The Adjustment Of Global Imbalance And Economic Transition Of East Asia

Since1980s，the global imbalance and East Asian miracle have been paid moreattention in world economy，and been pushed towards frontier by the outbreak ofglobal financial crisis．At the same time，the balanced development of global economyseems to be the straw of the recovery after the financial crisis．The East Asia，as oneside of global imbalance，encountered serious external shock．The transformation ofregional economic growth pattern is also imminent，and the economic transition willbecome the severe challenge for East Asia．Is there a link between adjustment of globalimbalance and transition of East Asia，what is the key factor of East Asian transition，the answers are in this paper．The global imbalance is an old topic，and East Asian economic transition is alsonot a new problem after Asian financial crisis．Based on the survey about the researchof global imbalance，whether the new international division based on financialcomparative advantage or “Bretton Woods II”，the research of global imbalance wasfocused on the deficit side of global imbalance，namely the country which has financialcomparative advantage and center country，for example，U.S. is the typical one；andthen，the adjustment pressure of global imbalance is undertook by the East Asianeconomics which are the surplus side of global imbalance．Although the pressure wasfocused on the East Asian economics，the majority research of the current accountreverse is about developed countries，and a few about East Asian newly developingcountries．This paper has attempted to explore the relation between the development ofglobal imbalance and the development of East Asian economic through differentperspective and measure，and then discover the key factors of the economic transitionof East Asia．Firstly，global imbalance which has developed since Nineteen eighties is dividedinto two stages in this paper，namely “U.S.-Japan imbalance” and “U.S.-China imbalance”，and then measured through indices about trade and finance．Thecoexistence of trade imbalance and financial imbalance is the distinct feature of thisglobal imbalance，especially for the imbalance between U.S. and China．So theadjustment of global imbalance is not only the adjustment of trade imbalance，but alsothe adjustment of financial imbalance and the relation of them．Then the divisionbetween “trade states” and “financial states” is defined as the new form ofinternational division．The new connotation of global imbalance based on the forwardanalysis is：as the globalization and financial integration proceed，the new formation ofinternational division has developed with the development of “financial states”，sothe emergence of global imbalance is inevitable，this is the exhibition of the financialhegemony of “financial states” and reflection of the hegemonic adherence of “tradestates”．Secondly，the essence of East Asian transition is discussed．Based on the theory ofeconomic development，the generally comprehension of economic transition in thispaper is：the object of transition is economic growth，the foundation is institutionchange， the power of transition is the development of division and specialization，and then the economic growth pattern changes gradually．When the concept of“property division” is introduced，the financial development is brought intoeconomic transition and is the key factor in the process．Then the survey about thegrowth pattern of East Asia integrated with the new connotation of global imbalancereveals，global imbalance and East Asian pattern are different exhibition of the sameproblem，the essence of East Asian transition is the changes that can alter theadherence of East Asian “Trade states” in the new form of international division，and the division is the power of East Asian transition．Thirdly，the general equilibrium model is constructed based on the understand andanalysis about global imbalance and East Asian transition．The research about therelations between financial development and global imbalance and economic growthhas been so many，most of them argue the importance of the financial development andthe significant influence in the development of global imbalance and economicgrowth．Recently，there has been research that include institution and division thinkmuch of the influence of institution and division for the development．But they does not integrate the financial development with the institution and division，and a fewabout the influence mechanism of financial development．Inspired by the new classical economic theory，especially by the framework of thegeneral equilibrium analysis developed by Pang （2009，2010）， the financialdevelopment is introduced in the division system，namely the financial sector is a partof labor division system，and then we develop a four products model and its extensionbased on the three products model in Pang（2010）．After the analysis of the modelsthat forward developed，we find the mechanism which financial development affecteconomic growth，namely under the improved institution efficiency and financial tradeefficiency，the labor division develop and deepen by financial development，and thenpromote the economic growth．The implications of forward academic conclusions for the East Asian transitionare：the changes of the current dependence of East Asia upon the final products marketand financial markets of U.S. build upon，the improved institution efficiency and thetrade efficiency of service sectors and the productivity promotion of financial sectorsin East Asian Regional are the key factors．The improved institution efficiency andtrade efficiency could deepen the division between service sectors and promote theindividual specialization，the development of service sectors could enhance theregional available demand，especially the development of financial sectors，and thenpromote economic growth．That is to say，the development of service sectors andfinancial sectors are the key factors for East Asia，which could weaken the dependenceupon external markets，but there is a significant threshold effect．In the Chapter5，this paper uses the fixed effect or random effect Panel model andDynamic Panel model for the empirical analysis．The Chapter6and Chapter7analyzethe East Asian economic transition from regional and national level．At the regionallevel,the East Asian economic transition is the cooperation of trade and financial fieldbetween the countries and districts,the development of regional economicintegration,especially the cooperation of China and Japan;at the national level, the EastAsian economic transition is Chinese economic transition, the objective of transition isthat China become the regional final product market provider and financial assetsprovider,its essence is financial transition, and the transformation of correspondinginstitutional arrangement in the final analysis． In a word，the East Asian economic transition is financial transition under theimproved institution efficiency and trade efficiency．When the financial transitionarises，the intra-regional demand of East Asia could effectively expand and get rid ofexternal markets in deed，and then alter the disadvantage of East Asia in the globaldivision system and realize endogenous regional economic growth．...