Japan's Role in the East Asian Political Economy: From Crisis to Bloc?

The role of Japan in the East Asian political economy has been to gradually reintegrate the region by deploying a range of economic means. Although at the time of the East Asian crisis some commentators saw the fragmentation of the region as a likely outcome, the intervening years have rather demonstrated that the greater integration of the region has been the result. Japan has played a crucial leadership role in promoting regional integration. In the wake of the crisis, this has been manifest as both short- and longer-term responses, with the Japanese government offering immediate financial support to the affected economies, as well as technical and other assistance on softer conditionalities than the International Monetary Fund. Over the longer term, Japan has put forward policies to promote the internationalization of the yen, seeking to increase its use for regional trade. It has also moved away from a sole commitment to ‘open regionalism’ by holding negotiations on Free Trade Agreements with South Korea, Singapore and other countries. The article concludes that, although Japan has indeed played a crucial leadership role in promoting regional integration, the continuing importance of relations with the United States and Europe means a regional ‘bloc’ is unlikely to emerge in the foreseeable future.