, above all, its 2011 enlargement to include the United States and Russia, the contrast between the two conceptualisations of an Asian region has become confused. In order to explain this development, this article suggests that the language of 'region' or 'community' is a discursive smokescreen disguising changes in approaches to multilateralism. An examination of the East Asia Summit, contrasting it with another recent regional project, the Trans Pacific Partnership, suggests that the actors involved are seeking to ensure the primacy of individual nation states in intergovernmental multilateral relations.
Topic:: Development and Economics
Political Geography:: China, America, India, East Asia, Asia, and Australia

23. US Agricultural Exports to ASEAN Grow - But Face Competition

Author:: Michael McConnell
Publication Date:: 03-2012
Content Type:: Policy Brief
Institution:: East-West Center
Abstract:: ASEAN countries have long been an important international market for US agricultural exports. The United States, in 2011, exported almost $9.6 billion of agricultural products to ASEAN, making it the sixth-largest export destination for US farmers, ranchers, and agribusinesses—behind Japan ($14 billion) and just behind the European Union ($9.6 billion), but well ahead of South Korea ($7 billion). Moreover, the value of agricultural trade between the United States and ASEAN almost doubled between 2007 and 2011, with the top four ASEAN markets in 2011 for the United States being Indonesia ($2.8 billion), the Philippines ($2.1 billion), Vietnam ($1.7 billion), and Thailand ($1.3 billion). With a population of 614 million and strong economic growth, it is expected that ASEAN will continue to be an important market for US agricultural products. However, the United States is likely to face increasing competition, particularly from China, Australia, and New Zealand, all of which have free trade agreements (FTAs) with ASEAN.
Topic:: Agriculture, Demographics, Economics, International Trade and Finance, Markets, and Food
Political Geography:: United States, China, Europe, East Asia, South Korea, Australia, Southeast Asia, and New Zealand

24. Balancing Tradition and Modernity: The Future of Retirement in East Asia

Author:: Richard Jackson, Neil Howe, and Tobias Peter
Publication Date:: 07-2012
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: As the world's societies age, governments and businesses are trying to look ahead and anticipate the needs of tomorrow's growing elderly populations. Nowhere is this more difficult to do than in emerging East Asia.
Topic:: Demographics, Economics, and Health
Political Geography:: Israel and East Asia

25. Coordinating Regional and Multilateral Financial Institutions

Author:: C. Randall Henning
Publication Date:: 03-2011
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Recent crises and the expansion of international financial arrangements have dramatically elevated the importance of cooperation between regional institutions and the International Monetary Fund (IMF). While the case for coordination between regional and multilateral institutions is generally accepted, however, the need to organize it on an ex ante basis is not fully appreciated. The relatively successful cooperation among the European Commission, European Central Bank, and IMF on the European debt crisis is not likely to be easily replicated in joint programs for countries in other regions, moreover, and the costs of coordination failure could be very large. Recent innovations at the IMF, on the other hand, present opportunities for cooperation with regional facilities. Henning reviews (1) the case for organizing cooperation on an ex ante basis, (2) the policy and institutional matters that should be coordinated, (3) how East Asian arrangements in particular and the IMF might cooperate, and (4) an Interinstitutional Agenda of general principles, modalities, and institutional recommendations. The G-20, member states, and institutions themselves should address this agenda proactively.
Topic:: Debt, Economics, Regional Cooperation, International Monetary Fund, and Financial Crisis
Political Geography:: Europe and East Asia

26. Is Indonesia Bound for the BRICs?

Author:: Karen Brooks
Publication Date:: 11-2011
Content Type:: Journal Article
Journal:: Foreign Affairs
Institution:: Council on Foreign Relations
Abstract:: Indonesia is in the midst of a yearlong debut on the world stage. This past spring and summer, it hosted a series of high-profile summits, including for the Overseas Private Investment Corporation in May, the World Economic Forum on East Asia the same month, and the Association of Southeast Asian Nations (ASEAN) in July. With each event, Indonesia received broad praise for its leadership and achievements. This coming-out party will culminate in November, when the country hosts the East Asia Summit, which U.S. President Barack Obama and world leaders from 17 other countries will attend. As attention turns to Indonesia, the time is ripe to assess whether Jakarta can live up to all the hype. A little over ten years ago, during the height of the Asian financial crisis, Indonesia looked like a state on the brink of collapse. The rupiah was in a death spiral, protests against President Suharto's regime had turned into riots, and violence had erupted against Indonesia's ethnic Chinese community. The chaos left the country -- the fourth largest in the world, a sprawling archipelago including more than 17,000 islands, 200 million people, and the world's largest Muslim population -- without a clear leader. Today, Indonesia is hailed as a model democracy and is a darling of the international financial community. The Jakarta Stock Exchange has been among the world's top performers in recent years, and some analysts have even called for adding Indonesia to the ranks of the BRIC countries (Brazil, Russia, India, and China). More recent efforts to identify the economic superstars of the future -- Goldman Sachs' "Next 11," PricewaterhouseCoopers' "E-7" (emerging 7), The Economist's "CIVETS" (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa), and Citigroup's "3G" -- all include Indonesia.
Topic:: Economics and Financial Crisis
Political Geography:: Russia, United States, China, Indonesia, India, East Asia, Brazil, and Island

27. From REDD to Green: A Global Incentive System to Stop Tropical Forest Clearing

Author:: David Wheeler, Robin Kraft, and Dan Hammer
Publication Date:: 12-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In this paper, we develop and illustrate a prototype incentive system for promoting rapid reduction of forest clearing in tropical countries. Our proposed Tropical Forest Protection Fund (TFPF) is a cash-on-delivery system that rewards independently monitored performance without formal contracts. The system responds to forest tenure problems in many countries by dividing incentive payments between national governments, which command the greatest number of instruments that affect forest clearing, and indigenous communities, which often have tenure rights in forested lands. The TFPF incorporates both monetary and reputational incentives, which are calculated quarterly. The monetary incentives are unconditional cash transfers based on measured performance, while the reputational incentives are publicly disclosed, color-coded performance ratings for each country. The incentives include rewards for: (1) exceeding long-run expectations, given a country's forest clearing history and development status; (2) meeting or exceeding global REDD+ goals; and (3) achieving an immediate reduction in forest clearing. Drawing on monthly forest clearing indicators from the new FORMA (Forest Monitoring for Action) database, we illustrate a prototype TFPF for eight East Asian countries: Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Thailand, and Vietnam. A system with identical design principles could be implemented by single or multiple donors for individual or multiple forest proprietors within one or more countries, as well as national or local governments in individual countries, tropical regions, or the global pan-tropics. Our results demonstrate the importance of financial flexibility in the design of the proposed TFPF. Its incentives are calculated to induce a massive, rapid reduction of tropical forest clearing. If that occurs, a TFPF for East Asia will need standby authority for disbursements that may total $10–14 billion annually for the next two decades. This financial burden will not persist, however, because the TFPF is designed to self-liquidate once all recipient countries have achieved clearly specified benchmarks. We estimate that the TFPF can be closed by 2070, with its major financial responsibility discharged by 2040.
Topic:: Agriculture, Economics, Globalization, and Markets
Political Geography:: China, Indonesia, Malaysia, East Asia, Vietnam, Cambodia, Thailand, Southeast Asia, and Myanmar

28. Prospects and Challenges for Increasing India-Pakistan Trade

Author:: Ishrat Husain
Publication Date:: 11-2011
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: In the face of massive economic challenges, a burgeoning population, energy and water shortages, and huge and growing numbers of unemployed workers, especially youth, Pakistan needs to look for ways to move itself out of the economic hole into which it has fallen. Greater trade with India offers an immediate and rich possibility of economic growth for both Pakistan and India. Recent meetings between the commerce ministers of both countries in New Delhi appear to have yielded some good intentions to increase trade from its current level of $2 billion a year to $6 billion, still well below what many scholars estimate to be the potential. Yet, the obstacles remain, in the form of rules and regulations that inhibit trade, and in the lack of private-sector initiatives that would surmount governmental foot dragging. In the end, it is the private sector—not of cial trade—that will boost incomes on both sides of the border. And the question remains: Will India and Pakistan see the advantage of opening borders as being mutually beneficial?
Topic:: Economics, International Trade and Finance, Bilateral Relations, and Border Control
Political Geography:: Pakistan, India, and East Asia

29. Earthquake, Tsunami Hit Japan: Assessing the Economic Impact

Author:: Sheila Smith
Publication Date:: 03-2011
Content Type:: Video
Institution:: Council on Foreign Relations
Abstract:: The earthquake and tsunami that hit Japan will have a severe, lasting impact on the Japanese economy, says CFR's Sheila Smith, Senior Fellow for Japan Studies.
Topic:: Economics, Energy Policy, and Natural Disasters
Political Geography:: Japan and East Asia

30. Asian Economic Integration and Cooperation: Challenges and Ways Forward for Pan-Asian Regionalism

Author:: Durgesh K. Rai
Publication Date:: 11-2010
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: As the Asian economies have grown larger and become more complex, they have also be-come more integrated at both the regional and the subregional level. Yet although economic integration has increased, regionalism in the sense of economic cooperation at both the pan-Asian and subregional levels has lagged behind. Regionalism or economic cooperation in terms of bilateral or multilateral FTAs is a relatively new phenomenon, but one that has in-creased rapidly in recent years. However, the progress of Asian regionalism faces several challenges. Also, the increasing number of FTAs could lead to a "spaghetti-bowl effect" and reduce trade volume instead of increasing it. In addition to resolving the existing challenges, actors in the region need to convert some of the existing FTAs into a broader one that can serve as a hub for further integration. Given the potential economic gains and future eco-nomic dynamism of the region, this paper suggests the pursuit of the Comprehensive Economic Partnership in East Asia (CEPEA) rather than the East Asia Free Trade Area (EAFTA).
Topic:: Economics, Markets, and Regional Cooperation
Political Geography:: East Asia and Asia

31. Learning about Schools in Development

Author:: Charles Kenny
Publication Date:: 12-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: There has been considerable progress in school construction and enrollment worldwide. Paying kids to go to school can help overcome remaining demand-side barriers to enrollment. Nonetheless, the quality of education appears very poor across the developing world, limiting development impact. Thus we should measure and promote learning not schooling. Conditional cash transfers to students on the basis of attendance and scores, school choice, decentralization combined with published test results, and teacher pay based on attendance and performance may help. But learning outcomes are primarily affected by the broader environment in which students live, suggesting a learning agenda that stretches far beyond education ministries.
Topic:: Development, Economics, Education, and Poverty
Political Geography:: Afghanistan and East Asia

32. Recovery: The Global Financial Crisis and Middle-Income Countries

Author:: Alejandro Foxley
Publication Date:: 07-2009
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially— have shown themselves to be particularly vulnerable. The crisis has high- lighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds –and those that aspire to join their ranks – as they rebuild
Topic:: Economics, Globalization, Markets, and Financial Crisis
Political Geography:: Europe, East Asia, and Latin America

33. A G-20 caucus for East Asia

Author:: Stephen Grenville and Mark P Thirlwell
Publication Date:: 10-2009
Content Type:: Policy Brief
Institution:: Lowy Institute for International Policy
Abstract:: In September 2009 the Pittsburgh Summit designated the G-20 as the world's premier forum for international cooperation. The G-20's arrival at the apex of the international economic architecture gives East Asia a much greater presence at the top table of the world economy: six regional economies, including Australia, are members of the G-20, in contrast to the G7, which only had room for Japan. This increase in representation creates important new opportunities for the region. But making use of these opportunities requires significant increases in policy-making resources. Unfortunately, in many Asian economies, such resources are in short supply relative to the wide variety of pressing problems the region currently faces.
Topic:: Economics, International Cooperation, and International Organization
Political Geography:: Japan, Israel, East Asia, and Australia/Pacific

34. Recovery: The Global Financial Crisis and Middle-Income Countries

Author:: Alejandro Foxley
Publication Date:: 07-2009
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially—have shown themselves to be particularly vulnerable. The crisis has highlighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds?and those that aspire to join their ranks—as they rebuild.
Topic:: Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:: Europe, East Asia, and Latin America

35. Australia-East Asia/U.S. Relations

Author:: Graeme Dobell
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Center for Strategic and International Studies
Abstract:: Australia's government swung from the right to the left of the political spectrum in 2007. The U.S. did the same in 2008. Yet, not much changed in the fundamentals of the 57-year-old U.S.-Australia alliance. The assertion of alliance continuity, however, comes with a major caveat: the tectonic effects being exerted by China's rise. As with the rest of the Asia-Pacific, Australia is adjusting significant aspects of its foreign and security policy to the magnetic pull of China, which was dramatized for Canberra through the middle of 2009 by an outburst of Chinese official anger directed at Australia. Other important influences to consider include the so-called “Kevin Rudd” effect, the global economic crisis, and the ongoing conflicts in the Middle East.
Topic:: Economics and Government
Political Geography:: United States, East Asia, and Australia

36. US economic statecraft in East Asia

Author:: Maryanne Kelton
Publication Date:: 05-2008
Content Type:: Journal Article
Journal:: International Relations of the Asia-Pacific
Institution:: Japan Association of International Relations
Abstract:: This article analyzes the reasons that led to the six United States forces withdrawals from South Korea between 1947 and 2008 and the Republic of Korea's responses to these policies. The article discusses the local and global aspects of these forces' functions and tasks and attempts to understand why Korea has not prepared itself for the withdrawal of the US forces throughout the years. The article will argue that there might be a seventh withdrawal of US forces from Korea in the near future, which South Korea and the USA should begin preparing for.
Topic:: Economics
Political Geography:: United States and East Asia

37. Regional Overview

Author:: Ralph A. Cossa and Brad Glosserman
Publication Date:: 10-2008
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Center for Strategic and International Studies
Abstract:: Hopes of progress in Six-Party Talks negotiations evident in the closing days of the previous quarter were quickly dashed as anticipated disagreements over verification of North Korea's nuclear declaration created a stalemate still in evidence at quarter's end. The only movement was backward, as “action for action” was replaced by inaction and worse. Last year, Secretary of State Condoleezza Rice made news by not showing up at the annual ASEAN Regional Forum ministerial. This year she went and hardly anyone noticed. The democratic process made for interesting watching this quarter, not only in Thailand and Malaysia, but in East Asia's most established democracy, as Japan saw its third leader in the 24 months since Prime Minister Koizumi departed the scene. The once presumably left for dead U.S.-India nuclear deal was reincarnated by the Indian Parliament this quarter with the U.S. Congress following suit at quarter's end and President Bush's signature in early October. Finally, the U.S. sneezed this quarter and the rest of the world did catch cold, even as Wall Street struggles with a serious bout of pneumonia. Economic policy also dominated the “foreign policy debate” between Senators Obama and McCain, with no questions and only sparse references to Asia throughout.
Topic:: Economics
Political Geography:: India, East Asia, Asia, and North Korea

38. Fighting irrelevance: An economic community 'with ASEAN characteristics'

Author:: John Ravenhill
Publication Date:: 12-2007
Content Type:: Working Paper
Institution:: Australian National University Department of International Relations
Abstract:: The Association of Southeast Asian Nations (ASEAN) enters its fifth decade of economic cooperation in more favourable circumstances than those experienced at the time of its thirtieth anniversary. Paradoxically, and contrary to expectations at the time, the financial crises of 1997—98 may have strengthened ASEAN. The backlash against what was perceived as an unsympathetic Western response to East Asian difficulties put ASEAN at centrestage in new regional cooperative arrangements. Moreover, rivalry between China and Japan for regional leadership has led them both to seek to negotiate regional partnerships with ASEAN as a whole. ASEAN, however, faces new challenges—particularly from rapid economic growth in China and India, and from the proliferation of preferential trade agreements (PTAs) (including a large number involving individual ASEAN members). ASEAN has made only slow progress in economic cooperation. The complete removal of tariffs has fallen behind schedule and is not due to be realised until 2010. The private sector makes little use of ASEAN's preferential arrangements because they afford little advantage over most-favoured-nation tariffs—certainly not sufficient to offset the costs of complying with paperwork, and the consequent delays experienced. ASEAN has made little progress on 'deeper integration' issues—the removal of 'beyond border' barriers to trade. Some of the bilateral PTAs that ASEAN countries have negotiated with extra-regional partners go further in removing barriers than ASEAN's own arrangements. ASEAN members continue to eschew binding commitments within their own economic collaboration despite making them within the World Trade Organization and in some of their bilateral PTAs. Liberalisation under ASEAN's auspices has not been sufficiently significant to encourage business groups to invest substantial resources in lobbying for deeper integration.
Topic:: International Relations and Economics
Political Geography:: Japan, China, India, Israel, East Asia, and Australia/Pacific

39. The European Union and China

Author:: Roberto Menotti
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Lowy Institute for International Policy
Abstract:: The EU is a newcomer to East Asian affairs, but its stake in the region is growing rapidly in light of China's economic clout. The European approach to China's rise differs profoundly from that of the US, due to geopolitical realities and a general belief in the benign effects of economic interdependence.
Topic:: Foreign Policy and Economics
Political Geography:: China, East Asia, and Asia

40. China and Economic Integration in East Asia: Implications for the United States

Author:: C. Fred Bergsten
Publication Date:: 03-2007
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: East Asia is clearly, if gradually and unevenly, moving toward regional economic integration. Market forces are leading the process, as firms construct production chains across the area that exploit the comparative advantage of its individual countries. Governments are now moving to build on those forces, and consolidate them, through a series of formal agreements to intensify their economic relationships and start creating an East Asian Community.
Topic:: Development and Economics
Political Geography:: United States, China, Israel, East Asia, and Asia

41. Economic Growth and India's Future?

Author:: Joydeep Mukherji
Publication Date:: 03-2006
Content Type:: Working Paper
Institution:: Center for the Advanced Study of India
Abstract:: Recent optimism about India is based on the view that the country may finally be on a higher growth trajectory after more than a decade of halting economic reform. Spurred by a balance of payments crisis a decade ago that pushed the government of India to nearly defaulting on its foreign debt, a series of coalition governments have slowly deregulated the once most-regulated economy outside the communist world. Over the years, the government has enlarged the role of market forces, given more freedom to the private sector, and cut barriers to domestic and foreign competition. At the same time, India's state governments have gained considerable autonomy from the central government, making India into the federal state envisaged in its constitution.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: India, East Asia, and Asia

42. India's New Entrepreneurial Classes: The High Growth Economy and Why it is Sustainable?

Author:: Sunil Bharti Mittal
Publication Date:: 02-2006
Content Type:: Working Paper
Institution:: Center for the Advanced Study of India
Abstract:: I am Francine Frankel, director of the Center for the Advanced Study of India, and it is my great pleasure this evening to introduce our speaker for CASI's Annual Lecture, Sunil Bharti Mittal, the founder, chairman, and group managing director, Bharti Enterprises. I hardly need tell this audience that Bharti Tele-Ventures is India's leading telecom conglomerate and its largest mobile service operator.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: India, East Asia, and Asia

43. Scorecard on Corporate Governance in East Asia

Author:: Stephen Y.L. Cheung and Hasung Jang
Publication Date:: 12-2006
Content Type:: Working Paper
Institution:: Centre for International Governance Innovation
Abstract:: The far reaching economic effects of the 1997 Asian financial crisis underscore the importance of structural reforms in the governance of the East Asian business sector. This paper measures the progress of corporate governance reforms in nine East Asian economies towards the guidelines established by the Pacific Economic Cooperation Council (PECC), as revealed empirically through two surveys. The first survey is a stock-taking exercise to take note of on-going reforms in corporate governance rules and regulations, while the second covers perceptions of the implementation and enforcement of corporate governance rules as seen by fund managers and analysts. This study indicates a divergence between the regulatory environment and market perceptions of corporate governance practices in the countries sampled. The survey results also show that, although the nine economies do not differ significantly in the corporate governance rules and regulations they have put in place, there is a significant difference in terms of market perceptions of their corporate governance practices. More than an academic exercise, this study is meant to share the experiences of corporate governance reform among East Asian economies.
Topic:: Economics, Government, and Industrial Policy
Political Geography:: Israel, East Asia, and Asia

44. Central Asia Between Competition and Cooperation

Author:: Yu Bin
Publication Date:: 12-2006
Content Type:: Policy Brief
Institution:: Foreign Policy In Focus
Abstract:: Great power competition in Central Asia ebbs and flows in a timeless and tireless fashion. Unlike in Europe and East Asia during the Cold War and after, the fault line for the current jockeying for position in Central Asia between Washington and Beijing is not easily discernible. Instead, fluidity, uncertainty, and even outright reversal of fortunes among the major players have been the norm.
Topic:: Cold War, Diplomacy, Economics, and International Cooperation
Political Geography:: Europe, Washington, Central Asia, and East Asia

45. China's Social Unrest: The Story Behind the Stories

Author:: Albert Kiedel
Publication Date:: 09-2006
Content Type:: Policy Brief
Institution:: Carnegie Endowment for International Peace
Abstract:: China is confronting widespread violent and even deadly social unrest, raising Communist Party alarms about national security. Some observers speculate that unrest could undermine China's national leadership, as it did in the Ukraine and the Philippines. Some U.S. policy makers might welcome unrest in China as a path to democracy and “freedom.” But rather than an opportunity to transform China's political order, China's social unrest should be understood as the unavoidable side effects—worsened by local corruption—of successful market reforms and expanded economic and social choice. Managing this unrest humanely requires accelerated reform of legal and social institutions with special attention to corruption. More violence would generate more suffering, potentially destabilizing East Asia and harming U.S. interests. The United States should encourage China to strengthen its social reconciliation capabilities, without making electoral political reform a prerequisite for intensifying engagement across the board.
Topic:: Civil Society, Development, and Economics
Political Geography:: United States, China, Ukraine, East Asia, and Asia

46. Asia's Labour-Driven Economic Development, Flying-Geese Style: An Unprecedented Opportunity for the Poor to Rise?

Author:: Terutomo Ozawa
Publication Date:: 06-2006
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: The notion of 'shared growth' was introduced by the World Bank in recognition of East Asia's rapid growth accompanied by poverty reduction. It emphasizes the criticality of pro-poor policies and institutional setups in the fast-developing East Asian economies. The efforts of these individual countries are, however, a necessary but not sufficient condition (explanation). There is a more essential, underlying region-wide mechanism that simultaneously promotes regionalized growth and specifically favours Asia's working mass of unskilled labour. Such an efficacious mechanism is posited in the 'flying-geese paradigm of comparative advantage recycling in labour-intensive goods'. The paper argues that a number of favourable factors have fortuitously coalesced to engender a considerably favourable condition for Asia's rapid catch-up growth in which unskilled labour (the poor) can participate as their countries' most vital input in labour-driven development.
Topic:: Development, Economics, and Poverty
Political Geography:: East Asia and Asia

47. The Rule of Law, Legal Traditions, and Economic Growth in East Asia

Author:: Meredith Woo-Cumings
Publication Date:: 05-2006
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper examines the literature on the rule of law and economic development, and in particular the influential argument by La Porta et al., on the superiority of the Anglo-American common law system in fostering financial development. In this paper I show that however compelling their argument might be, legal traditions and institutions do not determine the nature of the state, nor its likely role in the economy—nor do they critically determine the course of economic development. I build my case by examining the real and informal mechanisms of state intervention in the economy in East Asia.
Topic:: Development, Economics, and International Law
Political Geography:: America, Israel, and East Asia

48. Innovations, High-Tech Trade and Industrial Development: Theory, Evidence and Policy

Author:: Lakhwinder Singh
Publication Date:: 03-2006
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: Innovations spur science-based trade and industrial development in a fast changing pace of globalization. Knowledge accumulation and diffusion have been increasingly recognised as fundamental factors that play an important role in long-run economic growth. This paper focuses on the long-term innovation strategy of industrial and technological development in developing countries. Growth theory, empirical evidence and several indicators of innovation have been pressed into service to draw important lessons from historical experience of the developed and newly industrializing countries for the industrial development of the developing economies. Technology development and public technology policy experience of the East Asian countries have been examined to reinvent the role of public technology policy that can be adopted to develop national innovation system to nurture and build innovative capabilities in the developing economies in the dynamic global economy.
Topic:: Development, Economics, Industrial Policy, and International Trade and Finance
Political Geography:: East Asia

49. Roaring tiger or lumbering elephant?

Author:: Mark P Thirlwell
Publication Date:: 09-2006
Content Type:: Working Paper
Institution:: Lowy Institute for International Policy
Abstract:: In the past, there has been plenty of scepticism about India's economic prospects: for many, Charles De Gaulle's aphorism regarding Brazil, that it was a country with enormous potential, and always would be, seemed to apply equally well to the South Asian economy. While the 'tiger' economies of East Asia were enjoying economic take-off on the back of investment- and export-led growth, the lumbering Indian elephant seemed set to be a perpetual also-ran in the growth stakes. Yet following a series of reform efforts, first tentatively in the 1980s, and then with much more conviction in the 1990s, the Indian economic model has been transformed, and so too India's growth prospects. High profile successes in the new economy sectors of information technology (IT) and business process outsourcing (BPO), along with faster economic growth, triggered a widespread rethink regarding India's economic prospects, and a wave of foreign portfolio investment flowed into Indian markets. Perhaps India was set to be a tiger after all.
Topic:: Economics, Emerging Markets, and International Trade and Finance
Political Geography:: South Asia, India, East Asia, Asia, and Brazil

50. Taiwan In Search of a Strategic Consensus

Author:: Banning Garrett, Franklin Kramer, and Jonathan M. Adams
Publication Date:: 03-2006
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: At the beginning of 2006, Taiwan is confronted with difficult choices that it currently seems unprepared to face. Cross-Strait tensions have diminished in the last year and Taiwan's economy has grown at an annualized rate of about 3.6 percent, which is respectable if not robust by East Asian standards. Taiwan, however, also faces an East Asian future which likely includes an increasingly important role for its relations with the Mainland as China becomes an ever more important economic and political factor regionally and globally.
Topic:: Foreign Policy, Economics, and International Trade and Finance
Political Geography:: China, Taiwan, East Asia, and Asia

51. OECD Territorial Review of Japan

Publication Date:: 09-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: In recent years Japan has been challenged by important socioeconomic changes. Low economic growth, population ageing and depopulation, and new trade relationships with the East Asia region have made it increasingly necessary to transform the system established during the period of economic and demographic expansion.
Topic:: Development, Economics, and Emerging Markets
Political Geography:: Japan, Israel, and East Asia

52. Policy Coherence Towards East Asia: Development Challenges for OECD Countries

Author:: K. Fukasaku, M. Kawai, M.G. Plummer, and A. Trzeciak-Duval
Publication Date:: 05-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The East Asian development experience needs to be better understood — especially the region's clustered, sequential development process and neighbourhood effects linking economies at different levels of industrial development. How have different policy vectors transmitted by OECD countries, notably in the areas of trade, investment and aid, contributed to the development of the region? To what extent have the impacts of OECD-country policies depended on the capacity of East Asian economies to respond through their own public policies?
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Israel and East Asia

53. The Poverty Macroeconomic Policy Nexus: Some Short-run Analytics

Author:: George Mavrotas and S. Mansoob Murshed
Publication Date:: 12-2005
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain sectors may cause greater poverty reduction. The model involves a non-traded and a traded sector on the formal side of the economy. The former is more capital intensive and the latter more unskilled labour intensive. Increased employment in the traded sector is more pro-poor compared to a similar rise in the non-traded sector as the former draws workers out of poverty in the informal sector. The model in our paper analyses short-run effects of devaluation, a rise in the money supply induced by financial deepening, and taxation to discourage non-traded goods consumption. Financial deepening can induce greater output and reduce poverty. Other results are mixed and taxonomic. We also attempt to differentiate between the stylised experiences of East Asia and Latin America. East Asian economies have relied more heavily on labour-intensive manufactured exports, whereas Latin America has had a relatively greater share of capital intensive and natural resource based exports. In recent decades countries in these two regions have had differing experiences in poverty reduction, with poverty arguably declining more in East Asia.
Topic:: International Relations, Development, Economics, and Poverty
Political Geography:: East Asia and Latin America

54. The East Asian Experience: The Poverty of "Picking Winners"

Author:: Barry Desker and Deborah Elms
Publication Date:: 12-2005
Content Type:: Working Paper
Institution:: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:: Many leaders in Africa argue that East Asia's success in economic growth and development is due to special prowess in "picking winners." That is, the state is assume to have adequately identified future growth areas and effectively channeled investments into specific firms or industries. We argue, however, that this assessment is not accurate. Even where states have attempted to follow this path, they have frequently made a hash of it. The wrong sectors or firms have been identified. Public monies have been squandered or siphoned off for private enrichment. Instead, the successful East Asian states have focused their attention on consistently creating competitive market environments. They have invested in the hard and soft infrastructure (like road, ports and education) necessary for success in an increasingly globalized economy. It is these types of policies that currently hold out the greatest prospects for growth in Africa.
Topic:: Economics and Poverty
Political Geography:: Africa, Israel, and East Asia

55. The Current State of the Japanese Economy

Author:: Edward J. Lincoln
Publication Date:: 04-2005
Content Type:: Working Paper
Institution:: Council on Foreign Relations
Abstract:: No abstract is available.
Topic:: Development, Economics, and Government
Political Geography:: Japan, Israel, and East Asia

56. A Currency Basket for East Asia, Not Just China

Author:: John Williamson
Publication Date:: 08-2005
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: China recently announced that it is adopting a basket of currencies as the peg for its exchange rate instead of the US dollar. This announcement raises questions of how such a system works, whether other East Asian countries would be advised to follow China in adopting a basket numeraire, and whether it would be advantageous to these countries if they were all to adopt the same basket. This brief answers these questions.
Topic:: Economics, International Cooperation, and International Trade and Finance
Political Geography:: United States, Israel, East Asia, and Asia

57. Egypt after the Multi-Fiber Arrangement: Global Apparel and Textile Supply Chains as a Route for Industrial Upgrading

Author:: Dan Magder and Dan Magder
Publication Date:: 08-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Exporting through international supply chains was a successful way for East Asian countries to develop their textile and apparel industries in the 1970s and 1980s, but it is a less clear route for countries like Egypt trying to compete today. The challenge is particularly acute given the strength of competitors like China, and even more so in the post-MFA era. Some analysts suggest that "lean retailing" increases the importance of geography in exporting in the world of rapidly changing apparel fashion, in a way that could beneﬁt a country like Egypt with its proximity to European end markets. Using a supply chain model, this paper suggests that shortening lead times can indeed have an impact on proﬁts, but that the effect is not tremendous, being in the range of a 0.3 percent to 0.9 percent increase in proﬁts for every week of improvement in lead times. The study also ﬁnds that the business environment in Egypt lags key comparator countries in several areas that help the ﬁrms compete in global apparel chains, although recent reforms by the Egyptian government are working to address several of these aspects. It concludes by exploring to what extent geography, trade preferences, and local production factors may help Egypt's textile and apparel industry carve out a role for itself in global supply chains, and provide an engine to drive industrial upgrading throughout the country.
Topic:: Economics, Emerging Markets, and International Trade and Finance
Political Geography:: Europe, East Asia, North Africa, and Egypt

58. What Iraq and Argentina Might Learn from Each Other

Author:: Anna Gelpern
Publication Date:: 06-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Financial collapse usually triggers a flurry of market, academic, and policy innovation. The Latin American debt crisis of the 1980s produced the Brady Bonds and led to the rise of today's emerging markets. In the late 1990s, crises in Pakistan, Ecuador, and Ukraine helped teach the markets how to restructure international sovereign bonds. Crises in Mexico, Russia, Brazil, Turkey, and throughout East Asia raised doubts about the international system's ability to manage vast and rapid capital flows, and prompted a big-picture reassessment under the rubric “international financial architecture.” This included most famously the sovereign bankruptcy proposals discussed elsewhere in this volume.
Topic:: Development and Economics
Political Geography:: Pakistan, Russia, Turkey, Ukraine, Middle East, East Asia, Brazil, South America, Latin America, and Mexico

59. Global Economic Prospects: Slower But Still Solid Growth in 2005; Worries About Growth and Inflation for 2006

Author:: Michael Mussa
Publication Date:: 04-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: After surging to the highest growth rate in a generation, world real GDP is set to slow from a rate of just over 5 percent for 2004 to about 4 percent for 2005 and a tad slower for 2006. The economic slowdowns in several important economies in the second half of last year, including much of continental Europe and Japan, already make it clear that year-over-year growth will slow for 2005. But the continued strong growth of domestic demand in other countries, most notably the United States and China, virtually assures that global growth this year will not fall below potential.
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Japan, China, Europe, Israel, and East Asia

60. The Potential of International Policy Coordination

Author:: John Williamson
Publication Date:: 03-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: International economic policy coordination is an idea that is not nowadays at the top of the international agenda. The usual idea these days is that if each country pursues its own national interests, then the world will do as well as possible: There are no exploitable bargains of the type "it will pay [both][all] of us to change policies simultaneously even though if one of us made the change individually we would suffer" available. Even if there are no opportunities of that type (let us call them type A) available, there might still in principle be the chance of gaining by subscribing to a set of rules: Country X might expect to gain more over time from countries Y and Z respecting the rules than it would lose at other times from being obliged to modify its behavior according to the rules. Let us call these type B gains.
Topic:: International Relations and Economics
Political Geography:: United States and East Asia

61. The case for regional exchange rate arrangement in East Asia'

Author:: Takuji Kinkyo
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: The Asian crisis highlighted the difficulties for developing countries to actively manage exchange rates in an environment of high capital mobility. Now it became fashionable to argue that the exchange rate should be either allowed to float freely or irrevocably fixed. This paper examines the case for regional exchange rate arrangements as an instrument to enhance the manageability of exchange rates and discusses the options in East Asia. It critically assess the existing proposal of common basket peg system and suggests that East Asia should seek to create an Asian-version of regional monetary system modeled on the EMS.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: East Asia and Asia

62. Small Enterprises and Economic Policy

Author:: Simon Johnson and Anders Åslund
Publication Date:: 03-2004
Content Type:: Policy Brief
Institution:: Carnegie Endowment for International Peace
Abstract:: Institutions such as strong property rights and the rule of law are important for both long-run economic performance and short-run volatility. Developing good institutions is generally viewed as a desirable goal, but there is no agreed road map for such changes.
Topic:: Economics
Political Geography:: Israel, Eastern Europe, East Asia, and Latin America

63. Transpacific trade imbalances: causes and cures

Author:: Warwick McKibbin, Park Yung Chul, and Jong-Wha Lee
Publication Date:: 09-2004
Content Type:: Policy Brief
Institution:: Lowy Institute for International Policy
Abstract:: This paper explores the causes of the transpacific trade imbalances using an empirical global model. It also evaluates the impact of various policies to reduce these imbalances. We find the fundamental cause of trade imbalances since 1997 is changes in saving-investment gaps, attributed to the surge of the U.S fiscal deficits and the decline of East Asia's private investment after the 1997 financial crisis. Our simulation results show that a revaluation of East Asia's exchange rates by 10 percent (effectively a shift in monetary policy) cannot resolve the imbalances. We find East Asia's concerted efforts to stimulate aggregate demand can have significant impacts on trade balances globally, but the impact on the US trade balance is not large. US fiscal contraction is estimated to have large impacts on the US trade position overall and on the bilateral trade balances with East Asian economies. These results suggest that in order to improve the transpacific imbalance, macroeconomic adjustment will need to be made on both sides of the Pacific. lowy institute for international policy.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Israel and East Asia

64. India: the Next Economic Giant

Author:: Mark P Thirlwell
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: Lowy Institute for International Policy
Abstract:: The Indian economy is showing clear signs of realising its dormant potential. The impact of more than a decade of economic reforms, instigated by a 1991 balance of payments crisis, has now removed or at least mitigated some of the major economic distortions that have handicapped past economic performance. One important result has been a significant boost to the economy's overall potential growth rate. Another has been India's re-engagement with the global economy, which in turn has transformed the prospects of key sectors of the Indian economy. This transformation has been most visible in the case of information technology-related services exports, where India has already become an important global player. But there are also positive signs in the areas of merchandise trade and international capital flows. These trends will have important consequences for the international economy as a whole and for Australia in particular.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: India, East Asia, Asia, and Australia

65. Election Watch: Japan — Japan's party system: shifting the political axis, releasing economic reform

Author:: Malcolm Cook
Publication Date:: 02-2004
Content Type:: Policy Brief
Institution:: Lowy Institute for International Policy
Abstract:: Changes in Japan's party system offer new hope for Japan's long-delayed economic reform as the axis of voting power accelerated its shift to the urban areas. The upcoming Upper House1 elections will provide another opportunity to see how far these changes have come and how permanent they are. The Liberal Democratic Party (LDP) has dominated post-war Japanese politics due to the party's overwhelming support in Japan's declining rural areas. The LDP's iron grip on the rural vote has created and been maintained by a nexus of interests between LDP politicians, favoured construction companies and rural voters. This rural public works "glue" has been one of the main reasons the Japanese government has been unable to address its drastically declining fiscal position. The political power of Japan's small farming sector also explains why Japan's bilateral and multilateral free trade diplomacy has not progressed. The November 9 Lower House election results and the rise of a real alternative to the LDP promise to help Prime Minister Koizumi's three-year fight to "modernise" the LDP and make it more appealing to urban and younger voters. November 9's results also suggest that if Koizumi loses this intra-LDP battle, then in the next Lower House elections the LDP will lose. So whether Koizumi is successful or not, economic reform chances in Japan have been boosted. Australia's largest trading partner is better placed for free trade talks bilaterally and globally and to address its worrying fiscal situation, the largest threat looming over Japan's future prosperity.
Topic:: Development, Economics, and Politics
Political Geography:: Japan, Israel, East Asia, and Australia

66. What Went Right in Japan

Author:: Adam S. Posen
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Japan's recovery is strong. Real GDP growth will exceed 4 percent this year and likely be 3 percent or higher in 2005 and perhaps even 2006. The Japanese economy has been growing solidly for the last five quarters (average real 3.2 percent annualized rate), and the pace is sustainable, given Japan's underlying potential growth rate (which has risen to 2 to 2.5 percent per year) and the combination of catch-up growth closing the current output gap and some reforms that will raise the growth rate for quarters to come (though not permanently). Indicators of domestic demand beyond capital investment are increasingly positive, including housing starts bottoming out, inventories drawing down, and diminished deflation. Moreover, on the external side, while China was the main source of export growth in 2003, the composition of exports has become more balanced this year and is widening beyond that seen in other recoveries. Just as in the United States and other developed economies, a sharp slowdown in Chinese growth and a sustained further increase in energy prices represent the primary risks to the outlook.
Topic:: Development and Economics
Political Geography:: United States, Japan, China, Israel, East Asia, and Asia

67. Selective Intervention and Growth: The Case of Korea

Author:: Marcus Noland
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: This paper attempts to determine whether conditions amenable to successful selective interventions to capture cross-industry externalities are likely to be fulfilled in practice. Three criteria are proposed for good candidates for industrial promotion: that they have strong interindustry links to the rest of the economy, that they lead the rest of the economy in a causal sense, and that they be characterized by a high s hare of industry-specific innovations in output growth. According to these criteria, likely candidates for successful intervention are identified in the Korean data. It is found that, with one exception, none of the sectors promoted by the heavy and chemical industry (HCI) policy fulfills all three criteria.
Topic:: Development and Economics
Political Geography:: Israel, East Asia, and Korea

68. American Unilaterism, Foreign Economic Policy and the 'Securitisation' of Globalisation

Author:: Richard Higgott
Publication Date:: 10-2003
Content Type:: Working Paper
Institution:: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:: This paper traces the 'securitisation' of US foreign economic policy since the advent of the Bush administration. It does so with reference to US economic policy in East Asia. It argues that in the context of US economic and military preponderance in the world order, the US has been able to resist the temptation to link foreign economic and security policy. While there was evidence of the securitisation of economic globalisation in US policy from day one of the Bush administration, it was 9/11 that firmed up this trend. For the key members of the Bush foreign policy team, globalisation is now seen not simply in neo-liberal economic terms, but also through the lenses of the national security agenda of the United States. Economic globalisation is now not only a benefit, but also a 'security problem'. 9/11 offered the opportunity for what we might call the 'unilateralist-idealists', in the Bush administration, to set in train their project for a post-sovereign approach to American foreign policy. The paper identifies some intellectual contradictions in current US strategy and raises a series of question about the implication for world order of the consolidation of the trends identified in the paper.
Topic:: Security, Economics, and Globalization
Political Geography:: United States, America, and East Asia

69. A Global Race for Free Trade Agreements

Author:: Arne Melchior
Publication Date:: 11-2003
Content Type:: Working Paper
Institution:: Norwegian Institute of International Affairs
Abstract:: The article examines the currently expanding worldwide network of bilateral free trade agreements. Following regional integration in Europe and later the Americas, the process if East Asia has accelerated from 2002. A Distinctive feature of the current stage in the expansion of FTAs beyond geographical regions and into global space, hence challenging WTOs supremacy on inter-continental trade rules. Setbacks in the WTO Doha Round may stimulate a further move towards «global bilateralism». The more such agreements in place, the greater is the incentive for new ones. Even if political obstacles hinder some agreements, the process is currently accelerating. While it is rational for countries to pursue such agreements, they should in parallel work for multilateral trade liberalisation in order to reduce the discriminatory impact of FTAs. This is needed if we are to avoid that «Most Favoured Nation» treatment under the WTO actually becomes «Least Favoured Nation» treatment: Rules that only apply to countries that are left outside the «free trade race».
Topic:: Economics, Globalization, International Trade and Finance, and Politics
Political Geography:: America, Europe, and East Asia

70. The Politics of China's Shareholding System

Author:: Mary Comerford Cooper
Publication Date:: 06-2003
Content Type:: Working Paper
Institution:: Walter H. Shorenstein Asia-Pacific Research Center
Abstract:: This paper considers two questions. First, why did the Chinese government establish stock markets? Second, how have political interests shaped the key features of these markets? Based on both interviews and statistical analysis, the paper argues that China's top Party-State leaders attempted to create stock market institutions that allow the state to maintain control over listed companies, and over “the market” as a whole.
Topic:: Economics and Government
Political Geography:: China, Israel, East Asia, and Asia

71. Revaluing the renminbi: a case of 'déjà vu all over again'?

Author:: Mark P Thirlwell
Publication Date:: 11-2003
Content Type:: Policy Brief
Institution:: Lowy Institute for International Policy
Abstract:: There are strong parallels between today's US-China tensions over trade and US-Japan economic relations in the 1980s.
Topic:: Economics
Political Geography:: United States, Japan, China, Israel, East Asia, and Asia

72. Economic Leverage and the North Korean Nuclear Crisis

Author:: Kimberly Ann Elliott
Publication Date:: 04-2003
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Almost a decade ago, as the last nuclear crisis with North Korea was reaching a peak, I concluded the following about the potential utility of economic sanctions: The debate over US policy toward North Korea boils down to one deceptively simple question: what does Kim Il-sung want? No one can be sure of the answer and different interpretations have quite different policy implications. If the Great Leader views a nuclear weapons option as important to the survival of his regime, economic sanctions are unlikely to force him to give it up. But if he views the threat of developing nuclear weapons as a bargaining chip, some combination of carrots and sticks may induce him to trade it away.
Topic:: Diplomacy, Economics, and International Trade and Finance
Political Geography:: Israel, East Asia, and North Korea

73. The Difficulties of Discerning What's Too Tight: Taylor Rules and Japanese Monetary Policy

Author:: Adam S. Posen and Kenneth N. Kuttner
Publication Date:: 12-2003
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Observers have relied increasingly on simple reaction functions, such as the Taylor rule, to assess the conduct of monetary policy. Applying this approach to deflationary or near-zero inflation environments is problematic, however, and this paper examines two shortcomings of particular relevance to the Japanese case of the last decade. One is the unusually high degree of uncertainty associated with potential output in an environment of prolonged stagnation and deflation. Consequently, reaction function-based assessments of Japanese monetary policy are so sensitive to the chosen gauge of potential output as to be unreliable. The second shortcoming is the neglect of policy expectations, which become critically important as nominal interest rates approach zero. Using long-term bond yields, we identify five episodes since 1996 characterized by abrupt declines in Japanese inflation expectations. Policies undertaken by the Bank of Japan during this period did little to stabilize expectations, and the August 2000 interest rate increase appears to have intensified deflationary concerns.
Topic:: Climate Change, Economics, and International Trade and Finance
Political Geography:: Japan, Israel, East Asia, and Asia

74. Revitalizing the Economies of Japan and the United States

Author:: C. Fred Bergsten
Publication Date:: 06-2003
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The United States and Japan are the two largest national economies in the world. Since the early 1990s, they have been moving in opposite directions. The United States enjoyed an expansion of record duration from the end of the Gulf War in 1991 until early 2001, growing much faster than any other G-7 country and much faster than it had at any time since the Second World War. Japan's economy, by contrast, has been virtually stagnant since its financial bubble burst in the early 1990s and has clearly experienced its worst performance since its recovery from the ravages of the Pacific War.
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Japan, Israel, and East Asia

75. Innovation and Social Capital in Silicon Valley

Author:: Martin Kenney and Donald Patton
Publication Date:: 07-2003
Content Type:: Working Paper
Institution:: Berkeley Roundtable on the International Economy
Abstract:: The high cost regions of Europe, North America, and Japan recognize that the key to their economic vitality is innovation. Increasingly, many also accept that the primary units of competition based on high quality, innovative products are not nations, but firms within regions, some of which occasionally bridge national boundaries. This has resulted in a significant increase in interest in the nature and functioning of such regional economies, variously known as clusters or industrial districts.
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Europe, Israel, East Asia, and North America

76. How does globalisation affect local production and knowledge systems? The surgical instrument cluster of Tuttlingen, Germany

Author:: Gerhard Halder
Publication Date:: 03-2002
Content Type:: Working Paper
Institution:: Institute for Development and Peace
Abstract:: The recent discussion of the winners and losersfrom globalisation has given prominence to regional development and industrial clusters in the global organisation of production and know-how. Tuttlingen, in southern Germany, is the recognised world leader in the global surgical instruments industry. However, price competition from emerging low-cost locations in South and South/East Asia and Eastern Europe, and rapid technological developments in medical engineering pose new challenges for the Tuttlingen cluster. In the past, institutional joint action was one of the pillars of the cluster's success, but there are doubts as to whether such institutions can face the new challenges. New public-private initiatives suggest a way forward, but it is too early to gauge their impact. In the past there wereimportant examples of small and medium sized firms coming togetherin joint marketing, production, and research and development efforts. While they continue, local competition has become more intense, making inter-firm co-operation more difficult. Some firms do, however, co-operate with suppliers further down the value chain, particularly those in Pakistan and Malaysia. The new challenges are also leading to further differentiation, both amongst firms as well as between producers and traders within the cluster. The most radical forms of product and functional upgrading are being concentrated in the cluster' sleading large firms. Innovation seems to be linked to close ties with end-users, the concentration of knowledge in medical engineering, and changes in surgical practices and health care delivery. Thus, the cluster while the 'big fish' in its own pond of surgical instruments, is having to come to terms with being a 'small fry' in the larger sea that constitutes the global health care sector.
Topic:: Development, Economics, Globalization, and Regional Cooperation
Political Geography:: Europe, East Asia, and Germany

77. The Trezise Symposium on the Japanese Economy

Author:: Edward J. Lincoln
Publication Date:: 06-2002
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: The Japanese economy has undergone a decade of sluggish growth marked by three recessions, including the current one. This time, recession is accompanied by general price deflation, a situation unprecedented among industrialized nations since the Great Depression of the 1930s. Meanwhile, the financial sector sits on a rising mountain of bad loans. A serious financial crisis and deeper recession are real possibilities.
Topic:: Economics and International Trade and Finance
Political Geography:: Japan, Israel, and East Asia

78. The Benefits and Costs of Group Affiliation: Evidence from East Asia

Author:: Stijn Claessens, Joseph P.H. Fan, and Larry H.P. Lang
Publication Date:: 05-2002
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper investigates the benefits and associated agency costs of using internal capital markets through affiliating with groups using data of two thousand firms from nine East Asian economies between 1994-6. We find that mature and slow-growing firms with ownership structures more likely to create agency problems gain more from group affiliation, while young and high-growth firms more likely lose. Agency problems are important explanatory factors of firm value in economies outside Japan, but less so in Japan. Consistent with the literature, financially constrained firms benefit from group affiliation. Our results are robust to different time periods and estimation techniques.
Topic:: Economics and International Trade and Finance
Political Geography:: Israel and East Asia

79. Foreign Penetration of Japan's Investment-Banking Market: Will Japan Experience the "Wimbledon Effect"?

Author:: Nicole Pole
Publication Date:: 07-2002
Content Type:: Working Paper
Institution:: Walter H. Shorenstein Asia-Pacific Research Center
Abstract:: Foreign banks have long faced difficulties in attempting to enter certain Japanese financial markets. This is due partly to regulatory practices and partly to specific Japanese socioeconomic conditions, for instance the system of relationship banking. While retail banking is still a sector in which almost no foreigners have been able to succeed, some foreign financial institutions have been able to gain market share in investment and wholesale banking.
Topic:: Economics and International Trade and Finance
Political Geography:: Japan, Israel, East Asia, and Asia

80. The Looming Japanese Crisis

Author:: Adam S. Posen
Publication Date:: 05-2002
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: After more than a decade of economic stagnation and minimal structural change, Japan stands on the brink of outright financial crisis—the only debate is whether the Japanese government can dodge its imminent economic threats for another six months at most, or ride the wave of global expansion to throw still more money at these problems with decreasing effectiveness until the public debt becomes unsustainable (which should be no later than 2005). Either way, volatility in Japanese asset markets will be extremely high for the next 36 months, with significant declines on average in asset prices and the yen.
Topic:: Economics, Government, and International Trade and Finance
Political Geography:: Japan, Israel, and East Asia

81. Passive Savers and Fiscal Policy Effectiveness in Japan

Author:: Adam S. Posen and Kenneth N. Kuttner
Publication Date:: 04-2002
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The efficacy of fiscal policy in Japan in the last decade has been a subject of considerable dispute, and the coincidence of mounting deficits and continued stagnation has led some to conclude that fiscal policy was ineffective. This paper finds ample support for the opposite conclusion: exogenous fiscal policy shocks (as derived from a structural vector-autoregression model) had pronounced real effects in Japan. Expansionary fiscal policy was expansionary, and contractionary policy contractionary, consistent with the implications of conventional macroeconomic theory. A historical decomposition shows that Japan's burgeoning public debt stems almost entirely from the recession-caused slowdown in revenue growth, and that fiscal policy was at times procyclical rather than consistently expansionary. Direct examination of the long-run relationship between private saving, taxes, and spending confirms that any Ricardian effects of future public liabilities on saving were insufficient to offset the direct first-order effects of taxes and public expenditures. The passivity of Japanese savers therefore seems to have contributed to the efficacy of fiscal policy; otherwise, some combination of increased saving, capital outflow, and higher interest rates would have diminished its impact.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Japan, Israel, and East Asia

82. Japan — LDP Prognosis

Author:: Caspar Fithin
Publication Date:: 04-2001
Content Type:: Policy Brief
Institution:: Oxford Analytica
Abstract:: The ruling Liberal Democratic Party (LDP) will elect a new president on April 24. Given that the LDP is the largest party in parliament, its president will also become the country's prime minister. While the media and the public are demanding genuine leadership from the government, the LDP's structure militates strongly against forthright policy-making.
Topic:: Economics, Government, Political Economy, and Politics
Political Geography:: Japan and East Asia

83. Japan — Monetary Easing

Author:: Caspar Fithin
Publication Date:: 03-2001
Content Type:: Policy Brief
Institution:: Oxford Analytica
Abstract:: The Bank of Japan (BoJ) announced a new approach to monetary policy which effectively targets money supply growth and inflation on March 19. The BoJ has indicated that the immediate consequence of its measures to boost financial system liquidity will be to push short-term interest rates back to zero or virtually zero. It has pledged to maintain rates at this level until deflationary pressures are reversed and the consumer price index becomes positive. The BoJ's actions have the potential to lead to a revival in share prices, corporate activity and bank lending. If the initiative results in a sustained weakening of the yen, the economy may also benefit from stronger export growth. However, the effect of all of these measures will be blunted unless they are accompanied by the structural reforms which the government has for some time foreshadowed, but which have suffered from delay and indecision.
Topic:: Economics, Government, and International Trade and Finance
Political Geography:: Japan and East Asia

84. Foreign Direct Investment in New Electricity Generating Capacity in Developing Asia: Stakeholders, Risks, and the Search for a New Paradigm

Author:: Robert Thomas Crow
Publication Date:: 01-2001
Content Type:: Working Paper
Institution:: Walter H. Shorenstein Asia-Pacific Research Center
Abstract:: The rate of investment sufficient to provide developing Asia with a reasonably adequate supply of electricity is immense, ranging from a World Bank estimate of 2000 megawatts (MW) each month (which translates into an annual investment of about $35 billion per year) to even higher estimates. All of the larger countries of developing Asia have been looking for foreign direct investment (FDI) to provide a significant amount of the needed capital. In 1996, financial closings for new power projects in developing Asia reached $13.7 billion, or almost 40 percent of the lower range of the estimated requirement. Although data on the foreign share of the monetary value of financial closings is not available, it is likely to be over 80 percent. Thus, the foreign share of total direct investment in power projects in developing Asia appeared to have been around 30 percent before the East Asian currency crisis.
Topic:: Economics, Energy Policy, and International Trade and Finance
Political Geography:: East Asia and Asia

85. Finance and Changing US-Japan Relations: Convergence Without Leverage—Until Now

Author:: Adam S. Posen
Publication Date:: 08-2001
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: In the postwar era, US-Japan economic relations have been characterized by substantial tensions, yet this has not damaged the underlying security relationship or critically harmed the multilateral economic framework. In fact, these two economies have become more integrated over time even as these tensions played out. These tensions, however, have required an enormous expenditure of political capital and officials' time on both sides of the Pacific and have led to foregone opportunities for institution building and policy coordination. They have deepened since Japan “caught up” with the United States around 1980, and Japanese and US firms began increasingly to compete for profits and market share in the same sectors. Moreover, as both the US and Japanese economies continue to mature – both in terms of the age of their populations and their industrial mix – they will likely face even greater tensions between them over allocating the management and costs of industrial adjustment.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: United States, Japan, Israel, and East Asia

86. Rating Banks in Emerging Markets: What Credit Rating Agencies Should Learn From Financial Indicators

Author:: Liliana Rojas-Suarez
Publication Date:: 05-2001
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The rating agencies' and bank supervisors' records of prompt identification of banking problems in emerging markets has not been satisfactory. This paper suggests that such deficiencies could be explained by the use of financial indicators that, while appropriate for industrial countries, do not work in emerging markets. Among the conclusions, this paper shows that the most commonly used indicator of banking problems in industrial countries, the capital-to-asset ratio, has performed poorly as an indicator of banking problems in Latin America and East Asia. This is because of (a) severe deficiencies in the accounting and regulatory framework and (b) lack of liquid markets for bank shares, subordinated debt and other bank liabilities and assets needed to validate the “real” worth of a bank as opposed to its accounting value.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: East Asia and Latin America

87. Unchanging Innovation and Changing Economic Performance in Japan

Author:: Adam S. Posen
Publication Date:: 05-2001
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The Toyota Commemorative Museum of Industry and Technology gives its visitors much to ponder. Established at the site in Nagoya where in 1911 Sakichi Toyoda founded his automatic loom factory (the basis of the family fortune, which later funded his son Kiichiro's development of automobile production), the museum was opened on June 11, 1994, the 100th anniversary of Toyoda's birth. It is a popular stop on field trips for Japanese schoolchildren, who are required to study in the 3rd grade the automobile industry. The messages, which Toyota wishes to instill in its young visitors, are the importance of “making things” and of “creativity and research.” And confronting all museum visitors upon entry, having central place in the vast and largely empty first room of the exhibits, is Sakichi Toyoda's one-of-a-kind vertical circular loom.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Japan, Israel, and East Asia

88. Foreign Direct Investment in China: Effects on Growth and Economic Performance

Author:: Edward M. Graham and Erika Wada
Publication Date:: 04-2001
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: By almost all accounts, foreign direct investment (FDI) in China has been one of the major success stories of the past 10 years. Starting from a base of less than $19 billion in 1990, the stock of FDI in China rose to over $300 billion at the end of 1999. Ranked by the stock of inward FDI, China thus has become the leader among all developing nations and second among the APEC nations (only the United States holds a larger stock of inward FDI). China's FDI consists largely of greenfield investment, while inward FDI in the United States by contrast has been generated more by takeover of existing enterprises than by new establishment, a point developed later in this paper. The majority of FDI in China has originated from elsewhere in developing Asia (i.e., not including Japan). Hong Kong, now a largely self-governing “special autonomous region” of China itself, has been the largest source of record. The dominance of Hong Kong, however, is somewhat illusory in that much FDI nominally from Hong Kong in reality is from elsewhere. Some of what is listed as Hong Kong-source FDI in China is, in fact, investment by domestic Chinese that is “round-tripped” through Hong Kong. Other FDI in China listed as Hong Kong in origin is in reality from various western nations and Taiwan that is placed into China via Hong Kong intermediaries. Alas, no published records exist to indicate exactly how much FDI in China that is nominally from Hong Kong is in fact attributable to other nations.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: United States, Japan, China, Israel, East Asia, Asia, and Hong Kong

89. Asia Pacific -- Reform Politics

Author:: Oxford Analytica
Publication Date:: 03-2000
Content Type:: Policy Brief
Institution:: Oxford Analytica
Abstract:: While the region has now emerged from recession, economic reforms remain incomplete and politically contentious. There is a risk that complacency and intransigence will weaken the momentum behind reforms before their full benefits can be felt. For countries not immediately enveloped by it, the East Asian crisis laid bare the risks associated with postponing economic reform without necessarily producing change.
Topic:: Economics, Political Economy, and Politics
Political Geography:: East Asia

90. A New Beginning: Recasting the U.S.-Japan Economic Relationship

Author:: Bruce Stokes
Publication Date:: 07-2000
Content Type:: Working Paper
Institution:: Council on Foreign Relations
Abstract:: The time is ripe for a bold new initiative to recast the U.S.-Japan economic partnership for the 21st century. A new Japan is emerging. Foreign investment is on the rise. Tokyo is deregulating and restructuring its economy. A new generation of Japanese entrepreneurs and venture capitalists has arrived on the stage.
Topic:: Economics and Political Economy
Political Geography:: United States, Japan, Israel, East Asia, Asia, and North Africa

91. Economic Crisis and Corporate Reform in East Asia

Author:: Meredith Woo-Cumings
Publication Date:: 06-2000
Content Type:: Working Paper
Institution:: Council on Foreign Relations
Abstract:: The Asian financial crisis of 1997–98 involved, among other things, a failure of regulation. Some believe this failure is endemic to global capitalism, and others believe it was profoundly local and idiosyncratic, emanating from regulatory flaws in the affected countries, stretching an arc from Thailand and Indonesia to Korea and Japan. There is also a debate about the nature of the regulation that failed. Some argue that the crisis emanated from a surfeit of nettlesome regulations and endemic industrial policy; others claim it happened for want of effective regulations and (even) industrial policy. Across the hypotenuse of these disagreements, however, stretches a universal recognition that regulatory infrastructure and institutions do matter and that they must play a major role in the way we think about economic development. After the miracle years in East Asia, “good governance” has become the Spirit of the Age.
Topic:: Economics and Political Economy
Political Geography:: United States, Japan, Indonesia, Israel, East Asia, Asia, Korea, and Thailand

92. The Paradox of Free Market Democracy: Indonesia and the Problems Facing Neoliberal Reform

Author:: Amy L. Chua
Publication Date:: 06-2000
Content Type:: Working Paper
Institution:: Council on Foreign Relations
Abstract:: This paper will situate the recent problems in Indonesia in a more general framework that I will call the paradox of free-market democracy. The basic thesis I will advance is as follows. In Indonesia, as in many developing countries, class and ethnicity overlap in a distinctive and potentially explosive way: namely, in the form of a starkly economically dominant ethnic minority—here, the Sino-Indonesians. In such circumstances, contrary to conventional wisdom, markets and democracy may not be mutually reinforcing. On the contrary, the combined pursuit of marketization and democratization in Indonesia may catalyze ethnic tensions in highly determinate and predictable ways, with potentially very serious consequences, including the subversion of markets and democracy themselves. The principal challenge for neoliberal reform in Indonesia will be to find institutions capable of grappling with the problems of rapid democratization in the face of pervasive poverty, ethnic division, and an historically resented, market-dominant “outsider” minority.
Topic:: Economics and Political Economy
Political Geography:: United States, Israel, and East Asia

93. The New Asian Challenge

Author:: C. Fred Bergsten
Publication Date:: 03-2000
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The initial postwar challenge from East Asia was economic. Japan crashed back into global markets in the 1960s, became the largest surplus and creditor country in the 1980s, and was viewed by many as the world's dominant economy by 1990. The newly industrialized countries (Korea, Taiwan, Hong Kong, Singapore) followed suit on a smaller but still substantial scale shortly thereafter. China only re-entered world commerce in the 1980s but has now become the second largest economy (in purchasing power terms), the second largest recipient of foreign direct investment inflows, and the second largest holder of monetary reserves. Indonesia and most of Southeast Asia grew at 7 percent for two or more decades. The oil crises of the 1970s and the financial crises of the late 1990s injected temporary setbacks but East Asia has clearly become a third major pole of the world economy, along with North America and Western Europe.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Japan, China, Europe, Israel, Taiwan, East Asia, Asia, North America, Korea, Singapore, and Hong Kong

94. When Labour and Capital Collude: The Varieties of Welfare Capitalism and Early Retirement in Europe, Japan and the USA

Author:: Bernhard Ebbinghaus
Publication Date:: 01-2000
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The institutionalisation of early retirement has become a universal feature of postwar industrial economies, though there are significant cross-national variations. This paper studies the impact of different types of welfare regimes, production systems and labour relations on early exit from work. After an analysis of the main trends, the paper discusses the costs and benefits of early retirement for the various actors — labour, capital and the state — at different levels. The paper outlines both the “pull” and “push” factors of early exit. It first compares the distinct welfare state regimes and private occupational pensions in their impact on early retirement. Then it looks at the labour-shedding strategies inherent to particular employment regimes, production systems and financial governance structures. Finally, the impact of particular industrial relations systems, and especially the role of unions is discussed. The paper finds intricate “institutional complementarities” between particular welfare states, production regimes and industrial relations systems, and these structure the incentives under which actors make decisions on work and retirement. The paper argues that the “collusion” between capital, labour and the state in pursuing early retirement is not merely following a labour-shedding strategy to ease mass unemployment, but also caused by the need for economic restructuration, the downsizing pressures from financial markets, the maintenance of peaceful labour relations, and the consequences of a seniority employment system.
Topic:: Economics
Political Geography:: United States, Japan, Europe, and East Asia

95. Japan—Economic Recovery

Author:: Oxford Analytica
Publication Date:: 10-1999
Content Type:: Policy Brief
Institution:: Oxford Analytica
Abstract:: Pessimism surrounding the Japanese economy has lessened as, against most expectations, recovery continues to take hold. Analysts who predicted further contraction in Japan's GDP during fiscal 1999 have altered to a more optimistic outlook. The reason for this turnaround is a general change in perception of the recession. Rather than the downturn being part of a decade-long stagnation persisting since the collapse of the bubble economy in 1991, the recession was in fact of more recent origin and, therefore, of a less intractable nature than commonly supposed.
Topic:: Economics
Political Geography:: Japan and East Asia

96. The Crisis in Asia: An Empirical Assessment

Author:: Warwick McKibbin
Publication Date:: 12-1999
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: The economies of South East Asia and Korea have been shaken by a financial and economic crisis that has enveloped the region since mid 1997. There are competing explanations for the cause of the crisis however most commentators would agree that a major shock that impacted on the countries has been a dramatic increase in the perceived risks of investing in these economies. This paper explores the impact of a re-evaluation of the risk in the Asian economies focussing on the differential real consequences of a temporary versus more permanent rise in risk. It contributes to our understanding of the possible consequences of the Asia crisis by applying a global simulation model that captures both the flow of goods as well as international capital flows between countries. The real impacts on the Asian economies of a rise in risk perceptions in the model are large and consistent with observed adjustment. However the spillovers to the rest of the world are relatively small because the loss in export demand that accompanies the crisis in Asia is offset by a fall in long term interest rates as capital flows out of Asia into the non-Asian OECD economies. Thus strong domestic demand in economies such as the US induced by the general equilibrium effects of the reallocation of financial capital can more than offset the consequences of lower export growth. The analysis also highlights the impacts on global trade balances reflecting the movements of global capital and points to both potential problems and lesson for policymakers over the coming years.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: China, Israel, East Asia, and Asia

97. The Global Economic Impacts of Trade and Financial Reform in China

Author:: Warwick McKibbin and KK Tang
Publication Date:: 12-1999
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: Despite the setbacks from the recent Asian currency crisis, the ascendancy of Asia as an economic centre of world economic activity is likely to continue into the 21st century. A key issue that will shape the role of Asia, and indeed the shape of the world economy in the 21st century, is the economic development of China. To date China has successfully weathered the currency storm in Asia and continues on a program of economic reform. If anything, the problems of Japan and Korea provide powerful lessons for other countries undergoing rapid economic growth and structural change. These lessons include the importance of a well developed financial sector with lending and investment decisions based on market signals rather than government directives. Whether China can further integrate smoothly into global markets and sustain the fast growth of the last few decades will be a crucial development in the world economy. In this paper, we explore the impacts of continued Chinese economic reform with a focus on the role of international financial flows both in the adjustment within China as well as in the transmission of Chinese reforms to the rest of the world.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: China, Israel, East Asia, and Asia

98. Regional and Multilateral Trade Liberalization: The Effects on Trade, Investment and Welfare

Author:: Warwick McKibbin
Publication Date:: 12-1999
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: This paper explores the impact on economies of trade liberalization under alternative regional and multilateral arrangements: unilateral liberalization; liberalization as part of the ASEAN regional grouping; liberalization as part of the APEC regional grouping; or liberalization as part of a multilateral trade liberalization regime. The paper is based on a Dynamic Intertemporal General Equilibrium model (DIGEM) called the Asia-Pacific G-Cubed Model. It is shown that the long run gains from a country's own liberalization tend to be large relative to the gains from other countries liberalizing although this varies across countries. It is also shown that there is a significant difference between the effects on GDP (production location) and the effects on consumption per capita of the alternative liberalization approaches across countries. The timing of liberalization is also shown to matter. With open capital markets the gains from credibly announced trade liberalization are realized before the reforms are put in place because there is a rise in global investment which raises the global capital stock. In addition there is a reallocation of capital via financial market adjustment. This paper also demonstrates that for some economies, there can be short run adjustment costs to trade liberalization because resources cannot be instantly reallocated across sectors in an economy. These adjustment costs from own liberalization can be reduced if more countries also liberalize. The nature of the dynamic adjustment suggests that other macroeconomic policies may play an important role during the early period of phased-in trade liberalization.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: China, Israel, East Asia, and Asia

99. Rapid Economic Growth in China: Implications for the World Economy

Author:: Warwick McKibbin and Yiping Huang
Publication Date:: 12-1999
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: Rapid growth of the Chinese economy in the past decade and its potential for strong growth into the foreseeable future have caused anxieties in the rest of the world. Some commentators see Chinese growth wholly in terms of competition for trade and investment opportunities with other developing economies and a major cause of structural adjustments in the advanced industrialized economies. In particular there have been warnings of severe consequences for international agricultural markets. In this paper we use a dynamic general equilibrium model called the G-CUBED model (developed by McKibbin and Wilcoxen) to explore possible future paths of the Chinese economy based on projections of population growth, sectoral productivity growth, energy efficiency and technical change in the Chinese economy. This model captures not only the composition of the direct trade impacts of developments in the Chinese economy but also the implications of the endogenous flows of financial capital on macroeconomic adjustment in the world economy. The study focuses on the period from 1990 to 2020. Rather than being a problem for the world economy, we find strong growth in China is beneficial for the world economy directly through raising world incomes.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: China, Israel, East Asia, and Asia

100. The Transmission of Productivity and Investment Shocks in the Asia Pacific Region

Author:: Warwick McKibbin
Publication Date:: 12-1999
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: An important aspect of macroeconomic interdependence in the Asia Pacific region is the adjustment of trade and current account balances in response to changes in saving and investment rates in individual economies. Greater trade flows, reliance on imported intermediate goods as well as more integrated capital markets imply that shifts in private or public saving and investment rates in an economy in the region can potentially have large impacts on other economies. This paper explores the quantitative nature of these linkages by focusing on a number of shocks within the context of a new dynamic multi-sector global model called the Asia-Pacific G-Cubed Model (AP-GCUBED). This model integrates sectoral adjustment with macroeconomic interdependence including explicit treatment of capital flows to explore the implications of a variety of productivity and investment shocks in the Asia Pacific Region. The first shock considered is a permanent decline in private investment in Japan. The second shock is a temporary rise in total factor productivity growth in China. The fall in Japanese investment is found to have a significant effect on trade flows and financial flows in the region whereas the rise in Chinese productivity has a quite different effect on the region.
Topic:: Economics, Emerging Markets, and Globalization
Political Geography:: China, Israel, East Asia, and Asia

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COLUMBIA UNIVERSITY PRESS