Reorienting East Asia: Ten Years after the Financial Crisis

Abstract

This year marks the tenth anniversary of the Asian financial crisis of 1997. This paper argues that the financial crisis marked the passing of the post-war order in East Asia. It was an order in which the United States provided political support for regime stability, Japan provided financial wherewithal for investment and enormous entrepreneurial talent had been provided by the overseas Chinese in Southeast Asia-and all of this in the context of the sequestration of the People's Republic of China. By the end of the last century, however, all of that had changed. In the aftermath of the Asian crisis, the influence of the United States and Japan has declined markedly, only to be replaced by the rising influence of China. The paper discusses the post-1997 East Asia by looking at the changing political order in the area, new patterns of trade and investment as well as demography-the new and old overseas Chinese and their relationship to their 'homeland'. Finally, the paper discusses how the economies in the region-Korea, for instance-are adjusting to the new Chinese regional order.