Political responses to the economic crisis: China, Japan and South Korea

The on-going financial crisis in the West has led to reduced economic growth and consumer demand among the major trading partners of East Asia. As was the case following the 1998 Asian financial crisis, the role that China plays in the regional and global financial system has increased, resulting in political responses from other East Asia nations who wish to maintain their level of influence over their key trading partners and in regional and global economic governance. Using role theory, this chapter shows China’s growing influence in global economic governance (with a focus on the G20) as a result of the 1998 Asian financial crisis and the 2008 global financial crisis. The chapter investigates the responses of Japan and South Korea to the increasing significance of China in economic governance, both regionally and globally. Overall, Japan and China have moved from their traditional roles as bystanders, and South Korea has consolidated its role as a middle power. In their new roles, all three East Asian states have attempted to become norm-setting actors within the global and regional governance structure.