CONTENTS -- Editor's Introduction -- Chapter 1 Determinants of Asian Capital Flight and the Impact of 1997 Economic Crisis Pornchai Chunhachinda and Kulpatra Sirodom -- 1. Introduction -- 2. Capital Flight Measurement -- 2.1. Direct Measures -- 2.2. Indirect Measures -- 3. Capital Flight from Asia -- 3.1. Sources of Information -- 3.2. Preliminary Analysis of Capital Flight -- 3.2.1. Impact of 1997 Economic Crisis -- 4. Determinants of Capital Flight -- 4.1. Literature Review -- 4.2. Regression Model -- 4.3. Empirical Findings -- Thailand -- The Philippines -- Indonesia -- Malaysia -- South Korea -- 4.4. Policy Implementation -- 5. Conclusions -- References -- Chapter 2 The Asian Financial Crisis, Deflation, and Structural Change in Hong Kong Alan K. F. Siu and Yue-Chim Richard Wong -- 1. The Changing Structure of the Economy -- 2. The Asian Financial Crisis and Economic Recession -- 3. The Need for a Theoretical Framework -- 4. Price Changes: Cyclical versus Structural -- References -- Chapter 3 Indonesian Economic Recovery Process and the Role of Government Sri Mulyani Indrawati -- 1. Introduction -- 2. The Crisis and the IMF Program -- 2.1. Technical Content of the Program -- 2.2. Policy Process and Government Capacity -- 3. The Recovery Process -- 3.1. Managing public debts -- Domestic debt problems -- Foreign Debts Problems -- 3.2. Fiscal Decentralization -- 3.3. Monetary Policy and The Central Bank -- 3.4. Corporate Restructuring -- 4. The New Role of Government -- 5. Conclusion -- References -- Chapter 4 Financial Crisis and Restructuring in Thailand June Charoenseang and Pornkamol Manakit -- 1. Introduction -- 2. The Evolution of the Crisis in Thailand since the 1980s -- 3. The Restructuring Process -- 3.1. Financial Restructuring -- 3.1.1. Financial Sector Restructuring Program of August 14, 1998.

3.1.2. Progress After the August 1998 Program -- 3.2. Corporate Debt Restructuring -- 3.2.1. Problems and Bottlenecks delaying Negotiations on Corporate Debt -- 3.3. The Thai Asset Management Company (TAMC) -- 4. Constraints on Restructuring -- 5. Conclusion -- References -- Chapter 5 East Asia FTA: Economic Modalities, Prospects and Further Implications Suthiphand Chirathivat -- 1. Context -- 2. Toward a concise economics of EAFTA -- 2.1. Scope and framework -- 2.2. Trade creation and trade diversion -- 2.3. Transaction costs -- 2.4. Market widening -- 2.5. Rules of origin -- 3. Implications for regional partners -- 4. Need for regional policy -- 4.1. Conceptual formulations -- 4.2. Possible future orientation -- Appendix 1: Summary of the Global Trade Analysis Project (GTAP) model applied in this study -- References -- Chapter 6 A Fundamental Scope for Regional Financial Cooperation in East Asia Akira Kohsaka -- 1. Introduction -- 2. Lessons from the Financial Crises in the 1990s -- 3. How to Manage External Financing -- 3.1. Patterns and Compositions of Capital Flows in East Asia -- 3.2. Exchange Rate Regimes -- 3.3. External Debt Management -- 4. How to Manage Domestic Financing -- 4.1. Financial Vulnerability? -- 4.2. Macroeconomic Adjustment -- 4.3. Growth cum Credit -- 4.4. Credit Crunch? -- 5. Macroeconomic Linkages and Monetary Integration -- 5.1. Capital Market Integration -- 5.2. Comparative Macroeconomic Linkages -- 6. Conclusion: A Scope for Regional Financial Cooperation -- References -- Chapter 7 Financial Cooperation and Integration in East Asia Yunjong Wang -- Abstract -- 1. Introduction -- 2. Rationale for Regional Financial Cooperation -- 3. Status of Regional Financial Cooperation -- 4. Examination of Regional Financial Integration in East Asia -- 5. Barriers to Financial Cooperation and Integration -- 6. Future Prospects.

References -- Chapter 8 Integrating the Two Asian Economic Giants: Japanese Multinational Corporations in China K. C. Fung, Hitomi Iizaka and Alan Siu -- Summary -- 1. Introduction -- 2. Some General Characteristics of Foreign Direct Investment in China -- 3. Japanese Direct Investment in China -- 3.1 Motives, Procurement and Destination of Sales of Japanese Affiliates in China -- 3.2 Regional Distribution of Japanese Direct Investment in China -- 4. Geographic Determinants of Japanese Direct Investment in China -- 4.1 Model specification -- 4.2 Panel Estimation -- 5. Conclusion -- Appendix A -- Appendix B: Data Sources -- References -- Chapter 9 The Development of the Greater Mekong Subregion (GMS): Real Promise or False Hope? Medhi Krongkaew, Khwaeng Klong-Chan and Khet Bangkapi -- 1. Introduction -- 2. Rationale for the GMS Growth Area -- 3. What Have Been Accomplished So Far? -- On the Strategic Framework for the Next Ten Years -- On the Framework Agreement for the Facilitation of the Cross-Border Movement of Goods and People -- On the Eleven Flagship Programs -- 4. Problems and Prospects of Further Cooperation in the GMS -- 5. Concluding Remarks: Thailand and the GMS, and the Larger Context of Regional Cooperation -- References -- Chapter 10 Investment-Growth Nexus in China: A Comparative Perspective Zhang Jun -- 1. Introduction -- 2. China's investment pattern in the context of East Asia -- 2.1. Investment rates -- 2.2. Industrial share of GDP and structural change of manufacturing sector -- 2.3. Investment in housing construction -- 2.4. The share of public investment -- 3. Has China over-invested? -- 3.1. Investment to GDP Ratios in Real Terms -- 3.2. Incremental capital-output ratio (ICOR) -- 4. Concluding remarks -- Appendix: Growth Accounting for Total Factor Productivity in Chinese Provinces: 1987-2001 -- Notes -- References.

Chapter 11 Corporate Governance and State-Owned Shares in China Listed Companies Qu Qiang -- 1. Introduction -- 2. Corporate governance and Share Structure -- 2.1. The role of PLCs in Chinese economy -- 2.2. Share structure -- 2.3. Critical impediments to corporate governance of China PLCs -- 2.3.1. Ambiguous property rights and multi-level principal-agent relationship -- 2.3.2. Weak managemental incentives and market discipline -- 3. How Did the State Shares in China PLCs Take Shape? -- 3.1. China economic reform strategy -- 3.2. Ideological, Political Constraints of PLCs -- 4. Failed practice of state share reselling in 2001 -- 4.1. Why and how the state decided to resell part of state-owned shares in 2001? -- 4.2. Conflicts between the government and the market -- 5. Concluding remarks -- References -- Chapter 12 Fiscal Performance, Public Debt and Fiscal Consolidation in Korea Chung Mo Koo -- 1. Introduction -- 2. Fiscal Policy and Budget Structure -- 2.1. Fiscal Policy in Korea -- 2.2. Size of Government Expenditure -- 2.3. Composition of General Account Expenditures -- 3. Budget Deficit and Public Debt -- 3.1. Consolidated Fiscal Balance -- 3.2. Snowballing Public Debt -- 4. Fiscal Policy in the Aftermath of the Financial Crisis -- 4.1. Fiscal Response to the Financial Crisis -- Public Funding for Financial Restructuring -- Expanding Social Safety Nets -- Deficit Budget to Encounter the Crisis -- 4.2. Assessment of Fiscal Performance in the Aftermath of the Crisis -- 5. Sustainability Test of Public Debt -- 5.1. Intertemporal Budget Constraints -- 5.2. Empirical Results -- 6. Conclusion -- References -- Chapter 13 Foreign Ownership, Technological Intensities and Network Strength: Electronics Firms in East Asia Rajah Rasiah and Rajiv Kumar -- 1. Introduction -- 2. Literature Review -- 2.1. Neoclassical models -- 2.2. Evolutionary models.

2.3. Alternative framework -- 3. The Embedding Environment and Foreign Direct Investment -- 4. Methodology and Data -- 4.1. Specification of Variables -- 4.1.1. Human Resource Capability -- 4.1.2. Process Technology Capability -- 4.1.3. R&D Capability -- 4.1.4. Overall Technology Intensity -- 4.1.5. Network Strength -- 4.2. Other critical firm-level Variables -- 4.2.1. Export Incidence -- 4.2.2. Union -- 4.2.3. Size -- 4.2.4. Ownership -- 4.2.5. Owner-managed Firms -- 4.2.6. Age -- 4.3. Statistical Models -- 5. Statistical Analysis -- 5.1. Statistical Differences -- 5.2. Statistical Relationships -- 6. Conclusions -- References -- Chapter 14 Growth with Equity over Vietnam's Economic Transition: A Political Economy Perspective Scott Fritzen -- 1. Poverty as the litmus test of economic reform in Vietnam -- 2. 'Growth with equity' as an emerging model of economic governance -- 3. Indicators from Vietnam's transition -- 3.1. Background to reforms -- 3.2. Vietnam in comparative context -- 3.3. Socioeconomic impacts of the transition -- 4. Can Vietnam sustain 'growth with equity' as a poverty reduction strategy? -- 4.1. Maintenance of macroeconomic stability -- 4.2. Rapid employment generation -- 4.3. Broad access to productive assets and human capital -- 4.4. Public goods -- 4.5. Safety net policies -- 4.6. Institutional reforms -- 5. The political context of economic governance reforms -- References.