Author: Yiping Huang, Peking University and ANU
Weaker data on consumption, income, employment, as well as forward-looking indicators in the US and the deceleration of GDP and production in China have triggered renewed fears about a double dip recession. In fact, the recent slowing of economic activity is the natural result of changes in policy and the economic environment. The slowing of economic activity is likely to be temporary. But beyond the very near term the world economy, especially the US and China, will transition to a new state of slower growth and higher inflation.
Three factors contributed to the recent slowing of economic activity. Read more…
Author: Scott Snyder, Asia Foundation
Ten years ago, North Korea snubbed China’s defence minister on the 50th anniversary of the entry of the Chinese people’s volunteers into the Korean War: Instead, Kim Jong-il hosted the first-ever visit by a US secretary of state, Madeleine Albright. A mirror image of that snub was recently delivered to a former American president, marking North Korea’s changed circumstances.
The snub to Beijing in 2000 arguably underscored the depth of North Korea’s desire to balance its dependency on China by pursuing diplomatic normalisation with the United States. Read more…
Author: Tobias Harris, MIT
Japanese Prime Minister Kan Naoto and Wen Jiabao, his Chinese counterpart, have met briefly in Brussels on the sideline of the Asia-Europe Meeting (ASEM) summit, marking an end to the bilateral standoff following the collision between a Chinese trawler and Japanese Coast Guard vessels in the vicinity of the disputed Senkakus.
As expected, Japan and China reiterated the importance of the strategic, reciprocal partnership initiative. High-level talks and cultural exchanges will resume. All in all, it is difficult to say what has changed strategically as a result of the dispute. That China will fiercely resist any perceived change to the status quo in its maritime disputes? Read more…
Author: Ulrich Volz, DIE
Twenty-five years after the initial agreement, a new Plaza Accord has been proposed and currency intervention is again the major issue. While the revaluation of one major currency, the Chinese yuan, has reinvigorated the debate, global imbalances and currency relations remain global problems. Rows over the recent intervention by the Bank of Japan to halt appreciation of the yen have highlighted once more the need for addressing these issues in a cooperative and multilateral framework. Unilateral and uncoordinated intervention, where countries effectively seek to lower the value of their own currency at the expense of other countries’ export competitiveness, clearly carry the danger of triggering a round of beggar-thy-neighbour policies and a protectionist backlash.
However, the prospects for a new Plaza Accord are dim: China will not be willing to give in to pressure from the US and other advanced or emerging economies that form the G20. Read more…
Author: Suiwah Leung, ANU
With an estimated GDP growth of 5.3 per cent in 2009 and a forecasted growth rate by the ADB of 6.7 per cent for 2010, Vietnam has not only survived the GFC in better shape than countries of comparable size in Asia, but has joined the ranks of middle-income countries by having its per capita GDP in excess of USD 1,000. This is certainly a remarkable achievement in two decades of economic reforms. With the leadership setting its sights on having Vietnam develop into an industrialised market economy by 2020, there are expectations in some quarters that foreign investors will again find Vietnam a very attractive investment destination after Brazil, Russia, India and China (BRIC).
Vietnam is no stranger to foreign investors. During the last two decades, the country has had an average FDI/GDP ratio of 5.9 per cent; the highest among many ASEAN countries during their respective periods of rapid growth from the mid-1970s to mid-1990s. Read more…
Author: Kazuhiko Togo, Kyoto Sangyo University
Discussions over the recent collision in waters near the Senkaku Islands between a Chinese trawler and two Japan Coast Guard vessels have not really touched upon the essence of the issue: The situation could escalate into a military confrontation between Japan and China.
It is not entirely clear what China’s true intent was. Read more…
Author: Zhongxiang Zhang, East-West Centre
China’s spectacular rates of economic growth since the onset of the 1978 reforms have been heavily dependent on the burning of dirty coal. This has given rise to unprecedented levels of domestic environmental pollution, and has in part, resulted in China being the world’s largest aggregate emitter of carbon dioxide.
It is realised in China that the conventional path of encouraging economic growth at the expense of the environment is no longer feasible. In order to reduce carbon dioxide emissions, China has recently pledged to cut its carbon intensity (the amount of carbon dioxide emitted per unit of economic output) by 40–45 per cent by 2020 relative to its 2005 levels. Read more…
Author: Michael Cucek, MIT
On October 4, the Tokyo No. 5 Committee for the Inquest of Prosecution released its second determination, mandating that Ozawa Ichiro, the former leader and secretary-general of the Democratic Party of Japan (DPJ), be indicted for crimes related to a land deal carried out by his political fundraising organisation, the Rikuzankai. In particular, the committee determined that there was sufficient evidence pointing to Ozawa having directed his subordinates to file misleading and incomplete financial reports with oversight officials.
The now inevitable indictment of Ozawa will not have an immediate impact on the surface. Ozawa will retain his Diet seat and will continue to serve as a full member with all the duties and privileges of office. Read more…
Author: John Hemmings, RUSI
It is often said that North Korea is the world’s only communist monarchy. But is it yet a true monarchy? The care with which Kim Jong-il has taken over the last 18 months in manoeuvring his third son, Kim Jong-un, into position to succeed him suggests that the dictator has some limits on his power in the North Korean system.
The reality of where power lies in Pyongyang is not as obvious as it might seem and there are indications that even Kim Jong-il must approach this transition carefully. Read more…
Author: Renu Kohli, New Delhi
A current account deficit widening at a furious pace, high inflation, a tightening monetary cycle, foreign inflows driving stock prices and an appreciating currency — these form an unusual macroeconomic constellation for liberalising the capital account.
Yet these beeps have been ignored, even as fresh pastures are opened for foreign investors. This also comes at a time when Western grasslands remain dry, the US Federal Reserve is poised to unleash a fresh round of liquidity, investors are rebalancing portfolios toward emerging markets, and other Asian nations are contemplating capital controls to stem the global tide of hot money. Read more…
Author: Andrew MacIntyre, ANU
Kevin Rudd’s political rebirth as foreign minister has been the subject of feverish discussion in Australia and some curiosity in the rest of the Asia. But it is more important for both Australian foreign policy and regional affairs than is at first apparent. In foreign policy terms, Kevin Rudd may be able to prevent Australia from following Canada’s ‘disappearing act’ in Asia. This matters.
Australia’s national conversation has been consumed in recent weeks with the unfamiliar intricacies and uncertainties of constructing a workable government following an extremely close election giving the balance of power to a combination of the small Greens party and a handful of individual political independents. Read more…
Author: Justin Li, ICE
Once upon a time in China, a man by name of Ye Gong loved dragons so much that he decorated everything with the symbols of dragons. Yet, he was mortified when a real dragon descended from the heaven to pay him a visit. Last night when Liu Xiaobo finally brought the Nobel Peace Prize home, it was not greeted with jubilation over one of China’s native sons finally winning the coveted prize but with helpless anger and awkwardness by Beijing.
The award of the Nobel Peace Prize to one of China’s most famous dissidents could not have arrived at a more sensitive time as a heated debate continues to rage about the future of democratisation since Premier Wen Jiabao’s speech in Shenzhen in early August. Read more…
Author: David Kelly, UTS
The award of the Nobel Peace Prize to Liu Xiaobo is a salutary event. For a Chinese writer and public intellectual to be so singled out does his nation no dishonour, despite official statements to the contrary. It shows rather that China, a nation that once led the world in the enunciation of universal values, is capable of returning to its ancient role.
In the fullness of time, Liu’s contribution to the social and political development of China will very likely come to be seen as comparable to that of Mandela’s to Africa or of Havel’s to Eastern Europe. Read more…
Author: Shiro Armstrong, ANU
As the G20 Summit in Seoul and the APEC Summit in Yokohama fast approach, how can Asia, a force for stability and dynamism in the fragile global economy, connect regional initiative to global governance? With China, Japan, Korea, Indonesia, Australia and India in the G20, Asia has new responsibilities and opportunities to influence global economic governance and contribute positively to the international economic system in the region’s, as well as the world’s, best interest.
In this week’s feature essay, based on his keynote speech to the 12th East Asian Economic Association conference in Seoul last week, Peter Drysdale argues that Asia can no longer expect a free ride on global public goods in trade or finance and that the time is past due to deliver on its global responsibilities. Read more…
Author: Peter Drysdale, ANU
In East Asia, as elsewhere in the world, the risks that we continue to face in recovery from the global financial crisis, not only economically but also politically, are a consequence of past failure in the architecture of international governance, including regional architecture, that frustrated a coherent East Asian and international response to the big problems of the day in their global context.
The global financial crisis and the emergence of the G20 has changed all this dramatically and gives the region as a whole, and the G20’s Asian members in particular, the opportunity to assume a new role and their proper responsibilities in managing the world economic order. Korea has peculiar responsibility in the exploitation of this opportunity as host of the first G20 Summit in Asia in November 2010. Read more…
