AJRC Books
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'China's APEC Agenda: Shangai 2001', Zhang Yunling and Peter Drysdale, 98pp. APC Policy Research Centre, Chinese Academy of Social Sciences, Beijing, and Australia Japan Research Centre, Australian National University
'Strengthening Australia–Japan Economic Relations', Gordon de Brouwer, Australian National University and Tony Warren, Network Economics Consulting Group, for the Department of Foreign Affairs and Trade, 62.pp.
30. APEC, Australia and Japan Dominic Wilson, 60 pp. The East Asian financial crisis of 1997–8 is a defining event in the region's history. It has created new priorities and challenges for individual governments and regional cooperation. As the region's primary regional organisation, the Asia Pacific Economic Cooperation forum (APEC), has come under fire for doing too little in the face of massive capital flight and financial collapse in several of its member economies.
Much of the recent criticism of APEC has been unfair or misguided. But the crisis has undoubtedly highlighted the need to clarify APEC's role, to give more detailed thought to its agenda and to reinvigorate it as an organisation. The principal danger is that without a clear sense of what APEC can and should achieve, member governments will attach less importance to APEC and turn away from an institution that has proved to be a highly valuable mode of regional cooperation over its first ten years of operation.
Since the inception of APEC and before, Australia and Japan have played central roles in originating and developing regional initiatives for economic cooperation. By renewing and expanding APEC's agenda in a way that builds on its strengths but acknowledges the need to address new problems, they can again play a useful role in ensuring APEC's relevance in the next millenium.
On 18 January 1998, a joint seminar was held at Kobe University with participants from Japan and Australia, as part of a new three year project jointly undertaken by the Australia–Japan Research Centre and the Research Institute for Economics and Business Administration at Kobe University on Australia, Japan and APEC.
This report, prepared by Dominic Wilson, provides some background to the project and summarises the preliminary discussions of the research team on a variety of areas that are central to APEC's agenda and Australia–Japan cooperation.
Professor Kenichi Ishigaki will lead a team from Kobe University to visit Canberra for a second seminar in September 1999. A conference will then be held in Australia in 2000 to present the project's final results.
29. Financial Reform and Macroeconomic Policy Management in Korea Heather Smith, 20 pp. In response to the 1997 crisis the Korean government in conjunction with the IMF adopted austere macroeconomic measures aimed at restoring investor confidence in the economy. Policies to restructure the financial and corporate sectors, along with other far-reaching market opening measures, were designed to lay the basis for recovery and growth. While exchange rate stability was rather quickly obtained by early 1998, whether the tight stance of macroeconomic policy achieved the goal of strengthening investor confidence, given the negative impact on the real economy, remains an open question. Nonetheless, during 1998 Korea made real progress in financial sector reform during a period of severe economic stress, compressing into a relatively short time frame, reforms that one would normally expect to take much longer. This rather remarkable pace of change has exceeded that of the other 'crisis' East Asian economies.
Political momentum for a reform process will more likely be sustained in an environment of an economy experiencing a rapid return to positive growth. In this regard, macroeconomic policy settings in Korea will need to remain flexible. Despite the recent improvement in some economic indicators, the structural fragility of the economy still makes Korea vulnerable to changes in confidence, which in turn is dependant on the pace of structural reform. Provided that corporate and financial sector reform proceed smoothly, Korea will emerge early in the next century a considerably more competitive and dynamic economy but still with a big agenda of reform issues in the areas of corporate governance and competition policy.
The experience of other industrialised countries suggests that Korean policymakers will now be embarking on a learning curve in the conduct of monetary policy in an open economy. One central lesson from the Australian experience during the 1980s is that, despite the substantial benefits that financial liberalisation brings, the costs associated with adjusting to this new environment should not be underestimated. A second important lesson is that empirical relationships amongst monetary aggregates, economic activity, prices, and interest rates are unlikely to withstand the changes of financial deregulation and liberalisation.
The international conference on 'Financial Reform and Macroeconomic Policy Management in Korea' held at the Australian National University in Canberra on 5 November under the auspices of the Korea Economy Program, Division of Economics (APSEM/RSPAS) formed part of an ongoing program of research on the Korean Economy.
This report, prepared by Dr Heather Smith, discusses the impact of the crisis on the Korean economy during 1998, the policy response of the Korean government and the IMF to the crisis, the progress in corporate and financial sector restructuring, and the longer-term growth prospects of the economy in light of the restructuring process.
The conference was funded under the Australia–Korea Foundation grants program. We gratefully acknowledge the financial support of the Australia–Korea Foundation.
28. APEC and Liberalisation of the Chinese Economy Ligang Song, 16 pp. Ten years after the establishment of the Asia Pacific Economic Cooperation (APEC) forum, the organisation faces its most daunting challenge: how to cope with the Asian financial crisis. With a strong contagion effect, the crisis has engulfed a number of APEC member countries in East Asia since mid-1997 and, by slowing the economic growth of most countries in the region, endangered the process of trade and investment liberalisation set out in the APEC agenda.
APEC has made substantial progress in reducing barriers to trade by individual countries in the past ten years, but there are real questions about the next steps in regional economic and political cooperation as forces mobilise against trade liberalisation in the fallout from the East Asian crisis.
The immediate goal for Asia Pacific Economic Cooperation is to restore positive economic growth and the confidence needed to sustain market-driven integration of the region's economies.
APEC has an important role to play both in holding policy directions firm, and in smoothing the trade tensions that will undoubtedly emerge beyond 1998, thus encouraging regional and domestic acceptance of China's continuing development as a source of economic stability in the region.
APEC offers China more than any other organisation does in liberalising its economy. China's participation and constructive role in APEC is of great significance not only to China itself but also to the region at large.
The international conference on 'APEC and Liberalisation of the Chinese Economy', held at the Chinese Academy of Social Sciences in Beijing on 7 October 1998, formed the second part of a collaborative research project being jointly undertaken by the Australia–Japan Research Centre and the APEC Policy Research Centre at the Chinese Academy of Social Sciences.
This report, prepared by Dr Ligang Song, summarises the views of the research team from both Australia and China on APEC objectives, the role that APEC can play in resolving the East Asian financial crisis, Australian and Chinese bilateral relations in Asia Pacific economic cooperation and China's liberalisation program in the APEC process.
We acknowledge gratefully financial support for the project from AusAID under the Australia–China Institutional Links Program. The project will conclude in 1999 with publication of a full research report in the year 2000.
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27. Regional Security Implications of the East Asian Economic Crisis Paul Dibb, Hugh White, Stuart Harris and Ross Garnaut, 16 pp. An expectation of continued rapid economic growth in East Asia has underpinned Australia's sense of confidence in a stable regional security outlook. The Asian economic crisis has dramatically weakened that assumption, at least in the near term. While the probability of military conflict in East Asia and the Pacific still appears low, the crisis has tested the capacity of states and institutions to respond to complex political challenges. Australia is already having to confront new strategic realities flowing directly from the impact of the crisis in Southeast Asia. A wider legacy of uncertainty surrounds power relativities in the region, capacities for great power leadership, the efficacy of global and regional institutions, and the ability of states to undertake necessary reforms to restore growth prospects.
Paul Dibb(pp. 2-4)assesses the short-term impact of the crisis on states and institutions in the Asia Pacific region and sketches possible scenarios for the longer term. He concludes that a more asymmetric geopolitical outlook is likely in coming years as some states cope better than others with pressures for economic and political reform. Hugh White (pp. 5–7) stresses that the consequences of the economic crisis for Australian strategic policy depend on how long it lasts, how wide it spreads and how deep it penetrates. His qualified optimism is tempered by uncertainty about Indonesia's political transition and about the capacity of Southeast Asia to maintain its sense of confidence and cohesion if a protracted economic slump ensues. Stuart Harris (pp. 7–9) is skeptical about the impact of the economic crisis on the inter-state regional security outlook. This view is grounded in what he sees as a relative lack of realpolitik power balancing in the Asia Pacific region and the likelihood that states will place even greater emphasis on economic development as a means of maintaining domestic stability. Ross Garnaut (pp. 10–13) draws attention to the way in which recessionary pressures have been transmitted through East Asia by rapidly declining intra-regional trade. He argues that the economic crisis will have its main impact on long-term economic growth through its effect on ideas about economic policy. It may also reshape attitudes towards American strategic involvement in the region given US association with the reform programs of the International Monetary Fund.
This report is based on a panel at the Australian National University organised by the Australia–Japan Research Centre on 10 August 1998. It was prepared by John Kunkel, Research Scholar at the Australia-Japan Research Centre.
26. Open Regionalism, APEC and the Chinese Economy Ligang Song, 16 pp. APEC has become an important international forum for China to demonstrate its willingness to integrate with the world economy. APEC is made all the more important by the fact that China is not a member economy of the WTO, nor of the OECD. As most APEC member economies are also economically the most important partners for China's trade and investment, China can address important issues with its major economic partners in a more efficient and consistent way under the auspices of APEC.
In facilitating China's trade liberalisation, APEC and the WTO seem to be mutually re-enforcing. APEC prepares China for the WTO and the WTO accession pushes China to proceed with the APEC process. In the longer term, China must realise that trade liberalisation, even if carried out unilaterally, is in its own interests. A mercantilist approach to trade liberalisation is not only harmful to short-run economic policy, but also detrimental to the long-run reform process. Reform is essential for a long time to come and should not be allowed to slow down when the external pressure for reform diminishes once China becomes a WTO member or if the APEC process slows down.
The integration of the Chinese economy into the region and global economy is mutually beneficial for China and its trading partners as the increase in its imports has been accompanied by rapid increases in its exports. China's ongoing trade liberalisation with enlarged capability for export supply and domestic demand for imported goods will lead the economy further down the road towards global integration.
The international conference on 'APEC and its impact on the Chinese economy,' held at the Australian National University in Canberra on 16 February 1998, formed part of a collaborative research project being jointly undertaken by the Australia–Japan Research Centre and the APEC Policy Research Centre at the Chinese Academy of Social Sciences.
This report, prepared by Dr Ligang Song, summarises the views of the research team from both Australia and China on the relationship between open regionalism, APEC and the Chinese economy, Australia and China bilateral relations in Asia Pacific Economic cooperation and APEC's impact on the Chinese economy.
A further conference on the next phase of the research project is scheduled to be held in Beijing in October 1998, leading to the publication of a major report summarising the main results of this research.
The project has been funded under the AusAID Australia–China Institutional Links Project. We acknowledge gratefully the financial support by AusAID.
25. Europe, East Asia, APEC and ASEM: Opportunities for inter-regional Cooperation, 24 pp. The emergence of the economies of East Asia and the Asia Pacific, alongside the integration of Europe, has been among the most important developments in the world economy in the second half of the twentieth century. These developments have taken place in an increasingly integrated international economy with the institutional support of the General Agreement on Tariffs and Trade (GATT), now the World Trade Organization (WTO).
World economic integration has been associated with the growth of regionalism in international economic affairs, yet the regionalism which is emerging in East Asia and the Pacific appears very different from the regionalism that earlier took root in Europe. How might Europe and other parts of the world respond to developments in the Asia Pacific economy and how, in particular, might Europe relate to East Asia and the process of Asia Pacific Economic Cooperation (APEC)?
The Australia–Japan Research Centre of the Australian National University is conducting a five-year research program to compare the experiences of regional economic cooperation in Europe and the Asia Pacific and to identify opportunities and options for strengthening economic relations between as well as among the two groups of economies. An initial conference was held in Canberra in August 1996. Four conferences, involving both researchers and policy makers, were held in Europe in May 1997 to explore these matters in more depth.
This report, based on the papers and discussions at the four conferences, is intended to complement the June 1997 Global Economic Institutions (GEI) newsletter, by comparing the different experience of regional economic cooperation in the European Union (EU) and the Asia Pacific, then exploring the potential benefits of and options for practical cooperation between the two groups of economies. This report also refers extensively to the results of five days of discussions in London, Brussels, Paris and Berlin, which are summarised in Europe, East Asia and APEC: A shared global agenda?, edited by Professors Peter Drysdale and David Vines and published by the Australia–Japan Research Centre, the GEI and Cambridge University Press in April 1998.
The conferences were organised by the Australia–Japan Research Centre at the Australian National University in cooperation with UK-based organisations the Global Economic Institutions (GEI) Programme, the Economic and Social Research Council and the Centre for Economic and Policy Research (CEPR), as well as the European Centre for Advanced Research in Economics (ECARE) in Brussels, the Centre d'Etudes Prospectives et Informations Internationales (CEPII) in Paris and the Japanese–German Centre in Berlin.
Financial support for the meetings was provided by the GEI, the AJRC, the European Commission, the British Foreign and Commonwealth Office and the Australian Department of Foreign Affairs and Trade.
24. The Australia-Japan Relationship: Preparing for the Next Generation John Kunkel, 20 pp. The significant issues emerging in the economic relationship with Japan and East Asia were discussed at a Symposium held in Canberra on 27 August.
The Symposium was hosted by the AJRC in conjunction with the Asia Club Foundation and the support of the MITI in Japan.
Following a series of seminars held in Japan earlier in the year, the Symposium sought to confront these issues in the relationship working from the base of the achievements over the last forty years. The agenda took stock of what the relationship currently is and what resources — especially human capital resources — we have to respond to the huge changes that are occurring and will occur in Japan over the next 30-40 years. One session was devoted to new developments in the media, communications and information area.
The meeting was opened by the Hon. John Anderson MP, Minister for Primary Industries and Energy. The presenters included: Mr Jiro Shibata from the International Trade Policy Bureau of the MITI; Professor Chikashi Moriguchi from Tezukayama University; Mr Takayuki Kamikura, President, Imagineer Co Ltd; News Limited's Chief Representative in Japan, Mr John McBride; and Mr Peter Hartcher, Asia Pacific Editor, the Australian Financial Review.
23. Developments in Australia-Japan Defence Ties John Kunkel, 16 pp. One of the major developments in the Australia–Japan relationship in recent years has been the upgrading of defence and security ties. Through the 1970s and 1980s, Australia's defence strategy focused on the immediate region of Southeast Asia and the Southwest Pacific. But the end of the Cold War has brought into sharper focus the emerging power relationships in Northeast Asia.
On 21 July 1997 the Australia–Japan Research Centre organised a panel to examine 'Developments in Australia–Japan Defence Ties'. Key panelists were Hugh White, Deputy Secretary of the Defence Department, and Paul Dibb, head of the Strategic and Defence Studies Centre at the ANU. This report outlines the discussion during the session and features extensive quotations from the key panelists.
Participants agreed that the strength of the broader bilateral relationship has made establishing a strategic dialogue between Australia and Japan all the easier. A large number of strategic commonalities and shared perspectives support the relationship. These include the respective alliance relationships with the United States and the joint interest in maintaining the US strategic presence in the Western Pacific, an interest in regional security and a shared approach to regional security mechanisms such as the ASEAN Regional Forum, and a shared interest in supporting the United Nations and its specific activities such as peacekeeping. In addition, Australia and Japan maintain among the most transparent military structures in the Asia Pacific region and they cooperate closely to encourage military confidence building measures and transparency.
Australia and Japan have established a pattern of annual talks between defence and foreign policy officials and regular ministerial visits. In addition, there is a heightened level of business on strategic issues through the embassies in Tokyo and Canberra. This relationship differs markedly from an alliance like ANZUS or from a defence cooperation relationship of the sort Australia has maintained in Southeast Asia. There is some service-to-service contact, but no expectation of this increasing to large-scale military operations.
Of necessity, Australia has had to fit in with a Japanese strategic agenda in building this relationship. One important example is Japan's move into peacekeeping as part of its strategic posture; an area where Australia has provided assistance. Japan's perception of Australia as a leading middle power with considerable military and foreign policy influence in Southeast Asia has been another important building block for the relationship.
What does the future hold for the Australia–Japan defence relationship? For the moment, the official view is that an alliance relationship or major military-to-military contacts are not on the agenda. Hugh White sums up the ultimate goal of the strategic dialogue in one word: 'influence'. He says: 'Getting that influence, building it, expanding it over time through greater exposure, greater trust, greater understanding of one another's thinking is the objective we have now rather than continuing to build into new directions'. Even so, the Australia–Japan security relationship is positioned to play a more important role in the emerging security architecture of the Asia Pacific region.
Australia and Japan: Asia Pacific Economic Cooperation and Regional Security. In July 1957 Australia and Japan ratified the Agreement on Commerce. This was a watershed in the development of the modern Australia-Japan relationship — a partnership which has since broadened and deepened with burgeoning economic, political and social exchange between the two countries. On 21 April 1997 the Australia–Japan Research Centre and Gaiko Forum, Japan's most authoritative foreign policy journal, held a special colloquium to commemorate the commerce agreement's fortieth anniversary. The central theme was the regional economic and security challenges facing Australia and Japan in an environment of rapid change. Decades of successful partnership offer only a partial guide to meeting these new challenges. As Peter Drysdale observes 'when we look ahead, we must judge the future of the Australia–Japan relationship by quite different yardsticks from those we used in the past'. This report is a step towards identifying those yardsticks. Includes Japanese language summary.
Perspectives and Prospects: China–Japan Relations in the Asia Pacific Region. Explores the relationship between China and Japan since the end of the World War Two; a relationship regarded as critical to the international order and the management of Asia Pacific cooperation. This report details Chinese, Japanese, Australian and US views on the changing political and economic environment in the Asia Pacific, political and economic relations between China and Japan, and the role of China and Japan in the Asia Pacific and world political and economic systems. Includes Chinese and Japanese translations.
Economic Reform and Challenges for the Japanese Economy. Annual review of the state of the Japanese economy and the reform challenges that must be faced if sustained economic growth is to be resumed. Speakers included Professor Iwao Nakatani from Hitotsubashi University, Tokyo; Mr Takeshi Kondo, of Itochu Corporation, Japan; Mr Kiyoshi Imai, of Nippon Credit Bank Investment Management Company, Japan; Dr Paul Sheard from Baring Asset Management, Japan; and Professor Peter Drysdale, Executive Director of the Australia–Japan Research Centre.
Canada and Australia: Cooperation in the Asia Pacific Region. Compilation of discussion from the Canada–Australia conference held at the ANU in July to commemorate the centenary of Canada–Australia trade relations. Expands on the shared interests of both countries in developing the Asia Pacific as a powerful region united by the economic prosperity and security stability provided by the Asia Pacific Economic Cooperation (APEC) forum.
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