The Political Economy of : ’s Development in Comparative Perspective: Fall 2012

New York University A Private University in the Public Service

Course Name The Political Economy of East Asia (BPEP-UB 9042) 4 points Instructor Contact Professor Mingqi Xu, Email: [email protected]; [email protected] Class Day and Time Mondays, 1:00-4:00 PM Office Hours Monday 4:10-5:10 PM, NYU Shanghai Center. Course Description This course introduces students to the main characteristics of economies in East Asia with historical perspective and political assessment. Its main purpose is to explore the political, cultural and historical aspects behind the rapid economic growth in the past decades in the region. It also discusses the differences of market institutions and mechanisms in the main countries in East Asia and the trend of economic cooperation and integration. This course will also examine the challenges that the East Asian Economies, especially the Chinese economy, are facing and tries to help students to have a better understanding of East Asia.

The first part of the course begins with an historical examination of how East Asian countries strive for modern society by political revolutions and economic transformations. We will first discuss the Japanese in 1868 and the Chinese Wuxu Reform Movement in 1898. ’s imperialist empire in East Asia and its defeated fate will also be discussed as historical background of the political economy of East Asia. Reforms and reconstruction in East Asia after the Second World War is the subsequent content and foundation of the political economy of modern East Asia. We will then compare the path of economic development in Japan, , the East Asian Tigers and to explore their similarities and differences from political economic perspectives.

The second part of the course focuses on China’s economic reform and opening process after 1978. After Japan and the so-called Four Tigers in East Asia experienced rapid economic development, China followed the economic development path and made a more astonishing miracle in economic development. We will discuss the reform measures in some main sectors in order to understand the basic characteristics of Chinese political economy and how the so-called with Chinese Characteristics resembles other East Asian economies and to what extent there remain Chinese Characteristics.

The third part of the course will investigate the future development and challenges that East Asian economies are facing. We will start with the East Asian Financial Crisis that extensively revealed the weak aspects of East Asian Economies. Japanese stagnation since 1990s is also a focus in this part. East Asian economic cooperation and integration will be discussed as a vehicle for future development. Questions discussed in this part include: “Is the East Asian Economic Model sustainable in the long-run?”, “Will China succeed to overcome the development trap after it reaches the end of industrialization and urbanization?”, “To what extent do the government and the market need to interact and adjust to the new situation?” Course Objectives This course has three main objectives: (1) to help students to learn general aspects of the rapid economic development of East Asia and the factors that boost rapid economic growth; (2) to understand China’s political economy in the past century and the reform

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

and opening process since 1978 with a comparative study viewpoint, which is the focus of this course; (3) to assess the role of government and the market and to explore the future path of political economy in East Asia. Grading Participation: 20% Components Mid-term exam (in-class, short-question answers): 20% Oral presentation (on your intended topic for the final paper): 15% Final Paper: 45% TOTAL: 100% Required Text(s) • Min Wan, The Political Economy of East Asia: Striving for Wealth and Power, CQ Press, October 2007 • Cai, Kevin G. The Political Economy of East Asia: Regional and National Dimensions, Palgrave Macmillan 2008 Instructor Brief Professor Xu Mingqi is a senior professor and currently serves as the Deputy Director Biography of the Institute of and Director of European Studies Center at the Shanghai Academy of Social Sciences, where he also served as Editor in Chief of Social Sciences and Academic Quarterly from 1998-2001.

Professor Xu graduated with an M.A. in economics from the Shanghai Academy of Social Sciences in 1982 and obtained his Ph.D. in International Economics from the Shanghai Academy of Social Sciences in 1994. His international experiences includes working as a Visiting Scholar at the University of Western Ontario in Canada from 1987-1988, at the Harvard-Yenching Institute at Harvard University from 1995-1996, and at the International Institute of Asian Studies at Leiden University in the Netherlands in 2001. More recently, he worked as a guest Professor in the School of International and Area Studies at Seoul National University in , where he researched regional monetary cooperation.

Professor Xu also works as Chief Economist of Shanghai Far East Credit Rating Corporation at present and is Executive Director of the Municipal Research Center for International Finance. He is also a guest professor of Fudan University. His main research areas are in the theory of world economy, international finance, monetary economics and monetary policy, and China’s financial system reforms. He has published ten books and more than 100 papers in both Chinese and English. He is frequently invited to give public lectures and consultancy to government officials and business executives on international economic issues. Grading A: Excellent performance showing a thorough knowledge and understanding of the Expectations topics of the course; all work includes clear, logical explanations, insight, and original thought and reasoning. B: Good performance with general knowledge and understanding of the topics; all work includes general analysis and coherent explanations showing some independent reasoning, reading and research. C: Satisfactory performance with some broad explanation and reasoning; the work will typically demonstrate an understanding of the course on a basic level. D: Passable performance showing a general and superficial understanding of the course’s topics; work lacks satisfactory insight, analysis or reasoned explanations. F: Unsatisfactory performance in all assessed criteria.

Citation style for papers: APA style of citation is required. Please refer to http://owl.english.purdue.edu/owl/resource/949/01/ for the citation style. Attendance Policy NYU Shanghai has a strict policy about course attendance that allows no unexcused

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

absences. Each unexcused absence will result in the deduction of three percentage points from the final grade. More than two unexcused absences will result in failure of the course. Students should contact their instructors to catch up on missed work but should not approach them for excused absences. All absence requests and excuses must follow the application procedure directions here: https://wikis.nyu.edu/pages/viewpage.action?pageId=30017155

Students are expected to arrive to class promptly both at the start of class and after breaks. Arriving more than 10 minutes late or leaving more than 10 minutes early can be considered an unexcused absence. Unexcused absences from exams are not permitted and will result in failure of the exam. If you are granted an excused absence from an exam by NYU Shanghai administration, your instructor will decide how you will make up the exam. This attendance policy also applies for classes involving a field trip or other off-campus visit. It is the student’s responsibility to arrive at the agreed meeting point on time.

There will be no adjustment of attendance records after the end of the semester. If you wish to contest a marked absence, you must do so before you leave Shanghai; if you think that there may be a discrepancy about your attendance in class on a given day, ask the NYU Shanghai academic staff to let you look at the attendance record. Submission of Late Written work due in class must be submitted during class time. Work Late work should be submitted in person to the Academic Assistant during regular office hours (9:30-6:00, Monday-Friday). The Academic Assistant will mark down the date and time of submission in the presence of the student. In the absence of the Academic Assistant, another member of the administrative staff can accept the work in person, following the same protocol.

Work submitted within five weekdays will be penalized one portion of a grade for every day that it is late (so if it is late by one day, an assignment marked an “A” will be changed to an “A-,” and so on). Work submitted more than five days after the due date without an agreed extension will be given a zero.

Please note that final essays must be submitted on time. Plagiarism Policy The presentation of another person’s words, ideas, judgment, images or data as though they were one’s own, whether intentionally or unintentionally, constitutes an act of plagiarism.

Students must retain an electronic copy of their work until final grades are posted on Albert. They must be prepared to supply an electronic copy if requested to do so by NYU Shanghai. Not submitting a copy of their work upon request will result in automatic failure in the assignment and possible failure in the class.

Penalties for confirmed cases of plagiarism are set out in the Student Handbook. Class 1 Section I: The History of East Asian Political Economy August 27 The End of Japanese Empire and Western Colonial Imperialism READINGS: • Cai, Kevin G.（2008）The Political Economy of East Asia, Chapter 2.

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

• Min Wan (2007) The Political Economy of East Asia: Striving for Wealth and Power, Chapter 4

• Dilip K. Basu (1977) “The Opium War and the Opening of China: A Historical Note” from Late Imperial China, Vol 3, Supplement 1, p. 2-16 o Direct link: http://muse.jhu.edu/journals/late_imperial_china/summary/v00 3/3.basu.html o Available@ GetIt link: https://getit.library.nyu.edu/go/4956951?umlaut.institution=NY U

• Andrew Nathan (1972) “Imperialism’s Effect on China,” from Bulletin of Concerned Asian Scholars, Vol 4, 4:19, p. 3 o Direct link: http://criticalasianstudies.org/bcas/back- issues.html?page=4 o Available @ GetIt Link: https://getit.library.nyu.edu/go/4959779?umlaut.institution=NY U

Class 2 Strive for Economic Power under New World Order: Japanese Political Economy since September 3 1945

READINGS: • Cai, Kevin G. （2008）The Political Economy of East Asia, Chapters 4.

• Min Wan (2007) The Political Economy of East Asia: Striving for Wealth and Power, Chapter 5

• Ellis Krauss (1992) “Policymaking and Industrial Policy in Japan,” Political Science and Politics, Vol. 25, No. 1, March 1992 o Direct link: http://www.jstor.org/stable/419573 o Available @ GetIt link: https://getit.library.nyu.edu/go/4959862?umlaut.institution=NY U

• Asim Sen (1983)“Lessons for Development from the Japanese Experience,” Journal of Economi. Issues,Vol.XVII, No. 2, June 1983. o Direct link: http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN =4682695&site=ehost-live o Available @ GetIt link: https://getit.library.nyu.edu/go/4959881?umlaut.institution=NYU

Class 3 Following Japanese Model: South Korean Political Economic after September 10 READINGS: • Cai, Kevin G.(2007) The Political Economy of East Asia, Chapters 5.

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

• Thomas Kalinowski and Hyekyung Cho (2009) “The Political Economy of Financial Liberalization in South Korea: State, Big Business, and Foreign Investors,” Asian Survey, Vol. 49, No. 2 2009. o Direct link: http://www.jstor.org/stable/10.1525/as.2009.49.2.221 o Available @ GetIt link: https://getit.library.nyu.edu/go/4889139?umlaut.institution=NYU

• “South Korea: A Replicable Model? ” Economic and Political Weekly, Vol. 29 No. 35, August 27, 1994 o Direct Link: http://www.epw.in/commentary/south-korea-replicable- model.html?ip_login_no_cache=f26c77822f84ff75fe0f8c4a3f8ccf0e Class 4 Flying Geese Model of East Asian Development: Political Economy of other East September 17 Asian Tigers.

READINGS: • Wan, Min (2007) The Political Economy of East Asia: Striving for Wealth and Power, Chapter 7

• C. H. Kwan, (2002) “The Rise of China and Asia’s Flying-Geese Pattern of Economic Development:An Empirical Analysis Based on US Import Statistics” o Direct link: http://www.rieti.go.jp/en/publications/summary/02070005.html

• Li, Xing(2007), “East Asian Regional Integration: From Japan-led ‘Flying- geese’ to China-centred “Bamboo Capitalism” o Direct link: http://vbn.aau.dk/files/13003157/CCIS_wp_no._3

• Kojima, Kiyoshi (2000). The `flying geese’ model of Asian economic development: origin, theoretical extensions, and regional policy implications.” Journal of Asian Economics 11: 375-401. o Direct Link: http://search.ebscohost.com/login.aspx?direct=true&db=bth&A N=4274601&site=ehost-live o Available @ GetIt link: https://getit.library.nyu.edu/go/4960012?umlaut.institution=NYU

Class 5 Chinese Strive for a Modern Society: Planned Economy after 1949 September 24 READINGS: • Cai, Kevin G. （2008）The Political Economy of East Asia, Chapter 7.1

• Anthony Saich “China’s Changing Road to Development: Political History, 1949-1978” o Available for purchase in digital form: . Go to the NYU Bookstore web site: http://www.bookstores.nyu.edu and click on the "Textbook Inquiry and Ordering" link . In the "Search by ISBN" option, enter 978200006013B

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

. Proceed to Checkout and complete your order. After completing your order you will receive an email with your access code and instructions regarding accessing the Digital Coursepack.

• Wu, Jinglian (2009) “China's Economy: 60 Years of Progress”, Caijing September 30, 2009 (Part 1 and 2) o Direct link for Part1 :http://english.caijing.com.cn/2009-09- 30/110269580.html o Direct link for Part II: http://english.caijing.com.cn/2009-10- 07/110275085.html Break Fall Break: October 1-5 October 1

Class 6 Section II: China’s Rise October 8 Reform and Opening to the Outside World after 1978: Socialist Market Economy

READINGS: • He, Fan (2007) “China’s Economic Reform: Success, Problems and Challenges”, RCIF Working Paper, No. 0701, Nov. 19, 2007. o Direct link: http://www.eaber.org/sites/default/files/documents/IWEP- RCIF_He_2007.pdf

• Chen, Aimin. “Urbanization: The Chinese Way.” China and World Economy 1 (2005): 15-31. o Direct link: https://ezproxy.library.nyu.edu/login?url=http://search.proquest.c om/docview/237250678?accountid=12768 o Available @ GetIt link: https://getit.library.nyu.edu/go/4948330?umlaut.institution=NYU

• Hugh White “The Geo-strategic Implications of China’s Growth,” in Ross Garnaut, Ligang Song, and Wing Thye Woo, eds., China's New Place in a World in Crisis: economic geopolitical and environmental dimensions, ANU E Press, 2009. o Direct link: http://epress.anu.edu.au/wp- content/uploads/2011/06/ch055.pdf

• Wu, Jinglian (2009) “China's Economy: 60 Years of Progress”, Caijing September 30, 2009 (Part 3 and 4) o Direct link for Part 3: http://english.caijing.com.cn/2009-10- 07/110275085.html o Direct link for Part 4: http://english.caijing.com.cn/2009-10- 09/110276500.html

Class 7 Midterm Test (for the first hour of class) October 15 Foreign Investment in China since Reform: A Peculiar Role in China’s Economic

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

Development (lecture for the following two hours)

READINGS:

• (2010): “Foreign Direct Investment: The China’s Story” o Direct Link: http://www.worldbank.org/en/news/2010/07/16/foreign- direct-investment-china-story

• Graham, Edward M. and Erika Wada (2001) “Foreign Direct Investment in China: Effects on Growth and Economic Performance”, in Peter Drystale ed. Achieving High Growth: Experience of Transitional Economies in East Asia, Oxford University Press, 2001. o Direct Link: http://www.petersoninstitute.org/publications/wp/01-3.pdf o Also Available at: http://ideas.repec.org/p/iie/wpaper/wp01-3.html

• Branstetter, Lee and C. Fritz Foley(2007): “Facts and Fallacies about US FDI in China”, NBER Working Paper 13470, October 2007. o Available as a hand-out for pick-up in the NYU Shanghai Academic Affairs office.

• Mauro F. Guillén “Experience, Imitation, and the Sequence of Foreign Entry: Wholly Owned and Joint-Venture Manufacturing by South Korean Firms and Business Groups in China, 1987-1995” in Journal of International Business Studies, Vol 34(2), p. 185 o Direct link : http://search.ebscohost.com/login.aspx?direct=true&db=bft&AN=51 0312456&site=ehost-live o Available @ GetIt Link: https://getit.library.nyu.edu/go/4960195?umlaut.institution=NY U Class 8 State Owned Enterprise Reform VS Private Enterprise Development October 22 READINGS:

• Tenev, Stoyan, and Chunlin Zhang. “Corporate Governance and Enterprise Reform in China.” Washington: World Bank/IFC, 2002. o Direct Link: http://www.ifc.org/publications/pubs/corp_gov/frontmatter.pdf>.

• Wang, Zhikai. “The Growth of China’s Private Sector: A Case Study of Zhejiang Province.” China & World Economy 3 (2006): 109-119. o Direct link: http://dx.doi.org/10.1111/j.1749-124X.2006.00026.x o Available @ GetIt Link: https://getit.library.nyu.edu/go/4948330?umlaut.institution=NY U

• International Financial Corporation. China’s Emerging private Enterprises: Prospects for the New Century, International Finance Corporation, 2000. o Direct Link: http://www.ifc.org/publications/

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

• Liu et al, “the Political Economy of Chinese Style privatization: Motivation and Constraints”, World Development Vol. 34, No. 12, PP2016-2033, 2006. o Direct Link: www.fdsm.fudan.edu.cn/photo/dptphoto/2006627135135470.doc Class 9 Financial System Reform and Development: An Unfinished Task October 29 READINGS:

• Bottelier, Pieter (2007): “Accelerating Reforms in China's Financial System”, China Brief, Vol. 6, Issue 24. o Direct Link: http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=4 009

• Okazaki et al (2011): “The Challenges Confronting the Banking System Reforms in China: an Analysis in Light of Japan’s Experience of Financial Liberalization”, IMES Discussion Paper No. 2011-E-6 o Direct Link: http://www.imes.boj.or.jp/research/papers/english/11-E- 06.pdf o Also available through: http://www.imes.boj.or.jp/research/abstracts/english/11-E-06.html

• Allen, Franklin et al. “China’s Financial System: Past, Present and Future.” o Direct Link: http://www.fimr.org/upload/community/20060421162350un.pdf

• He, Liping. “Evolution of Financial Institutions in Post-1978 China: Interaction between the State and Market.” China & World Economy 6 (2005): 10-26. o Direct link: http://cnki.en.eastview.com/kns50/detail.aspx?QueryID=30&Cur Rec=2 o Available @ GetIt Link: https://getit.library.nyu.edu/go/4948330?umlaut.institution=NY U

Class 10 Energy Security and Food Security in China and Their Impact to the Rest of the World November 5 READINGS: • He, Fan and Donghai Qin. “China’s Energy Strategy in the Twenty-first Century.” China & World Economy 2 (2006): 93-104. o Direct link: http://dx.doi.org/10.1111/j.1749-124X.2006.00018.x o Available @ GetIt link: https://getit.library.nyu.edu/go/4948330?umlaut.institution=NYU

• Zhang, Jian (2011) “China’s Energy Security: Prospects, Challenges, and Opportunities”, Brookings Institute CNAPS Visiting Fellow Working Paper, July 2011. o Direct link: http://www.brookings.edu/research/papers/2011/07/china- energy-zhang

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

• Mao, Yu Shi. “There is no Food Crisis in China.” China & World Economy 1 (2006): 105-111. o Direct link: https://ezproxy.library.nyu.edu/login?url=http://search.proquest.c om/docview/237250890?accountid=12768 o Available @ GetIt Link: https://getit.library.nyu.edu/go/4948330?umlaut.institution=NY U

• Aubert Claude(2008), “Food Security and Consumption Patterns in China: The Grain Problem” China Perspective, 2008/2 o Direct link: http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN =45123783&site=ehost-live o Available @ GetIt link: https://getit.library.nyu.edu/go/4963678?umlaut.institution=NYU

• Bryan Lohmar and Fred Gale (2008) “Who Will China Feed?” Amber Waves, Vol 6, Issue 2, 2008 o Direct link: http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN =32616042&site=ehost-live o Available @ GetIt Link: https://getit.library.nyu.edu/go/4963840?umlaut.institution=NY U

Class 11 Oral presentation: specific topic and outline of final paper and in-class discussion of November 12 each student’s paper topic.

Requirement: Each student should summit his/her written outline or PPT to Course instructor and get comments before making oral presentation in class. Class 12 Section III: East Asian Economic Model: Sustainability and Vulnerability November 19 Asian Financial Crisis and

READINGS: • Min Wan (2007) The Political Economy of East Asia: Striving for Wealth and Power, Chapter 6

• Singh, Ajit (1998) “FINANCIAL CRISIS IN EAST ASIA: ‘The End of the Asian Model?’” Development Policies Department, International Labor Office Geneva, Discussion Paper 24, 1998 o Direct link: http://www.ilo.org/employment/Whatwedo/Publications/WCMS_1236 10/lang--es/index.htm

• Khor, Martin (1998)“The Economic Crisis in East Asia: Causes, Effects, Lessons” Third World Network, o Direct Link:

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

siteresources.worldbank.org/INTPOVERTY/Resources/WDR/.../khor. pdf o Also Available through: http://www.ifg.org/khor.html

Class 13 Similarities and Differences: Comparative Review of East Asian Countries’ Economic November 26 Development

READINGS: • Park, Jong H.(2002) “The East Asian Model of Economic Development and Developing Countries”, Journal of Developing Societies, December 2002, PP330-353 o Direct link: http://dx.doi.org/10.1177/0169796X0201800403 o Available @ GetIt Link: https://getit.library.nyu.edu/go/4964008?umlaut.institution=NY U

• Boltho, Andrea and Maria Weber (2009) “Did China follow the East Asian development model”, European Journal of Comparative Economies, 2/2009 PP267-286 o Direct link: http://eaces.liuc.it/18242979200902/182429792009060206.pdf

• Perkins, Dwight (2007) “Asian Development Strategies, 1950-2006”, Paper prepared for the International Economic Association /Tsinghua University Roundtable Conference on “The Political Economy of Sustainable Growth” July 10-11, 2007 o Come to Academic Office to pick-up

Class 14 East Asian Economic Cooperation and Integration: Future of East Asian Political December 3 Economy

READINGS: • Cai, Kevin G.（ 2008） The Political Economy of East Asia, Chapter 8 • Min Wan (2007) The Political Economy of East Asia: Striving for Wealth and Power, Chapter 11

• Ito Takatoshi (2004) “East Asian Economic Cooperation and Integration”, RIETI conference, 16 January 2004, At the United Nations University, Tokyo, Japan o Direct link: http://www.rieti.go.jp/jp/events/04011601/pdf/ito.pdf

• ASEAN “ASEAN Plus Three Cooperation”, o Direct Link: http://www.aseansec.org/16580.htm

• Masahiro Kawai and Ganeshan Wignaraja (2010) “Free Trade Agreements in East Asia: A Way toward Trade Liberalization?” ADB Briefs No. 1, June 2010 o Direct link: http://www.adb.org/publications/free-trade-agreements- east-asia-way-toward-trade-liberalization

NYU Shanghai The Political Economy of East Asia: China’s Development in Comparative Perspective: Fall 2012

FINAL December Final Due on December 14 14

NYU Shanghai