06 Jan

East Asia’s Reemergence

Posted By Politybooks

The guiding theme of this book isthat East Asia’s reemergence as a semi-autonomous core of the world economyconstitutes one of the most significant structural changes in world politicssince the Industrial Revolution and Eurocentric globalization in the nineteenthcentury. Thanks to a regional developmental dynamic of remarkable intensity,duration and spatial scope, which spread from Japan to the rest of the region, EastAsia is gradually regaining the position in the world economy that it enjoyedprior to the great East-West and North-South divergence, commensurate with itsdemographic weight.

Overthe past four decades the region’s share of world Gross Domestic Product (GDP),in purchasing power parity (PPP), has risen from less than 10 percent to 30percent, a ratio that should rise by 2030 to just over 40 percent. China hasbecome the world’s second-largest economy in current exchange rates (thelargest in PPP). Since 1980 its share of world GDP (PPP) hasrisen from 2% to over 16%. Though growth has recently slowed due to the globalcontraction that followed the 2008 financial crisis, China remains on anascending trajectory: average per capita GDP (PPP) has risen from $250 in 1980to $9,800 and is expected to reach $16,000 by 2020. Assuming steady but slowergrowth going forward, per capita GDP should reach current Japanese or Europeanlevels by the mid-21st century.

China has simultaneously become thegravitational center of new transcontinental South-South trade and investmentlinkages, supplanting the United States, Europe and Japan as the leading tradepartner of most East Asian countries, and becoming a crucial actor in SouthAmerican, African and South Asian trade. Over the past twenty years South-Southtrade has expanded more rapidly than global trade, currently accounting for 25percent of the total, 21 percent of manufacturing exports, and 25 percent ofexports of manufactures with medium and high technological intensity. In manycases, notably in East Asia itself, this has been accompanied by industrialupgrading: the “developing” world’s share of manufacturing value-added hasrisen from less than 10 to nearly 30 percent.

Thepolitics of postcolonial reemergence have lagged behind economics but a gradualpolitical reordering is apparent in the growing voice of the South ininternational organizations and new institution-building efforts bypassingtraditional centers of power and authority. In 2013, Brazil, Russia, India,China and South Africa set up the New Development Bank (NDB), headquartered inShanghai, which will combine investment and monetaryfunctions, serving as a lending institution for infrastructure developmentprojects as well as a reserve facility dealing with balance of paymentsproblems. In 2014, China founded the Asian Infrastructure Investment Bank(AIIB). The creation of a distinct institutional system separate from theBretton Woods institutions that have underpinned world capitalism since 1945 hasmajor implications: from now on rules and regimes will no longer be exclusivelyset in the historic North.

The East Asian economic revolution,in short, is reshaping the global landscape. Though “revolution” has alwaysbeen a problematic concept to describe the cumulative effects of technological,economic and social change, I use it not only to denote the relatively sudden,considerable and sustained increases in the rate of growth that the region hasexperienced, but also and more broadly its systemically transformative effects.Like the European Industrial Revolution, the East Asian one is gradually changingthe order of the world. As the United Nations Development Programme (UNDP) emphasizes:“The world is witnessing an epochal global rebalancing. The rise of the Southreverses the huge shift that saw Europe and North America eclipse the rest ofthe world, beginning with the industrial revolution, through the colonial erato two World Wars in the twentieth century. Now another tectonic shift has putdeveloping countries on an upward curve”.

The book explores the sources ofthat shift and interrogates its implications for understandings of globalizationand capitalist development. Using a historical sociological approach to thestudy of world politics, it weaves together social theory and historicalnarrative to analyze the structural and contingent factors that gave rise,during distinct but interconnected moments of world history, to the East Asiandevelopment dynamic.

Moving from present to past and pastto present the book examines the early modern European-Asian encounter, theimperial collisions of the nineteenth century, ‘Pax Americana’ and thepost-war constitution of authoritarian capitalist developmental states, andChina’s state-capitalist turn in the late twentieth century. The focus is on the ways in whichimperialism, war and revolution shaped modern nation and state buildingefforts—the international interactions that generated state forms in thenineteenth and twentieth centuries which, to varying degrees, have proved ableto harness transnational forces to national institutions and purposes, and tosuccessfully alter national positions in the global economic hierarchy.

Major challenges lie ahead.For observers concerned with the problem of international inequality, such asthis author, global rebalancing is normatively desirable. But because itimplies intensified competition for resources, capital, status and voice itcarries not insignificant political and economic risks. At the same time capitalistdevelopment has generated new social fractures and environmental problems. Theseproblems need to be addressed to create the conditions for a sustainable andpeaceful future.