Asian Regionalism After the Global Financial Crisis

Conference paper
First Online:

Abstract

This chapter examines the evolving dynamics between economic globalization and Asian regional interdependence, and asks whether and how the global financial crisis impacted Asian regionalism. The analysis suggests that the global crisis did trigger advances in regional policy cooperation from 2008 onwards, especially in the area of financial and monetary cooperation. Although the first order response of Asian countries was to join the broader global effort to contain financial freefall at the world level, there emerged a second order response at the level of regional institutional building, specifically to “multilateralize” the Chiang Mai Initiative, and to develop a regional trust fund to help strengthen Asian bond markets. This finding reconfirms the theoretical proposition in historical institutionalism that financial crises have a catalytic effect in stimulating regional innovation. At the same time, we see evolution in the pattern of Asian regionalism in two respects: first, the recent advances in Asian regionalism are being driven primarily, at this stage, by the rise of the PRC and India—although each in their own way, and to varying degrees. The current advance in regionalism also builds on momentum provided by pre-existing programs of regional financial cooperation, namely the Chiang Mai Initiative, and “regional connectivity” programs that have also been championed by Japan and ASEAN countries, such as the GMS, CAREC, and BIMSTEC initiatives. Second, Asian economies appear to be pursuing inclusive regionalism, which attempts to strike a balance between helping themselves and helping the global economy. Asia is striving for modes of regional cooperation that are, on balance, complementary with the current global macroeconomic rebalancing agenda of the G20, and supportive of global integration and openness. The main policy findings are that Asia’s future standing in an increasingly multicentered world economy will be determined by its effectiveness in advancing a multilayered international cooperation agenda. Yet achieving such international gains will depend on Asia’s willingness to make serious advances in regional collective action and global leadership, especially in areas of financial and monetary cooperation.

Keywords

Asian regionalism Chiang Mai Initiative Globalization Regional connectivity Regional financial cooperation 
This is a preview of subscription content, log in to check access.

References

  1. Adams, C., Jeong, H. Y., & Park, C-Y. (2010). Asia’s contribution to global rebalancing. Asian Development Bank Working Papers on Regional Economic Integration Series. No.58. September.Google Scholar
  2. Asian Development Bank (ADB). CAREC website. CAREC program. http://www.adb.org/countries/subregional-programs/carec. (accessed 25 November 2012).
  3. Asian Development Bank (ADB). (2005). Central Asia in 2015. CAREC Policy Brief No.1. http://www.adb.org/Carec/Policy-Briefs/CAREC-Policy-Brief-01-2005.pdf.
  4. Asian Development Bank (ADB). (2006). BIMSTEC transport infrastructure and logistic study. ADB technical assistance report, Project number 38396. August. http://www.adb.org/documents/tars/reg/38396-reg-tar.pdf.
  5. Asian Development Bank (ADB). (2008). Technical Assistance completion report, BIMSTEC transport infrastructure and logistic study, Project Number TA-6635 REG. http://www.adb.org/Documents/TACRs/REG/38396-01-reg-tcr.pdf.
  6. Asian Development Bank (ADB). (2009). Enhancing ADB’s response to the global economic crisis: Establishing the countercyclical support facility. ADB Policy Paper. May.Google Scholar
  7. Asian Development Bank (ADB). (2010). Institutions for Asian regional integration: Toward an Asian economic community. Manila: Asian Development Bank.Google Scholar
  8. Bery, S. (2010). Does Asia have common interests in global monetary system reforms? East Asia Quarterly. October–December. 38–39.Google Scholar
  9. Bhattacharyay, B. (2010). Institutions for Asian connectivity. ADBI Working Paper No. 220. Tokyo: Asian Development Bank Institute. http://www.adbi.org/working-paper/2010/06/25/3915.institutions.asian.connectivity/.
  10. BIMSTEC website. http://www.bimstec.org/about_bimstec.html (accessed 25 November 2012).
  11. Calder, K., & Ye, M. (2004). Regionalism and critical junctures: Explaining the ‘organization gap’ in Northeast Asia. Journal of East Asian Studies, 4, 191–226. Spring.Google Scholar
  12. Capannelli, G. (2011). Institutions for economic and financial integration in Asia: Trends and prospects. ADBI Working Paper No. 308. Tokyo: Asian Development Bank Institute.Google Scholar
  13. Capannelli, G., Li, J-W., & Petri, P. (2009). Developing indicators for regional economic integration and cooperation. Manila: ADB Working Paper Series on Regional Economic Integration. No. 33.Google Scholar
  14. Chin, G. (2010a). Remaking the architecture: The emerging powers, self-insuring and regional insulation. International Affairs, 86(3), 693–715.CrossRefGoogle Scholar
  15. Chin, G. (2010b). The emerging countries and China in the G20: Reshaping global economic governance. Studia Diplomatica, LXIII(2–3), 105–124.Google Scholar
  16. Chin, G. (2011). Mediating financial instability: China, the BRICs and continuing rise. In P. Savona, J. Kirton, & C. Oldani (Eds.), Global financial crisis: Global impact and solutions (pp. 89–108). Aldershot: Ashgate.Google Scholar
  17. Chin, G., & Helleiner, E. (2008). China as a creditor: Rising financial power? Journal of International Affairs, 62(1), 87–102.Google Scholar
  18. Chin, G., & Stubbs, R. (2011). China, regional institution-building, and the China-ASEAN Free Trade Area. Review of International Political Economy, 18(3), 277–298.CrossRefGoogle Scholar
  19. Chin, G., & Wang, Y. (2010). Debating the international currency system: What’s in a speech? China Security, 6(1), 3–20.Google Scholar
  20. G20 Working Group 4. (2009). Final report: The World Bank and other multilateral development banks. Google Scholar
  21. Henning, R. (2002). East Asian financial cooperation. Washington, DC: Institute for International Economics.Google Scholar
  22. Hu, J. (2009). China to further assist developing countries. Speech cited in China Daily. 24 September. http://www.chinadaily.com.cn/china/2009-09/24/content_8730895.htm.
  23. Huang, P. (2009). Quoted in You Nuo, Fu Jing, and Wang Bo. Nation should play greater role in G20, Expert says. China Daily. 9 March 2009. http://www.chinadaily.com.cn/bizchina/2009-03/19/content_7594063.htm.
  24. Kaberuka, D. (2011). Boosting infrastructure investments in Africa. World Economics, 12(2), 7–24.Google Scholar
  25. Kuroda, H., & Kawai, M. (2002). Strengthening regional financial cooperation in East Asia. Asia Pacific Economic Papers No 332. Canberra: Australia-Japan Research Center, Australia National University. http://www.crawford.anu.edu.au/pdf/pep/pep-332.pdf.Google Scholar
  26. Li, C. (2009). China’s new think tanks: Where officials, entrepreneurs and scholars interact. China Leadership Monitor. Number 29.Google Scholar
  27. MacIntyre, A., Pempel, T. J., & Ravenhill, J. (2008). Crisis as catalyst: Asia’s dynamic political economy. Ithaca: Cornell University Press.Google Scholar
  28. Obama, B. (2010). Quoted in Obama warns nations not to rely on exports to US. BBC News (Asia-Pacific). 13 November. http://www.bbc.co.uk/news/world-asia-pacific-11748433#story_continues_1.
  29. Park, D., & Shin, K. (2010). Can trade with the People’s Republic of China be an engine of growth for developing Asia? Asian Development Review, 27(1), 160–181.Google Scholar
  30. Raj, J., & Dhal, S. (2008). Integration of India’s stock market with global and major regional markets. In: Bank for International Settlements. Regional finance and integration in Asia. Paper No. 42. pp. 202–236.Google Scholar
  31. Rajamohan, P. G., Rahut, D. B., & Jacob, J. T. (2008). Changing paradigms of Indo-Japan relations: Opportunities and challenges. ICRIER Working Paper No. 212.Google Scholar
  32. Rathus, J. (2009). The Chiang Mai initiative: China, Japan and financial regionalism. East Asia Forum. http://www.eastasiaforum.org/2009/05/11/the-chiang-mai-initiative-china-japan-and-financial-regionalism/.
  33. Singh, M. (2008). Cited in Indian PM confident of bigger roles India, China to play in world affairs. People’s Daily. 15 January. http://english.people.com.cn/90001/90776/90883/6338755.html.
  34. Sinha, C., & Pradhan, N. C. (2008). India’s financial openness and integration with Southeast Asian Countries: An analytical perspective. In Regional Finance and Integration in Asia. Bank for International Settlements. Paper No. 42. pp. 181–201.Google Scholar
  35. Summers, L. (2009). Quoted in lunch with the FT: Larry Summers. Financial Times. 9 July. http://www.ft.com/intl/cms/s/2/6ac06592-6ce0-11de-af56-00144feabdc0.html#axzz1fgAnKeEZ.
  36. Wang, X. (2007). China as a net creditor: An indication of strength or weakness. China and World Economy, 15(6), 22–36.CrossRefGoogle Scholar
  37. Xinhua Net (online). (2009). China’s central bank governor says IMF needs improvement. 18 April. http://news.xinhuanet.com/english/2009-04/18/content_11210468.htm.
  38. Yu, Y. (2007). The Asian financial crisis and the rise of Asian regionalism. Paper presented at the Asian Development Bank Conference. Japan: Kyoto.Google Scholar
  39. Zhai, F. (2010). The benefits of regional infrastructure investment in Asia: A quantitative exploration. ADBI Working Paper No. 223. Tokyo: Asian Development Bank Institute.Google Scholar
  40. Zhang, Y. (2011). Emerging force: China in the region and the world. Global Asia 6(4). Winter. http://www.globalasia.org/Issue/ArticleDetail/241/emerging-force-china-in-the-region-and-the-world.html.
  41. Zhang, Y. (2012). China’s regional and global power. East Asia Forum. 6 February. http://www.eastasiaforum.org/2012/02/06/chinas-regional-and-global-power/.
  42. Zhao, X. (2010). Monetary and currency cooperation across emerging Asia. Speech in Kunming, People’s Republic of China. 27 July. http://www.adb.org/Documents/Speeches/2010/ms2010066.asp.
  43. Zhou, X. (2009). Reflections on reforming the international monetary system. Speech given on 23 March. http://www.pbc.gov.cn/detail.asp?col=4200&ID=279 (Chinese); http://www.pbc.gov.cn/english/detail.asp?col=6500&id=178 (English).

Copyright information

© Asian Development Bank Institute 2014

Authors and Affiliations

  1. 1.York UniversityTorontoCanada

Personalised recommendations