The East Asian Political Economy: Stylized Facts and Security Debates

This policy brief links debates about the economic development of the Asia-Pacific to possible security implications. The brief makes four points. Past periods of high growth in the region have inevitably slowed, and China’s will too. The main question is whether thishappens gradually or as a result of crisis. Second, the global imbalances associated with export-oriented strategies and reserve accumulation have created strong dependence on the U.S. market. Third, the growth of intra-regional trade does not necessarily indicate a “decoupling” of the region. Increased Chinese leverage within the region may be exaggerated because of the continued role of international production networks in which Japanese, American, and European firms continue to play an important role. Finally, regional institutions are evolving and contributing to ongoing liberalization at the margin. But the institutional architecture remains fragmented and hamstrung by the tremendous diversity of the region’s political systems and economies.