Changing Global Financial and Trading Systems and Asia: Editors’ Overview

• Author: Kazumasa Iwata,Colin McKenzie,Takatoshi Ito,Shujiro Urata
• DOI: http://doi.org/10.1111/aepr.12232
• Date: 01 July 2018
• Published date: 01 July 2018

Changing Global Financial and Trading

Systems and Asia: Editors’Overview

Takatoshi ITO,

1

Kazumasa IWATA,

2

Colin MCKENZIE

3

†and Shujiro URATA

4

1

Columbia University,

2

Japan Center for Economic Research,

3

Keio University and

4

Waseda University

JEL codes: C54, E22, E61, F1, F2, F6, F13, F15, F16, F31, F32, F33, F34, F35, F36, F37, F38, F55,

G15, N14, N15, O11, O40

Accepted: 24 October 2017

1. Changing Global Financial and Trading Systems and Asia

While providing benefits to the global economy, the continued fast economic growth

of China also raises a number of important issues. China’s weight in the global econ-

omy is increasing, but its representation in the major international financial institu-

tions does not yet match China’s economic weight. China is running a large trade

surplus with the rest of the world, while the USA is running a large trade deficit with

the rest of the world and with China in particular. China has established new initia-

tives like the Asian Infrastructure and Investment Bank (AIIB) and the One Belt One

Road initiatives. There are differing views about whether these new institutions chal-

lenge existing institutions or merely supplement them.

Both in Europe and in the USA recently, there has been much more emphasis

given to the “losers”of globalization. This is most directly seen in the election of Presi-

dent Trump in the USA and the passing of the Brexit referendum in the United King-

dom. President Trump has withdrawn the USA from the Trans-Pacific Partnership,

threatened to withdraw from the North-American Free Trade Agreement (NAFTA)

and the US-Korea Free Trade Agreement (KORUS) unless better terms are agreed to,

and unilaterally imposed tariffs on aluminum and steel. Threats of trade sanctions have

also been made in other areas. There are strong concerns that these US actions will

lead to a trade war that will benefit no country. Both US trade policy and what will

happen when Britain actually leaves the EU are generating a deal of uncertainty for the

world economy. Some of the sovereign debt crises in Europe continue to smolder.

The papers in this issue of the Asian Economic Policy Review provide rigorous

assessments of various aspects of these issues by looking at the international financial

architecture (Ito, 2018), the future of East Asia’s trade (Pangestu et al., 2018), instabil-

ity in Europe (Kaji, 2018), the impact of Trump’s trade policies (Noland, 2018), and

China’s development finance (CDF) (Dollar, 2018).

†Correspondence: Colin McKenzie, Faculty of Economics, Keio University, 2-15-45 Mita, Tokyo

108-8345, Japan. Email: mckenzie@z8.keio.jp

© 2018 Japan Center for Economic Research 177

doi: 10.1111/aepr.12232 Asian Economic Policy Review (2018) 13, 177–191