The Political Economy of Asian Regionalism - Coursework Example

To what extent does international trade explain the remarkable success of the East Asian economies since 1945? Introduction It is irrefutable international trade has not only enhanced increased human interactions globally but also influenced the growth of numerous states’ economies more so in East Asian bloc. This is due to its constant devising of varied policies that favorably continue to ensure ample platform meant for these states to trade with their bordering partners in East Asian bloc as well as other far distance states, for instance, those in America and Europe regions. However, this did not attain adequate momentum until the conclusion of WWII (1945) when global states embarked on full economic developed with heightened growth recorded during “Long Boom Era”, which was from 1950 to 1973 (Schenk, 2011, p. 9). It was during this period East Asian states embraced the liberated opportunity availed by international trade, thus embarking on full employment coupled with economic prosperity (Schenk, 2011). Hence, ensuring sustained growth trajectories with encouragement from the then Japan’s “economic Miracle” that acted as an example whereby her approach encompassed embracing heightened saving rates besides US’ intervention, hence significantly opening up East Asian bloc and liberating it (Moore, 2010). Region opening in this case though then being political oriented to evade Soviet Union’s influence, was a platform, which East Asia embraced resulting to Japan’s 1980s tremendous growth as well as seeing China reentering global market besides other states (Schenk, 2011, p. 10). This was a significant move that has enabled the bloc advance economically and globally almost being at par with US. In addition, trade has enabled East Asia bloc managed to secure emerging markets for its products in other states as well as invest. This is quite evident in emerging economies where in exchange give out loans. Therefore, this study seeks to highlight varied aspects that the global/international trade since 1945 has availed to the East Asian region up to date whereby its states’ economies continue to thrive. International trade to the East Asian states has availed an unequaled opportunity to maintain as well as increase their networks. This is quite evident with the increased presence of Multinational Enterprises (MNEs) in the region (Fujita, Kuroiwa & Kumagai, 2011). Hence, propelling economic integration, this translates to increasing production networks not only among the individual states but among also extending their labor to other states, for instance US (Fujita, Kuroiwa & Kumagai, 2011, p. 2). Consequently, this normally strengthens the involved states economy aggressiveness to the extent numerous countries like US and Europe opt to have their products more so automobile related made in East Asia. Hence, tapping on the outsourcing market, which is a rare opportunity to numerous states globally though sometimes blamed for flooding third world with counterfeit merchandise. Due to the presence of MNEs in the region, respective states have significantly benefited from economies of scale in all their operations besides emergent technologies and management styles (Urata, Hahn & Narjoko, 2012, p. 92). Hence, continuing to improve their states’ economies though from an integrated perspective that incorporates all the states in the region. While commending about the advancement of East Asia due to international Trade, Kaie-Chin & Shu-Lung, (2014) in their study illustrate how technological revolution has appreciably enabled the individual states’ economies to thrive. In relaying progression in East Asia, they elaborate the success of Flat Panel Display (FPD), which is a unique knowhow presently proliferated in the entire world (Kaie-Chin & Shu-Lung, 2014). The extent into which East Asia has advanced is due to increased networks influenced by liberated global trade to the extent some of its players are global economic giants like China (Urata, Hahn & Narjoko, 2012). Since, they have managed to attain adequate knowhow on how to maintain an aggressive edge besides studying other emerging markets economies’ trends with the intention of marketing own products or services, for instance in Africa. The essence of having trading with varied regions besides a state benefiting economically usually ends up establishing good relations. These are essential especially in foreseeable where more contracts can emerge or jointly venture in varied markets. Presently, through international trade there has been increased involvement of East Asian states with the emerging economies. This is quite evident in Sub-Saharan region whereby to date it is undeniable Chinese entrepreneurs have established relations with varied states (Okoro & Oyewole, 2011, p. 736). For instance, Chinese according to Okoro and Oyewole (2011) study China alone in 2006 claimed to have invested approximately $55.5 billion, which respective beneficiary states have injected in their economies (Okoro & Oyewole, 2011). The state has also embarked on assuming varied contracts more so those related to infrastructures and exploration, for instance, in Kenya. Hence, leading to what currently scholars contend is the second scramble for Africa whereby influential players like UK and US are terribly losing their grasp of the continent they initially controlled economically (Morrison, Cooke & Campos, 2008, p. 13). This is due to increased interactions, ample settings maintained by international trade policies meant for economy empowerment of the two blocs whereby Africa benefits from huge, almost zero-rated interest loans whereas East Asian bloc gets oil, and other raw materials (Great Britain, 2009, p. 84). Chinese involvement also encompasses establishing firms .Similarly, other states from the same bloc have also ventured in Africa though not as immensely as China, hence prompting to the emergency of insinuations by scholars both from political and fiscal arenas. Since they doubt China’s involvement deeming the move is a mere cover up with hidden agenda intended to exploit the developing bloc through direct investments as well as joint venturing (Okoro & Oyewole, 2011, p. 736). However, due to liberty availed by global trade, the benefiting states have increasingly continued to strengthen this Sino-African trade relations (Okoro & Oyewole, 2011). These interactions could not have been evident if it were not for trade, which has bridged gaps of diverse cultures and languages for the two blocs embrace one goal. Mainly, this is to improve own economies by devising strategies that aid them in realizing mutual benefits contrary to numerous scholars contending Sino-African pact has hidden agenda. Additionally, international trade growth has significantly eased accessibility of foreign markets by East Asian bloc. This is for their home merchandise, which could have no value if the bloc solely relied on own market. For instance, Mukhopadhyay and Thomassin (2010, p. 8) in their study highlight how the East Asia due to International trade rapid growth has managed to venture in varied and far distance markets. This is without even relying on close by bodies or trading as per regional agreements (Mukhopadhyay & Thomassin, 2010). Consequently, this has prompted some of the individual states that comprise the bloc besides establishing entities in other regions enter into fiscal based contracts. For instance, Beijing through reliance on global expansion has established centers meant to ease investments in central Africa (Taylor, Kopinski & Polus, 2014). Hence, prompting the China secure approximately 75% of the region’s foreign contracts alone, which is more than what old players like European Union used to enjoy before losing relevance (Taylor, Kopinski & Polus, 2014). Mainly, this involvement with other blocs has not only enabled East Asia find investment regions but also where they can sell merchandise as well as buy. Since, no state is self sufficient to the extent it cannot rely on others in procuring products. Since 1945 and especially after conclusion of threats of cold war, the region due to increased interactions and favorable policies that emerged with global trade growth opened itself to trade opportunities (Sarkar, 2008). Since, through its policies saw this was the only way to liberate itself from fiscal constraints. They ended up in embracing full resulting to embracing any given opportunity with the intention of augmenting their upward trajectory mobility, which was in terms of economy. For instance, through embracing foreign trade its respective states managed to increase exports as well as ensure progression in other key sectors. This embraces learning, health as well as equality though not to the anticipated margins but compared earlier times significant improvements are evident. Equality in this case imply gender and closing on the evident gap amid the haves and states that may be struggling economically more so the citizens. In substantiating the argument of East Asia’s rapid growth, Hu (2015) reveals how the bloc within the past two decades technologically has transformed from imitation to pure innovation. This is due to increased interactions and opening up to global markets whereby individual states more so China and S. Korean scholars with ease can interact with others from developed regions (Hu, 2015). Taking S. Korea as a case study, Hu (2015) contends how the region’s varied states have embarked on intensive researches coupled with development in such a way to shun losing relevance in the market. This is to emerge with original merchandise, which will give any given entity an aggressive edge not only in the regional market but also globally. Hence, growth of free global trade assuming a significant role in exposing the region to competitive settings whereby it ought to have a similar spirited tactic. However, in its quest to ensure high aggressive edge, East Asia emphasized on education due to realization that it ought to be at par with global standards (Permani, 2009). This is after ascertaining how the extent of education usually determines a given region’s economy will prosper as evident in Permani (2009) study. However, this premise based on numerous studies while considering global trade lacks adequate empirical backing because of econometric problems. International trade’s unrelenting growth though in certain periods from 1945 experiencing global setbacks has remained a successful hallmark in favoring numerous East Asia’s development strategies. This is to the extent of certain blocs, for instance, India influenced to establish trade pacts with the bloc as De (2014) in his study contends. In its quest to trade with the bloc, India devised the “Look East Policy” whose core role encompassed negotiating terms meant to ease tariffs that may act as hindrance to her. This was to ensure it had good relations with the East Asia and to the extent of being capable venturing in the region. Consequently, this shows how growth in trade has not only enabled East Asia to reach other regions but also diverse parties intending to have or establish closer ties with the bloc. Hence, marking a similar occurrence when US intervened initially to diffuse of communism though to date this superpower player still has managed to maintain close ties with some of the key states in the region. Consequently, lure numerous investors who have emerged in the region and established MNEs. This is due to the opening of the region through trade besides exhibiting high prospects of rapid growth despite having inequalities across individual economies. The bloc’s institution of East Asia FTAs through respective regional authorities has facilitated to its growth significantly. This is because besides the instituted regional agreements enhancing free trade among close players, they have indirectly enhanced international free trade movement (Kotler, 2012). Hence, make the region being open to any sound and meaningful fiscal intervention that will enhance their respective economies. Because of diffusion of political restrictions that may bar certain parties especially foreign investors thus encouraging health competition but not to undermine local players. However, the emergence of FTAs based on numerous simulation studies has exhibited certain setbacks but not to the extent of rendering them bad because, merits exceed negative impacts. One of the merit linked to these FTAs include technology transfer, which is the sole basis for increased production in the region (Shen & Zhang, 2011). This from management to industrial process though the region’s individual states more China has emerged with advanced ways in conducting their operations though sometimes end up integrating with others (Shen & Zhang, 2011). However, there have been incidences where FTAs due to inevitable loopholes have somehow failed in netting certain foreign investors who only come in the region and exploit locals while in the business of realizing own interests, hence being a detriment that the respective authorities ought to curb by setting prevention appropriate measures. Other positive impacts embrace, Enhancing SMEs competitiveness (Capannelli & Kawai 2014) Enhance electronic commerce Capacity building Tourism promotion In conclusion, it is incontestable growth of global trade has significantly enabled East Asian bloc to develop from 1945 up to date to the extent some of its key states are global economic players like China. This is due to the international trade’s rapid progression whereby through its policies has ensured an appropriate platform meant for this bloc’s economies to develop. For instance, it is through the global trade the region has managed to enter into numerous pacts with varied and numerous states globally. This is in quest to attain materials in form of minerals and oil and in turn parting giving those states zero rated interest loans, for instance, sub Saharan Africa (Okoro & Oyewole, 2011). Besides, through increased interactions brought by trade East Asia has not only invested in foreign states but also managed to acquire markets for their respective merchandise. This is essential more so to a state that has intensively invested in industrial production such that its population cannot consume the surplus produced. In addition, the region due to trade has remained open to trade with both regional and other global states such that foreign investors can adequately blend in and invest but conduct own operations as per outlined procedures. Hence, maintain increased networks with varied regions as well as influential states, which was not the case initially when US in her quest to diffuse Soviet Union’s influence intervened. Networking for any state currently is inevitable if at all it aspires to develop not only economically but also in other states like in the field education, which this study has relayed with the East Asia’s case. This is because education normally forms the basis of innovation, which has enabled S. Korea being one of the bloc’s state transform from being imitators to be innovating. References Capannelli, G., & Kawai, M. 2014. The political economy of Asian regionalism. New York: Springer Science and Business Media. De, U. 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(2008). U.S. and Chinese engagement in Africa: prospects for improving U.S.-China-Africa cooperation. Washington, DC, CSIS Press. Mukhopadhyay, K., & Thomassin, P. J. (2010). Economic and environmental impact of free trade in East and South East Asia. Dordrecht, Springer. Okoro , E. & Oyewole , P. 2011. A cost-benefit analysis of China's trade relations with sub-Saharan Africa.  Chinese Business Review,10, 9, pp. 734-743. Permani, R 2009, 'The Role of Education in Economic Growth in East Asia: a survey', Asian-Pacific Economic Literature, 23, 1, pp. 1-20,. Sarkar, P 2008, 'Trade Openness and Growth: Is There Any Link?', Journal Of Economic Issues (Association For Evolutionary Economics), 42, 3, pp. 763-785. Schenk, C. R. 2011. International Economic Relations Since 1945. United Kingdom: Taylor & Francis. Shen, M. & Zhang, Y. 2011.The Status of East Asian Free Trade Agreements. Asian Development Bank Institute, pp. 1-31. 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