Abstract
Why has the military dimension of the US-Japan relationship remained the central point of reference for Japanese foreign relations, despite the demise of the Soviet Union? Why has Japan, deepening economic interdependence notwithstanding, remained politically distant from East Asia? Based on analysis of statements by Japanese and US political elites and academics regarding the US-Japan alliance, this article argues that the rise of China, coterminous with the rise of ‘Asia’, challenges the notion of the ‘West’ as, according to standards of industrial modernity, a superior social and political order. These moving ideational boundaries question Japan’s position as the most advanced Asian nation and member of the (Western) international society of states. Therefore, the US-Japan alliance has since the mid-1990s become increasingly important for securing Japan in the ‘West’ and the ‘West’s boundaries in East Asia.
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Country or Region: China
The Asian Development Bank and Korea Capital Market Institute, eds.
Summary
The ever-growing deepening, maturity, sophistication, and integration of Asia’s financial systems bring an increased risk of contagion during periods of financial distress. As a result, investment in financial safety nets for cushioning against the negative impacts of financial contagion is necessary. Further, there remains to be addressed the issue of the impact on Asia of the financial reform measures being initiated at the global level in response to the crisis of 2008.
This book lays out an analytical framework for addressing capital market integration at the regional level. It also projects the likely impacts of regional capital market integration by operationalizing this framework through the application of updated data.
This is a copublishing effort between ADB and Korea Capital Market Institute (KCMI), with further collaboration by the Peterson Institute for International Economics.
Terhalle, Maximilian
Summary
Why do international orders lack systemic legitimacy? This study examines the developing relationship between the US and China and explores the ways in which these two global powers are transitioning to a new global order, albeit one with significant risks and uncertainties for governance and legitimacy.
Terhalle argues that the financial crisis of 2008/09 established China as the key challenger to the United States amid a process of order transition. Subsequent disagreements between these two powers about the future shape of the global order’s legitimacy have manifested themselves in their intense competition with regard to spheres of influence in East Asia, the environment and ideology-related aspects of the order. In positing a new theoretical framework for understanding order and legitimacy in International Relations, The Transition of Global Order offers a significant contribution to the debate around world politics and the new global order.
Simon, Luis
Abstract
This article examines how, in a global strategic context presided by the rise of Asia and the US rebalance towards that region, Europeans are contributing to transatlantic burden-sharing—whether individually or through the EU/NATO. As Asian powers reach westward and the US shifts its strategic priorities eastward, classical geostrategic delimitations become gradually tenuous. Particularly important are the ‘middle spaces’ of the Indian Ocean, central Asia and the Arctic, in that they constitute the main avenues of communication between the Asia–Pacific and the European neighbourhood. The article seeks to understand how evolving geostrategic dynamics in Europe, the ‘middle spaces’ and the Asia–Pacific relate to each other, and how they might impinge on discussions on transatlantic burden-sharing. It is argued that the ability of Europeans to contribute to a more equitable transatlantic burden-sharing revolves around two main tenets. First, by engaging in the ‘middle spaces’, Europe’s key powers and institutions are helping to underpin a balance of power in these regions. Second, by stepping up their diplomatic and economic role in the Asia–Pacific, strengthening their security ties to (US) regional allies and maintaining an EU-wide arms embargo on China, Europeans are broadly complementing US efforts in that key region. There are a number of factors that stand in the way of a meaningful European engagement in the ‘middle spaces’ and the Asia–Pacific, including divergent security priorities among Europeans, the impact of budgetary austerity on European defence capabilities and a tendency to confine foreign policy to the immediate neighbourhood. The article discusses the implications of those obstacles and outlines some ways in which they might be overcome.
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Pardo, Ramon Pacheco, and Pradumna B. Rana
Abstract
Three decades of financial crises culminating in the global financial crisis have prompted the development of multilayered global financial governance. This article examines the relationship between the global and regional layers by analyzing the case of the global and ASEAN+3 financial safety nets. Making use of regime theory, we examine the evolution of the characteristics, main institutions, goals, and behavioral expectations of these two nets. The article argues that the ASEAN+3 regional financial safety net, which was mostly developed following the East Asian financial crisis of 1997, complements rather than undermines the global financial safety net. Similar characteristics, goals, and behavioral expectations underpin this complementarity.
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Otero-Iglesias, Miguel, and Mattias Vermeiren
Abstract
The domestic institutions of China’s state-permeated market economy (SPME) have been conducive to the consolidation of an investment- and export-led growth model that has transformed China from a low- to middle-income country. Since the global financial crisis Chinese authorities have become increasingly disposed to internationalizing the renminbi (RMB) to address the external monetary vulnerabilities arising from their economy’s excessive dependency on the dollar. We adopt a comparative capitalism perspective to argue that China’s international monetary ambition is incompatible with the domestic financial institutions of its SPME and growth model. The success of RMB internationalization hinges on the implementation of far-reaching domestic institutional reforms that would overhaul the key domestic financial institutions of its SPME. On the basis of a comprehensive analysis of the complementarities between these institutions and their role in China’s SPME and growth model, it is argued that the political capacity and resolve of the Chinese government to adopt these reforms can be called into question.
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Nölke, Andreas
Abstract
China plays a ‘mainstream’ role in global banking negotiations and does not articulate positions that considerably contradict those of the dominant actors (for example, the United States or United Kingdom). Still, the Chinese banking sector differs quite considerably from those of Western economies. In order to understand the Chinese stance on international banking regulation, we need to look at the development of domestic regulation in China. An analysis of institutional changes in Chinese banking regulations highlights the importance of various political-economic factions that have different positions on banking regulation. These factions are a core ingredient of the Chinese state-permeated model of capitalism. Moreover, it is impossible to understand the development of this type of capitalism without taking the size of the economy and the timing of its historical insertion into global capitalism into account.
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Melissen, Jan, and Yul Sohn, eds
Summary
Set against the backdrop of tensions in East Asia, this book analyzes how East Asia’s “new middle powers” and emerging powers employ public diplomacy as a key element of their foreign policy strategy and in so doing influence regional power dynamics. The volume brings together contributions from an international and influential group of scholars, who are leading debates on public diplomacy within East Asia. Where the study of public diplomacy has so far focused primarily on the West, the essays in this book highlight the distinct strategies of East Asian powers and demonstrate that understanding public diplomacy requires studying its strategies and practices outside as much as within the Western world. A focus on public diplomacy likewise gives us a more varied picture of state-to-state relations in East Asia.
McNally, Christopher A
Abstract
Over the past 7 years the Chinese government has begun in earnest a gradual process of seeking a more internationalized currency. By conceptualizing China’s domestic political economy as having generated Sino-capitalism, this article utilizes a ‘second image’ explanation to elucidate the logic of RMB internationalization policies. Therefore, rather than focusing on international incentives and constraints as they affect RMB internationalization the aim is to trace the origins of China’s unique policy stance with historical institutional analysis. The article begins with conceptualizing the domestic logic of Sino-capitalism and then highlights key aspects of Sino-capitalism’s institutional arrangements and policy approaches as they shape RMB internationalization. The article ends with arguing that the basic institutional logic and policy stances of Sino-capitalism are here to stay. With regard to RMB internationalization this indicates that full-scale liberalization measures, especially of China’s capital account, are unlikely to be undertaken in the near future. However, Sino-capitalism’s logic opens up new avenues by which China, as it becomes an ever larger part of the global political economy, could gradually foster an international currency.
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Kydd, Andrew H
Abstract
North Korea is a failed state waiting to happen. It imposes horrific privations on its own citizens as well as serious security threats on its neighbors and the United States. For twenty years, South Korea, the United States, and China negotiated with North Korea in hopes of inducing it to abandon its nuclear weapons program, reconcile with South Korea, and reform its economy. These negotiations failed to achieve their objectives and have been largely abandoned. North Korea is now a proud nuclear weapons state, defying both its adversaries to the south and its Chinese patrons to the north. Its young new leader, Kim Jong-un, shows no sign of undertaking economic reforms or opening to the south. In response, South Korea and the United States have formally adopted the goal of unification,1 and have seemingly hunkered down to await a North Korean collapse.
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Kawai, Masahiro, Peter J. Morgan, and Pradumna B. Rana
Summary
The global financial crisis of 2007-2009 exposed flaws and shortcomings in the global economic architecture, and has sparked an international debate about possible remedies for them. The postwar global architecture was essentially guided by the major developed economies, and was centered around the IMF, the GATT – the predecessor of the WTO – and the World Bank. Today, however, the balance of economic and financial power is shifting toward the emerging economies, especially those in Asia, and both global governance and economic policy thinking are beginning to reflect this shift. This book addresses the important question of how a regional architecture, particularly one in Asia, can induce a supply of regional public goods that can complement and strengthen the global public goods supplied through the global architecture. These public goods include institutions to help maintain financial stability, support more open
trading regimes and promote sustainable economic development.
Kalinowski, Thomas
Abstract
The East Asian G20 members – China, Japan and Korea – are playing an increasingly important role in governing the global economy. Their global political rise is frequently discussed in binary terms in which the ‘realist’ assumption of inevitable conflict between rising and declining powers is contrasted with the ‘liberal’ assumption of the region’s growing integration into international institutions. This article offers an alternative explanation for East Asia’s global political role by shifting attention to the internal dynamics of the East Asian development model. This ‘second image’ interpretation of international political economy focuses on the ways in which domestic political economies influence international negotiations and institutions. Furthermore, this article departs from a focus on national political economies and considers the global role of the East Asian model of capitalism as such. At the empirical level, this article investigates the role of East Asian G20 members in international macroeconomic coordination and in reducing global economic imbalances.
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Gottwald, Jörn-Carsten, and Sebastian Bersick
Abstract
The emergence of the People’s Republic of China (PRC, henceforth also China) as a major power raises fundamental questions regarding the future of global financial governance. China is seen to represent a new force in defining the ‘rules of the game’ (Douglas C. North) of global finance, particularly within the new G20 framework. This expectation, however, contrasts sharply with traditional views of China prioritizing sovereignty and therefore distancing itself from ambitious multilateralism. From a Chinese perspective, the contrast between external expectations regarding China’s future role and its traditional highly concentrated international involvement is striking. In terms of policy initiatives and proposals for institutional reform, the PRC has so far kept a low profile. This gap between high expectations due to a fundamental shift in opportunities and relatively low policy outcomes due to a hesitant revision of China’s role conception can be explained through an analysis of the effects of domestic demands, foreign expectations and traditional role conceptions. The article thus takes a role-theoretical approach to analyse the ongoing shift of China’s policy in global financial governance in the context of the G20. It reveals a significant revision of China’s key positions regarding global governance: it takes on more and more responsibility, compromises on sovereignty and supports the emergence of a new global configuration of actors. The Chinese leadership has not, however, started to push for global financial regulation with Chinese characteristics. As we argue, this is because a clear consensus on a new national role conception has not emerged (yet).
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Gottschlich, Pierre
Abstract
The article deals with bilateral relations between India and Myanmar. It argues that the current transformation processes offer a unique opportunity for a major readjustment of India’s foreign policy towards Myanmar. In taking on India’s perspective, it assesses the history, current state of and prospects for the relationship between New Delhi and Naypyidaw in six policy areas: democratization and stability; security in India’s Northeast region and illegal migration; trade and infrastructure; energy security; development cooperation; and the role of China.
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Gaenssmantel, Frank
Abstract
This article examines why and how China upgraded its engagement with the European Union (EU) in the years between 2001 and 2004, with reference to pre-existing foreign policy traditions and practices in reform-era China. It argues that most of the observed changes can be explained with reference to two dynamics. First, the changing international environment, mostly with regard to the roles of the United States and the EU, challenged the established approach to foreign policy inherited from Deng Xiaoping, China’s pre-eminent leadership figure from the late 1970s to the mid-1990s. In this sense, the shift towards the EU was part of wider efforts to solve this dilemma. Second, differences in how various groups in the Chinese foreign policy establishment understood and implemented Deng’s guidelines and their respective influence in policy-making can help to grasp some of the more specific developments in Chinese policy towards the EU in the early 2000s. To supplement this main claim, the article also critically evaluates the changes less well explained by these two dynamics and proposes additional explanations.
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