Impact of East Asian Financial Crisis on the Asia-Pacific Regional Order: A Geo-Economic Perspective

Abstract

Since the collapse of the Thai baht in July 1997, the malfunctions and misalignments of financial markets in many East Asian economies have resulted in adverse effects on the real economy and led to a full-scale, region-wide economic recession. When regional economies adjusted their trade and investment strategies in order to cope with individual economic hardships, the configuration of East Asian economic interdependence has changed. Such changes have raised concerns about regional stability and order as economic leverage becomes one of the major determinants of world order in the post-Cold War era. A geo-economic analysis of regional order in this paper delineates the Asia-Pacific economic geography by trade and investment flows and suggests that the United States and China are the potential winners in the regional geo-economic competition after the onset of the Asian financial crisis.