The Political Economy of Regional Integration in East Asia

Abstract

As a result of Japan’s defeat in World War II, the prewar regional political economy of East Asia within the framework of the Japanese empire was substantially transformed. The postwar political economy of East Asia was initially structured under the aegis of the United States, reflecting the political and economic conditions in the region at the time. As part of its postwar strategy in East Asia, Washington encouraged regional economic integration centered on Japan with noncommunist East and Southeast Asia functioning as a market and source of raw materials for the Japanese economy. The development of postwar economic relations between Japan and other capitalist economies in the region basically proceeded along this line. By the mid-1960s, with the normalization of relations between Japan and South Korea, the East Asian political economy had been solidly resumed. Thereafter, the major market economies in East Asia successively achieved economic miracles with Japan emerging as a new economic superpower and South Korea, Taiwan, and Hong Kong becoming newly industrializing economies. In this process, these economies became increasingly interdependent through growing trade and FDI among them. In the late 1970s,China moved away fromMao’s policy of self-reliance and began to participate in the regional and international economy.