Session 196: Globalization in Asia

Organizer and Chair: Carl J. Saxer, University of Copenhagen

Discussant: Kjeld Erik Brodsgaard, University of Copenhagen

Keywords: globalization, governments, deregulation, social spending, Asia.

One would be hard pressed to find a more controversial and debated topic than globalization. There is no coherent or dominant theory of it, and the debate has largely been dominated by two extreme views: proponents see it as a way to enhance the quality of life not only in the advanced industrialized nations, but also as giving the poorest countries a much needed opportunity to improve the quality of life in those countries. Opponents see the consequences of globalization in largely negative terms as a threat to social stability, state sovereignty, and national and cultural identity, and it has received significant resistance from various sectors of societies. Yet again other scholars, for instance neorealists, are skeptical about the extent of globalization. Analysis of globalization, which in reality is complicated political and historical process, must in equal measure take into consideration economic, social and political aspects. Globalization affects the structure of the nation’s economy, culture, politics and diplomacy, and this has led to that the separation between local and global and between domestic and foreign affairs has become increasingly blurred. From several different perspectives, the papers of this panel proposal seek to engage critically in analysis of the consequences of globalization in Asia, and how these consequences are dealt with by governments.

Governing Globalization: International Trade and Central-Provincial Relations in China, 1977–2002

Yumin Sheng, Yale University

Prevailing economic theories and preliminary empirical evidence suggest that growing world market integration unleashes centrifugal forces among subnational territorial units and undermines domestic central political authority. Reversing the conventional demand-side bottom-up approach, this article turns to the supply side by examining the incentives of and institutional resources available for national-level political actors. Through analyses of both cross-sectional and pooled time-series cross-section data on the provincial level for 1977–2002, it shows that the Chinese political center has manipulated its personnel monopoly power to tighten its grip over provincial Party Secretaries, the top-ranking officials in provinces that engage in more foreign trade and export. In the terminology of Yasheng Huang, Party Secretaries in those more economically open provinces tend to be more "bureaucratically integrated" with Beijing. Our findings have implications for the broader political economy literature on economic openness, political institutions and domestic intergovernmental conflicts as well as for the study of China’s domestic transition.

Globalization and Government Social Spending in East Asia (1950–2002)

So Young Kim, Florida Atlantic University

An intriguing aspect of economic globalization is that it raises the demand for social protection against increasing economic volatility associated with a globalizing economy, while constraining the state capacity to provide social protection. This paper presents an empirical study of the impact of economic openness upon government social spending in East Asian countries using cross-sectional time-series data on government expenditures on social programs for the last five decades (1950–2002). Unlike advanced industrial countries (and some of Latin American nations) where increasing openness has led to greater social spending, governments of East Asian countries have responded to growing openness by reducing or maintaining their already low-level social expenditures. This finding has several implications for the politics of globalization, one of them being that the double-sided effect of globalization is far skewed towards reducing public provision of much-needed social assistance in East Asia. Various episodes of globalization from other developing regions show that globalization does not work without complementary political and social efforts to reduce its harmful effects, the finding calls for active policy responses on the part of policymakers in East Asian countries in order to make openness work.

Globalization and the Indian Auto Industry

Yeong-Hyun Kim, Ohio University

The global auto industry has recently undergone yet another round of restructuring. This new wave has been characterized by both global alliance among large assemblers and massive investment flows into emerging markets. This paper pays particular attention to the latter trend. An explosive growth of automotive investment in Asia, Latin America and Eastern Europe has been attributed to national governments’ ambition for the development of a locally-based auto industry as well as global auto companies’ drive for market expansion. India’s auto industry has been deregulated since the 1991 liberalization. Since then, ten of the world’s leading carmakers have set up passenger car production facilities in the country. They include Daewoo, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai, Mitsubishi, Peugeot, and Toyota. The newly entered global auto companies and suppliers have fundamentally restructured the Indian passenger car industry. The past decade has witnessed a significant increase in passenger car production, a stream of new models, and the explosive growth of car and components exports. While the country’s auto industry as a whole has continued an unprecedented success, many local auto companies and suppliers have watched their market shares shrinking drastically. This paper examines the way in which the Indian passenger car industry has been integrated into global auto companies’ production and supply networks. The paper draws on interviews with four of the global auto companies invested in India. The interviews focused on each company’s investment decision, local operation, export, and adaptation to the Indian government’s auto policies.

Globalization as Policy: South Korea in Comparative Perspective

Carl J. Saxer, University of Copenhagen

In a recent globalization index analysis published in the March/April 2004 edition of the journal Foreign Policy, the Republic of Korea was in the 32nd place, four down from its place in 2003. This must be contrasted to the fact that the Republic of Korea is rather unique in that it is one of very few countries in world which a decade ago actually set out, through a government directed policy, to globalize its society. In November 1994 then President Kim Young-sam, formulated a globalization policy with the explicit purpose of making the country an advantaged nation. A number of goals, political, economic, social, and cultural were set and the means and methods of reaching these established. Drawing on semi-structured interviews and government policy papers, the paper analyzes in detail how this top-down government directed policy of globalization was formulated at that time and later pursued. Furthermore, taking an explicit comparative perspective, it analyzes the consequences of South Korea’s pursuit of globalization, with a particular emphasis on what seems to have been a negative reaction by civil society organizations and the public to the government’s policy.