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Regional integration in East Asia :challenges and opportunities - Part II : Trade, finance and integration


  • Sakakibara, Eisuke
  • Yamakawa, Sharon


The authors analyze the patterns of East Asia's trade and foreign direct investment (FDI) from a global and intraregional perspective, taking into account the importance of trade and FDI interlinkages. They propose two regionally-focused approaches to promoting trade and FDI in East Asia-regional agreements and regional production networks. The East Asia crisis strengthened appeals for regional cooperation in the financial area. As a result, a number of financial arrangements and initiatives have emerged since the crisis, the most prominent of these, the Chiang Mai Initiative. (The Association of Southeast Asian Nations plus China, the Republic of Korea, and Japan decided at their meeting in Chiang Mai, Thailand, in May 2000, to establish a regional network of swap arrangements.) While opening of the capital account is considered desirable in the long run, it is associated with considerable risk, particularly if macroeconomic policies are not sound and financial supervision and regulation is weak. Because of the potential volatility associated with floating regimes and the desire to avoid another crisis in the region, the authors discuss a number of options.

Suggested Citation

  • Sakakibara, Eisuke & Yamakawa, Sharon, 2003. "Regional integration in East Asia :challenges and opportunities - Part II : Trade, finance and integration," Policy Research Working Paper Series 3079, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3079

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    Cited by:

    1. Cheung, Yin-Wong & Steinkamp, Sven & Westermann, Frank, 2016. "China's capital flight: Pre- and post-crisis experiences," Journal of International Money and Finance, Elsevier, vol. 66(C), pages 88-112.
    2. Alain Kabundi, 2009. "Synchronisation Between South Africa And The U.S.: A Structural Dynamic Factor Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 1-27, March.


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