The New Configuration of the Asia-Pacific Economy and Sino-American Economic Relations I. Position of the Asia-Pacific Region in the World Economy

Yang Sizheng

Chinese Economy, 1994, vol. 27, issue 4, 71-81

Abstract: Beginning in the 1990s, post-cold war global politics and economics shaped a new configuration. The formerly antagonistic bipolar environment was replaced by a multipolar one. This was concretely manifested in the fact that the three large economic groups of Western Europe, North America, and East Asia were dominating the world economy, making up two-thirds of the world's manufacture and trade. However, politically, the United States and the European Community (EC) were still playing a major role. An unexpected economic recession followed in the wake of the disintegration of the Soviet Union and the collapse of the old order in Eastern Europe. Long-suppressed national conflicts exploded, leading to political turmoil, wars, and even national dismemberment. On the international political and economic stage, the Soviet Union and East European bloc lost their influence. Disappointingly, the end of the cold war did not bring the stability and prosperity of the world economy that people expected, or the often-discussed new world order. Starting in 1990, the West went into recession. Along with the recessions in England, Australia, and Canada, the United Statesâthe locomotive of the industrialized countriesâwent into recession at the end of 1990, ending eight consecutive years of growth. In 1991, the U.S. economy contracted by 0.7 percent. Japan and Germany, which had always led among developed countries, also fell into stagnation as their growth rates fell significantly. In 1991, the rate of growth of developed countries was merely 1 percent, while that of the world economy showed a decrease of 0.3 percent. Although it is generally forecast that the world economy will recover in 1992, facts in the United States show that the recovery will not be a strong one and will be smaller than normal. This means that the expectations of an economic upturn in the West has fallen through. The stagnation of the West's economy has weakened its ability to provide economic aid to the former Soviet Union and Eastern Europe. Germany is already feeling a financial crunch in merely maintaining the economy in its eastern portion.

Date: 1994
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