Asian Responses to the Global Financial Crisis

Asian Responses to the Global Financial Crisis

The Impact of Regionalism and the Role of the G20

Edited by Jehoon Park, T. J. Pempel and Geng Xiao

The expert contributors – both Asian and Western – illustrate that as G20 members, many Asian countries are now able to showcase their increasing powers and influence on global issues. Within this context, and via multidisciplinary economic and political science perspectives, the book deals with various issues such as World System analysis, the debate between the Washington Consensus and the Beijing Consensus, roles within the G20, and the contribution of ‘middle’ powers such as Korea and Australia. The application of European experiences to Asia is also considered, as are perspectives from the US. The book concludes that the key to resolving the current global economic crisis lies in how quickly a new global governance and monitoring system can be constructed, and that there are multiple roles for Asian countries to play in its development.

Chapter 2: The Other 80 Percent: Understanding Economic Drivers of Global Transformation

Geng Xiao, Sean Quirk and Jing Yang

Subjects: asian studies, asian economics, economics and finance, asian economics, politics and public policy, international politics, international relations, urban and regional studies, regional studies


Geng Xiao, Sean Quirk and Jing Yang 2.1 INTRODUCTION In 2007, globalization’s rising tide began to recede quickly. As boats were lowered, the collapse of major US financial institutions triggered the tsunami of the global financial crisis, knocking many into the water. We have been struggling to find the surface in the years since, and just as we are climbing back into our boats, the water seems to be receding again. The question remains: are we going to brace for another economic tsunami? Or are we going to see the industrialization, urbanization and globalization achieved over the last few centuries for the 20 percent of the world’s population in advanced economies spread over the next few decades to the other 80 percent of humanity? These are two divergent depictions of our global economy at the crossroads. Developed countries of the Organisation for Economic Co-operation and Development (OECD) still dominate the world economy in terms of income, consumption and wealth. As shown in Figure 2.1, advanced economies today only account for 18 percent of the world’s population, yet they contribute 68 percent of global gross domestic product (GDP). These countries are currently leaders in the global economic system. Their multinational corporations, such as Airbus, Apple, Wal-Mart, and so on, still dictate how supply chains are organized around the world to generate employment, products, incomes and wealth. The optimists like ourselves note that with today’s technical knowledge and economic development, the 21st century will likely see the 80 percent in emerging markets...

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