THE Pacific Rim

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THE Pacific Rim

• Christopher Clott

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Importance of the Pacific Rim

• U.S. Merchandise trade with the Pacific Rim is
  larger than with any other area in the world.
  Major trading partners include China, S. Korea,
  Japan, Taiwan and Sing.
• Pac Rim countries produce more than one fourth of
  the worlds Gross Domestic Product and contain
  over one third of the worlds labor force and
  retail consumers.

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What is the Pacific Rim?
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Major Themes of Discussion

• Progress and Tradition The tensions of centuries
  old traditions tied to advanced economic
  development.
• Collisions between East and West Huge
  differences of culture and ideas between these
  two major groups of people.
• Democracy, Authority and Power What is a
  democracy? Is it necessary for economic growth?
• Economic Interdependence The Pacific Century?

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China- 6000 years old

• The Mandate of Heaven- The Middle Kingdom,
  source and center of civilization.
• Confucius- societal order- pursuit of harmony.
• Daoism/Buddhism- the heart, understanding of the
  natural world. The mind and the heart

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The Dominance of China

• In 1492 as Columbus discovered the Americas,
  China was the most advanced nation on earth.
• Chinese inventions of paper, porcelain and
  gunpowder among others far beyond Europe.
• Trade with China avidly sought by the West since
  the time of Marco Polo. The Silk Rd

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Chinas Impact

• Chinese written characters, legal framework,
  Confucian/Buddhist ideals underpin the Pacific
  Rim countries.
• China turned inward during the Ming and Manchu
  dynasties. Innovations, power and development
  would shift to Europe. China governed by a
  series of warlords by the 1800s. Forced to
  accept foreign controls and make humiliating
  concessions (The Opium Wars) etc.

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Rise of Japan

• Alone among Pac Rim nations for never being under
  foreign dominance. Japan closed to all foreigners
  by Tokugawa from 1612 to 1853 when Commodore
  Perry and the Black ships forced Japan to open to
  the outside.
• After great confusion and hostility the country
  in the Meiji era learns from the West- borrowing
  and adapting Western ideas to the Asian world.
• Japan becomes a formidable power by 1900 but is
  all but ignored by the Western world.

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Pressures on Korea

• The three kingdoms that make up Korea are beset
  by internal divisions, cultural conservatism and
  the overwhelming power of Japan which conquers
  the country twice.
• The Taft-Katsura agreement- negotiated by the
  U.S. and Japan cedes influence of Japan over
  Korea while U.S. will influence the Philippines.
  Japan governs Korea harshly from 1905 to the end
  of WWII.

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The Treaty of Versailles 1919

• A pivotal year. Old European empires are weakened
  after WWI.
• Japan expects to be rewarded for being on side of
  Allies. They are not and the Generals take over.
• Nationalism and democratic ideals encouraged by
  the words of President Wilson are not rewarded or
  encouraged. Chiang Kai-shek, Ho Chi Minh,
  Sukarno, Sun Yat Sen and Syngman Rhee will emerge
  as patriots and leaders during this time.

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Events leading to WWII

• War began when the U.S. put an embargo on the
  sale of oil to Japan from the Dutch controlled
  East Indies.
• Japan had been forcibly annexing parts of China
  since the 1920s. The Generals running the
  country were bent on dominance within Asia- saw
  the U.S. as the biggest roadblock.

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WWII and the Aftermath

• Status of China- internal battle for control
  between Communists and Nationalists.
• Japan high water mark was 1942 conquered much of
  Southeast Asia- destroyed colonialism but left a
  lasting distrust.
• Did the bomb have to be dropped? - Victimization
  of Japan.
• American Occupation 1945-1951 Constitution and
  important reforms.

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Rise of Japan

• The Korean War 1950-53 and continued U.S.
  involvement. Need for military bases.
• Edward Deming and Joseph Juran. Total quality
  control (TQM) taught to the Japanese- ignored in
  post-war U.S.
• MITI and Industrial policy. From toys to steel to
  ships to cars to electronics to semiconductors
  guided in large part by the government.

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Japan Ascendant

• U.S. preoccupied with Cold War issues- A
  disastrous military presence in S.E. Asia.
• Japanese Keiretsu become world powers. Trade
  frictions and restructuring of U.S. industry in
  the 1980s.
• An economic superpower but politically invisible.
  The bubble economy and decline.
• The need for Wa harmony in all things makes it
  difficult to restructure in the 90s.

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Japan Descendent

• End of the Bubble Economy and Government
  paralysis and corruption.
• Cutting edge, highly competitive industries but
  the need for change from the outside.
• Worlds second largest economy but unable to take
  actions to restructure debt ridden banks and get
  rid of zombie companies.
• Restrains world growth.

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The Four Tigers

• S. Korea, Taiwan, Singapore and Hong Kong all
  begin there journey to economic power in
  different ways.
• S. Korea - rising from the ashes of war through
  exports by Chaebol cos.. Heavy govt..
  interference. Corruption, a lack of
  entrepreneurs, and the need for heavy defense
  restrain it. We are treaty bound to defend Korea.
  N.Korea remains very dangerous.

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The Four Tigers (cont.)

• Taiwan- settled by Chiang Kai-shek and those who
  escaped the Communist takeover of China in 1949.
  China views this as the 19th province and is
  threatened by independence talk. We are treaty
  bound to defend Taiwan but would we?
• Emerged as a powerful economy but a political
  non-country as China grew.
• Massive investment in China by Taiwanese
  business.

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Hong Kong

• SARS
• The last colony ruled by the British from the
  1840s to 1997 when the handover to China is
  made. Very controversial.
• Hong Kong given 50 years to keep the current
  system separate from that of China.
• The nation has thrived as a trade conduit
  throughout its existence but is now under more
  pressure from China.

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Singapore, Malaysia

• Singapore emerged as a prosperous nation-state
  after WWII. Ruled with an iron hand by Lee Kwan
  Yew. Economically prosperous Chinese business
  community but socially engineered and no
  tolerance of dissent.
• Malaysia- emerged as a major player in the 1990s
  thanks to low labor costs and investment from
  Japan, the U.S. and Singapore. Heavy handed
  control and jailing of adversaries by Dr. Mahatir.

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China Wakes
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Two Quotes

• China is like a sleeping giant. Let her sleep.
  For when she awakes she shall astonish the world
  Napoleon- 1817
• China is a riddle wrapped in a mystery inside an
  enigma Churchill- 1939
• A most complex country!!!

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Post WWII

• 1949- The Communists take over China. Set about
  remaking an ancient society. Disastrous
  industrialization in 1958 (The Great Leap
  Forward) and destruction of the Middle class in
  1966 (The Cultural Revolution) set back the
  nation.
• Mandarin becomes the official language and China
  is able to feed its massive population.

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The Thaw

• President Nixon and the trip to China- 1972
• Late 1970s- Deng Tsiao-Ping takes over.
• Reforms started in 1979- Black cat, white cat,
  as long as it catches mice what is the
  difference?
• Special Economic Zones along the coast to contain
  and control capitalism.
• 1989 Tiannemen Square

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The Middle Kingdom takes world stage

• Workshop of the world- enormous consequences for
  Pac-Rim neighbors, the U.S. and the world.
• Now the worlds fourth largest economy.
• WTO membership in 2001. Olympics will be held in
  Beijing in 2008.
• What does Communism mean in a fast-changing
  society? Power struggles within the government.
• A billion people striving for a better life. But
  gaps between rich and poor are immense.

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The Asian Financial Crisis and Aftermath

• Economic wreckage and pain in Thailand, Indonesia
  and the Philippines. Massive corruption (crony
  capitalism), Rise of Islamic fundamentalism.
• Asian values are slowly giving way to more
  openness in the global economy.
• U.S. involvement must be clear-eyed and obvious.
  Our future is tied to complex relationships with
  the Pacific Rim countries.

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The End