Global Political Economy - Regionalism - Essay Example

The civil war re-started soon after the war against the Japanese was over. Mao had carefully cultivated support in the areas he controlled, whereas, the Guomintang, lead by Chiang Kai-shek, had a different view on how china should be ruled.Chiang did not believe in democracy. He supported the view that society was best served by one supreme leader supported by the military. He was called the "Generalissimo" and, like other dictators, he had his secret police to enforce law and order - the Blueshirts. Their job was to hunt down communists and to develop a spying system that would allow them to infiltrate the communists. The Blueshirts tended to brutalise society into obedience. In this sense, Chiang tried to enforce his authority by force - something that Hitler and Mussolini tried to do. Chiang's attempt to win the support of the people in his territory was minimal Meanwhile, on Taiwan, throughout the 1950s and 1960s, intermittent skirmishes occurred throughout the mainland's coastal and peripheral regions, though American reluctance to be drawn into a larger conflict left Chiang Kai-shek too weak to "retake the mainland" as he constantly vowed. ROC fighter aircraft bombed mainland targets and commandos, sometimes numbering up to 80, landed repeatedly on the mainland to kill PLA soldiers, kidnap CCP cadres, destroy infrastructure, and seize documents. The ROC lost about 150 men in one raid in 1964.Mao's prestige rose steadily after the failure of the Comintern-directed urban insurrections. In late 1931 he was able to proclaim the establishment of the Chinese Soviet Republic under his chairmanship in Ruijin, Jiangxi Province. The Soviet-oriented CCP Political Bureau came to Ruijin at Mao's invitation with the intent of dismantling his apparatus. But, although he had yet to gain membership in the Political Bureau, Mao dominated the proceedings. Few Chinese had any illusions about Japanese designs on China. Hungry for raw materials and pressed by a growing population, Japan initiated the seizure of Manchuria in September 1931 and established ex-Qing emperor Puyi as head of the puppet regime of Manchukuo in 1932. The loss of Manchuria, and its vast potential for industrial development and war industries, was a blow to the Nationalist economy. The League of Nations, established at the end of World War I, was unable to act in the face of the Japanese defiance. The Japanese began to push from south of the Great Wall into northern China and into the coastal provinces. Chinese fury against Japan was predictable, but anger was also directed against the Guomindang government, which at the time was more preoccupied with anti-Communist extermination campaigns than with resisting the Japanese invaders. The importance of "internal unity before external danger" was forcefully brought home in December 1936, when Nationalist troops (who had been ousted from Manchuria by the Japanese) mutinied at Xi'an. The mutineers forcibly detained Chiang Kai-shek for several days until he agreed to cease hostilities against the Communist forces in northwest China and to assign Communist units combat duties in designated anti-Japanese front areas. At Yan'an and elsewhere in the "liberated areas," Mao was able to adapt Marxism-Leninism to Chinese conditions. He taught party cadres to lead the masses by living and working with them, eating their food, and thinking their thoughts. The Red Army fostered an image of conducting guerrilla warfare in defense of the people. Communist troops adapted to changing wartime conditions and became a seasoned fighting force. Mao also began preparing for the establishment of a new China. In 1940 he outlined the program of the Chinese Communists for an eventual seizure of power. His teachings became the central tenets of the CCP doctrine that came to be formalized as Mao Zedong Thought. With skillful organizational and propaganda work, the Communists increased party membership from 100,000 in 1937 to 1.2 million by 1945. In 1945 China emerged from the war nominally a great military power but actually a nation economically prostrate and on the verge of all-out civil war. The economy deteriorated, sapped by the military demands of foreign war and internal strife, by spiraling inflation, and by Nationalist profiteering, speculation, and hoarding. Starvation came in the wake of the war, and millions were rendered homeless by floods and the unsettled conditions in many parts of the country. The situation was further complicated by an Allied agreement at the Yalta Conference in February 1945 that brought Soviet troops into Manchuria to hasten the termination of war against Japan. Although the Chinese had not been present at Yalta, they had been consulted; they had agreed to have the Soviets enter the war in the belief that the Soviet Union would deal only with the Nationalist government. After the war, the Soviet Union, as part of the Yalta agreement's allowing a Soviet sphere of influence in Manchuria, dismantled and removed more than half the industrial equipment left there by the Japanese. The Soviet presence in northeast China enabled the Communists to move in long enough to arm themselves with the equipment surrendered by the withdrawing Japanese army. The problems of rehabilitating the formerly Japanese-occupied areas and of reconstructing the nation from the ravages of a protracted war were staggering, to say the least. Belatedly, the Nationalist government sought to enlist popular support through internal reforms. The effort was in vain, however, because of the rampant corruption in government and the accompanying political and economic chaos. By late 1948 the Nationalist position was bleak. The demoralized and undisciplined Nationalist troops proved no match for the People's Liberation Army (PLA). The Communists were well established in the north and northeast. Although the Nationalists had an advantage in numbers of men and weapons, controlled a much larger territory and population than their adversaries, and enjoyed considerable international support, they were exhausted by the long war with Japan and the attendant internal responsibilities. In January 1949 Beiping was taken by the Communists without a fight, and its name changed back to Beijing. Between April and November, major cities passed from Guomindang to Communist control with minimal resistance. In most cases the surrounding countryside and small towns had come under Communist influence long before the cities. After Chiang Kai-shek and a few hundred thousand Nationalist troops fled from the mainland to the island of Taiwan, there remained only isolated pockets of resistance. In December 1949 Chiang proclaimed Taipei, Taiwan, the temporary capital of China. Maoists believe that Maoism sought to achieve, by means of his political philosophy, the ideal of a strong, prosperous and socially egalitarian China, endeavoring to build a modern socialist nation. He instigated several major socio-political programs, including the Anti-Rightist Campaign, the Great Leap Forward, and the Cultural Revolution, the failings of which are widely criticized. Mao is still a controversial figure today. While officially held in high regard in China, he is today rarely mentioned by the government, whose policies have diverged greatly from those of Mao. Maoists around the world regard Mao as a great revolutionary leader whose thought is the highest expression of Marxism. His detractors hold that his leadership and policies were accountable for the deaths of tens of millions of innocent Chinese and caused severe damage to the culture, society, economy, and foreign relations of China. The army led by Mao, entitled Revolutionary Army of Workers and Peasants, was defeated and scattered after some fierce battles. Afterwards the exhausted troops were forced to leave Hunan for Sanwan, Jiangxi, where Mao re-organized the scattered soldiers, rearranging them from a military division into a smaller regiment. And Mao ordered that each company must have a party branch office with a commissar as its leader who would give political instructions based upon superior mandates. This military rearrangement in Sanwan, Jiangxi initiated the CCP's absolute control over its military force and has been considered to have the most fundamental and profound impact upon the Chinese revolution. Later on, they moved to Jinggang Mountains, Jiangxi. Despite Taiwan being rumored as the fabled "Island of Dogs," "Island of Women," or any of the other fabled island thought, by Han literati, to lie beyond the seas, Taiwan was officially regarded by Ching Emperor Kangxi as "a ball of mud beyond the pale of civilization" and did not appear on any map of the imperial domain until 1683 (Teng;2004, pp. 34-59). The act of presenting a map to the emperor was equal to presenting the lands of the empire. It took several more years before the Ching court would recognize Taiwan as part of the Ching realm. Prior to the Ching Dynasty, the Middle Kingdom was conceived as a land bound by mountains, rivers and seas. The idea of an island as a part of the Middle Kingdom was unfathomable to the Han prior to the Ching frontier expansion effort of the 17th Century (Teng;2004:pp 34-49, 177-179) The presence of the Great Wall demonstrates some earlier concepts of "China's" borders in relation to the PRC's current holdings and claims (Millward;1998, pp 36-38). The "suspicious history" of Taiwan is often cited by Chinese nationalists to support their claim that "Taiwan has belonged to China since antiquity". Taiwanese nationalists do not regard these claims as valid. With the help of the China Aid Act of 1948 and the Chinese-American Joint Commission on Rural Reconstruction, the KMT authorities implemented a far-reaching and seemingly highly successful land reform program on Taiwan during the 1950s. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan's first industrial capitalists. Together with businessmen who fled from the mainland, they once again revived Taiwan's prosperity previously ceased along with Japanese withdraw and managed Taiwan's transition from an agricultural to a commercial, industrial economy. Taiwan has developed steadily into a major international trading power with more than $218 billion in two-way trade. Tremendous prosperity on the island was accompanied by economic and social stability. Taiwan's phenomenal economic development earned it a spot as one of the East Asian Tigers. The history of Taiwan is a story of both frustration and miracles. Taiwan, isolated and poorly developed, had been a neglected island before the 17th century. But during the age of exploration and maritime conquest by Europeans, Taiwan attracted world attention because of its strategic location and natural resources. The Dutch (1624) and the Spanish (1628) colonized parts of northern and southern Taiwan. Jheng Cheng-gong , who was loyal to the fallen Ming dynasty, defeated the Dutch in 1662 and set up a government on Taiwan to defy the Manchus, who had established the Cing dynasty . The Manchus conquered Taiwan in 1683 and ruled it until 1895, when Taiwan was ceded to Japan after the First Sino-Japanese War. Eventually, Taiwan was returned to China at the end of World War II. Mass migration to Taiwan changed the character of the island. Recognizing the urgent need for industrious farmers, the Dutch employed the new immigrants, providing them with oxen, seeds, and implements. Because all land in these areas belonged to the Dutch East India Company, the Dutch were able to profit enormously from collecting heavy rents from the Chinese tenants. Although settlers petitioned to be allowed to buy and own the land they were tilling, so that they could pay taxes instead of rent, the Dutch rulers refused. Unemployment, mistreatment by the colonial rulers and collection of a new head tax increased tensions. In September 1652, frustrated Chinese farmers revolted against the Dutch. The rebellions were violently suppressed by the Dutch, who slaughtered about 3,000 peasants. During its 50-year rule of Taiwan, Japan developed programs designed to supply the Japanese empire with agricultural products, create demand for Japanese industrial products, and provide living space for emigrants from an increasingly overpopulated home country. The colonial government eventually introduced an industrialization program to build Taiwan as a base for its "South Forward Policy" of colonial expansion into Southeast Asia. The period of Japanese colonization can be roughly divided into three periods. The first, from 1895 to 1918, involved establishing administrative mechanisms and suppressing armed resistance by local Chinese and indigenous peoples. One of the largest revolts, the Tapani Incident of 1915, resulted in the deaths of several thousand Taiwanese. During this period, the Japanese introduced strict police controls, carried out a thorough land survey, standardized measurements and currencies, monopolized the manufacture and sale of important products (such as salt, sugar, and pineapple), began collecting census data, and made an ethnological study of the island's indigenous peoples. During the second period from 1918 to 1937, Japan consolidated its hold on Taiwan. Compulsory Japanese education and cultural assimilation were emphasized, while economic development was promoted to transform the island into a secure base from which Japan could launch its southward aggression. The third period, which started in 1937 and ended in 1945, included the naturalization of Taiwan residents as Japanese. The Chinese on Taiwan were forced to deny their heritage by adopting Japanese names, wearing Japanese-style clothing, eating Japanese food, and observing Japanese religious rites. Chinese dialects and customs were discouraged and Chinese language schools closed. Heavy industry and foreign trade was strongly emphasized during this period, coinciding with the requirements of the Second World War. japanese development of Taiwan as a colony was extensive in areas such as railroads, agricultural research and development, public health, banking, education and literacy, cooperatives, and business. Transportation Infrastructure: Recognizing the importance of transportation to Taiwan's economy, the colonial rulers constructed 2,857 miles of railroad lines, modernized harbors, and built 2,500 miles of highways. Despite Japanese successes in transforming Taiwan into a society that was economically more modern than its neighbors, alien rule came at a heavy cost. Economic development was primarily for the benefit of Japan, not Taiwan. The Taiwanese were denied self-government and democracy and kept out of high positions at all levels of society. People were taught to see themselves as Japanese instead of Chinese, and in fact, during the Second World War, tens of thousands joined the Japanese military. Liberation from colonial rule came only with the defeat of Japan in 1945 and Taiwan's return to China East Asian economic integration has become a hot topic since the Asian financial crisis. Countries in the region have increasingly moved in favour of closer cooperation and coordination. Various proposals for free trade areas and Asian monetary cooperation have emerged. Regionalism in East Asia has been encouraged by the worldwide tendency to move to regional integration and by increasing interdependence in the region. World Trade Organization, increasing trade and financial flow with East Asian economies and financial system reform and further opening to the world market led China to become more confident about and supportive of regional cooperation and integration in the hope that integration would provide more opportunities for China to realise its comparative advantages and a more secure environment in which to maintain stability.. Economic integration in Asia has been encouraged and stimulated by increasing regionalism in other parts of the world. S East Asia includes the most important and fastest growing economies in Asia and is the central force driving the Asian economy. People in Asia generally believe that if Asia is going to compete with North American and European regionalism, East Asia should play the central role and there should be closer regional economic cooperation among its members. The economic scale of ASEAN is too small for it to compete with the other two regional blocs. If South Korea, Japan and China plus ASEAN established a body for economic collaboration, it would be a major economic bloc, able to compete with NAFTA and the EU. China, Japan and South Korea have a combined foreign exchange reserve of US$800 billion. If we add ASEAN's foreign reserves of $123.5 billion, East Asia holds almost 50 per cent of total foreign exchange reserves in the world. The East Asian economy would be even larger and stronger if Hong Kong and Taiwan were added. Some people have estimated that in the next 15 years East Asia's GDP will be above US$25 trillion, making the region the largest and most influential economy in the world. With these enticing prospects, people in the region have been encouraged to speed up their cooperation and have no reason not to do so Thirdly, East Asian countries have become increasingly important economic partners for China, although the United States remains its single most important market. Trade between China and East Asian countries has increased rapidly. One of the aspects of political reform is how peacefully a government adapts to the changing of the guard. Thailand has done better in this area than the Philippines, said Rooney. "The Philippines has experienced change, but it has been brought about more by street revolution than through the orderly political process." Outlooks mixed briefed the on the status of economic recovery in the rest of Southeast Asia. MALAYSIA The economy has fared better here than in Thailand and Indonesia, primarily because of short-term capital controls which were imposed after the '97 collapse. "Malaysia's financial institutions survived more intact than the neighboring countries, so they have a better basis on which to proceed," INDONESIA that the country will have a very difficult time pulling out of the economic crisis. "The financial structure suffered strongly due to the country's reluctance to accept the IMF's terms for assistance. And neither the banks nor the private sectors have restructured. Political reform is painful; a leader is needed who will be able to provide enough unity to pull the country out of crisis. Social reform is lagging." THE PHILIPPINES "Although the Philippines was the least affected by the economic collapse, the country is still plagued by recurrent political problems and weak social reforms. Economically, the country is likely to maintain the middle ground at the bottom of the structure." SINGAPORE "Political stability and good policies helped the country implement corrections to economic problems quickly, and it has survived fairly well until recently. Now, the final assembly operations that were attracted to Singapore by its skilled labor are defecting to China, where costs are lower. So Singapore is looking to find other areas in which it can compete attractively." VIETNAM "The collapse had little effect on the country as it was never part of the boom. It's still very difficult to do business in Vietnam. Many companies have left and are waiting until the investment climate improves before they return. The agricultural sector, however, has done quite well. Four or five years ago, they were importing rice from Thailand; now they are one of the leading rice exporters and are taking the market away from Thailand at the lower end of the rice market." 2005 has been a year plagued with external environmental uncertainties globally and notably in the Asian region, with high-profile events such as the repeated terrorist bombings in Bali; the Asian tsunamis and numerous other natural disasters across the region; the bird flu; rising oil prices; and ongoing geo-political tensions. Despite the above factors, the Asia region as a whole has continued its recovery and stabilization from the economic crises that began in the late 1990s," says Tan Mang Teck, research director, Asia/Pacific Manufacturing Research, Manufacturing Insights. "The APEJ region will continue to be a fast-growing regional economic block, powered by the emerging economic engines of China and India." Manufacturers have a lot of information available to them, but few put that information to work to improve the efficiency and timeliness of decision making. Leading organizations are building complete control loops over their processes to connect strategic (risk mitigation), tactical (speed and agility), and operational (consistency and control) decisions. There are good opportunities for IT vendors to develop an integrated business & IT vision and roadmap for manufacturing clients extending beyond the four walls. Manufacturing Insights suggests IT vendors focus on value realization instead of new application investment. Doing this will allow IT vendors to provide thought leadership in areas which are close to the hearts of manufacturing clients, as well as to position and "gel together" products, services, and overall value proposition. Interesting is one thing, size another. In this regard, Asia still lags compared to Europe and the US. Asian M&A activity in the year's first half was US$87 billion, more than doubling the US$40 billion achieved during the same period last year. But about a third of that volume belonged to one deal only, the aforementioned LBO by Pacific Century CyberWorks (PCCW) of Cable & Wireless HKT. And the major deals were still largely dominated by one sector - telecommunications - with five of the ten selected by CFO Asia as Deals of the Year from that sector alone. This was a function of global changes in the industry's switch to mobile technology and the effect of the Internet. All told, deal volumes don't match levels elsewhere in the world. Yet there was a glimmer of audacity and regional flavor to many of the deals in Asia this year. Analysts call this proof positive that the distinctive pattern of recovered Asia established itself in 2000, setting the stage for growth. Looking ahead, China, with Hong Kong remain the biggest center for potential deal activity outside Japan; Taiwan the region's laboratory for successful and innovative capital raising; and Singapore a bubbling mixture of autocracy and free-market ambitions. Problems still abound. Japan's wheezing banking system has chilled the deal-making environment there and throughout Asia. South Korea's chaebol threaten a collapse that could affect the region's economy. But despite these hazards, a new race is off the starting blocks. CFOs, start your motors. Three dimensions in particular reveal the complexity of the bilateral relationship in the era of Asian regionalism. First, talks about regional integration and Sino-Japanese relations take place in the broader context of security and global foreign policy concerns. Are Japan and China balancing one another, and regional integration policy becomes one more theater of this bilateral competition Or, can free trade negotiations be isolated from broader geopolitical concerns, and be used to improve bilateral relations Second, both Japan and China have exhibited a very active ASEAN policy of late, initiating and, in the case of China, concluding FTA negotiations. Why does ASEAN figure so prominently in Japanese and Chinese FTA diplomacy What are the main differences in the Japanese and Chinese approaches And third, what are the likely scenarios for Asian regionalism Will an encompassing regional bloc develop, or will the current wave of bilateral agreements predominate Will the general approach to institution-building in East Asia be of inclusion or exclusion There is no easy answer to these questions, but perhaps more interestingly there is not a single answer to them either. Japanese economic elites are profoundly divided on all these key issues. The "rise of China" with the strengthening of Chinese economic and military capabilities and the protracted economic downturn in Japan led many to predict a fundamental structural shift in the regional distribution of power, with consequent increase of bilateral frictions. It is perhaps not surprising that critical voices of Chinese policy and pessimist views on the future of the bilateral relationship are so predominant in Japan. Conclusion Regionalism is gathering momentum in East Asia, but integration is just beginning; further progress will require new institutional arrangements. China has begun to promote regional FTAs and monetary cooperation as it integrates its economy into the world and regional economies. Countries in East Asia should make greater efforts to strengthen their political and economic efforts to work together on both trade and monetary cooperation in order to achieve common benefits for the East Asian community. Can East Asia overcome such a fragmented pattern of regional integration and develop into a more cohesive regional entity While many of my interviewees believed in the benefits of pursuing the larger dream of an East Asian bloc, there was near-unanimous consensus on the impossibility of achieving such a goal in the near future. The only chance for a comprehensive regional bloc to emerge depends on the willingness of Japan and China to engage each other in free trade negotiations. While many in the business community expressed positive views for such negotiations in order to reap the benefits of an investment protection treaty or hedge against changes in Chinese economic policy, they were not actively lobbying for FTA talks because politicians were unlikely to be receptive under the current climate of strained bilateral relations. Furthermore, there was no sense of urgency in negotiating with China, since most of my interviewees seemed to believe that China must first demonstrate its ability to implement WTO commitments. References Chae Wook and Han Hongyul (2001) 'Impact of China's accession to the WTO and policy implications for Asia-Pacific developing economies', Korea Institute for International Economic Policy Working Paper 01-02. Dutta, Jan M (1998) 'A macroeconomic core of an open economy for progressive industrialization and development in Asia in the new millennium', paper presented to conference organised by the American Committee on Asian Economic Studies and Chulalonkorn University, Bangkok, Thailand, 16-18 December 1998. Goto, Junichi (2001) 'FTAS and their economic implications with reference to Asia', paper presented at Capacity Building Workshop on Trade Policy Issues, organised by the Asian Development Bank Institute and Ministry of Foreign Affairs, Singapore, 16-24 April 2000. -- (2002) 'Economic interdependence and cooperation with reference to Asia', paper presented at Capacity Building Workshop on Trade Policy Issues, 25 February to 1 March, Singapore. See also . Katzenstein, J. Peter, Natasha Hamilton Hart, Kozo Kato and Ming Yue (2000) Asian Regionalism, Ithaca, New York: Cornell University Press. Lee, Chang Soo (2002) 'Korea's FDI: Choice of location and effect on trade', Korean Institute for International Economic Policy Working Paper 02-07. Shin, Kwanho and Yunjong Wang (2002) 'Reverse sequencing: Monetary integration ahead of trade integration in East Asia', Korean Institute for International Economic Policy Discussion Paper 02-08. Wyplosz, Charles (2001) 'A monetary union in Asia Some European lessons', in Future Direction of Monetary policy in Asia, Canberra: Reserve Bank of Australia. Read More