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 6: The Global Financial Crisis and its Implications for East Asian Financial Integration

Pilhyun Kim

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

Extract

Pilhyun Kim 6.1 INTRODUCTION A few years have passed since the subprime crisis in 2008, which later morphed into the biggest financial crisis in history, first started to grasp  media headlines. And the global economy is still suffering from its aftermath, posting only anemic recoveries around the world. Among those countries affected by this crisis, the East Asian region stands out in a sense that it went through two major financial crises in just ten years. No other region has had a similar experience. People in East Asia collectively thought that they learned a valuable lesson from the 1997 crisis. This time around, they realized, to their grief, that the talk of financial integration thereafter did not really amount to anything. A greater need for financial cooperation by building closer economic and financial ties among the East Asian countries was recognized by all but was not appreciated truly enough to materialize into concrete policy measures. There are many reasons for this failure, that range from political unwillingness to economic imbalances. However, if anything, the current crisis brought to the surface that financial cooperation and integration in East Asia can no longer be put off until the time is perfectly right. It is essential that East Asia advances its integration and cooperation process in order to secure sustained economic growth. To this aim I review, in this chapter, what damage the current global financial crisis has wreaked on East Asia’s economies and their prospects. Then I suggest policy measures to help...

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