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Asia's Resurgence

and Its Global Implications




By the beginning of the twentieth century, Asian economies were being buffeted by a flood of imported goods and new technologies from the West. By the beginning of the twenty-first century, several of those same Asian economies were producing and innovating at the leading edge of key technologies and were viewed by Westerners as a serious "threat" to their industries. Such a dramatic turnaround would have been unlikely in a region where commercial revolutions had no historic precedent. Pacific Asia, as noted in Chapters One and Two, had undergone previous surges in international commerce and had shown a capacity for sophisticated learning and technical advancement in earlier periods that far exceeded the levels found in the West at the same time.

Stability and growth in the Pacific Asian regional economy now strongly depends on the global economy, but its primary centers are China, Japan, and the United States. It is a highly interdependent region where most of the smaller trading nations conduct more than half their trade with other states in the region. Chapters Six and Seven are important for understanding the strategies that have brought about this economic transformation, but Units Four, Five, and Eight are necessary to comprehend its political paradoxes. In the broadest sense, Japan led the Pacific economic revival and to become the dominant economic power in Asia, but its political influence is tempered by its record in the Pacific War and a resurgent China has now begun to challenge its economic and political influence. One element that remains constant throughout is the political force of nationalism.  It helped forge new nations in the mid-twentieth century but has now become a volatile ingredient in the relationships among those nations.

Regional cooperation remains tentative but is growing. It is unlikely to achieve the levels found in Western Europe any time soon, and the objectives of such cooperation in the Pacific Basin will remain different from those of Europe as long as the global economy remains relatively open. The role of the United States is important in this regard as it exerts its regional influence as the preeminent global economic and military power. Its strategy to maintain an open world economy includes playing a significant role in regional political and economic organizations. And finally, in key respects, the evolving relationship betweed China and the United States exerts an immense influence on other regional and global relationships.

 Pacific Asia is gradually losing its stereotypical image in the West as merely a "crowded and impoverished" region, but the challenges of population, poverty, urbanization, and environmental degradation loom larger than ever for many of its societies.




After reading Chapter 13, you should have a basic understanding of the following concepts.

1.      The development of commerce in the Pacific and Asia since the nineteenth century can be contrasted to previous ages of commerce in terms of scope, scale, and identification of geographic epicenters; whereas the "locomotives" of commercial development historically were China and India, today they are China, Japan and the United States.

2.      Asian postwar growth has relied heavily on exports to regional and global markets; export-led growth strategies have been aimed in particular at the United States. This trans-Pacific asymmetry in trade became a dominant feature by the 1980s, straining relationships, especially with Japan.

3.      The Plaza Accord of 1985 led to the decision to allow the yen to appreciate relative to the dollar. Although this decision did not esolve trade imbalances in the Pacific, it did lead to a 50 percent reduction, in dollar terms, of America's global trade deficit. Concurrently, it had the effect of nearly doubling the Japanese domestic asset base.

4.      During the 1980s, Japan decisively supplanted the US as the leading source of manufactured goods, new business investment, technology, and economic aid in an area stretching from South Asia to the Pacific islands. This pattern of growth was stimulated by international economic factors stemming from rising production costs in the Japanese market, leading to the location of new production off­ shore.

5.      Early in the twenty-first century, China’s resurgent growth and entry into the global economy enabled it to seriously challenge Japan’s economic and political leadership in the Asia Pacific.  New initiatives were launched to forge closer cooperation among East Asian countries.

6.      In most of Pacific Asia, economic strength takes on greater or as high a priority as military capacity. Notwithstanding the preeminent position militarily and economically of the United States worldwide, this means that China and Japan exert significant regional influence through their economic size and growth.

7.      Pacific Basin regionalism is as yet a vaguely formed concept and the prospect of a Pacific Community, similar in scope to the European Community, is far from reality. Even so, the growth of trans-Pacific trade, which exceeded trans-Atlantic trade beginning in the early 1980s, is having a profound effect, politically, economically, and culturally, on the interaction of the countries of the Pacific, which themselves are becoming an increasingly integrated trading region. The US has a critical role to play as this process evolves and is the only economic superpower that can act as an intermediary between Europe and Asia.

8.      Throughout Pacific Asia there is growing recognition of the extent to which underlying changes in demography, technology, and the environment in one geographical area can have a major impact in another. The implications of interdependence-in terms of resource management, population growth, migration, technology transfer, growing levels of urbanization, and environmental degradation—will have a profound affect on the future prospects of the Pacific Basin.






ASEAN Plus Three

ASEAN Regional Forum

Bretton Woods Agreement

Current Account Imbalances

East Asian Summit

East Asian regionalism

Foreign Exchange Earnings



Plaza Accord




1.      What is the potential for a trade bloc in Asia? What are theincentives for creating one? What are the disincentives? Should Americans be concerned about the creation of an Asian trade bloc?

2.      Should Asians be concerned about the creation of a North American trade bloc?

3.       Should the Pacific Basin nations try to cooperate as a bloc to improve their competitive positions against the European Union and NAFTA? What factors prevent the Pacific from organizing itself in a manner similar to Europe?

4.       If you could design the ingredients for a trading body in the Pacific region, what countries would you include? Explain your reasons for including some and excluding others. What benefits would you see for the average consumer in the countries you have included? What disadvantages?

5.       Assume you are a senior economic planner for an Asian developing country,   such as Thailand or Malaysia. What arguments might you make for placing low on your list of development priorities the solution of environmental problems? Alternatively, why might you argue the opposite point of view?

6.       How vital is telecommunications for economic development? How would you rate it alongside priorities such as transportation and the environment? What aspects of  telecommunications are most important?

7.       What are the positive aspects of Japan's postwar role in Pacific Asia? What diplomatic role should it try to play in the region?

8.       How have changes in Japan's economic status not been matched by changes in its status vis-a-vis the United States in Pacific Asia? What aspects of the Japan-United States relationship seem most likely to be undergoing fundamental change?

9.       How do the United States and Japan view China's re-emergence as a regional economic and political power?  What are the implications of China's growing military capabilities?

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