Foreword -- Contents -- List of Abbreviations -- Introduction: China's Economic Presence Calla Wiemer -- 1. Gains from Economic Exchange -- 2. Financial Stability, Crisis Recovery, and Exchange Rates -- 3. Institution Building and Clout of the Region Globally -- 4. China's Presence -- REGIONAL ECONOMIC INTEGRATION -- Inaugural Address Myoung-Ho Shin -- Globalization: What It Is and Who Benefits D. Gale Johnson -- 1. What Made Globalization Possible and Effective? -- 2. Why the World is Different Now: Knowledge -- 3. Sources of Benefits of Globalization -- 4. Have the Poor Benefited? -- 5. Life Expectancy -- 6. Increased Agricultural Productivity -- 7. Immunization -- 8. Knowledge -- 9. Where Markets Have Not Been Permitted to Function -- 10. Concluding Comments -- 11. Acknowledgment -- 12. References -- Prospects for an Asian Currency Area Robert Mundell -- 1. The Advent of the Euro and the New Triad -- 2. Exchange Rate Gyrations -- 3. Currency Areas and Power Centers -- 4. Does an Asian Currency Need an Anchor? -- 5. An Inside Currency Anchor for Asia? -- 6. The Dollar as Anchor? -- 7. Reform of the International Financial System -- 8. Dollarizing Hong Kong -- 9. APEC Monetary Reform -- The European Central Bank and the International Role of the Euro Juergen Schroeder -- 1. Institutional Design and Objectives of the European Central Bank (ECB) -- 2. The External Value of the Euro -- 3. The Euro as International Currency -- 4. Performance of the Euro as International Currency in First Three Years -- 5. References -- Asian Economic Community: Intra-Community Macro- and Micro-Economic Parameters Manoranjan Dutta -- 1. Globalism and Regionalism -- 1.1. The post-WWII infrastructure of globalization and the new world -- 1.2. The European Economic Union -- 2. Asia-Pacific Economic Cooperation (APEC) -- 3. Lessons to Learn from the EU Model.

3.1. The pan-European culture and civilization -- 3.2. Progression to an intra-EU micro- and macro-economic agenda -- 3.3. Membership of the EU anchored to the principle of inclusion, not exclusion -- 3.4. EU's competitively larger economic base warrants immediate attention -- 3.5. Shares of world trade for member economies of EU and the Euro-regime -- 3.6. Richer and poorer member economies in EU compact -- 3.7. Freedom of labor movement -- 3.8. Fluctuations of exchange rate: euro vis-a-vis US dollar -- 4. Asian Economic Community (AEC) -- 4.1. The map of Asia is as real as the map of Europe -- 4.2. Any effort toward AEC must be based on a comprehensive intra-regional micro- and macro-economic agenda -- 4.3. Membership of the AEC must be anchored to the principle of inclusion -- 4.4. Uniformity of the level of industrialization of prospective member economies of AEC, even if the group of 3 + 5 has been an issue of concern -- 4.5. AEC's economic base in terms of its shares of world output and trade -- 5. Conclusion -- 6. Acknowledgments -- 7. References -- East Asian Economic Cooperation: The "10 + 1" Mechanism for Moving Forward Jingyi Ye -- 1. Introduction -- 2. Current Early Stage of Progress in East Asian Economic Cooperation -- 2.1. Successful examples of regional economic cooperation: EU and NAFTA -- 2.2. East Asia's early stage economic cooperation -- 3. Constraints on East Asian Regional Economic Cooperation -- 3.1. Economic constraints -- 3.2. The sovereignty constraint -- 3.3. Political and cultural constraints -- 4. Leadership Dynamics -- 4.1. US hegemonism -- 4.2. The leadership void within East Asia -- 5. Conclusion -- 6. Acknowledgment -- 7. References -- Pax Americana-Led Catch-Up, Flying-Geese Style: Regionalized Endogenous Growth in East Asia Terutomo Ozawa -- 1. Introduction: Regionalized Endogenous Growth.

2. Hegemon-Led Macro-Clustering -- 3. A Reformulated "Flying-Geese (FG)" Paradigm -- 4. Demanufacturization and Tertiarization in the US -- 5. Japan's Role as the Second Goose -- 5.1. Industrial upgrading intermediation and production fragmentation -- 5.2. Capacity augmenter -- 6. Export Competitiveness and Currency Appreciation -- 7. Public Policies of Catch-Up Economies -- 8. Conclusions -- 9. References -- Asian Economic Integration: A Perspective on South Asia Saleem M. Khan and Zahira S. Khan -- 1. Introduction -- 2. Regional Integration Agreements in Asia -- 3. World Trends in Regional Integration Agreements -- 4. South Asian Dilemma and Potential -- 4.1. Economic indicators -- 4.2. Social indicators -- 4.3. Economic potential -- 5. Proposed South Asian Strategy -- 6. Conclusions -- 7. References -- ASIAN POLICY & PERFORMANCE -- Can East Asia Rise Again? Tzong-Shian Yu -- 1. Introduction -- 2. Overview of the Recent Economic Situation in East Asia -- 2.1. Economic growth -- 2.2. The financial markets -- 2.2.1. Stock markets -- 2.2.2. Foreign exchange markets -- 3. Comparing the East Asian Financial Crisis and the New Economy Slump -- 3.1. Different sources of economic recession -- 3.2. Different causes of the two recessions -- 3.3. Scope of the two recessions -- 3.4. Impact on the economies of East Asia -- 4. Policy Measures to Combat the Slump -- 4.1. The United States -- 4.2. Japan -- 4.3. Taiwan -- 4.4. Mainland China -- 4.5. Other countries -- 5. Can East Asia Rise Again? -- 6. Prospects for Formation of an East Asian Community -- 6.1. ASEAN plus three -- 6.2. ASEAN plus one -- 6.3. ASEAN and Japan -- 6.4. The Greater China Economic Community -- 7. Concluding Remarks -- 8. References -- Identifying Terms of Trade Effects in Real Exchange Rate Movements: Evidence from Asia Mardi Dungey -- 1. Introduction -- 2. Data -- 3. Model Framework.

4. Empirical Results -- 5. Conclusions -- 6. Acknowledgements -- 7. References -- Appendix A. Data Sources -- Appendix B. Derivation of the Covariance Expression -- Industrial and Commercial Firms' Response to the Asian Crisis: A Logistic Approach Stephen Reynolds, Somchai Ratanakomut and James Gander -- 1. Introduction -- 2. Methodology and Model -- 3. Statistical Results -- 4. Conclusions -- 5. References -- Moral Hazard and Legal Regulation in the Financial Market: Japan's Mega-Bank Mergers Yoshinori Shimizu -- 1. Introduction -- 2. Fiscal Costs of Financial Crises Worldwide -- 3. Legal Enforcement in the Transitional Economy -- 4. Mega-Bank Mergers and Too-Big-To-Discipline-Adequately (TBTDA) -- 5. Merger Announcement and Stock Prices -- 6. Empirical Research on Mega-Bank Mergers -- 7. Conclusion -- 8. References -- FOCUS ON CHINA -- Bank Regulation in China: Property Rights, Incentives, and Accountability Yan Guo -- 1. Evolution of China's Financial System and Regulatory Structure -- 2. Reform of State-Owned Banks -- 2.1. Elimination of credit quotas -- 2.2. Recapitalization of state-owned commercial banks -- 2.3. Transfer of NPLs to asset management companies (AMCs) -- 2.4. Classifying loans based on risk -- 2.5. Dispensation of unprofitable bank branches -- 2.6. Reorganization of the PBC -- 3. Dealing with Problematic Institutions -- 3.1. Closure of Hainan Development Bank (HDB) -- 3.2. Clean up of trust and investment corporations (TICs) -- 3.3. Urban credit cooperatives (UCCs) -- 3.4. Rural credit cooperatives (RCC) -- 4. Clean Up of Illegal Bank Funds in the Stock Market -- 5. Potential Problems Associated with WTO Entry -- 6. Conclusion -- 7. References -- Foreign Direct Investment in China: An Analysis of Source Country and Sector of Utilization Wenhui Wei and Manoranjan Dutta -- 1. Introduction.

2. China's Absorption of Foreign Investment, 1979-2000 -- 3. Source-Country Composition of FDI -- 3.1. Source-country composition of FDI in China -- 3.2. Comparison with other Asian countries -- 4. Sectoral Composition of FDI -- 4.1. Sectoral composition of FDI in China -- 4.2. Comparison with other Asian countries -- 5. Concluding Remarks -- 6. References -- Agglomeration Economies and FDI Spatial Distribution: Evidence from Joint Ventures in China Chyau Tuan and Linda F. Y. Ng -- 1. Introduction -- 2. FDI Facilitation in a Core-Periphery System: Theories and Evidence -- 2.1. Significance of the core-periphery system and agglomeration economies -- 2.2. Hong Kong as a service-city core since 1990s -- 3. Research Methodology -- 3.1. The data -- 3.2. Spatial distribution: GIS mapping -- 3.3. The model -- 4. Statistical Results -- 4.1. FDI flow patterns by industrial sector and firm size -- 4.2. Behavior of FDI by investment source and firm size -- 4.3. Agglomeration patterns by sector, size, and source: Correlation analysis -- 5. Conclusion -- 6. References -- Korea-China Technological Cooperation Yang-Taek Lim -- 1. Korea-China Economic Relations -- 2. Technology Policy and Cooperation Efforts -- 2.1. Korea's technology policy and development -- 2.2. China's technology policy and development -- 2.3. Korea-China government cooperation in S&T -- 2.3.1. Korea-China Industrial Cooperation Committee -- 2.3.2. Agreement on Korea-China S&T Cooperation -- 3. Commercial Technology Transfer -- 3.1. Korea's technology exports to China -- 3.2. Korea's technology imports from China -- 4. Conclusion -- 5. References -- ASEAN-China Free Trade Area: Background, Implications and Future Development Suthiphand Chirathivat -- 1. Introduction -- 2. Background -- 3. Implications -- 4. Simulation Results -- 5. Framework Agreement -- 6. Upcoming Challenges -- 7. Conclusion.

8. Acknowledgments.