Korea and East Asia in a Changing Regional and Global Environment

After the global financial crisis, it has been getting clearer that the existing world economic system has wider cracks, and the world after the end of the crisis would look much different from what we have seen over the last thirty years. In the changing landscape of the world economy, some conspicuous features have emerged. China stood up as one of the major economic powers in the world, so that we cannot think of the world economy without taking the Chinese economy into consideration. Dealing with as much domestic instabilities and imbalances as many of the fast developing countries, however, China does not seem to think it has the capacity to deal with the world affairs and its domestic ones at the same time. Europe, after the brilliant history of regional integration process, is now faltering from the crisis of its common currency. Reforms in economic and political governance are on demand. The United States, which stood up as the unipolar global power after the collapse of communism some twenty years ago, was the very origin of the global crisis, and it has not demonstrated outstanding leadership in economic recovery since the crisis occurred. We are also confronting many challenges of how to deal with the financial industries within a sustainable global economy. In a changing world environment like this, East Asia has been asked to solve problems in the region for itself. Considering its growing economic weight and importance, East Asia has sometimes been even asked to share responsibility in world affairs. In connection, Korea, as one of the economies in the region that emerged rapidly, has been asked to display leadership on peace and prosperity in the region and the faltering world as well. All of these changes have given rise to tough tasks for Asians and Koreans. This book is an outcome of dialogue and exchange of ideas among European and Korean scholars in tackling these issues; at an international conference titled "Korea and East Asia in a Changing Regional and Global Environment" which was held in Vienna, 28-9 April 2011. This book tries to tackle the issues concerning changes in three areas: changes in economic, security and development/ODA. The first part covers economic aspects of the changing world environment and challenges for Korea and East Asia. In chapter one, Bark Taeho and Kang Moonsung deal with East Asia's strategy in G20 economic and trade issues. It aims to identify the trade agenda that reflects Asia's concerns regarding the global and regional trading system against the background of G20 summit meetings after the crisis. East Asia has played an important role in the evolution of global production and trade networks. Though the region’s production networks in East Asia became the major transmission mechanism of the crisis, resulting in a trade collapse, but Asia experienced a relatively quick turnaround, demonstrating that its network was not derailed. Asian economies have also shifted their policy focus from multilateralism to regionalism, even though several challenges remain such as underuse and a shallowness of their regional trade agreements. Bark and Kang recommend that the Seoul Summit seek tangible results on resolving the stalemate of the Doha Development Agenda to strengthen the credibility of G20, integrate individual free trade agreements into broader regional trade agreements, and link the development agenda to trade. Chapter two talks about the role of Korea and East Asia under the changing trade environment. First, Professor Song Yoocheul elaborates on his argument by emphasizing the growing weight of East Asia in the world economy. The three northeast Asian countries of Korea, China and Japan accounted for 20% of world GDP and over 40% of foreign reserves after the crisis. During the recovery from the crisis, the role of East Asian countries has been highlighted as a buffer in consumption and production cycles of the world economy with their high economic growth. Their trade perf