Co-design for a New East Asia After the Crisis by Hitoshi Hirakawa (auth.), Hitoshi Hirakawa, Young-Ho Kim

By Hitoshi Hirakawa (auth.), Hitoshi Hirakawa, Young-Ho Kim (eds.)

East Asia loved a job as a development heart of the area economic climate from the Sixties till the foreign money and fiscal obstacle of 1997. In 1993, the area financial institution issued a record entitled "The East Asian Miracle: fiscal development and Public Policy," during which the financial institution expressed its admiration for the zone 's swift monetary increase­ ment. in spite of the fact that, inside merely 4 years the area had fallen prey to the forex and fiscal difficulty that unfold outward from Thailand. in the course of the obstacle, many East Asian nations all started in the end to cooperate with each other on the way to focus on those unparalleled problems and to avoid one other trouble. in truth, the East Asian quarter was once an exception through the Nineties with re­ spect to regionalism. A surge of regionalism, which all started in Europe within the moment part ofthe Eighties, unfold to North the United States and Latin the United States. notwithstanding, the North­ east Asian quarter particularly, along with Japan, China (People's Republic of China), and Korea (Republic of Korea), didn't perform any type of nearby fiscal preparations. local cooperation frameworks have been restricted to coun­ attempts belonging to the organization of Southeast Asian countries (ASEAN) and didn't unfold to the Northeast Asian region.

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In January 1995, the WTO, successor to GATT, came into being, which seemed to strengthen the world trading system. , regionalism in the sense ofthe WTO definition l5 (Fig. 1). The first step was Korean President Kim's proposal to then-Japanese Prime Minister Keizo Obuchi ofa Korea-Japan free trade agreement in October 1998. 16 According to a communique from the two leaders in November 1998, institutes in each country, the JETRO-Institute of Deve10ping Economies (IDE) in Japan and the Korea Institute for International Economic Policies (KIEP) in Korea, would set up study teams for a joint examination of future economic relations, including the possibility of establishing a free trade agreement.

The share of firms expecting divestment was only 2%. Reasons given for a continuing presence in a given region were in particular "enlargement of AFTA market" (32%), "levels of past investment" (31 %), "avoidance of risk of investment concentration in China" (29%) and "enough ASEAN-based operations" (28%) [JETRO 200ld]. In short, not all Japanese firms 2. Globalization and Regional Cooperation in East Asia 37 rush to invest in China. In general, mutual economic integration seems to be progressing.

Japan and China are eompeting for aeeess to ASEAN, and in the end, the two eountries are likely to beeome involved in region-wide East Asian eeonomie eooperation or eeonomie integration drive. This faet is of erueial importanee. H. L---;:l~---------='-------~ ....... ASEAN ........ -_'--_'--_'--_'--_'--_'-----' 1970 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 Fig. 2. Intraregional export rates oftrade bioes, 1970-2001. Source: World Bank 2003 5. 1 Regional Integration in East Asia and Japan's Problems The impact of the currency crisis and the currency union in Europe taught East Asia lessons on how best to cope with globalization.

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