Three Systems Surrounded by Crisis

The question I have been asked to address concerns the “Greater Chinese Economy in its Regional Setting” -more specifically, the impact of Asia’s recent economic crisis on mainland China, Hong Kong, Taiwan, and the overseas Chinese communities throughout the region. This is an extraordinarily ambitious task and, at most, I will only be able to deal with parts of it. What is more, it should be noted at the outset that the term “Greater China” is not regarded with favor in any part of the region! And with good reason: the term seems to imply a Chinese hegemonic domain-a role which Beijing eschews, Hong Kong and Taiwan (in ascending order) deny, and the rest of Asia, including Japan, views with varying degrees of trepidation. I will therefore avoid the use of the term altogether, my marching orders notwithstanding.

Of the four parts of this discussion, the first addresses the “storm’‘-that is, Asia’s economic turmoil, its breadth and depth, and at least some of its explanations and causes. The second considers the relatively limited impact of Asia’s economic turmoil on China, Taiwan, and Hong Kong, all of which (though to varying degrees) would seem to constitute the “eye” of the storm. The third section directly addresses China’s medium- to long-term growth prospects and both the positive and negative factors affecting these prospects. Finally, I conclude with some observations. about other issues and “wild cards,” including the possible devaluation of the Chinese renminbi, Japan’s recent and current role in the Asian financial turmoil, and security issues in the Asian environment as a whole.

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