Asia’s economies have been hard hit by the current global financial crisis, despite in most cases enjoying strong macroeconomic fundamentals and stable financial systems.  Early hopes were that the region might be “decoupled” from the Western world’s financial woes and even able to lend the West a hand through high growth and the investment of large foreign exchange reserves.  But that optimism has been dashed by slumping exports, plunging commodity prices, and capital outflows.  The region’s most open, advanced and globally-integrated economies—Hong Kong, Singapore, and Taiwan—are already in severe recession, with Japan, Korea and Malaysia not far behind, and dramatic slowdowns are underway in China, India, Indonesia, Thailand and Vietnam.  What role did Asian countries play in the genesis of the global crisis, and why have they been so severely impacted?  How is their recovery likely to be shaped by market developments and institutional changes in the West, and in Asia itself in response to the crisis?  Will the region’s embrace of accelerated globalization and marketization following the 1997-98 Asian financial crisis now be retarded or reversed?

Linda Lim is a leading authority on Asian economies, Asian business, and the impacts of the current global financial crisis on Asia, and she has published widely on these topics. Her current research is on the ASEAN countries’ growing economic linkages with China.

Forthcoming in 2009 are Globalizing State, Disappearing Nation: The Impact of Foreign Participation in the Singapore Economy (with Lee Soo Ann) and Rethinking Singapore’s Economic Growth Model. She serves on the executive committees of the Center for Chinese Studies and the Center for International Business Education at the University of Michigan, where formerly she headed the Center for Southeast Asian Studies. Before coming to Michigan, she taught economic development and political economy at Swarthmore. A native of Singapore, she obtained her degrees in economics from Cambridge (BA), Yale (MA), and Michigan (PhD).

This talk is an overview of the changing role of foreign investment in Chinese workplaces. Foreign investment inflows helped transform the Chinese industrial landscape in the 1990s. As ownership has become blurred and increasingly mixed between domestic-foreign and public-private in China, preferential policies and laws for foreign-invested firms have diminished. A more level playing field has raised the stakes for foreign business and led to their increased participation in national debates on labor legislation and legal protections for workers. This talk will focus on this new role for foreign investors and how it is changing Chinese laws and the Chinese workplace.

Professor Gallagher studies Chinese politics, law and society, and comparative politics. She is currently working on two projects. The first, funded by a Fulbright Research Award and the National Science Foundation, examines the development of rule of law in China by examining the dynamics of legal mobilization of Chinese workers. "The Rule of Law in China: If They Build It, Who Will Come?" focuses on the demand-side of rule of law through an exploration of legal aid plaintiffs in Shanghai, a four-city household survey on legal knowledge, attitude, and practice, and in-depth case analysis of labor disputes. The second project examines labor standards and practices in four Chinese regions. One goal is to find if there are diffusion effects in legislation, court behavior, and labor practices across different regions. Another goal is to look for evidence of a "race to the bottom" in labor standards and social welfare not between China and other competing economies, but within China's own domestic economy.

This talk is part of the Stanford China Program Winter 2009 China Seminar Series titled "30 Years of Reform and Opening in China: How Far from the Cage?"

Japan's industrial landscape is characterized by hierarchical forms of industry organization that are increasingly inadequate in modern sectors, where innovation relies on platforms and horizontal ecosystems of firms producing complementary products. Using three case studies--software, animation and mobile telephony--two key sources of inefficiencies that this mismatch can create will be illustrated.

First, hierarchical industry organizations can "lock out" certain types of innovation indefinitely by perpetuating established business practices. Second, even when the vertical hierarchies produce highly innovative sectors in the domestic market, the exclusively domestic orientation of the "hierarchical industry leaders" can entail large missed opportunities for other members of the ecosystem, who are unable to fully exploit their potential in global markets.

Dr. Hagiu will argue that Japan has to adopt several key measures in order to address these inefficiencies and capitalize on its innovation: strengthening antitrust and intellectual property rights enforcement; improving the legal infrastructure (e.g. producing more business law attorneys); lowering barriers to entry for foreign investment and facilitating the development of the venture capital sector.

Andrei Hagiu is an Assistant Professor in the Strategy group at Harvard Business School. His research focuses on multi-sided markets, which feature platforms serving two or more distinct groups of customers, who value each other's participation. He is studying the business strategies used by such platforms and the structure of the industries in which they operate: payment systems, advertising supported media, personal computers, videogames, mobile devices, shopping malls, etc. Hagiu is using the insights derived from this research to advise a wide range of companies in all of these industries.

In addition, he is also involved in competition and industrial policy research and advisory projects, in Japan, China and in the United States. He graduated from the Ecole Polytechnique and the Ecole Nationale de la Statistique et Adminstration Economique in France with an MS in economics and statistics, before obtaining a PhD in economics from Princeton University in 2004. Prior to joining HBS, he spent 18 months in Tokyo as a fellow at the Research Institute of Economy Trade and Industry, an economic policy think-tank affiliated with the Japanese Ministry of Economy Trade and Industry.

This event is presented in conjunction with the Japan Society of Northern California.