Asia Seeks Win-Win: Cooperation Promotes Development: Proceedings of the 2003 Annual Meeting of the Boao Asia Forum

Author: Xingdao Book Company
Publisher:
Publishing Date: 2004-05-01
Features: From the perspective of consumption based on GDP, the market size of East Asia reached 3 trillion 700 billion USD in 2002. In contrast, the world's largest consumer country, the United States, with its "world factory" size of 7 trillion 300 billion USD, means that the market size of East Asia has grown to nearly half of that of the United States. The total import and export volume of East Asia was approximately 2 trillion 300 billion USD in 2002. This scale is approaching one-fifth of the total world trade volume, and this amount has already surpassed the current import and export volume of the United States. On the other hand, for Japan, Asia is also a highly important region. Japan's total import and export volume with Asia reached 325.7 billion USD in 2002, accounting for 43% of Japan's total trade volume, and these transactions were basically conducted within East Asia. I think it can be said that East Asia has become an indispensable and inseparable trade partner region for Japan.
Looking back at the economic development and cooperation in Asia
Next, I would like to briefly review the economic development relationship between Japan and Asia. In 1954, the Japanese government began implementing Official Development Assistance (ODA), which has now spanned half a century, continuously supporting the development and improvement of basic social facilities in countries around the world. In particular, Japanese government loans have been used as funds for the construction of basic social facilities, earning widespread praise for Japan's ODA contributions. From 1992 to 2001, the Japanese government provided a cumulative total of 88 billion USD in official development assistance worldwide, of which nearly 60% was allocated to Asia, a region with which Japan has long maintained close ties. As everyone knows, Japanese private enterprises and the Japanese government's ODA efforts have also actively participated in foreign direct investment (FDI) in Asia, particularly in East Asia. As Japanese private enterprises establish businesses abroad and transfer technology in various fields, they have contributed to supporting local industries and building and improving industrial infrastructure. By the end of 2002, Japan's total foreign direct investment worldwide had reached approximately 300 billion USD, with about 56 billion USD invested in East Asia, accounting for nearly 20% of the total. Japanese private enterprises' direct investment in China, though relatively new, has reached about 12 billion USD of the aforementioned 56 billion USD, accounting for only 4% of the total amount but is now growing rapidly.
The Asian region has successfully achieved economic development by receiving assistance and investment from industrialized countries led by Japan. However, the Thai baht crisis that occurred in July 1997 quickly spread to the Philippines, Malaysia, Indonesia, and then to Hong Kong and South Korea, triggering the Asian currency crisis, an economic crisis that struck East Asia. The direct cause of the Asian currency crisis was the rapid outflow of short-term private foreign capital to other countries. However, the fundamental reason should be attributed to the underdeveloped financial systems in East Asian countries. In this severe economic situation, the Chinese government, fearing further strikes and instability in East Asian countries, restrained the protectionist measures of its own economic capital and refrained from resorting to depreciation to calm the crisis. This was indeed a remarkable contribution and deserves to be widely recognized.
Additionally, during the turbulent times, European and American companies and capital continuously flowed out of East Asia. However, most Japanese companies remained steadfast in their local operations, implemented additional investments to expand their businesses, and shared the hardships with local employees, helping them weather the storm. I believe everyone still remembers the arduous process of East Asia emerging from the Asian currency crisis, so I will not elaborate further.
East Asian countries adopted the slogan "Learn from mistakes and never repeat them" and worked to improve their financial systems. In May 2000, they signed the "Chiang Mai Initiative," a framework involving 10 ASEAN countries and three additional nations—Japan, China, and South Korea. Under this initiative, measures such as bilateral currency swap agreements, assistance in case of emergencies, and the establishment of mutual surveillance systems for the economic conditions of the participating countries were steadily implemented. I am deeply relieved by this progress.
Interdependence in the Asian economy
I would like to discuss how the interdependence of the Asian economy has developed. As an example that directly illustrates interdependence, the trade structure between Japan, China, and Hong Kong Special Administrative Region is often cited. For instance, in 2002, Japan had a trade surplus of 22 billion USD with China, while Japan had a trade surplus of 24 billion USD with Hong Kong Special Administrative Region, maintaining a relatively balanced trade relationship. This is because many of the export goods from Japan to Hong Kong Special Administrative Region are ultimately destined for mainland China, where goods produced and processed in China are exported to Japan.
Since last year, much discussion in Japan has centered on the emergence of the "China threat theory" regarding China, the "world's factory," which has rapidly grown and risen. Concerns have been raised, such as the replacement of Japanese products by cheap goods produced in China, the acceleration of factory transfers to China, the hollowing out of manufacturing industries, and the increase in unemployment. However, China is no longer just seen as the "world's factory"; it has also become recognized as the "world's market." Thus, the China threat theory has become outdated. Prime Minister Koizumi stated at the Boao Forum last year, "China's rise is not a threat but both a challenge and an opportunity for Japan." As Prime Minister Koizumi said, the complementary relationship between Japan and China is now being utilized more effectively and is intensifying.
Japan and China are not only complementary but are also engaging in mutual learning, seeking coexistence and shared prosperity through further technological innovation and the development of new technologies. This consensus is deepening between the two countries. Moreover, Japanese companies that have moved to China to maintain competitiveness have demonstrated creativity locally, increased product added value, and revitalized their businesses, even providing a stimulus to domestic Japanese companies. This phenomenon can be said to be a source of joy.
One of the background factors behind China's remarkable development is the inflow of foreign direct investment. This situation has also provided positive inspiration to other countries undergoing the transition to a market economy. As the Chairman of the Japan-Vietnam Economic Committee of the Japan Business Federation, I frequently visit Vietnam and have directly witnessed significant changes in the Vietnamese government recently. Seeing China attract investments directly from around the world, the Vietnamese government has reevaluated its stance and recognized the need to sincerely focus on attracting foreign direct investment from abroad.
After overcoming the economic crisis, ASEAN countries have also begun new efforts to attract foreign investment. In this regard, Thailand's success is particularly notable. Meanwhile, President Megawati of Indonesia issued a declaration declaring 2003 as the "Year of Investment" and began improving the investment environment. Today's world is a globalized era that utilizes the internet, with the advancement of information and logistics leaving us amazed.