Asian Regionalism? ASEAN Northeast Asia

Outline Economic development Economic interdependence ASEAN 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 2nd 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 $1bn 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 2nd 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