Walking down a side street in Shanghai's French Concession, a partially preserved corner of that city's gloried and turbulent past, visitors come upon an ivy-covered house that served as the headquarters for the Shanghai branch of the Communist Party in the 1940s. Here the spartan quarters of Mao's second in command, Zhou Enlai, are carefully preserved, the narrow beds and wooden desks evoking a simpler, revolutionary China.

A short ride away, across the murky waters of the Huangpu River, monuments to the new China are being erected in what was farmland less than two decades ago. The Pudong New Area, with its clusters of highrise office towers and multi-story shopping malls, is emblematic of the rush to wealth and economic power that now drives China.

These were among the images from a visit to China by a delegation of scholars from the Walter H. Shorenstein Asia-Pacific Research Center from April 8-14, 2007. Though time was short, the group managed to visit Shanghai, Hangzhou, and Beijing.

Fulfilling Shorenstein APARC's mission to carry its work "into Asia," the delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China's development strategy to the current state of relations between China and its longtime rival and neighbor, Japan.

The delegation was led by Shorenstein APARC director and professor of sociology Gi-Wook Shin and by professor of political science Jean C. Oi, who has launched the center's new China studies program. The group included Shorenstein distinguished fellow Ambassador Michael H. Armacost, associate director for research Daniel C. Sneider, and senior program and outreach coordinator Neeley Main. In Beijing, Freeman Spogli Institute director Coit Blacker joined the delegation, as did Shorenstein APARC's Scott Rozelle.

The trip started in Shanghai, a dynamic center of finance and industry that has drawn in many Stanford graduates. State-owned enterprises such as Baosteel, one of the world's largest steel producers, are in the midst of becoming players in the global marketplace. From Baosteel's sprawling complex of docks, blast furnaces, and rolling mills along an estuary of the Yangtze River, products are now being dispatched around the world. In a meeting, the leadership of the Baosteel Group expressed an eagerness to tap into the educational and training opportunities offered at Stanford University.

Shanghai is not only the business capital but also a political center, rivaling Beijing. The Shanghai Institute for International Studies is an unofficial foreign relations arm of the Shanghai government. Shanghai Institute scholars are also players in national policy debate on many key issues facing China, such as relations with Taiwan, with Japan, and even with the Korean peninsula.

The scholars presented their views on a wide range of issues, from the preparations for the 17th Congress of the Communist Party this coming fall to emerging structures of regional integration in East Asia. Professor Xu Mingqi, who is also a senior leader of the Shanghai Academy of Social Sciences, explained that China's development strategy is shifting toward a more balanced approach. Whereas local government officials previously were pressed to meet targets for GDP growth, foreign investment, and export volume, now they must also raise employment levels, close the growing income gap, and provide social security.

Hangzhou, considered one of the most beautiful cities in China, is a two-hour drive south of Shanghai. The modern roadway passed a tableau of the suburbanization of this part of China's countryside, with multi-story brick homes mushrooming amidst the fields. The delegation arrived at Zhejiang University, considered among the best of China's provincial higher educational institutions and growing rapidly in size and scope.

The Shorenstein APARC delegation met with faculty members from Zhejiang's social science departments, who briefed the delegation on their research work in areas such as distance education, international relations, Chinese history, even a school of Korean studies. Zhejiang is also the site of a new research institution, the Zhejiang Institute for Innovation (ZII), founded by Stanford engineering graduate Min Zhu, a Silicon Valley entrepreneur who is determined to bring the lessons of Stanford and the valley to his home province and his undergraduate alma mater. ZII aims to foster applied research that can tie the university to the vibrant entrepreneurial culture of Zhejiang province. Shorenstein APARC researchers may soon be carrying out fieldwork in this laboratory of change, based at ZII.

Beijing, however, is still the place that matters most in China, not only in the realm of government but also when it comes to academic scholarship. The delegation met with two of Shorenstein APARC's longtime corporate affiliates in China: PetroChina, the state-owned oil and gas giant, and the People's Bank of China. Shorenstein APARC dined with a lively group of Chinese journalists, organized by former Stanford Knight fellow Hu Shuli, the editor of Caijing Magazine, considered China's leading independent business publication.

The substantive task was to forge new ties with key research institutions. The current state of China's development strategy was again on the agenda when the delegation met with senior officials from the National Development and Reform Commission (NDRC), formerly China's State Planning Commission. Alongside the NDRC, the delegation met as well with the leadership of an offshoot of China's State Council, the China Development Research Foundation, which is doing important work in promoting good governance in areas such as poverty alleviation, nutrition, and budgeting. Those conversations were echoed later in our meetings with scholars from Peking University's School of Government.

Shorenstein APARC's own China program, as Oi explained, is focused on understanding the tensions that arise as China grapples with the consequences of its rapid economic development. Out of the meetings in Beijing, an ongoing dialogue has begun, to be advanced this summer with a visit from a NDRC delegation and in the fall with an international conference at Stanford on China's Growing Pains.

The delegation also engaged in frank and useful exchanges on a variety of international relations issues. We had an extended meeting with scholars and leaders of the China Reform Forum (CRF), a think-tank associated with the Communist Party's Central Party School, the premier institution for training party leaders and officials. The CRF is credited with authoring important concepts such as the foreign policy doctrine of China's "Peaceful Rise." These discussions were followed by a visit and exchange with scholars from Peking University's widely respected School of International Studies.

The scholars shared analysis of the current state of the North Korean nuclear negotiations, as well as evaluating the outcome of Chinese Premier Wen Jibao's visit that week to Japan. Over dinner with CRF Vice Chairman Ding Kuisong, the conversation turned to the American presidential politics and the future direction of U.S. foreign policy.

Professors Blacker, Shin, and Oi also met with senior officials of Peking University, as part of an ongoing dialogue about cooperation between these two premier institutions of higher education.

WASHINGTON, May 24 (IPS) - This year the Association of Southeast Asian Nations celebrates its 40th birthday, and it has big plans. After four decades of being largely a political and security alliance, ASEAN is accelerating its plans for economic integration.

ASEAN leaders are so eager to pull together into an economic community that they recently decided to move the goalposts. The economic benchmarks originally planned for 2020 have been moved up to 2015.

"The mission of this economic community is to develop a single market that is competitive, equitably developed, and well integrated in the global economy," says Worapot Manupipatpong, principal economist and director of the office of the Secretary-General in the ASEAN Secretariat. He was speaking last week at an Asian Voices seminar in Washington, DC, sponsored by the Sasakawa Peace Foundation.

The single market of 2015 would encompass all ten members of ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam. According to the projections of the ASEAN Secretariat, the single market will be accomplished by removing all barriers to the free flow of goods, services, capital, and skilled labor. Rules and regulations will be simplified and harmonised. Member countries will benefit from improved economies of scale. Common investment projects, such as a highway network and the Singapore--Kunming rail link, will facilitate greater trade.

Although there will not be a single currency like the European Union's euro, the ASEAN countries will nevertheless aim for greater currency cooperation.

"ASEAN's process of economic integration was market-driven," says Soedradjad Djiwandono former governor of Bank Indonesia, and it was influenced by the "Washington consensus" favoring increased liberalisation. "It is a very different framework from the closed regionalism of the Latin American model," he continues. With multilateral talks on trade liberalisation stalled, efforts have largely shifted to bilateral negotiations. "There has been a proliferation of bilateral agreements that developed countries use as a way to push a program for liberalising different sectors," Djiwandono concludes.

So far, ASEAN points to increased trade within the ten-member community as an early sign of success. But, overall trade share -- 25 percent -- pales in comparison to the 46 percent share of the North American Free Trade Agreement countries or the 68 percent share of EU countries. And with intra-ASEAN foreign direct investment rather low -- only 6 percent in 2005 -- financial integration lags behind trade integration.

The ASEAN approach differs in several key respects from the EU model, which originated in a 1951 coal and steel agreement among six European nations. ASEAN's origins, in contrast, have been primarily political and security-oriented, observes Donald Emmerson, director of the South-east Asia Forum at the Shorenstein Asia-Pacific Research Center at Stanford. "The success attributed to ASEAN is that it presided over an inter-state peace ever since it was formed. There's never been a war fought between ASEAN members."

Also distinguishing ASEAN from EU is the latter's institutionalisation. "ASEAN is radically different," Emmerson continues. "The much discussed ASEAN way is consultation, not even voting, since if they vote, someone will lose. Sometimes the consultation goes on without result. Sometimes decisions are reduced to the lowest common denominator. It also means that rhetoric predominates." This consultative process will be tested in November, when ASEAN leaders gather to adopt a charter, something that the EU has so far failed to accomplish.

Another difference with Europe is the enormous economic disparities among the ASEAN members, with Singapore and Brunei among the richest countries in the world and Laos among the poorest. These economic disparities are reproduced within the countries as well.

Worapot Manupipatpong points to two ASEAN initiatives for closing the gap. There is help for small and medium-sized enterprises. And the Initiative for ASEAN Integration,"basically provides technical assistance to Cambodia, Laos, and Myanmar so that they can catch up with the rest of the ASEAN members," he says. "Attention will be paid to where these countries can participate in the regional networks, what comparative advantage they have, and how to enhance their capacities to participate in the regional development and supply chain."

Then there are ASEAN's efforts to address "public bads," according to Soedradjad Djiwandono. "When there is a tsunami or a pandemic," he argues, "the worst victims are the marginalised or the poor. Addressing that kind of issue has some positive impact on reducing inequality."

"The gap between the early joiners and the later joiners will continue to be substantial because ASEAN has always been more of a forum and less of a problem-solving organisation," observes Karl Jackson, director of the Asian Studies Program at the School for Advanced International Studies at Johns Hopkins University. "As a result one would expect that these gaps would be closed only as individual countries increase their rates of growth." He attributes the inequality within countries to the middle stage of growth experienced by almost all societies: "Inequality increases before the state becomes strong enough to redivide some of the pie and take care of the gross inequalities caused by rapid economic growth."

ASEAN is banking on financial and trade liberalisation increasing the overall regional pie. On paper it is an ambitious project. But "the low hanging fruit have been plucked," says Donald Emmerson. Tariffs on the "easy commodities" have already been reduced to less than 5 percent. But non-tariff barriers to trade remain, and member countries are very protective of certain sectors.

Also tempering the region's optimism is the memory of the Asian financial crisis. The crisis began in Thailand in 1997 and spread rapidly to other countries in the region. One school of thinking holds that capital mobility -- "hot money" -- either caused or considerably aggravated the crisis. Since the ASEAN integration promises greater capital mobility, will the region be at greater risk of another such crisis?

"One consequence of the economic dynamism of the Asia-Pacific region," notes Donald Emmerson, "is that the accumulation of vast foreign exchange reserves -- obviously in China, but in other countries too -- more than anything else represents an asset that can be brought into the equation as a stabilising factor in the event of a financial crisis." Also, he continues, as a result of the ASEAN plus Three network, which adds China, South Korea, and Japan to the mix, the 13 countries have "made serious headway toward establishing currency swap arrangements that would come into play in an emergency on the scale of an Asian financial crisis."

Karl Jackson also looks to currency reforms as a hedge against future crisis. The Thai baht and the Indonesian rupiah are now unpegged currencies. "You will not have a situation in which the central bank of Thailand loses 34 billion US dollars defending the baht," Jackson argues. "Instead, the baht will appreciate or depreciate according to market forces."

But Jackson still remains cautious about the future. He points to the large number of non-performing loans in the Chinese banking sector. Also, there is "this anomaly of the U.S. absorbing two-thirds of the savings coming out of Asia, plugging it mostly into consumption rather than direct investment," he observes. "Eventually there has to be some kind of readjustment. The real value of the dollar must fall." (END/2007)

Reprinted by permission from IPS Asia-Pacific.

The alliance between the Republic of Korea and the United States has been facing new pressures in recent months. Leaders in Washington and Seoul are visibly out of synch in their response to the escalatory actions of North Korea, beginning with the July 4 missile tests and leading to the October 9 nuclear explosion. South Korean leaders seem more concerned with the danger that Washington may instigate conflict than they are with North Korea's profoundly provocative acts. American officials increasingly see Seoul as irrelevant to any possible solution to the problem. Officials on both sides valiantly try to find areas of agreement and to paper over differences. If attempts to restart the six-party talks on North Korea falter again, it is likely this divide will resurface.

There is a tendency on both sides of the Pacific to overdraw a portrait of an alliance on the verge of collapse. Crises in the U.S.-ROK alliance are hardly new. As I have written elsewhere, there never was a "golden age" in our alliance that was free from tension. Korean discomfort with an alliance founded on dependency and American unease with Korean nationalism has been a constant since the early days of this relationship. Clashes over how to respond to North Korea have been a staple of the alliance since its earliest days.

Korean-American relations today are much deeper than at the inception of this alliance. Our interests are intertwined on many fronts, not least as major players in the global economic and trading system. We share fundamental values as democratic societies, built on the rule of law and the free flow of ideas. There is a large, and growing, contact between our two peoples, from trade and tourism to immigration.

The current situation is worrisome however because it threatens the security system that lies at the foundation of the alliance. Though our interests are now far broader, the U.S.-ROK alliance remains military in nature. The founding document of this alliance was the

Mutual Defense Treaty signed on October 1, 1953, following the conclusion of the armistice pact to halt the Korean War. That treaty has been significantly modified only once - 28 years ago in response to American plans to withdraw its ground forces from Korea - to create the Korea-U.S. Combined Forces Command (CFC).

The two militaries have a vital legacy of decades of combined command, training and war planning. American military forces in significant numbers have remained in place to help defend South Korea from potential aggression from the North. South Korean troops have deployed abroad numerous times in support of American foreign policy goals, including currently in Iraq and Afghanistan.

This foundation of security is not only essential to this alliance but is the very definition of the nature of alliances in general, as distinct from other forms of cooperation and partnership in international relations.

"Alliances are binding, durable security commitments between two or more nations," Dr. Elizabeth Sherwood-Randall, a Stanford scholar and former Clinton administration senior defense official, wrote recently. "The critical ingredients of a meaningful alliance are the shared recognition of common threats and a pledge to take action to counter them. To forge agreement, an alliance requires ongoing policy consultations that continually set expectations for allied behavior."

Alliances can survive a redefinition of the common threat that faces them but not the absence of a threat. Nor can alliances endure if there is not a clear sense of the mutual obligations the partners have to each other, from mutual defense to joint actions against a perceived danger. "At a minimum," Sherwood-Randall says, "allies are expected to take into consideration the perspectives and interests of their partners as they make foreign and defense policy choices."

By this definition, the U.S.-ROK alliance is in need of a profound re-examination.

The 'shared recognition' of a common threat from North Korea that was at the core of the alliance is badly tattered. As a consequence, there is no real agreement on what actions are needed to counter that threat.

There is a troubling lack of will on both sides to engage in policy consultations that involve an understanding of the interests and views of both sides, much less setting clear expectations for allied behavior. Major decisions such as the phasing out of the CFC have been made without adequate discussion.

Americans and Koreans need, in effect, to re-imagine our alliance. We should do so with the understanding that there is still substantial popular support for this alliance, despite conventional wisdom to the contrary. The problems of alliance support may lie more in policy-making elites in both countries than in the general public. That suggests that a concerted effort to reinvigorate the alliance will find public backing.

The results of the Chicago Council on Global Affairs 2006 multinational survey of public opinion show ongoing strong support for the American military presence in South Korea. Some 62 percent of Koreans believe U.S. troop levels are either about right or too few; some 52 percent of Americans share that view. A slightly larger percentage of Americans - 42 percent compared to 36 percent of Koreans - think there are too many U.S. troops. Along the same vein, 65 percent of Americans and 84 percent of Koreans favor the U.S. providing military forces, together with other countries, in a United Nations-sponsored effort to turn back a North Korean attack.

The crack in the alliance comes over the perception of threat from North Korea.

While some 79 percent of Koreans feel at least "a bit" threatened by the possibility of North Korea becoming a nuclear power, only 30 percent say they are "very" threatened. Fewer Koreans feel the peninsula will be a source of conflict than the number of Americans. More significantly, nuclear proliferation is viewed as a critical threat by 69 percent of Americans, compared to only half of Koreans (interestingly, Chinese are even less concerned about this danger).

The opinion poll was conducted before the nuclear test so it is difficult to judge the impact of that event. These survey results do clearly indicate however that while the security alliance still has support, there is an urgent need for deep discussion, at all levels, about the nature of the threat.

The crisis that faced the NATO alliance in the wake of the end of the Cold War has some instructive value for Koreans and Americans today. At the beginning of 1990, I was sent by my newspaper, the Christian Science Monitor, from Tokyo, where I had been covering Japan and Korea since the mid-1980s, to Moscow. The Berlin Wall had fallen a few months earlier and the prospect of the end of a half-century of Cold War in Europe was in the air. However, I dont believe anyone, certainly not myself, anticipated the astounding pace or scale of change that took place within just two years.

Within less than a year, in October of 1990, West and East Germany were reunited.

The once-mighty Soviet empire in Eastern Europe disintegrated almost overnight. By July of 1991, the Warsaw Pact had come to an end. Perhaps most astounding of all - not least to officials of the administration of George H.W. Bush - the Soviet Union fell abruptly apart in December 1991.

These tectonic events triggered a debate about the future of the NATO alliance that had provided security to Europe since it was founded in April of 1949. Soviet leader Mikhail Gorbachev somewhat famously - and perhaps apocryphally - anticipated this debate. "We are going to do something terrible to you," he is said to have told Ronald Reagan. "We are going to deprive you of an enemy."

In those early days, the very continued existence of NATO was under active discussion. The Soviet leadership called for the creation of entirely new "pan-European" security structures that would replace both NATO and the Warsaw Pact. Some in Europe favored the European Union as a new vehicle for both economic integration of the former

Soviet empire into Europe, along with creating new European security forces that would supplant NATO's integrated command.

A more cautionary view argued for retaining NATO without change as a hedge against the revival of Russia as a military threat or the failure of democratic and market transformation in the former Soviet Union. American policymakers opted instead for the ambitious aim of expanding NATO membership to absorb, step by step, the former Soviet empire, including the newly freed western republics of the Soviet Union.

Along with expansion, the United States pushed NATO to redefine the "enemy." Americans argued that new threats to stability and security from ethnic conflict - and international terrorism - compelled NATO to "go out of area or out of business." NATO did so first in the Balkans, in Bosnia and Kosovo, though reluctantly. The alliance has moved even farther beyond Europe to Afghanistan, where NATO commands the international security forces. This draws upon the invaluable investment made in joint military command and operations that are the foundation of the alliance.

Certainly NATO's transformation is far from complete. As was evident at the most recent NATO summit in Riga, considerable differences of opinion remain between many European states and the United States over the mission of NATO. Europeans tend to still see NATO as an essentially defensive alliance, protecting the "euro-Atlantic" region against outside aggression, with an unspoken role as a hedge against uncertainties in Russia. They are resistant to continued American pressure for expansion - including a new U.S. proposal to move toward global partnership with countries such as Japan, South Korea and Australia.

But the reinvention of NATO after the Cold War provides some evidence that even when the nature of the threat has changed, security alliances can preserve a sense of common purpose.

A re-imagined U.S.-ROK alliance could draw from the NATO experience by including the following elements:

HEDGE - The alliance remains crucial as a 'hedge' against North Korean aggression, even if the dangers of an attack are considered significantly reduced. If North Korea retains its nuclear capability, that hedge will need to expand to include a shared doctrine of containment and deterrence, including making clear that the U.S. will retaliate against use of nuclear weapons, no matter where it takes place. Strategically the alliance is also a 'hedge' against Chinese ambitions to dominate East Asia and a guarantor of the existing balance of power;

EXPANSION - The alliance can reassert its vitality as the basis, along with the

U.S.-Japan security alliance, of an expanded multilateral security structure for

Northeast Asia;

NEW MISSIONS - The alliance should take on new missions, most importantly to participate in military and non-military counter-proliferation operations;

OUT OF AREA - A re-imagined alliance might formalize an "out of area" role, elevating the deployments of peacekeeping and other forces to Iraq and Afghanistan into more systematic joint global operations between the two militaries. In this regard, the participation of South Korea in a program of global partnership with NATO, most importantly in the area of joint training, merits serious discussion.

There is another alternative: South Korea and the United States can chose to bring their alliance to a close. If we cannot agree on the common threats that face us, this alliance cannot endure. What we should not do is to allow the alliance to drift from inattention into a deeper crisis that would only benefit our adversaries.

(This article is based on a presentation by the author to the 1st ROK-U.S. West Coast

Strategic Forum held in Seoul on Dec. 11-12, 2006).

This article appeared on the website of the Maureen and Mike Mansfield Foundation.

Reprinted with permission from the Maureen and Mike Mansfield Foundation.

In 2003, consumption of IT goods worldwide was $1.5 trillion. Asia represented twenty percent of this total. Even more telling, Asia produced about forty percent of these goods. The continued rise of Asian IT innovation will pose a challenge to the eminence of traditional IT centers, notably Silicon Valley.

Making IT examines the causes as well as the major consequences of the dramatic rise of Asia in this industry. The book systematically analyzes each country's policies and results, on both a national level and, more importantly, in the innovation regions that have developed in each country: Japan's excellence in technology and manufacturing skills; Bangalore, India's late start and sudden explosion; Taiwan's Hsinchu Science-based Park's entrepreneurship and steady growth; Korea's Teheren Valley's impressive development of large companies; Singapore's initial reliance on multinational firms and its more recent switch to a home-developed strategy; and China's Zhongguancun Science Park's encouragement of investment from foreign firms while also promoting a domestic IT industry.

The book outlines the difficulties in the IT industry, including Japan's tendency to keep out most foreign firms and China's poor protection of intellectual property. Developed by the team that brought readers The Silicon Valley Edge, Making IT analyzes why this region has an advantage in this industry, the similarities and differences in the countries' strategies, why companies have clustered in specific localities, and most important, what will be changing in the coming years.

Making IT should leave no doubt that the United States and other countries competing in the global economy will face enormous challenges--and opportunities--responding to the rise of an innovative Asia.

Contributors

• Jun-Woo Bae, Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST)
• Zong-Tae Bae, Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST)
• Rafiq Dossani, Shorenstein Asia-Pacific Research Center, Stanford University
• Kyonghee Han, Department of Human and Community Development, University of California, Davis
• Ken-ichi Imai, former Senior Fellow, Freeman Spogli Institute for International Studies, Stanford University
• Martin Kenney, Department of Human and Community Development, University of California, Davis
• Jong-Gie Kim, Graduate School of Business and Economics in Information, Myongji University
• Kark Bum Lee, Information and Communications University, School of Management
• Noboru Maeda, Graduate School of Creative Cities, Osaka City University
• Sam Ock Park, College of Social Sciences, Seoul National University
• Jon Sandelin, Office of Technology Licensing (OTL), Stanford University
• Chintay Shih, College of Technology Management, National Tsing-Hua University
• Sang-Mok Suh, Myongji University
• Shoko Tanaka, ST Research
• Toru Tanigawa, Kyushu University
• Kung Wang, Graduate Institution of Industrial Economics, National Central University
• Yi-Ling Wei, Industrial Economics and Knowledge Center, Industrial Technology Research Institute
• Poh Kam Wong, Entrepreneurship Centre, National University of Singapore
• Yasuhisa Yamaguchi, Japan Development Bank
• Mulan Zhao, Administrative Committee of Zhongguancun Science Park