Since the Asian Financial Crisis of 1997-98, East Asian
economies have sought to make themselves less vulnerable to global
financial markets by transforming the regional financial
architecture. With Japan as a leading actor, they have introduced
initiatives to provide emergency financing to crisis economies,
support the development of local-currency bond markets, and better
coordinate currency policies.
In Currency and Contest in East Asia, William W. Grimes
builds on years of primary research and scores of interviews with
participants and policy analysts to provide the most accurate,
complete, and detailed description available of attempts to build
financial cooperation among East Asian countries. Adapting realist
political economy theory to the realities of contemporary global
finance, Grimes places regional issues firmly in the wider context
of great-power rivalries. He argues that financial regionalism can
best be understood as one arena for competition among Japan, the
United States, and China.
Despite their mutual desire for regional prosperity and economic
stability, these three powers have conflicting political interests.
Their struggles for regional leadership raise questions about the
long-term feasibility of regional financial cooperation, the
possible effects of Sino-Japanese rivalry on regional financial
stability, and the potential for East Asian financial regionalism
to undermine the long-established-albeit waning-global and regional
dominance of the United States and the dollar.
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