Asian Regionalism ASEAN Northeast Asia Outline Economic development

Asian Regionalism? • ASEAN • Northeast Asia

Outline • Economic development – Flying geese, falling geese • Economic interdependence • ASEAN • Northeast Asia

Postwar Development I • Flying geese pattern of economic development, by industry

Postwar Development II • Flying geese pattern of economic development, by region

Trade Interdependence

ASEAN: overview • Association of Southeast Asian Nations • 10 member states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, & Vietnam • home to 642 million people • collective GDP of US$2. 8 trillion

ASEAN: founding (1967) • 5 founding members: – Thailand, Malaysia, Singapore, Indonesia, Philippines • Bangkok Declaration of 1967: – accelerate economic growth – promote regional peace and stability – contain the spread of communism

Arc of Containment

End of Cold War • ASEAN Free Trade Area • initiated at ASEAN summit in 1992 • comprehensive program of regional tariff reduction • program later broadened and accelerated • reaffirmed during Asian Financial Crisis of 1997 -98

End of Cold War • • • Expansion of ASEAN 1995: Vietnam 1997: Laos 1997: Myanmar 1999: Cambodia

ASEAN: External Links • A joint forum with Japan was established in 1977 • A cooperation agreement with the European Community was signed in 1980 • ``ASEAN + 3”: regular series of meetings at the cabinet and head-of-government levels with Japan, China, and South Korea since 1997

ASEAN: Trade Partners

Net Inflow of FDI to ASEAN

Northeast Asia • Japan, South Korea, North Korea • Mainland China, Hong Kong, Taiwan • Mongolia, Russia

Northeast Asia • Compared with Southeast Asia and West Europe, Northeast Asia has lagged behind – in developing mechanisms or institutions – of coordination, cooperation, or integration • especially considering the immense economic potentials in the region – natural resources – human infrastructure

Political Difficulties • Legacies of World War II – Japanese atrocities in Pacific Asia • Legacies of Cold War – partition of Korea

Political difficulties • Territorial disputes between – Japan and China – Japan and South Korea • “Sea of Japan” or “East Sea”? – Japan and Russia • mutually reinforcing suspicions

Current Status • Washington-Tokyo-Beijing triangle – PRC & Japan regard relationship with each other as 2 nd in importance to that with US • Japan plays significant role in integrating PRC into world economy • Japan has a vital interest in PRC’s development and stability • Economic interdependence

PRC’s Trade Partners • Japan is mainland China’s second largest trade partner and import source • Total trade volume nearly $1 bn per day • Total imports from Japan: US$166 billion – 9% of mainland China’s total imports • Total exports to Japan: US$137 billion – 6% of mainland China’s total exports

Japan’s Trade Partners • Mainland China is Japan’s largest trade partner, largest source of imports, and 2 nd largest destination of exports – US$297 billion trade in 2017 – compared with $207 billion trade with US • PRC (including Hong Kong) became Japan’s largest trade partner in 2004 – surpassed the US for the first time

Japan’s Direct Investment • Largest investment source outside of greater China before 2013 • Over 30, 000 Japan-invested enterprises • Directly or indirectly employ over 10 million people