A Chinese Renaissance in an Unremittingly Integrating Asian Economy

Abstract

This paper attempts to address an imperative topic in Asian economic development: the relationship between China's economic expansion and Asian economic growth. It tries to answer the all important query, whether China's economic ascent is a threat or an opportunity for the Asian economies. Due to the size of its economy, its openness and the rapidity of its GDP growth, China is swaying the individual Asian economies as well as the regional economy. When a significant-size economy is growing almost three times as rapidly as the global economy, the neighboring economies cannot possibly expect to remain impervious. Various issues are analyzed in the paper, including foreign direct investment inflows and impacts, regional production networks, plausible scenarios for China and the remaining Asian economies, and strategy for coping with China's rapid development. Although some Asian economies and some sectors will face adverse effects—short- or long-term—of China's rapid growth, the apocalyptic predictions are grossly overdone. For the most part, the impact of China's rapid growth can be mutually beneficial. This is the conclusive idea of this paper.

Notes

^*Dr Dilip K. Das was educated at the Graduate Institute of International Studies, University of Geneva, Switzerland. A professor of international economics, international trade and international finance and banking, he was associated with Webster College, Geneva; ESSEC, Paris; INSEAD, Fontainebleau, France; Australian National University, Canberra; and Graduate School of Business, University of Sydney, Sydney. He has published extensively on the Chinese and Asian economy related issues as well as international trade, international finance, international business and globalization related issues in the recent past. His most recent book is entitled China and India: A Tale of Two Economies (London and New York: Routledge, 2006).

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^28. At this point, after a devaluation of 28% of the official exchange rate, the new exchange rate was fixed at 8.28 renminbi yuan to the dollar, which was held until 2005. In 1994 and 1995, the economy suffered from two bouts of high inflation, which reversed the effect of the moderate currency devaluation.

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^39. This FTA is between China and ASEAN-6 economies. ‘ASEAN-6’ refers to Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The newer ASEAN members are Cambodia, Lao PDR, Myanmar and Vietnam and are referred to as the ASEAN-4.

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Additional information

Notes on contributors

Dilip K. Das

41 *Dr Dilip K. Das was educated at the Graduate Institute of International Studies, University of Geneva, Switzerland. A professor of international economics, international trade and international finance and banking, he was associated with Webster College, Geneva; ESSEC, Paris; INSEAD, Fontainebleau, France; Australian National University, Canberra; and Graduate School of Business, University of Sydney, Sydney. He has published extensively on the Chinese and Asian economy related issues as well as international trade, international finance, international business and globalization related issues in the recent past. His most recent book is entitled China and India: A Tale of Two Economies (London and New York: Routledge, 2006).