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Political Economy of World-Systems 2002 Conference Riverside, California |
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Abstract China in East Asia after the American
Hegemony -- China's Open Door Policy and the Relationship between China and
Japan Seung-Wook Baek East Asian countries have gotten worldwide attention as a new global accumulation center during the decline of the American Hegemony. China, that stood aside from the East Asian financial crisis and still shows relatively high growth rate, is still regarded as one of the leading candidates for the new growing center in this region. After having pursued socialist mercantilist strategies for about 20 years, China opened its door wide to world economy since 1970s. Until the early 1990s, however, China seemed to display an 'East Asian developmental state model' that appeared to have been abolished by most former East Asian developmental states that began to accept 'Washington Consensus' and neo-liberal re-adjustment. Though international circumstances for China in the post-cold war era are different from those of other East Asian countries (especially Japan and Asian NICs 4) that enjoyed favorable conditions acknowledged by the USA during the Cold War period, the Chinese government could lead the economy guided by the state, expand export markets rapidly, and control capital market without facing serious breakdown of the economy. One of the reasons to maintain these strategies is the increasing role of 'diaspora capital' from overseas Chinese scattered around Southeast Asia. This overseas Chinese capital invested mainly processing manufactures of small and medium size in China's coastal areas and led China to be incorporated into the 'multi-layered contract system' in East Asia as a bottom level partner. Since the mid-1990s this development model has been changing as investment by non-Asian TNCs increased and China's State Owned enterprises (SOEs) met serious structural problems. Recently the Chinese government accelerates the open door policy especially for TNCs from core countries that are competitors rather than supplementary elements for domestic SOEs. The aim of this new tide of open door policy is to push ahead the neo-liberal readjustment of SOEs. The future picture of China's development strategies may depend on whether or not China can maintain selective economic support policies for specific industries, control capital market from global speculative capital, solve unemployment problems, and get the real fruits from massive government expenditure policy such as the 'Great Western Development.' This situation may be analogous to the American 'New Deal' era in the 1930s, but China doesn't seem to have enough and necessary conditions to solve problems only using domestic resources. Therefore, it is geopolitical and geo-economic arrangement in East Asia that may decide future road of China's development, and above all China-Japan relationship is important since both countries face economic impasses. Japan's investment in China, which was the next step of Japan's expansion towards Southeast Asia (especially ASEAN 4), increased rapidly in the early 1990s and dwindled since 'reverse Plaza' after 1995. Though China is incorporated into the East Asian multi-layered contract system in terms of supply of technology and main machinery equipment from Japan, participation in the division of labor within East Asia, and selling of end-products to the US markets, it also displays some differences from other East Asian countries in terms of the scale of domestic market, increasing competition for the market among TNCs of non-Asian origins, and its strategic importance in this region. These different circumstances give rise to polemics of China policies within Japan. Capitalist internationalists of Japan's MITI and MOFA is facing a new challenge of groups stressing a new version of 'China Threat' that involves economic as well as political implications. Japan's China policy is also influenced by the relationship between China and the USA that shows a clear opposition between land power and maritime power in the post-cold war period. |
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27th Annual Conference of the Political Economy of World-Systems Spring Hosted by the Institute for Research on World-Systems at the University of California, Riverside |