Publication in Economics, Politics and Public Policy in East Asia and the Pacific

How should G20 help global rebalancing?

Author: Yiping Huang, Peking University and ANU

On September 29, the US House of Representatives passed the bill to punish China for its undervalued currency. For the bill to become actual policy, it requires endorsement by the Senate and approval by the president. So, with mid-term elections due for the House and the Senate on November 2, the currency tension between China and the US might ease somewhat temporarily.

Treasury Secretary Tim Geithner indicated during a Ways and Means Committee hearing before the House of Representatives that he would use the upcoming G20 Summit in Seoul to pressure China to accelerate pace of renminbi appreciation. There are some obvious benefits of using a multilateral framework such as G20 Summit for resolving a currency dispute. Read more…

Japan’s foreign economic relations

Author: Hugh Patrick, Columbia University

Japan’s international economic relations are more important than ever. A major player in the global economic and financial system, Japan is strongly influenced by investment, trade and issues of international economic diplomacy.

Trade is the foundation of Japan’s international economic relations. Imports supply the oil, iron ore and food grains essential to Japan’s industrial production and household consumption. A plunge in Japanese exports was a major cause of the Japanese recession, and Japan’s recovery has been almost entirely due to recovery of rapid export growth. Read more…

Using sub-national comparison to study Chinese politics

Author: William Hurst, University of Texas at Austin

In the recent past, Western political scientists were divided over whether newly possible field research in mainland China was superior to exclusively document-based study or émigré interviewing in Hong Kong. At some point in the 1980s, the debate subsided and mainland-based field research won out. So, which fieldwork methods, applied in which local contexts, are best suited to which research questions in Chinese politics?

There are three main fieldwork approaches: Single-site case studies, sub-national comparative analysis, and large-scale surveys across many regions or populations. Read more…

East Asia Summit: Where is Europe?

Author: Jonas Parello-Plesner, European Council on Foreign Relations

It is the biggest multilateral event this side of the G20, including the leaders of India, China, Japan, Korea, Indonesia and Australia. On Saturday the 30th of October the 16 leaders of the East Asia summit will gather in Hanoi, with special representation for both Russia and the US. Secretary Clinton is joining as the latest leg of her impressive Asia-Pacific trip. From Russia, Lavrov, is flying in. The EU, however, is conspicuously absent.

During the Bush-administration there was no American interest in joining the East Asia Summit, perceived as another talk shop with concrete results. The Obama administration reversed all that. It both signed up for Asian multilateralism – the Treaty of Amity and Cooperation with ASEAN – and made sure it brought something to the negotiation table. Read more…

Testing time for the G20

In the G20, a voluntary process of cooperation can be effective if it concentrates on vital issues and can achieve perceptible policy convergence.

Author: Andrew Elek, ANU

Two years ago, the global financial crisis was the catalyst that brought the emerging economic giants to the global table, promising a new world economic order. Agreement on simultaneous stimulus and sustaining openness was in marked contrast to the uncoordinated policies of the 1930s. A looming global depression was avoided and this early success has allowed the G20 to claim the right to supplant the G7/G8 as the steering committee for the global economy. The new forum now needs to shore up its legitimacy to represent the rest of the world, determine its priorities and pursue them in a credible way.

After just a few meetings, G20 communiqués are becoming longer, with nice words about an ever-wider range of important matters, while not committing participants to do very much. This combination  risks a loss of credibility and salience, but can be avoided. Read more…

China’s changing intergovernmental relations

Author: Yongsheng Zhang, Development Research Centre, State Council

China’s intergovernmental relationships are undergoing rapid change. Having officially endorsed ‘socialist democratic politics’, grassroots elections and internal democracy in the ruling Chinese Communist Party (CCP) are continuing to develop. The rule of law is strengthening and a civil society is being established.

This evolution will have a profound influence on China’s long-term development. Four scenarios are possible. Read more…

Southeast Asia: Patterns of security cooperation

Author: Carlyle A. Thayer, UNSW @ ADFA

Australia will face a more complex strategic environment in Southeast Asia over the next decade as at least eight major trends drive strategic change. New patterns of security cooperation and tension will result and pull Australian strategic policy in different and possibly contradictory directions.

There are eight major drivers of strategic change:

1.  The global financial crisis (GFC) has accelerated the power shift from North America and Europe to East Asia and reinforced China’s rise in all dimensions of national power. Read more…

China a motivator for Latin America

Author: Kevin P. Gallagher, Boston University

Over the past 30 years, both China and nations across Latin America have sought to move away from inward looking economic models and integrate into the world economy. In 1980, the collective economic output of Latin America was seven times as large as that of China. Now, China’s economy is larger than all of the economies in Latin America combined.

In the process of leapfrogging over Latin America, China has tugged some Latin American economies along with it, but the longer run implications could prove less favourable. China’s rise has been good for Latin America over the past decade. Read more…

G20: Leadership need not only come from the G7

Author: Jeffrey Frankel, Harvard

Korea has an opportunity to exercise historic leadership when it chairs the G20 meeting in Seoul. This will be the first time that a non-G7 country has hosted the G20 since the larger, more inclusive, group supplanted the smaller rich-country group in April 2009 as the premier steering committee for the world economy. With large emerging market and developing countries playing such expanded roles in the world economy, the G7 had lost legitimacy. It was high time to make the membership more representative. But there is also a danger that the G20 will now prove too unwieldy, in which case effective decision-making might then revert to the smaller group.

When countries like China and India used to demand a larger voice in world governance based on their large populations, they did not get very far. Read more…

Fifty Years of OPEC

Author: Stuart Harris, ANU

A little noticed anniversary celebrated in September was that of 50 years of the existence of the Organisation of the Petroleum Exporting Countries (OPEC).  Despite the muted fanfare, its establishment led to fundamental changes in the global economic and political orders that remain critical today.

OPEC was established in September 1960 with five members – Saudi Arabia, Venezuela, Kuwait, Iraq and Iran; it now has 12 members. Read more…

Providing a voice to ‘excluded’ nations in the G20

Author: Ishrat Husain, Institute of Business Administration, Karachi

The formation of the G20 grouping of finance ministers and central bank governors and their heads of state is indeed a significant improvement compared to the previous G8 arrangements. The dynamic changes in global economic output and international trade are adequately reflected in this expanded group. The inclusion of 10 emerging economies such as South Africa, Mexico, Argentina, Brazil, China, South Korea, India, Indonesia, South Arabia and Turkey in the consultative process has broadened the scope of the dialogue. but it still excludes 170 nations from direct participation in this forum.  Norway, one of the major donors to development programs, has protested that it has no voice within the group.

The questions of the legitimacy, representative character, governance structure, voice and accountability of the G20 remain and pose certain dilemmas for countries such as Pakistan which do not have a seat on the table. Read more…

US-Japan alliance the big winner from the Senkaku Islands dispute

Author: Aurelia George Mulgan, ADFA@UNSW

Japan’s new DPJ government initially set out to rebalance Japan’s relations between the United States and Asia by emphasising a more independent Asia-oriented diplomacy with an East Asian Community as the centrepiece.

Japanese rhetoric about the alliance has also changed: There was more talk of an ‘equal’ alliance and a security stance ‘equidistant’ between the United States and China. Read more…

G20 consensus, compliance and the limits of legitimacy

G20 Meeting 2008

Author: Gary Hawke, New Zealand Institute of Economic Research

The G20 has been widely welcomed, but so far it has had little impact. If it should become effective, its legitimacy will become contested. Members of the G20 are more or less the 20 largest economies in the world. The criterion is arbitrary but not unreasonable. G20 membership is much more inclusive than that of the older G7 and G8. it is less dominated by north America and Europe than its predecessors. The inclusion of China, India and Brazil greatly enhances the legitimacy of its claim that it speaks for the major economies of the world.

The G20, however, has no basis in agreed treaties. It is not part of the United Nations system and it has no distinct legal basis. Read more…

The Senkaku Islands incident and Japan-China relations

Author: Satoshi Amako, Waseda University

Since the Senkaku Islands ship collision incident, media sensationalism has raged, and Japan-China relations have been greatly shaken. In the middle of this upheaval, which involved the cancellation of various Japan-China related events, I went to Beijing on September 26 to participate in the Japan-China-Korea Symposium hosted by the Chinese East Asia Forum. The keynote speech strongly urged that ‘given the current difficulties, dialogue between Japan and China is necessary more than ever. Cutting off dialogue will not achieve anything’. Almost all of the 150 participants enthusiastically supported the idea. The worsening relation is saddening, and I sincerely hope improvements can be realized as also did many of the Chinese participants.

So, how should we interpret the recent sequence of events? Read more…

Copenhagen to Cancun: Where is climate change policy going internationally?

Author: Peter Drysdale, ANU

The Cancun conference on climate change is now a little over a month away. As Stephen Howes observes in this week’s lead, ‘the contrast between the hype in the lead up to last year’s Copenhagen climate change conference and the subdued silence which precedes this year’s conference in Cancun in December could not be starker’. If Copenhagen collapsed under the weight of inflated expectations, Cancun cannot but surprise on the upside, so low are the expectations of what it might achieve.

Yet, the path from Copenhagen to Cancun has not been all downhill. Read more…