8.7

• Regionalism is a relatively new aspect of Asia's rise
• Asia's economies


  • Increasingly connected through trade, financial transactions, direct investment, technology, labor and tourist flows, and other economic relationships
• The 1997/98 financial crisis was an important catalyst for this new regionalism and gave rise to a range of new initiatives
• Asia's regional initiatives are not intended to replicate the institutions of the European Union (EU), but have rather focused on finding new and flexible forms of cooperation that reflect the region's diversity and pragmatism
• Asia's regional initiatives are not intended to replace global relationships, but rather to complement them
• Asian regionalism


  • Dynamic and outward-looking, could bring huge benefits not just to Asia, but to the world by sustaining the region's growth, underpinning its stability, and reducing inequality
• The center of gravity of the global economy is shifting to Asia, as the region's economy is already similar in size to those of Europe and North America, and its influence in the world continues to increase
• In many Asian countries, the cycle of poverty has been broken, and in others, this historic aim is within sight
• Asia's extraordinary success has brought new challenges, as citizens demand that rapid economic growth also be sustainable and more inclusive
• Asia must now play a larger role in global economic leadership
• Regional economic cooperation is essential for addressing these challenges
• How regionalism can benefit Asia

  • Link the competitive strengths of its diverse economies to boost productivity and sustain growth, connect capital markets to enhance financial stability, cooperate on exchange rate and macroeconomic policies, pool foreign exchange reserves, exercise leadership in global decision making, build connected infrastructure and collaborate on inclusive development, create regional mechanisms to manage cross-border issues
• How Asian regionalism can benefit the world

  • Generate productivity gains, new ideas, and competition that boost global economic growth, contribute to the efficiency and stability of global financial markets, diversify sources of global demand, provide leadership to sustain open global trade and financial systems, create regional mechanisms to manage global health, safety, and environmental issues
• Asian regionalism is primarily motivated by the desire to advance welfare in the region, and would not detract from development elsewhere, but rather help sustain global economic progress
• In the 1930s, countries created preferential trade blocs and discriminatory currency blocs in an attempt to shelter their economies from the Great Depression, which led to the collapse of international trade and financial flows
• The architects of the post-war global economic system adopted the principle of non-discrimination as a central pillar of the General Agreement on Tariffs and Trade (GATT), the forerunner of the World Trade Organization (WTO)
• Many economists and policymakers remain skeptical about regionalism because of its potentially negative impact on the multilateral trade and financial system
• Regionalism must not lead to protectionist blocs, but the open, outward-oriented regionalism that is emerging in Asia can avoid posing such a threat
• Asia comprises several powerful countries and centers of economic activity, with many shared economic priorities, but also some diverging ones, which are amplified by history and politics
• The price of cooperation is the loss of some national sovereignty and the narrowing of policy options for pursuing purely national objectives
• Regionalism


  A political ideology that favors a specific region over a greater area, usually resulting from political separations, religious geography, cultural boundaries, linguistic regions, and managerial divisions
• Regionalism


  Differs from globalization
• The ASEAN (Association of Southeast Asian Nations) was born in 1967 with five original members: Indonesia, Philippines, Malaysia, Thailand, and Singapore
• ASEAN was established as a regional economic forum with the United States' strong support
• In 1997, the ASEAN plus three (Japan, South Korea, and China) was instituted
• In the 2000s, Japan and China competed over how to adapt to the relentless tide of globalization via the politics of membership
• The East Asian Summit is a regional forum held annually by leaders of 16 countries in the East Asian, Southeast Asian and South Asian regions, which in 2010 decided to add two more members, the United States and Russia
• Three propositions of Asian regionalism: 1) Geographical Asia is too diverse for cultural Asia, 2) Geographical Asia is too small for globalizing Asia, 3) Geographical Asia is too conflictual internally for strategic Asia
• China hit back at Trump's tariffs on $50 billion in Chinese goods with its own proposed tariffs on 106 American products accounting for around $50 billion in trade, raising fears of an all-out trade war between the world's two biggest economies
• China's new tariffs target major US exports like aircraft, soybeans, and cars, in an attempt to target states that voted for Trump
• Foreign Ministry Spokesman: '"Those who attempt to make China surrender through pressure or intimidation have never succeeded before, and will not succeed now."'