Straddling Economics and Politics

Straddling Economics and Politics: Cross-Cutting Issues in Asia, the United States, and the Global Economy

Charles Wolf
Copyright Date: 2002
Edition: 1
Published by: RAND Corporation
Pages: 228
https://www.jstor.org/stable/10.7249/mr1571rc
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  • Book Info
    Straddling Economics and Politics
    Book Description:

    This collection of essays examines the case for and against globalization, the effects of U.S. economic and foreign policy, and numerous issues related to Asian economics and politics. Published in prominent journals and news media between 1996 and 2001, these cross-cutting essays are as relevant today as when they were first written. The author provides remarkable insight into the economic and military directions in which particular countries or regions are moving, and what these movements portend for the future.

    eISBN: 978-0-8330-3401-4
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. FOREWORD
    (pp. iii-viii)
    Charles Wolf Jr.

    The 38 essays in this book were written between the end of 1996 and the middle of 2001, and published inThe Wall Street Journal,The Asian Wall Street Journal,The Wall Street Journal Europe,The Los Angeles Times,The New York Times,The International Herald Tribune,The Weekly Standard,Critical Review,Society,The Milken Review, andInternational Economy. All the essays appear in their original, unedited form, and none has been altered in light of the world-shaking and world-shaping terrorist attacks of September 11, 2001 on the World Trade Center in New York and the Pentagon in Washington, D.C....

  3. Table of Contents
    (pp. ix-xii)
  4. FIGURES
    (pp. xiii-xiv)
  5. TABLES
    (pp. xv-xvi)
  6. PART I: THE GLOBAL ECONOMY

    • Chapter 1 GLOBALIZATION: MEANING AND MEASUREMENT
      (pp. 3-14)

      Millions of words have been written, hundreds of conferences convened, and dozens of books published about globalization. Yet the subject remains clouded, if not obscured, by the rhetoric surrounding it.

      The situation recalls a comment by an 18th century philosopher, sometimes referred to as the “first American.” Said Benjamin Franklin (I paraphrase slightly): Where there is “a flood of words,” there is usually only “a drop of reason.”

      Or, to cite an anonymous 17th century poet: “Where words most abound, much sense beneath is rarely found.”

      As a result of the rhetoric, media hype, and spin associated with globalization, as...

    • Chapter 2 GLOBALIZATION: LESS THAN MEETS THE EYE
      (pp. 15-18)

      Globalization is becoming obscured as much as illuminated by the rhetoric surrounding it. If we define it as greater access to markets by foreign businesses, then there is considerably less globalization than has been presumed.

      Increased access to markets implies that disparities from country to country in prices, wages and real interest rates should decrease substantially. In fact, while some of these disparities have diminished, most have persisted.

      With a decline in price gaps among countries, price correlations across markets should increase, and divergences in production should rise due to enhanced opportunities for specialization in each country. But different economies...

    • Chapter 3 FINANCIAL CRISES AND THE CHALLENGE OF “MORAL HAZARD”
      (pp. 19-24)

      In the innumerable discussions and debates about Asia’s financial turmoil, typically dated from the collapse of the Thai baht on July 2, 1997, the standard script includes an acknowledgment of a phenomenon called “moral hazard” (hereafter referred to as MH). Once MH has been acknowledged, the script calls for it thereafter to be passed over lightly, if not entirely ignored, in favor of other explanations and terminology, including such evocative terms as “financial contagion,” “herd-like behavior,” “speculative currency attacks,” and “predatory hedge-fund speculators.”

      Although MH is familiar in the lexicon of economists, it has a distinctly “other social-science-besides-economics” tonality. The...

    • Chapter 4 THE MORNING AFTER
      (pp. 25-29)

      In the past two years, major financial quakes have struck three geographically non-contiguous areas: East Asia in July 1997, Russia in August 1998, and Brazil in January 1999. If the sharp jolts in these economies were converted to seismographic readings, they would register at least 6.5 on the Richter scale, about the same as the Los Angeles earthquake in 1994.

      In the Asian “crisis” countries—Thailand, Korea, Indonesia, and Malaysia—asset values plummeted by about 75 percent due to the combined effects of currency depreciations and deflated property and equity markets. Averaging over these countries, an asset worth $100 in...

    • Chapter 5 FINANCIAL FLU ISN’T CONTAGIOUS
      (pp. 30-34)

      Like the dog that didn’t bark in the classic Sherlock Holmes story, one of the most significant, as well as neglected, facets of the financial turmoil afflicting the international economy since mid-1997 is what didnothappen. What did not happen is the global deflation and recession, or anything approaching this dismal prognosis by such occasionally credible sources asThe Economist, George Soros, Paul Krugman, and others in the past year. In fact, economies producing more than 80 percent of the global product have adjusted with reasonable speed and effectiveness. Nor has the process of their adjustment significantly affected their...

    • Chapter 6 HISTORY HASN’T ENDED: THE STRUGGLE BETWEEN MARKETS AND GOVERNMENTS RESUMES
      (pp. 35-40)

      In 1992, Francis Fukuyama offered the optimistic forecast that the “end of history” was impending. His thesis was that the collapse of Soviet communism and the pervasive and demonstrated failures of centrally-planned, command economies had led to universal acceptance of market-based, capitalist democracies. So, he contended, the Manichean struggle between them, which dominated the history of the twentieth century, was at an end.

      Fukuyama’s forecast was premature.

      Once again, the old refrains about the shortcomings of markets and “the crisis of global capitalism” (to use the title of George Soros’s new book) are being sung by a politically-diverse choir, including...

    • Chapter 7 THE WTO CONTROVERSY: EXAGGERATED FEARS AND UNREALISTIC HOPES
      (pp. 41-46)

      In the five years since it was established in Geneva, the World Trade Organization (WTO) has acquired a prominence based more on the controversy it has aroused than on the influence it has exercised.

      Both preceding and since WTO’s aborted ministerial meeting in Seattle at the end of November 1999, the controversy has been intense, as well as misconceived and misdirected. The contest for liberalizing the global economy—WTO’s ostensible purview—is mainly being played on other turf than that of the WTO.

      The controversy has been abetted by several contending sides, each presuming that WTO has powers which in...

    • Chapter 8 ECONOMIC FACTS POINT TO A WEAK EURO
      (pp. 47-50)

      The governor of France’s Central Bank doesn’t have quite the mythic stature of his counterpart in the United States. Nevertheless, Jean-Claude Trichet is one of the most influential and respected figures in Europe’s high financial circles. Besides his Bank of France domain, he is also a member of the governing council of the European Central Bank and a prominent candidate to succeed the ECB’s present head at the end of his tenure.

      So, when Mr. Trichet asserts, as he recently has done, that “ … the euro is undervalued compared to our [i.e., Europe’s] fundamentals,” it can be presumed that...

    • Chapter 9 E PLURIBUS INCERTUM UNUM
      (pp. 51-54)

      Review of Larry Neal and Daniel Barbezat,The Economics of the European Union and the Economies of Europe, Oxford University Press, 1998, 396 pp., and Stephen F. Overturf,Money and European Union, St. Martin’s Press, 1997, 303 pp.

      On January 1, 1999, the European Monetary Union (EMU) will be inaugurated. Probably two-thirds of the fifteen members of the European Union (EU) will be included in the EMU’s initial membership. Although the Maastricht Treaty of 1992 laid down exacting budgetary and financial criteria for EMU membership (which few of the prospective members will be able to meet without highly creative accounting),...

    • Chapter 10 THE CRISIS OF GEORGE SOROS
      (pp. 55-60)

      Some books evoke as much interest because of their authorship as because of their content. George Soros’s new book (The Crisis of Global Capitalism, Public Affairs, $26, 284 pages) qualifies on both counts. Soros himself acknowledges that his views “enjoy widespread respect and recognition not because of my philanthropy or philosophy, but on account of my ability to make money in the financial markets… [and my] reputation as a financial wizard.”

      Soros is the multibillionaire head of Soros Fund Management, which oversees the Quantum Fund. Quantum is putatively one of the world’s largest and most nimble hedge funds, a genre...

  7. PART II: THE U.S. ECONOMY AND FOREIGN POLICY

    • Chapter 11 WHETHER AND WHEN TO INTERVENE
      (pp. 63-66)

      The first anniversary of U.S. troop deployments in Kosovo highlights a crucial and controversial question which the eventual presidential debates should, but probably won’t, address: Whether and when should the United States intervene to forestall, mitigate, or counter ethnic conflicts and other violations of human rights abroad?

      Such interventions span a wide range of operations: peacekeeping (Bosnia over the past five years); peacemaking (Kosovo in the past year); “operations other than war” (Somalia, Haiti, and Rwanda in prior years); and the provision of humanitarian assistance in militarily insecure circumstances (all of the above). In the lexicon of military planners, these...

    • Chapter 12 TAX CUTS, DEBT REDUCTION, AND “FAIRNESS”: WHY TAX REDUCTION IS NO MORE “UNFAIR” THAN DEBT REDUCTION
      (pp. 67-70)

      Critics of the Bush Administration’s tax reduction plan fault it on two principal counts: too large, and “unfair” because the resulting benefits accrue disproportionately to high-income earners.

      According to the critics, tax cuts should be more selective (that is, “targeted”)—hence “fairer”—and smaller, thereby allowing more of the estimated future budget surpluses to be used to pay down the federal government’s $3.4 trillion of publicly-held debt over the next 10 years. The implication is that accelerated debt reduction—which would be possible if tax reductions were smaller—would be “fairer” than would the larger, across-the-board cuts in tax rates...

    • Chapter 13 FALSE ALARMS ABOUT THE U.S. TRADE DEFICIT
      (pp. 71-74)

      An alarmist consensus is emerging among economic forecasters and commentators that the U.S. trade deficit in 1998 and 1999 will “soar,” “surge,” and reach “huge levels.” Prudent observers should treat this consensus, like others arrived at by economic forecasters, with a healthy degree of skepticism. As an eminent Nobel Prize-winning economist, Paul Samuelson, once noted, “Economists have correctly predicted nine of the last five recessions.”

      The consensus forecast of a soaring U.S. trade deficit is very likely to be wrong once again. Moreover, even if the forecast were closer to the mark than it is likely to be, its limited...

    • Chapter 14 TWO DEFICITS THAT JUST DON’T MATTER (Co-authored with Walter Wriston)
      (pp. 75-78)

      Two of the supposed indicators of the economy’s health—the trade deficit (or balance) and the federal budget deficit (or balance)—are constantly under the media spotlight, yet they are actually among the least important and most unreliable indicators that we have. This is not to say that each is unimportant, or that reaching a trade balance or a budget balance by 2002 would be unwelcome, but only that the two balances are among the least significant and most unreliable indicators of the economy’s health and prospects.

      Why then do they get so much attention in the media, in public...

    • Chapter 15 TAXES, TRADE, AND GROWTH
      (pp. 79-82)

      After the Party conventions conclude in August, it can be expected, or at least hoped, that the presidential campaigns will turn to substantive issues like economic growth, employment, wages, taxes, and trade. If and when this occurs, the ensuing debate should address one of the most basic, as well as most important, relationships in economics: that between the savings-investment balance, on the one hand, and the trade balance (or, more accurately, the current account balance), on the other. To the extent that domestic savings fall short of domestic investment, the economy must import more than it exports. So, if the...

  8. PART III: ASIAN ECONOMICS AND POLITICS

    • Chapter 16 ARE “ASIAN VALUES” REALLY THAT UNIQUE?
      (pp. 85-88)

      “Asian values” have been both extolled and censured by innumerable politicians, pundits, and professors in countless written and spoken words. The praise has been for the putative contribution of Asian values to the “miracle” of Asian economic development in the 1980s and through the mid-1990s. The blame has been for their putative contribution to Asia’s financial meltdown in 1997 and 1998. Whether praising or blaming, these opposed commentaries have held two premises in common: first, that Asian values are pervasively shared among the dozen countries and 2.7 billion people in the Asian region (including India), and second, that these values...

    • Chapter 17 THROUGH A HAZY CRYSTAL BALL: ASIA’S ECONOMIC OUTLOOK, 1997–2020
      (pp. 89-100)

      According to Niels Bohr, “It is very difficult to make predictions, especially about the future”! The wisdom of this precept is reinforced when forecasts are made for a region as diverse, dynamic, and volatile as Asia. This diversity is reflected in the enormous differences that prevail in the region’s economic levels and rates of growth in GDP and per capita GDP, in technological sophistication, trading patterns and trading partners, capital flows, and even “cultural values.”¹

      Because of this diversity, different growth trajectories can be expected both among the Asian countries and by each of them over time. So, China, Japan,...

    • Chapter 18 ASIA IN 2015
      (pp. 101-106)

      What will Asia look like in the second decade of the twenty-first century? While no one knows, this doesn’t mean all guesses are equally good. To get a better fix on the future, a promising place to start is with three key indicators of the future economic and military position of the principal Asian countries including—besides the United States—China, Japan, Korea, Indonesia, and India. Inclusion of India is based on the premise that its size, growth, and history will make it increasingly influential in the broad Asian region in the twenty-first century.

      The three key indicators are gross...

    • Chapter 19 THE ACCUMULATION OF MILITARY CAPITAL IN ASIA AND THE UNITED STATES, 1997–2015
      (pp. 107-112)

      The relation between economic growth and military resource allocations is complex. On the one hand, more rapid growth and a larger gross domestic product (GDP) increases resources available for military spending. On the other hand, larger allocations for military purposes may slow economic growth, to the extent that such allocations reduce non-military capital formation. Moreover, the scale of military resource allocations usually depends on the existence of security threats or uncertainties, and this influence on military spending may be unrelated to economic growth.

      Over the past decade, and prior to the financial turmoil in Asia since the middle of 1997,...

    • Chapter 20 TOO MUCH GOVERNMENT CONTROL
      (pp. 113-118)

      Asia’s financial earthquake is the second biggest international surprise of the past decade. The first (and weightier one) was the demise of the Soviet Union. Like the 1991 Soviet shock, Asia’s financial hemorrhaging has had many contributory causes. Most of these have been acknowledged and discussed, with the debate largely focusing on their relative importance.

      However, the primary cause of the Asian crisis has been largely obscured: namely, the legacy of the so-called “Japan development model,” and its perverse consequences. Subsequently relabelled the “Asian development model,” because variants of it were applied elsewhere in the region, this strategy of economic...

    • Chapter 21 THE END OF ASIA’S ECONOMIC CRISIS
      (pp. 119-124)

      The much publicized Asian economic “crisis,” which began with the collapse of the Thai baht in July 1997, is over! Instead of a situation that was initially and properly characterized as a “crisis”—to which some observers implausibly ascribed responsibility for triggering crises in Russia and Brazil as well—Asia currently displays a wide range of economic performance, problems, and prospects. Asia’s collective economic circumstances no longer constitute a “crisis.”

      This is not to deny or minimize the fact that individual countries within the region still confront serious economic problems, with sharply different prospects for alleviating, let alone solving them....

    • Chapter 22 WHEN GOOD NEWS ISN’T NEWSWORTHY
      (pp. 125-128)

      When East Asia experienced sharp economic reversals in 1997–1998, the profusion of media reports used words like “meltdown,” “collapse,” and “crash.” East Asia’s recovery in 1999 and 2000 has been no less dramatic, but the rhetoric used to describe it has been both more restrained and less abundant.

      This asymmetry has several explanations. One is simply the media’s predilection for bad news over good.

      A second relates to uncertainty about the robustness of the recovery, and the desire of commentators to avoid being too far out on a limb if the turnaround turns around.

      A third explanation is that...

    • Chapter 23 ASIA’S DRAMATIC RECOVERY
      (pp. 129-132)

      East Asia’s recovery in 1999 and 2000 has been no less dramatic, though much less publicized, than its deep economic reversals in 1997 and 1998.

      Triggered by the collapse of Thailand’s baht in July 1997, four economies that had high positive GDP growth in 1996 experiencednegativegrowth between 5 percent and 12 percent in 1997 and 1998. Asset values in these “crisis” countries—Thailand, Korea, Malaysia, and Indonesia—plummeted by about 75 percent due to the combined effects of currency depreciation and deflated equity and property valuations. Averaging over the four economies, an asset worth $100 in June of...

    • Chapter 24 CHINA AFTER DENG
      (pp. 133-136)

      Most discussions of potential changes within China since Deng Tsiaoping’s demise focus on possible political and leadership changes that may ensue in the next several years. Yet these dimensions of China’s landscape are probably less prone to change, and more likely to exhibit continuity, than some others.

      To be sure, Jiang Zemin did not ascend to the peak of China’s hierarchy with nearly as strong prior credentials—notably those relating to close associations and high formal military rank in the PLA—as did Deng and Mao. Nevertheless, this difference can be overdrawn. In the half-dozen years that Jiang has been...

    • Chapter 25 WHY CHINA’S 8 PERCENT GROWTH TARGET IS NOT GOOD NEWS
      (pp. 137-140)

      When senior Chinese economists are asked these days to comment on prospects for continued economic liberalization and reform, they typically respond by addressing a different question: how can China boost its GDP growth to a newly-established target rate of 8 percent annually in 1998 and 1999? Achieving this target is accorded special attention because of the “slowdown” (sic) to 7.2 percent reported in the first quarter of 1998. This response is usually accompanied by emphasizing a massive government infrastructure program of $750 billion to $1 trillion over the next two or three years to assure that the 8 percent goal...

    • Chapter 26 CHINA’S DEVALUATION: WHETHER, WHEN, HOW MUCH?
      (pp. 141-144)

      Toward the end of each of the past three years, a question has perennially arisen as to whether, when, and by how much China will devalue the yuan. In fact, this is the wrong question.

      The right question is, whether and when will China move from a partly convertible to a fully convertible currency, and from a semi-pegged to a flexible exchange rate system? And, by the way, at what exchange rate would a flexible yuan be likely to trade?

      What typically precipitates the devaluation question is a shortfall in several economic indicators behind goals previously announced by China’s leaders....

    • Chapter 27 CHINA’S HIERARCHS FACE A CRITICAL DILEMMA
      (pp. 145-148)

      China’s socialist market economy is starting to look much more like capitalism, creating a new dilemma for the nation’s communist leadership.

      In the next few months, mainland China’s first free and competitive stock market, known as the second board market, will open. Unlike existing stock exchanges in Shanghai and Shenzhen, whose listings are mainly state-owned, partly privatized companies, the new market’s listings will consist largely of private Chinese businesses, many involved in high technology, and joint ventures between Chinese and foreign investors whose companies are registered in China. The Shanghai and Shenzhen stock markets will be consolidated in Shanghai and...

    • Chapter 28 COMMUNISTS AND CAPITALISTS IN CHINA: WHO WILL CO-OPT WHOM?
      (pp. 149-152)

      The defining event in China in the first year of the 21st century is probably not the EP-3/F-8 aircraft collision near Hainan and its aftermath, or the detention, trial, and release of Chinese-American scholars, or the repression of the Falun Gong, or the award of the 2008 Olympics to Beijing—although each of these is important. The defining event is the decision of the Chinese leadership to admit acknowledged capitalists to membership in the Communist Party of China (CPC). The ramifications of this decision include the prospect of two very different futures: (1) a “capitalists co-opt party” scenario, or (2)...

    • Chapter 29 CHINA CONTINUES ITS FITFUL MARCH TOWARD CAPITALISM
      (pp. 153-156)

      While the Party faithful still refer to China’s economic system as a “social market economy with Chinese characteristics,” a more apt description is a “mixed state and private economy withEuropeancharacteristics.” These characteristics include a pervasive, interventionist government role as producer, regulator, and corporate owner; a growing and innovative private business sector (currently producing more than one-third of China’s non-agricultural output); and a variety of joint ventures between government, domestic, and foreign business. (Two of these characteristics also bring to mind the stagnating economy of Japan.)

      What Britain’s Prime Minister, Tony Blair, has referred to as the “Third Way”—...

    • Chapter 30 ONE CHINA, THREE SYSTEMS?
      (pp. 157-160)

      One of the striking, as well as neglected, aspects of the recent financial turmoil in Asia is the sharply different impact it has had on the three China domains: China Mainland, China Hong Kong, and China Taiwan (the latter, incidentally, is the formal name under which Taiwan registers as a member of APEC). Taiwan, despite its open markets, has maintained a remarkable degree of financial stability in the midst of the region’s turbulence. Hong Kong, notwithstanding its open markets and a monetary system pegged to the U.S. dollar, has been acutely volatile. China Mainland, by contrast, has displayed evident stability...

    • Chapter 31 RESTARTING CROSS-STRAIT RELATIONS: BEYOND THE DIALOGUE OF THE DEAF (Co-authored with Jonathan Pollack)
      (pp. 161-164)

      The election of Chen Shui-bian as Taiwan’s new president and the prospective entry of both China and Taiwan into the World Trade Organization offer a rare opportunity for a fresh start in cross-Strait relations. For the first time since the 1993 agreement in Singapore between designated representatives of the two governments, there is now a possibility that both sides might agree on terms of reference in cross-Strait ties for which neither claims outright ownership or a monopoly of political virtue.

      Explicit economic agreements and regulations constitute the common ground where the two sides could break the stalemate in cross-Strait ties...

    • Chapter 32 CURING JAPAN’S ECONOMIC MALAISE
      (pp. 165-170)

      For Japan to emerge from its severe and protracted economic doldrums nothing will help as much as abandoning its deep-seated commitment to an export-led economic strategy. Toward this end, Japan should remove the pervasively preferential treatment favoring its export firms and industries, and protecting them, along with domestic industries, from potentially competitive imports.

      Japan’s export-led strategy should be replaced by an “import-accommodating” one, which would not only benefit Japan but would contribute significantly to the economic recovery of the entire Asian region, as well.

      This prescription is heretical. According to standard economic analysis, imports are deflationary while exports are expansionary....

    • Chapter 33 LONG-TERM PROSPECTS FOR JAPAN
      (pp. 171-182)

      Q: Could we begin with a description of your recent research and how it evolved?

      A: In collaboration with three RAND colleagues, I recently worked on economic trends in the People’s Republic of China, India, Indonesia, Japan and South Korea, a project funded jointly by the Department of Defense and the Smith Richardson Foundation. This study basically revisited work done in 1989 and 1995 for the Office of the Secretary of Defense that involved examining economic trends and associated military spending and investment in a wide range of countries, some European, some Middle Eastern, and some Asian. In 1994 and...

    • Chapter 34 NEW THERAPIES FOR JAPAN’S ECONOMIC SCLEROSIS (Co-authored with Mark Buchman)
      (pp. 183-188)

      The familiar remedies for Japan’s ills are not working. Last year, the inaptly-named “Big Bang” liberalization program resulted in a limited deregulation of financial services in Japan. In recent weeks, Japan’s Central Bank has lowered its overnight funds rate from 1/2 to 1/4 of one percent (the comparable Federal Reserve rate is 5 1/4 percent). Still more recently, numerousgaiatsu-generating advisors have urged Japan to print money in abundance so as to prod Japanese consumers to divest their futons and postal savings accounts of yen in favor of a buying spree that will galvanize the depressed Japanese economy.

      In fact,...

    • Chapter 35 JAPAN’S COMFORTABLE STAGNATION
      (pp. 189-192)

      Economic stagnation in Japan is uniquely compatible with generally prevalent comfort, which is a major reason why stagnation is likely to endure. Underlying this endurance is the fact that zero economic growth or very slow growth in Japan still implies rising per capita income because Japan’s population will soon begin to decline.

      In the 1970s and 1980s, Japan was the economic wonder of the industrial world, recording the highest annual growth rate among all developed economies throughout this period. Its annual growth averaged above 4 percent, transforming Japan into the world’s second largest economy. This remarkable record provoked a heated...

    • Chapter 36 HOW TO DEFEND JAPAN WHILE “ENGAGING” CHINA
      (pp. 193-196)

      In the next few weeks, the crucial dilemma facing U.S. security policy in the Asia-Pacific region will be highlighted when the new guidelines for the Japan American Security Alliance (JASA) are finalized on September 24th, and one month later China’s president Jiang Zemin arrives in Washington for his first state visit with President Clinton.

      The dilemma arises because the two principal elements of U.S. security policy in the region—“revitalizing” JASA, and “engagement” of China—are in conflict with one another. Advancing the first retards the second. The two impending events are reflective of this conflict.

      The conflict springs from...

    • Chapter 37 WHEN A BALANCE OF POWER CAN BE DESTABILIZING
      (pp. 197-200)

      What will determine whether the Asia-Pacific region will experience peace and stability, or conflict and disorder, in the next decade? Most responses to the question take either of two forms: broad and general answers (for example, the outcome will depend on continuation or interruption of the region’s dynamic economic growth, on whether or not the Asia-Pacific region proceeds toward integration into the world economy, and on the character of China’s post-Deng leadership); or specific answers that focus on particular issues or disputes in the region (for example, the status of Taiwan, how the “one-China-two systems” formula plays out, whether the...

    • Chapter 38 MANAGING THE COSTS OF KOREAN REUNIFICATION—IF IT OCCURS
      (pp. 201-204)

      Prospects for eventual reunification of North and South Korea appear brighter than at any time in the past several decades. Yet it is premature, if not naïve, to assume that reunification will occur smoothly, let alone peacefully.

      To be sure, the recent signs are encouraging, as well as unusual: the much publicized embrace by the two Presidents Kim and their amicable discussions in June, followed by exchanges of visits between 100 selected North and South Korean families, by the release by South Korea of several dozen convicted North Korean spies, and by the joint appearance of the South and North...

  9. INDEX
    (pp. 205-210)
  10. ABOUT THE AUTHOR
    (pp. 211-212)