American military power underpinned the security structure of the Asia Pacific region during the Cold War. Post-Cold War, its role is still vital to peace and stability in the region. The most overt manifestations of American military might are the Japan–America Security Alliance (JASA) and the Korea–America Security Alliance (KASA). These bilateral alliances, together with a modified Australia–New Zealand–United States (ANZUS) treaty relationship, point to the diversity of security interests and perspectives in the region. Even during the height of the Cold War, the region never quite presented the kind of coherence that would have facilitated the creation of a truly multilateral defense framework of the sort exemplified by NATO. In Southeast Asia, the lack of strategic coherence resulted in a patchwork of defense arrangements between local and extraregional states. Dominated by the United States, the Southeast Asia Treaty Organization (SEATO) was only nominally regional.

During the Cold War, the United States entered into region-wide alliances to “contain” communism. In the post-Cold War period, uncertainties, rather than clearly definable threats, have marked the Asia Pacific’s strategic landscape. While not disen- gaging from the region, the United States is encouraging greater burden-sharing by its friends and allies located there. In consequence, JASA and KASA are undergoing change even as regional states accept their utility and reassurance value. At the same time, region-wide multilateral confidence-building and cooperative security processes, which involve practically all the states on opposite sides of the old Cold War divide, have emerged. China — the object of Cold War containment policies — is being constructively engaged through these multilateral processes. How the existing alliances, which still have their deterrent functions, can be related to these nascent multilateral processes is the focus of this paper. Because the Association of Southeast Asian Nations (ASEAN) is the driving force behind the ASEAN Regional Forum (ARF), the only region-wide process seeking a balanced relationship among the external powers in the post-Cold War setting, we explore first the evolving ASEAN perspectives toward KASA and JASA. The paper will then relate the ASEAN-driven frame- work to the security concerns of Northeast Asia.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

China's rapid economic growth during the past two decades has occurred without the systematic privatization programs once urged upon the former Communist regimes of Europe and the USSR. Some observers have argued that this shows that changes in property rights are not important in reforming a command economy; others insist that in China a façade of public ownership hides a variety of ownership forms that are essentially private in nature. This volume seeks to adjudicate these opposing views by clarifying conceptually and factually the pattern of property rights changes in the contemporary Chinese economy.

The contributors to this volume, from the fields of anthropology, economics, political science, and sociology, have all conducted fieldwork in China on specific economic sectors or enterprise types. Working with a common definitional framework derived from the work of the institutional economist Harold Demsetz, they seek to establish which actors exercise what kinds of rights in practice over what kinds of economic assets, documenting changes through time. Most of the essays examine the rural industrial economy - the fastest-growing sector - or the "spin-off" economic enterprises and activities of public enterprises and institutions.

The research presented in this volume supports several specific conclusions. First, industrializing rural regions have emerged with diametrically opposed property rights regimes: in one kind of region public ownership only marginally different in form from that of the Mao years has predominated; in other regions wholly new forms of private household and foreign-funded enterprise have arisen. Second, the regimes of all the examined regions and sectors have evolved continually since the outset of reform, and in recent years change has accelerated because of the increased pressures of competitive markets. Third, in the evolution of property rights the distinction between public and private is not crucial in differentiating the key arrangements; instead, a more finely differentiated set of gradations from "public" to "private" prove central to the story of the Chinese economy.

Since 1992, the Japanese economy has been utterly stagnant, with signs of weak performance at every turn. Since 1997, Japan’s economy has experienced negative growth, a situation unprecedented in the postwar era. Most large Japanese corporations have engaged in extensive restructuring during this period, which has in turn contributed to 4.8 percent unemployment—higher than rates in the United States. Further, in 1998, the closure rate of small companies (3.8 percent) exceeded the start-up rate of new business ventures (3.7 percent).

This grim scenario has not always existed. Japan once fostered phenomenal growth, from the smallest of ventures to the largest of multinational companies. As is evident in organizations such as Sony and Honda, Japanese entrepreneurship once led the world in innovation. In the 1990s, however, this torch has passed to the U.S. economy, which has enjoyed an extraordinary boom, due in large part to Silicon Valley venture businesses. Why have Japanese entrepreneurial activities, formerly so robust, lagged behind?

In asking this question, other questions arise. Despite the present business climate, how can Japan revive its economy? How can it absorb its unemployed workers? Most important, how can Japanese entrepreneurship again take the lead, and restore the country’s economic health? This paper seeks to address these issues.

Published as part of the "Silicon Valley Networks" Research Project.

At the height of the Cold War, the dominant Western theories of alliance building in interstate relations argued that alliances tend to be motivated more by an external need to confront a clearly defined common adversary than by the domestic attributes of alliance partners. The newly reinvigorated U.S.-Japan alliance, however, together with the newly expanded NATO, seems to depart from the conventional pattern by emphasizing shared democratic values and by maintaining a high degree of ambiguity regarding the goals and targets of the alliance. Although these new features of American-led military alliances provide an anchor in an other- wise highly fluid situation in the post–Cold War world, many Chinese foreign- and defense- policy analysts believe that U.S. alliances with Asian countries, particularly with Japan, pose a serious, long-term challenge, if not a threat, to China’s national security, national unification, and modernization. The ambiguity of the revised U.S.-Japan security alliance means that it is at best searching for targets and at worst aiming at China.

China’s concerns about the intention, scope, and capability of the alliances are set against a backdrop of several major changes in the region: the end of the Cold War, the simultaneous rise of China and Japan, the post-revolution reforms of Asian communist regimes, and the United States as the sole superpower. China’s uneasiness about the U.S.-led alliances goes far beyond the systemic change in the post–Cold War world, however. Its roots lie in China’s inherent weakness in the games of major powers in East Asia and in relations with other major powers in the first half of the twentieth century.

This paper begins with an overview of the interactions between China and the U.S.-led alliances in East Asia during the Cold War. This is followed by an examination of the post– Cold War period and China’s policies toward the alliances. Finally, policy options are discussed.

The study will review select policy-relevant scholarly publications of the 1990s, when the U.S.-led alliances were perceived to have made significant adaptations to the post–Cold War environment and when China’s perceptions of and policies toward these alliances also changed significantly. The survey also includes some interviews with Chinese analysts.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

North Korea has recently exhibited some noteworthy changes. In September 1998 it amended its constitution to change the power structure and introduced a number of progressive clauses. It also began to use the slogan “A Strong and Prosperous Nation,” which emphasizes eco- nomic prosperity as well as political, ideological, and military strength.

There are two conflicting views among North Korea watchers regarding these changes, together with some other recent changes in relations between the party, military, and govern- ment. One view is that the new constitution can be characterized by the distribution of au- thority and power. According to this view, North Korea is now trying to institutionalize the ruling system, ending Kim Jong Il’s personal rule. Technocrats will take more responsibility for running the economy. Constitutional clauses regarding the economy also aim to provide legal and institutional bases for reform and opening to the international community. This view regards the slogan “A Strong and Prosperous Nation” as North Korea’s declaration of its intent to focus foremost on economic development rather than the military and ideology. According to the other view, on the other hand, the new constitution only institutionalizes and strengthens the military rule that has persisted in North Korea for the last several years. This view suspects that the distribution of power reflected in the new constitution is nominal and that constitutional change regarding the economy is nothing but acceptance of change that has already taken place in North Korea. Therefore, the closed system will be maintained. During the last several years, particularly since the death of Kim Il Sung, there has been debate regarding the relationship between the party, military, and government in North Ko- rea. Does the enhanced status of the military increase its role in North Korea’s general deci- sion-making? Is the role of the party decreasing in the face of the rising role of the military? Is the role of the government also changing? Finally, do the changing relations between the party, the military, and the government affect North Korea’s policy direction?

The purpose of this paper is to analyze the changing relations between the party, military, and government, and their impact on policy direction in North Korea.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

Just like many other crises, the Korean currency crisis came suddenly. In mid-November 1997, headlines in the Korean press consisted mostly of presidential election stories. At that time the presidential race was very close; the Grand National Party candidate, Lee HoiChang, was making a dramatic comeback, while the National Congress for New Politics candidate, Kim Dae-jung, was making his best effort to maintain his narrow lead. Thus, when President Kim Young Sam announced on November 19 his decision to fire key economic policy-makers on the grounds of mismanaging the economy, most Koreans were surprised at the news and questioned the president’s motivation. Two days later they were completely shocked to learn that the Korean government was asking the International Monetary Fund (IMF) for emergency standby loans because the Korean foreign reserve level was very low at $7.3 billion and most foreign financial institutions were unwilling to roll over their short-term loans to Korea.

China’s attitude toward the U.S.-Japan and U.S.-Korea alliances, particularly the former, has drawn a lot of attention in the post–Cold War era. How China views the utility and function of these two security alliances and reacts to them could well shape the dynamics of the alliances. From a historical perspective, however, this is not a new issue. China has lived with these alliances for almost half a century. To better understand China’s current concerns about the alliances and to predict its future posture, we might look for clues in what China has done in the past. This paper attempts to provide a broad survey of Chinese perceptions of the two security alliances in the Cold War period to elucidate Beijing’s post–Cold War policy orientation. By tracing the evolution of the Chinese calculus of the U.S.-Japan and U.S.- Korea alliances, it hopes to find answers to the following questions. What are some of the important variables or conditions that defined China’s attitudes and approaches to dealing with these two alliances? How do these variables or conditions interact with each other? Have they been constant or changing over time? Are they still relevant in the post–Cold War era, and to what extent?

The paper draws its findings mainly from the Chinese official media. While this may not be an ideal source, it nevertheless provides a systematic data basis for a historical analysis of continuity and change. There is no question that the official Chinese media, particularly before the 1980s, was full of rhetoric and propaganda. There has always been a gap between rhetoric and behavior in Chinese foreign policy, as in other countries. Nevertheless it is equally true that behind rhetoric always lie perceptions, self-serving or not, that provide “diagnostic propensities” and “choice propensities” of the Chinese leaders and elites, and thus have policy implications.

The findings of the paper suggest that China’s perceptions of the targets, internal structures, and functions of the U.S.-Japan and U.S.-Korean alliances have changed remark- ably over time, from extreme hostility to high tolerance. These changes resulted from the interactions of such factors as China’s assessment of the world balance of power, the well- being of its relationship with both indigenous and outside powers, and the priority of its national policy. The evolution of Chinese perceptions also illustrates that China need not view the two security alliances as inherently hostile to its interests. Under some circum- stances they can be considered useful or at least harmless. Beijing’s attitudes are often determined not by the two alliances per se but rather by its perception of the sources of threat to its security and whether these security alliances can alleviate or aggravate the threat. On the other hand, given the nature of China’s foreign policy, Beijing does not have intrinsic love for these alliances. Since the 1980s, China has not particularly endorsed any bilateral or multilateral military alliance in the region. Normatively China is also uneasy with the reality of the American military presence in the region and tends to see it as a short-term arrange- ment rather than a long-term phenomenon. During the Cold War, the Chinese perceived the two security alliances as either against China or with China. In the post–Cold War period, they have yet to be convinced that the function of the two alliances could be neither.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.