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A well-developed services supply chain is crucial for regional integration. In the context of East Asia and ASEAN, it will allow countries at varying development stages to effectively participate in regional as well as global supply chains. This paper examines services from a supply chain perspective and discusses policy implications for liberalization of the sector in East Asian economies. In particular, the study focuses on global value chain (GVC) activities for services that are independent of linkages to the manufacturing sector. [ABSTRACT FROM AUTHOR]

China's accession to the WTO in 2001 and the subsequent liberalization of its FDI and trade policies have boosted the country's exports and facilitated its improved participation in regional production networks. This paper builds on the existing literature on production networks by examining some of the recent structural changes in China's intermediate goods trade with East Asia. Chinese policies to promote technological progress and indigenous innovation have been instrumental in bringing about such change, most of which can be captured by shifts or movements in the nation's intra-industry trade index for intermediate goods. Two significant findings emerge from the empirical exercise: first, China is progressively reducing its reliance on import of intermediate goods for production and export; and second, the country remains integrated with East Asian economies in several technology-intensive sectors such as machinery and electronic devices. [ABSTRACT FROM AUTHOR]

The spread of free trade agreements (FTAs) in East Asia amidst slow progress in the WTO Doha negotiations has stimulated a debate over the way forward. This paper examines the region's evolving trade architecture, characteristics of FTAs and welfare implications of alternative FTA scenarios. It suggests that consolidation of multiple and overlapping FTAs into a single East Asian FTA can help mitigate the harmful noodle bowl effects of different tariffs, rules of origin and standards. The paper also suggests that WTO-plus elements need to be further expanded and that consolidation into a Comprehensive Economic Partnership in East Asia at the ASEAN+6 level would yield the largest gains to East Asia among plausible regional trade agreements. As the next priority, the paper points to the formation of FTAs between East Asia, the United States and the EU as well as making FTAs more multilateral-friendly. [ABSTRACT FROM AUTHOR]

This paper uses a combination of economic reasoning with empirical evidence to review the fertility decline experienced in South, Southeast, and East Asia. The fertility transition in this region has roughly coincided with a period of rapid economic growth. There has also been an increase in urbanization levels, greater female education and labour force participation, and demand for skilled labour. The paper focuses on the manner in which these macro-level changes have raised the production cost of children as assets and changed parental perception of children from being economic assets to liabilities. Where these factors have not come into play, such as in India, demographic change has not materialized, at least not to the extent of the other countries in this sample. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) has increased rapidly in East Asian countries over the past two decades, and many studies find that it has significant linkages with economic growth. This paper examines the impacts of FDI in groups of 15 East Asian countries classified by level of economic development, using panel data analysis together with cointegration methods. The results show that favourable impacts of FDI on East Asian countries depend on complementary factors, particularly each host country's economic conditions such as levels of financial market development, institutional development, better governance, and appropriate macroeconomic policies. Furthermore, East Asian countries need to increase their investment in fundamental infrastructures, human capital development, and facilities for enhancing international trade and investment climate. [ABSTRACT FROM AUTHOR]

The phenomenon of proliferation of preferential trade agreements, bilaterally and regionally, was particularly more pronounced both in the aftermath of the regional financial and economic crisis that affected East Asia in 1997-98 and in the inability of the WTO to yield any substantial outcome to improve growth prospects of the Asian economies. This paper analyses the implications of ASEAN's ongoing FTAs and examines its role in fostering deeper economic integration within ASEAN and in Asia. It analyses the evolution and characteristics of FTA proliferation in ASEAN, identifying major trends. The paper argues that in their present state, if not properly designed and managed, there are valid concerns that these FTAs could end up becoming a stumbling block towards integration efforts. Implementation integrity among FTA members therefore remains a key to its success, and empirical and policy research needs to be much more forthcoming in this area in order to fully understand the economic ramifications of these FTAs. [ABSTRACT FROM AUTHOR]

This paper analyses the influence of the East Asian crisis and the subsequent reforms on the oligopolistic nature of the Thai banking industry. Since the crisis, there have been substantial changes in competitive environment, including a decline in the family ownership of banks as well as the arrival of new entrants. How did these changes affect a banking industry in which the six largest local banks accounted for over 70 per cent of market share? The estimated Lerner index from Bresnahan's (1989) conjectural variation model indicates the possibility of a decline in the degree of competition. [ABSTRACT FROM AUTHOR]

This paper examines time series cross-country output convergence in eleven counties of East Asia and the Pacific. Specifically, we model the cross-country output differences as a Stochastic Unit Root (STUR) processes. Using the output-differences between Japan (reference country) and the other ten sampled countries, we find output convergence only for the Japan-Australia, Japan-New Zealand, Japan-Taiwan and Japan-Thailand country-pairs. Alternatively, using the output-differences between Australia (reference country) and the other ten sampled countries, we fail to find any evidence of convergence in seven country pairs of the sampled countries except for Australia-Japan, Australia-Hong Kong and Australia-New Zealand country pairs. Overall, our results do not support output convergence in a broader perspective but support the notion of "club convergence" among a small subset (30--40 per cent) of similar fast-growing economies. The causes for non-convergence of per capita real GDP for a majority of country pairs are an empirical issue that involves country-specific factors that render output gaps highly persistent, but we can broadly outline a few reasons for non-convergence and these include, low and unequal economic growth, lack of economic and financial integration among the sampled countries. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between exchange rate volatility and exports of the five selected East Asian economies. A measure of the quantitative proxy of the exchange rate risk is constructed, focusing on the role of moving-average in smoothing the persistence of the risk measure. Vector autoregressive (VAR) model, error correction modelling (ECM), and variance decomposition (VD) are applied to characterize the joint dynamics of variables in both the short and long run. The Johansen results indicate a stable long-run relation between exports and exchange rate. Results show that a great fluctuation of exchange rate volatility has significantly impacted the volume of exports for the economies concerned. To this end, the forecast error VD shows that the innovations of exchange rate volatility have minor impact on export patterns in the study. [ABSTRACT FROM AUTHOR]

The course of regional integration in East Asia has been shaped by a complex mix of internal and external factors. Although the emergence of initiatives like "ASEAN Plus Three" appears to indicate that East Asia is assuming a more independent and regionally-oriented place in the international system, this paper argues that the future trajectory of ASEAN Plus Three, and of the region more generally, will continue to be constrained by internal tensions and—especially—by the continuing influence of the United States. In short, for the foreseeable future, East Asia will be marked by a form of "reactionary regionalism" in which regional initiatives are designed to mediate and moderate external influences. [ABSTRACT FROM AUTHOR]

Since the ]9903, East Asia-including Northeast and Southeast Asia-has led the world in adopting a task-by-task international division of labour or international production networks (IPNs), the core of which consists of niachinery industries. In this regard, how far has India integrated with East Asia? Using international trade data for comparison from multiple perspectives, this article gives an overview of the current position of India with respect to machinery IPNs and information and communication technology (ICT) services. The article shows that India has not yet participated in machinery IPNs in the East Asian region. We argue that ICT services are a source of strength for the Indian economy, and its competitiveness could be utilized effectively by combining new technologies with traditional industries such as manufacturing. India still has huge untapped opportunities for utilizing the mechanics of a new international division of labour to accelerate economic growth, innovation and poverty alleviation. And economic integration with East Asia could work as a trigger to redirect India's industrialization strategies. [ABSTRACT FROM AUTHOR]

Maritime security is a major concern in the Asia Pacific, yet is riddled with highly complex "wicked problems" that have thus far defied solution. These include different interpretations of the Law of the Sea underpinning regional maritime security, the lack of good order at sea, numerous conflicting claims to maritime jurisdiction, the implications of increased naval activity in the region and the lack of agreed maritime boundaries. This article identifies major wicked problems and reflects on the likelihood that they will be successfully addressed in regional forums. It finds some optimistic indications of a greater preparedness to address these issues than has been the case in the past. However, much will depend on whether existing mindsets can change to allow regional countries to corporate more effectively with regards to maritime security. The article concludes with the proposal that an Asian Peace Research Institute should be established to promote more independent thinking and greater cooperation. [ABSTRACT FROM AUTHOR]

The article discusses the background and progress of present financial cooperation initiatives, new chances offered and evolution of new regional economic architecture in East Asia. The factors behind the development of recent financial cooperations are the deepening regional economics and financial interdependence, response to the Asian financial crisis from 1997-1998, and European monetary integration. It is inferred that East Asia can add to the stability of global finance through achieving sustainable economic development and financial stability by instituting of resilient national financial systems.

In order to characterize and explain regional formation processes, theories in the field of international relations have focused primarily on political and economic parameters that were drawn from experiences in Western Europe. In East Asia, however, it is often mentioned that "regional dynamism" and cross-border economic activities, rather than formal agreements between governments, or shared historical or cultural "Asian" background generates the formation of the region. This article, however, examines the role popular culture plays in shaping and regionalizing East Asia. It focuses on the process by which confluences of culture have diffused throughout East Asian markets in the decades surrounding the 1990s and the concurrent formation of regional media alliances. An attempt is made to go beyond state-centric explanations of regionalization and extend the cultural approach to regionalization, demonstrating how popular culture can affect regional formation. [ABSTRACT FROM AUTHOR]

Investigates how the Research and Development (R&D) capital formation in developed countries affects the productivity of East Asian economies. Use of a data set of seven East Asian economies, Hong Kong, Indonesia, Korea, Malaysia, the Philippines, Singapore, and Thailand; How spillovers from Organization for Economic Co-operation and Development (OECD) countries promote the total factor productivity of sample economies.

The study of financial market efficiency has important implications in terms of global macroeconomic stability. The case of six selected East Asian stock markets (China, Japan, Hong Kong, Malaysia, Singapore and South Korea) during the Asian Financial Crisis (AFC) and Global Financial Crisis (GFC) is analysed here using a battery of well-known econometric techniques that starts with traditional unit root testing for random walk behaviour. The six countries were selected on the basis of market capitalization to offer insights into the behaviour of the most relevant markets in the region. The results show that during both crises, these markets exhibited significant inefficiencies. This is shown by the fact that positive correlations characterized markets returns behaviour in general, except fo r South Korea and Hong Kong, during the GFC. Of particular note is the case of China; its stock markets suffered losses and high volatility during the GFC and exhibited increasing correlations with other stock markets in the region, showing progressive levels of integration within the region and more exposure to global events. [ABSTRACT FROM AUTHOR]

This article examines why Asia's multilateral defence diplomacy has been a relative laggard when compared to other forms of institutionalized security dialogue, and what explains its recent rise. It argues that explanations that stress the "catalytic role" of external shocks such as the Asian Financial Crisis (AFC) or changes in the distribution of power or threats are underdetermining. Rather, Asia's new multilateral defence diplomacy reflects strategic emulation on the part of ASEAN elites, who localized ideas initially put forward by outsiders in order to maintain ASEAN's central place in the regional security architecture. Its rise has also been helped by the changing role of militaries h7 some East Asian states and its rapid institutionalization owes much to historical contingency, in particular the interests of two influential ASEAN Chairs in Indonesia and Vietnam. The final part of the article briefly assesses the future prospects and influence of regional multilateral defence diplomacy. [ABSTRACT FROM AUTHOR]

Why have Asia's many projects in regionalism not been able to realize their stated goals, despite the fecundity of, and enthusiasm for, region-building initiatives over the last two decades? In an attempt to answer this question, this article identifies the pursuit of a holistic regionalism embodied in the desire for a regional community as a persistent goal in official discourse, and argues that an apparent state of frustration describes the difficulty of regional institutions and forums in bridging the growing gap between these articulated goals and actual outcomes. The empirical case for the argument here is provided by the founding of the East Asia Summit in 2005, which has disclosed the limits of both exclusive and inclusive models of regionalism in Asia. In exploring causation, the article argues that both structural and agential factors are at the heart of this problem. The tensions thrown up by the competing processes of realist and liberal-institutionalist order-building in Asia have imposed structural constraints on the ability of regional projects to realize their normative aspirations. Equally important in causing this state of frustration are the agents of regionalism — in particular, regional elites — who articulated the goal of a regional "Community" to propel regional projects, and have set the bar above the current capacities of regional institutions. [ABSTRACT FROM AUTHOR]

This article examines the process by which certain coastal states in East and Southeast Asia may confirm their sovereign rights over areas of continental shelf more than 200 nautical miles from their baselines — areas commonly termed the "outer" or "extended" continental shelf. The article provides an overview and explanation of this legally and technically complex process. It also highlights some of the numerous issues and uncertainties in respect of both the interpretation of the relevant provisions of the international law of the sea and practical aspects of the implementation of the process itself. Many states around the world, including in East and Southeast Asia, are striving to meet a deadline for submissions related to the outer continental shelf of May 2009. Existing and potential submissions are outlined. The potential opportunities and challenges associated with outer continental shelf are then discussed. [ABSTRACT FROM AUTHOR]

The East Asia Summit is the newest leaders-led regional organization in the Asia Pacific with a broad mandate and an unclear future. Its membership means that it is stuck halfway between being an East Asian regional body such as the ASEAN+3 process and an Asia-Pacific body such as Asia-Pacific Economic Cooperation. Expanding the East Asia Summit to include the United States would enhance its ability to be the primary strategic forum in Asia and clearly identify the Summit as on Asia-Pacific body. This would not only improve Asia's regional architecture, but would also serve the interests of the United States, ASEAN, Japan, China and India. The biggest challenge facing this positive development is convincing the United States to sign the Treaty of Amity and Cooperation and overcoming the concerns of the other regional bodies about an enhanced East Asia Summit. In 2009, a new administration in Washington and the EAS meeting in Vietnam will provide a powerfully symbolic opportunity to invite the United States into the East Asia Summit and allow the Summit and the United States to find their proper homes in Asia's evolving regionalism. [ABSTRACT FROM AUTHOR]

Neorealists argue that Japan's response to the rise of China has been to draw closer to the United States in order to balance Chinese power. In practice, the Koizumi and Abe administrations differed in their responses to the growth of Chinese power in East Asia. While Prime Minister Koizumi sought to consolidate the US-Japan alliance, Prime Minister Abe adopted a dual-track approach, combining enhanced bilateralism with enhanced regionalism. Although buttressing the US-Japan alliance, this strategy aimed to balance China by building a containment coalition with other Asia-Pacific states. Japan's signing of a security declaration with Australia in March 2007 was an important element of Abe's strategy, and marked a subtle shift in Japanese security policy from exclusive bilateralism to modest minilateralism. Although congruent with US strategic interests, this move supported Prime Minister Abe's ambition to exercise more autonomous influence over the regional security order. [ABSTRACT FROM AUTHOR]

We specify appropriate models for the behavior of East Asian economies' pre-crisis daily bilateral exchange rates vis-à-vis the U.S. dollar and explore systematic relationships among those exchange rates. Our preliminary analysis indicates that the rupiah, baht, and Hong Kong dollar are stationary against the U.S. dollar; Unlike major currencies, the rupiah, peso, and won do not exhibit volatility clustering vis-à-vis the dollar We also find evidence of systematic relationships that are consistent with contagion during the 1997 Asian crisis. The distinctive characteristics of East Asia's exchange rates were due to capital controls. Our findings lend some support to the region's post-crisis moves towards more flexible exchange rates. An Empirical Examination of East Asia's Pre-Crisis Pegged Exchanged Rates. [ABSTRACT FROM AUTHOR]

In his article "The Geography of Peace", Robert Ross postulates that a bipolar regional power balance has emerged in East Asia. This theory is premised on the assumption that smaller Asian states will seek to compensate for their own vulnerability by clearly aligning with either China or the United States. In the case of Southeast Asia, however, stable but competitive Sino-U.S. relations have provided ASEAN states with considerable strategic leverage. Although these states maintain a close relationship with their respective geopolitically dominant great power, this leverage allows them to manoeuvre between and to strengthen their autonomy vis-à-vis China and the United States. Closer examination of the 1998 addendum to the 1990 U.S.-Singapore Memorandum of Understanding, the 1999 U.S.-Philippines Visiting Forces Agreement and the 1999 Sino-Thai Plan of Action for the 21st Century demonstrates these trends. [ABSTRACT FROM AUTHOR]

Presents an empirical study of the determinants of per capita economic growth in the group of economies forming the Association of South-East Asian Nations (ASEAN). Contribution of services to the growth of real gross domestic product per capita; Estimated results of a structural per capita growth equation reveal that growth of services exerts a statistically significant positive effect.

Focuses on a new regionalism that has emerged in East Asia that represents a clear break from the region's strong history of multilateralism. Review of movements towards regionalism in East Asia, with discussion on how it relates to the region's economic development model and analysis of its ability to revive dynamic regional economic growth that was enjoyed over a period of thirty years until the onset of the financial crisis in 1997.

The large capital inflow into East Asia was accompanied by a steady decline in the risk premia levied on Eurobonds issued by East Asia, a phenomenon indicative of over-lending rather than over-borrowing. The Asian financial crisis is the opposite phenomenon -- investor panic as opposed to investor exuberance. Prudence would suggest limits on short-term foreign borrowing by domestic banks and corporations, greater exchange rate flexibility, and international co-ordination on financial supervision and reporting. Financial fire-fighting should be improved by reform of the governance of the IMF and of IMF standard operating procedures; and by the establishment of regional monetary, bodies and an international bankruptcy court. [ABSTRACT FROM AUTHOR]

Reports on the economic crisis in Malaysia, and its alternative approach in managing that crisis. Impact of East Asian economic crisis on Malaysia; Strategies to revive the economy; Sustainability of the Malaysian recovery process; Difference of Malaysian response to crisis from response by other affected Asian countries; Effectiveness of the recovery measures; Challenges to sustain recovery.

There is a general consensus in East Asia that the United States is a benign hegemon but not necessarily a reliable one. In the absence of a specific adversary, U.S. security policy is frequently at the mercy of special interests and the pulling and hauling of domestic politics between the Executive branch and the Congress. In East Asia, U.S. strategy for the most part is divided between separate Northeast and Southeast Asian environments, although some overlap exists because of the importance of the South China Sea as a trade route. America's most important bilateral relationship with Japan is experiencing a significant enhancement through the recently ratified New Defense Guidelines which provide a larger role for Japanese assistance to U.S. forces. On the other hand, in Southeast Asia, although the United States has access to ports and airfields in several states, these are not sufficient in the event of a major regional military crisis. [ABSTRACT FROM AUTHOR]

Assesses the major responses of the Association of South-East Asian Nations (ASEAN), Asia Pacific Economic Cooperation (APEC), and the Asian Development Bank (ADB) to the East Asian financial crisis. Measures to promote regional recovery; Co-ordinated policy responses; Institutional innovations for responding to the crisis.

Examines whether the East Asian exchange rate regimes were a cause of the crisis, or whether the crisis would have emerged under alternative exchange rate regimes. Relationship between the exchange rate regime and the recovery process; Discussion on the exchange rates as a cause of crisis; Lessons that East Asian developing economies learned from the crisis.

The purpose of this article is to give a picture of the development of intraregional foreign direct investment (FDI) in East Asia. The region today (excluding Japan) receives more than half of all FDI in less developed countries. Japan is still the biggest actor for intraregional investment, but the East Asian newly industrialized countries (NICs) have emerged as important investors in the 1980s and 1990s and are, relative to their size, more active foreign investors than Japan. ASEAN and China are also active as outward investors, but on a rather smaller scale compared to the former countries. The distribution of FDI industry-wise is also reported in this article. One interesting development is the high and rising share of services in FDI. A complicated network of transnational business is now rapidly developing in Asia-Pacific. Even in the absence of formal market integration, a degree of de facto integration has been developing for some time. In fact, the initiatives recently taken to bring about integration in the region seem to be propelled by the actual events instead of being the reason for them. The ASEAN Free Trade Area, now taking form, should provide new incentives for FDI, however. [ABSTRACT FROM AUTHOR]

Using the most recent data compiled from a variety of sources, this article presents a brief comparative educational profile of ASEAN member countries, other developing countries and developed countries of the East Asian region. Concentrating on financial conditions in education, the article analyses the investment in education, priority given to education in the national economies, intra-sectoral priorities, the unit costs, and the present mechanisms of funding education, including the role of the private sector in the same. The experience of East Asia may provide some important lessons for the developing countries in their endeavour to educate their people. [ABSTRACT FROM AUTHOR]

An important regional issue emanating from recent economic developments in the Pacific Rim area concerns direct rivalry among ASEAN, China, and the East Asian NICs in the import markets of developed third countries. For example, as latecomers to industrialization, China and ASEAN tend to specialize in the same labour-intensive export products, such as textiles and electrical goods. This article analyses recent trade data for the third-country market of Japan to assess the extent of Asian (China, the NICs, and ASEAN) competition. Shift-share analysis is used to measure the magnitude of Asian economic rivalry. The results of the shift-share analysis suggest that ASEAN exports have suffered the most from the recent entrance of China into the Japanese market. The NICs, however, on balance performed very well in their exports to Japan, particularly with respect to manufactured products. [ABSTRACT FROM AUTHOR]