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Currency and Contest in East Asia

The Great Power Politics of Financial Regionalism

William W. Grimes

Publication Year: 2008

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.

Published by: Cornell University Press


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pp. 1-2

Title Page, Copyright

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pp. 3-8


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pp. vii-viii

Figures and Table

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pp. ix-x

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pp. xi-xiv

This book is the culmination of over eight years of research, thought, writing, and rewriting that began in 1999. Initially, I meant only to revisit a theme that had been dropped from my first book. That theme was “internationalization of the yen,” a constantly mutating debate that had resurfaced in Japanese financial politics every decade ...


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pp. xv-xvi

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Introduction: The Emergence of East Asian Financial Regionalism

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pp. 1-9

The rise of regional institutions and initiatives in East Asia in recent years is a striking and new phenomenon. On this much, nearly everyone can agree. But what does that mean? Is East Asia the cusp of a regional revolution as governments emerge from decades, if not centuries, of political and economic fragmentation ...

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1. The Strategic Political Economy of Financial Regionalism

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pp. 10-35

To analyze the dynamics of financial regionalism and demonstrate the importance of great power politics in shaping it, we need the right tools. In this chapter I clarify the framework for analysis as well as the specific political and economic contexts in which East Asian states are operating. ...

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2. The Rise of East Asia as a Region: Progress and Challenges

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pp. 36-70

Having laid out an analytical framework for analyzing the politics of regionalism, I turn now to a close consideration of East Asia as an economic and political entity. While we should expect great power politics to intrude into even functional areas of cooperation, it is the market-driven logic of economic competition, integration, and growth ...

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3. Lending into Crises: The Chiang Mai Initiative

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pp. 71-117

East Asian financial regionalism was forged in the crucible of the Asian Financial Crisis, as one high-growth economy after another fell victim to severe currency depreciation and credit crunches. Many observers both inside and outside the region attributed the worst of the effects to the slowness, inappropriate design, ...

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4. Currency Management and Contestation

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pp. 118-159

The most ambitious aspect of financial regionalism is currency cooperation. Given the almost total lack of coordination to date, it is tempting at first blush simply to dismiss the whole discussion, with its aspiration of a common currency and regional central bank, as nothing more than regionalist rhetoric. ...

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5. Bond Market Initiatives

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pp. 160-203

The final component of East Asian financial regionalism is to be found in efforts to promote bond market development. The political story in this chapter is significantly complicated by the role of private sector actors. ...

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Conclusion: Currency and Contest in East Asia

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pp. 204-218

Financial regionalism is happening in East Asia. Its pace can be slow and its destination is decidedly unclear, but there is no question that cooperative efforts are expanding and that they will be a key component of East Asian economic regionalism and regionalization more broadly. ...


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pp. 219-238


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pp. 239-248

E-ISBN-13: 9780801458675
Print-ISBN-13: 9780801446894

Page Count: 264
Publication Year: 2008

Edition: 1