RIETI Policy Symposium

Resolving New Global and Regional Imbalances in an Era of Asian Integration

Announcement

Economic integration in East Asia is in part stimulated by new intra-industry vertical specialization as seen typically, for example, in the electronics industry. The rise of China is pushing further this vertical specialization. China has been rapidly developing its processed exports by importing sophisticated technology-intensive intermediate goods from Japan and the NIEs such as Korea and Taiwan, processing them with its cheap labor and exporting the processed products, particularly, to the U.S. and the EU. This has created a triangular trade pattern on a global scale which, combined with the rapid increase in the U.S. current account deficit, has generated a new pattern of global current account imbalances. In 2003, China posted a trade surplus of more than 100 billion dollars in its bilateral trade with the U.S. However, China's trade surplus with the whole world remained at 20 billion dollars. This implies that China has huge trade-deficits vis-a-vis countries other than the U.S., one of the main causes being its imports of sophisticated intermediate goods from Japan and the NIEs.

This new global pattern of current account imbalances, comprising the already-large U.S. current account deficit and current account surpluses of the East Asian region including Japan, is a reflection of the global triangular trade pattern on the one hand, while it has also created a global monetary situation where the rapidly increasing foreign reserves in the Asian region is influencing the U.S. interest rates, on the other.

At this symposium, the nature of the new global imbalances and their sustainability will be analyzed, and a possible scenario of the adjustment processes of these imbalances will be discussed. More concretely, the symposium will address what impact the adjustment processes, i.e. foreign exchange adjustments, monetary-cum-fiscal, and structural reforms, will exert on the process of East Asian economic integration, and specify appropriate economic policies that will overcome the global imbalances, and provide for sustainable growth and facilitate further economic integration in East Asia.

Information

  • Date: 17 - 18 June, 2004.
  • Venue: Keidanren Kaikan (Keidanren Hall)
  • Language: Japanese / English (with simultaneous interpretation)
  • Contact: RIETI Ms. Matsukura / Ms. Katagiri
    Tel: 03-3501-8398

* Streaming video footage of and handouts pertaining to the symposium will be available for downloading from the RIETI website after the event.

Day 1: 17 June

13:30-13:45 Opening Remarks: OKAMATSU Sozaburo (RIETI Chairman)
13:45-15:45 Session 1: Determinants of the sustainability of the U.S. external deficit and the right policy mixes for adjustments
Paper Presentation
OGAWA Eiji (Professor, Graduate School of Commerce and Management, Hitotsubashi University)
Anne-Marie L. BROOK (Economist, Money and Finance Division, Economics Department, Organisation for Economic Co-operation and Development)
Discussant
TOJO Yoshiaki (Special Assistant to the Vice Minister for International Affairs and Director, International Economic Affairs Division, Trade Policy Bureau, Ministry of Economy, Trade and Industry)
Q&A
15:45-16:00 Coffee Break
16:00-17:30 Session 2: The triangular trade pattern and its implications for global and regional imbalances
Paper Presentation
Françoise LEMOINE (Senior Economist, Centre d'etudes prospectives et d'information internationales)
Discussants
FUKAO Kyoji (RIETI Faculty Fellow / Professor, Institute of Economic Research, Hitotsubashi University)
Peter GARBER (Global Risk Strategist, Global Market Research, Deutsche Bank Securities)
Q&A

Day 2: 18 June

9:00-10:30 Session 3: Competition and collaboration among economic agglomerations and fragmentation of corporate functions - What lies beneath the increasing economic integration in Asia
Paper Presentation
KIMURA Fukunari (Professor, Faculty of Economics, Keio University)
HISATAKE Masato (RIETI Senior Fellow)
Discussants
HATTA Tatsuo (RIETI Faculty Fellow and Research Counselor / Professor, Division of International Studies, International Christian University)
FUJITA Masahisa (Professor, Institute of Economic Research, Kyoto University / President, Institute of Developing Economies, JETRO)
Q&A
10:30-10:45 Coffee Break
10:45-12:45 Session 4: Designing appropriate adjustment policies in Asia - Searching for the right policy mix of currency adjustments, monetary and fiscal policies, and structural reforms
Paper Presentation
-Global and Regional Issues
Peter GARBER (Global Risk Strategist, Global Market Research, Deutsche Bank Securities)
OTANI Ichiro (Economic Policy Consultant / former Head, IMF Resident Representative Office in China)
-Country Issues
Li-Gang LIU (Assistant Professor of Public Policy and Finance, School of Public Policy, George Mason University)
Piti DISYATAT (Senior Economist, Monetary Policy Group, Bank of Thailand)
Discussants
YU Yongda (Professor, School of Public Policy and Management and Development Research Center for 21st Century, Director of Institute of Economic Cooperation, Tsinghua University)
KURODA Haruhiko (Professor, Hitotsubashi University / ex-Vice Minister of MOF of Japan)
Q&A
12:45-14:00 Lunch
14:00-16:00 Session 5: Optimal exchange rate regime for Asia
Session Chair
OTANI Ichiro (Economic Policy Consultant / former Head, IMF Resident Representative Office in China)
Paper Presentation
TANAKA Soko (Professor of International Finance, Faculty of Economics, Chuo University)
Albert KEIDEL, III (Deputy Director, Office of East Asian Nations, U.S. Department of the Treasury)
Discussants
Yunjong WANG (Vice President, SK Research Institute for SUPEX Management)
YU Yongda (Professor, School of Public Policy and Management and Development Research Center for 21st Century, Director of Institute of Economic Cooperation, Tsinghua University)
Q&A
16:00-16:15 Coffee Break
16:15-18:00 Session 6: Panel discussion - Searching for optimal adjustment policies in both the U.S. and Asia
Panelists
ITO Takatoshi (Professor, The Graduate School of Economics and Research Center for Advanced Science and Technology, The University of Tokyo)
Li-Gang LIU (Assistant Professor of Public Policy and Finance, School of Public Policy, George Mason University)
Peter GARBER (Global Risk Strategist, Global Market Research, Deutsche Bank Securities)
SANO Tadakatsu (Vice-Minister for International Affair, Ministry of Economy, Trade and Industry)
Others (to be announced on the day)
* The agenda is subject to change.